Tax cuts! [Archive] - MacRumors Forums

Desertrat

Sep 11, 2003, 03:36 PM

Still got your 1040 book around? Take a range of arbitrary gross incomes, say by 10s from $20K on up to $100K or whatever. Knock off the standard deductions. Figure the tax. Makes it easy to see who pays what.

Even without a progressive rate, rich folks pay a lot more than poor folks. Ad valorem taxes on property are the most obvious, particularly for schools. They buy more and fancier cars and clothes, which is a bunch more in sales taxes.

I'm still stuck with the feeling that it's just flat-out unfair to make a guy who works smarter, longer and harder than others in order to make more money, pay a higher percentage of that money as income tax. All my working life, I put in for overtime work, or did stuff at home from five to midnight or worked on weekends. Other folks were sitting on their dead butts watching TV. Why is it fair to charge me a higher RATE on my income?

'Rat

mactastic

Sep 11, 2003, 04:02 PM

Because all the other taxes affect you less the more you make. That is my understanding of regressive taxes. When you look at overall tax burden, not just income taxes, you find that the tax burden is spread pretty evenly IMHO.

mcrain

Sep 11, 2003, 04:09 PM

If you do a search on these political boards about taxes, you'll find a lot of discussions in which I, and others, have discussed the nature of the different taxes. In fact, there are one or two examples comparing two people, one who makes a little, and one who makes a lot, and on average, they pay about the same amount as a percentage of income in taxes. The very, very wealthy generally pay less (not more as a percengate of income) as do the extremely poor. There are exceptions, but in general, that's the way it works.

You can do research on the internet if you'd like, or you can do like I did, take every tax class offered in a good law school, and learn your tax policy from a guy asked by Reagan to be his SecTreas.

(edit) Oh, I almost forgot... you can practice tax law for over 5 years, 2 of which with a taxing agency.

Waluigi

Sep 11, 2003, 04:17 PM

Whoa, I'm completely lost here. Just a quick question for mcrain: where did you learn so much about our tax system? Do they even teach that in college level economics classes? I'm not trying to second-guess you; I'm just taken aback at your in-depth knowledge on taxes.

It is pretty sad too, because most voting Americans have strong opinions about taxes, and they, like me, would be lost in this thread. It really should be taught in our k-12 curriculum somewhere so we can prepare our children to become more informed when they vote.

--Waluigi

EDIT: Well, looks like you answered my question as I was writing it!

mcrain

Sep 11, 2003, 04:29 PM

I really don't mean to sound cocky, but the fact of the matter is that I really do know a lot about taxes. In fact, I know a lot more about taxes than 99% of the politicians in Washington.

In 1996, there was a debate between the top democrat on taxes and the top republican on taxes. During the argument, they argued back and forth on some issue like capital gains taxes. What they were saying made no sense to me, and both sides seemed wrong.

I went to my professor (big time republican), and asked him if he had seen the debate, and asked whether I was nuts in thinking that both sides were wrong. His response was that with ONE year of tax law under my belt, that I already had more tax education than both of them. (He knew both personally).

Since that time, I have taken 6 or 7 more law school tax courses and worked in tax law for 5+ years.

Yes, I just bashed the premise of this thread and the Republican spin on tax policy. But, you may not know that while I can say that I really do know how the tax system works, I can not, and will not, say that the Democrats are right. They aren't. They are as blinded by the Washington spin as most everyone else is.

There is a fair way to apportion taxes in this country, but it WILL NEVER be adopted because NO ONE would support it. Way too much political losses for both sides if it were used.

Taft

Sep 11, 2003, 04:53 PM

G4scott

Sep 11, 2003, 04:59 PM

mcrain for secretary of treasury (or something like that)!

eh... It hurts to live in the most liberal part of Texas, but I can deal with it!!!

That's one thing I have noticed, is that there is way too much politics involved in, well, politics...

Of course, I don't think taxing the top 1% more is going to help very much...

I still think that America has turned into the land of opportunity for the smart, and the land of welfare for the lazy...

mcrain

Sep 11, 2003, 05:04 PM

Originally posted by G4scott
mcrain for secretary of treasury (or something like that)!

Of course, I don't think taxing the top 1% more is going to help very much...

I still think that America has turned into the land of opportunity for the smart, and the land of welfare for the lazy...

1. No way.
2. Who said anything about taxing the top 1% more? It's the Republicans who are insisting that we tax them less. Big, big difference.
3. That's absolutely pathetic. You need to read and maybe go talk to some people who are homeless/jobless/on welfare before you make that sort of statement. Let me ask you a question. When you imagine someone on Welfare, what does that person in your mind look like?

Desertrat

Sep 12, 2003, 12:01 AM

Save the arrogance, please, Taft. I read every post in the thread, which is why I asked the question. When folks support a progressive tax rate as earned incomes rise, I question the fairness. I'm no "tax professional", but I've been dealing with the IRS for some fifty years, now--and I ain't totally iggerant.

McCrain asked, "When you imagine someone on Welfare, what does that person in your mind look like?" :) For me, it varies all over the place. A better question might be, "What percentage of those receiving governmental assistance are truly deserving?" There, I'd have to say, "Most."

The problem is that the eligibility requirements have been loosened away from the "safety net" concept to--for too many--a way of life. For instance, "children having children" and AFDC. I don't really have any answer for correcting it, however.

A few years back, I ran the numbers for my once-upon-a-time situation, had I stayed gainfully employed in the formal world in Austintatious. Wife, couple of kids, $50K a year. The total of all taxes and governmental fees ran somewhere around 42 percent.

I'm dubious that somebody trying to live off of a $20K/yr gross income lays out $8,000 in total taxes.

'Rat

Taft

Sep 12, 2003, 10:30 AM

Originally posted by Desertrat
Save the arrogance, please, Taft. I read every post in the thread, which is why I asked the question. When folks support a progressive tax rate as earned incomes rise, I question the fairness. I'm no "tax professional", but I've been dealing with the IRS for some fifty years, now--and I ain't totally iggerant.
...
'Rat

The question you asked is:

I'm still stuck with the feeling that it's just flat-out unfair to make a guy who works smarter, longer and harder than others in order to make more money, pay a higher percentage of that money as income tax. All my working life, I put in for overtime work, or did stuff at home from five to midnight or worked on weekends. Other folks were sitting on their dead butts watching TV. Why is it fair to charge me a higher RATE on my income?

Boiled down, what you are really asking is "why is it fair to charge people who make more money a higher rate of taxes?"

From McCrain's earlier post:

1. Federal income taxes are not the only taxes collected.

2. If you look at all taxes collected, as a percentage of income, everyone (even people who pay NO federal income taxes) pays a nearly equal percentage of their income in taxes.

Oh, one more...

3. Making the federal income tax less progressive makes the overall tax system regressive.

Boiled down that basically means, "wealthy people pay more on their income tax because if they paid less in income tax they would be paying less in overall taxes.

Thats the point. By only considering income taxes, you can't possibly make an assertion as to the fairness of the tax system in this country. Income tax is only a small fraction of the total taxes collected in this country. If you take total taxes into account, the system is more fair than you obviously think it is.

Sorry to be pissy, but it seems like people just blantantly ignore information on these boards when they make their points. You might not believe what mccrain said, but he answered your question a few posts before you asked it. If you've got information that refutes the theory, lets hear it.

It wasn't arrogance, it was frustration.

Taft

Taft

Sep 12, 2003, 10:31 AM

And about this:

I'm dubious that somebody trying to live off of a $20K/yr gross income lays out $8,000 in total taxes.

I'm sorry, but between you and a tax professional, I'm going to believe the tax professional.

You save money, right? I mean, you probably don't spend all of your after income tax money every month.

But lets pretend make third of what you currently do. Now a much higher percentage of your paycheck would have to be spent on your daily necessities.

Now consider that everything you buy, and most services you use have some sort of tax on them. So if most poor people are able to save/invest less and must spend more of their money, the following equation should hold:

(total $$ spent) * (avg tax rate)
---------------------------------------
(total income)

is less than

(total income) * (avg tax rate)
------------------------------------
(total income)

So the more of your income spent each year, the higher your tax rate would be. If you spent all of your income every year, your total tax rate would be higher than if you only spent 75% of your income (assuming you invest or save the extra 25%). This assumes the tax rate on all products and services is equal, which is untrue, but should drastically effect the equation above.

Also, depending on your method of investment, you might be offered temporary tax exemption on some of that income (through IRA's or what-have-you). A poor person who had no extra income every month would have a hard time investing their money that way. And if you are really wealthy, you can probably afford really good accountants that will be able to wriggle out of a few more taxes, bringing your rate down even further.

Based off of mccrain's explanations here is how I envision it looking:

income + |
tax | ..
as a | ...
% of | ....
income | .....
| ....
|...
- |_______________________
- total income +

other + |
tax |...
as a | ....
% of | .....
income | .....
| ...
| ..
- |_______________________
- total income +

total + |
tax |
as a |
% of | . . . . . . . .
income |... ....
|
|
- |_______________________
- total income +

Taft

Desertrat

Sep 12, 2003, 11:26 AM

Well, let's see, here, Taft. You said, "If you look at all taxes collected, as a percentage of income, everyone (even people who pay NO federal income taxes) pays a nearly equal percentage of their income in taxes."

I'll use my mother as an example, although she's representative of quite a few LOLs that I know. (Florida and Arizona have millions like her.)

She lives in a paid-for house with modest ad valorem taxes. Her paid-for car is driven some 1,200 miles per year. Other than insurance, her overhead for food, utilities and "stuff" is maybe $600 a month. IOW, she ain't much of a consumer.

The great majority of her income is tax-free coupon clipping.

Her taxes to all grabbers totals out maybe 10% of her income. That's income, ad valorem, sales, gasoline, tariffs, excise, you name it...

The "hidden" taxes that account for some 60% (?) of federal income don't directly affect folks' decision-making on their spending. Generally. What does affect economic decision-making is the tax rate on one's income. It can move a person from an earned-income category to efforts at capital gains or other "unearned" income. Tax rates have pushed a goodly number of people into "off the books" business activity. (Aside from legal but unreported sales, there is the world of "controlled substances" where I really doubt there is much reporting of income.)

So I really doubt this notion of equality...

'Rat

Taft

Sep 12, 2003, 12:07 PM

Originally posted by Desertrat
Well, let's see, here, Taft. You said, "If you look at all taxes collected, as a percentage of income, everyone (even people who pay NO federal income taxes) pays a nearly equal percentage of their income in taxes."

I'll use my mother as an example, although she's representative of quite a few LOLs that I know. (Florida and Arizona have millions like her.)

She lives in a paid-for house with modest ad valorem taxes. Her paid-for car is driven some 1,200 miles per year. Other than insurance, her overhead for food, utilities and "stuff" is maybe $600 a month. IOW, she ain't much of a consumer.

The great majority of her income is tax-free coupon clipping.

Her taxes to all grabbers totals out maybe 10% of her income. That's income, ad valorem, sales, gasoline, tariffs, excise, you name it...

The "hidden" taxes that account for some 60% (?) of federal income don't directly affect folks' decision-making on their spending. Generally. What does affect economic decision-making is the tax rate on one's income. It can move a person from an earned-income category to efforts at capital gains or other "unearned" income. Tax rates have pushed a goodly number of people into "off the books" business activity. (Aside from legal but unreported sales, there is the world of "controlled substances" where I really doubt there is much reporting of income.)

So I really doubt this notion of equality...

'Rat

I can see from your profile that you're around 70. That would put your mother at around lets say 90. I take it she probably doesn't work at that age, nor should she. So she probably doesn't have much of an income, rather living off of savings/social security/retirement funds. If she does, I'm envisioning interest/earnings on investments. Is that close?

You said "The great majority of her income is tax-free coupon clipping." but that isn't really income. She isn't being paid to do it, nor is there any transfer of wealth taking place. Thats bargain hunting. I would very much like to see the items you listed in the credit column of your calculations for your mother's income. Did you figure out coupon clipping into your year end income? Somehow I don't think you are using the legal definition of the word income.

So you are comparing yourself to a 90 year old woman, making very little money and saying what exactly? That she should be taxed more? That you should be taxed equally to her?

I'm talking about people who work at jobs and have real incomes. Familes of four where the father works at a factory for 25 grand a year and the mother brings in another 10. People who spend every dollar feeding/clothing/schooling their children and trying to give them the best life possible. Or the families where the father can't get work or the factory closed down.

Theres a big difference.

Taft

Desertrat

Sep 12, 2003, 03:57 PM

Hokay. It's a "define your terms" thing. No biggie.

She'll be 93 come October 20th. Coupon clipping is worth maybe $40K a year, mas o menos. Retirement fund income, roughly $12K a year...

I've used "income" per IRS: Earned income, as in salary and wages; unearned income as in capital gains, dividends and suchlike.

Age makes no difference, nor does occupation, when one looks at taxes per se. Age does bring some advantages insofar as exemptions, but one is not entirely off the hook.

:) I discovered Schedule C back around 1968, and decided IRS had given me a license to steal. Been legal and laughing, ever since.

:D, 'Rat

Taft

Sep 12, 2003, 05:12 PM

Originally posted by Desertrat
She'll be 93 come October 20th. Coupon clipping is worth maybe $40K a year, mas o menos. Retirement fund income, roughly $12K a year...

I've used "income" per IRS: Earned income, as in salary and wages; unearned income as in capital gains, dividends and suchlike.

OK, I'm thouroughly confused. Are you talking about coupons as in coupons from the Sunday newspaper? As in "50 cents off frozen yogurt?" Does she work for a company who pays her to clip coupons or does she simply reap the savings that the coupons in the sunday paper bring?

And by calling it "income" do you mean the total of all that she saved by using coupons?

Finally, how does a person who makes 12 grand a year from retirement clip enough coupons and buy enough products to net 40 grand in savings from those coupons? It just seems statistically impossible. Everything she buys would have to be 80% off in order for her to pull it off.

$60,000 * .20 = $12,000

Call me ignorant or extravagant, but I just don't see how its possible.

Taft

Taft

Sep 12, 2003, 05:15 PM

Originally posted by Desertrat
I've used "income" per IRS: Earned income, as in salary and wages; unearned income as in capital gains, dividends and suchlike.

BTW, as far as I know, the government taxes just about every form of income. At the very least, you have to report the income, even if you don't end up paying taxes on it.

Does your mother report her "profits" from coupon clipping to the IRS? Is she required to? I doubt it.

If the IRS doesn't consider it income, it probably isn't. They'd want a piece of it if it was.

Taft

mcrain

Sep 12, 2003, 05:48 PM

Originally posted by Taft
BTW, as far as I know, the government taxes just about every form of income.

Except the receipt of an inheiratence or a gift or a lot of forms of corporate income.

Desertrat

Sep 12, 2003, 09:22 PM

Taft, municipal bonds pay interest every six months. The bonds have sheets of dated coupons attached. You take scissors and clip them off as they come due and deposit them at your bank. So, "coupon clippers". (I think there have been some changes in how this is handled; don't recall the specifics. However, the "c-c" name is still used. :) )

Municipal bonds are of two general types: Revenue bonds, paid by income from a project (e.g., a power plant) and General Obligation bonds, guaranteed by the tax revenues. The interest rates are lower as they are more secure than corporate bonds, and because they are free from federal income tax. (Some states tax this interest.) Munis can be bought and sold, just like stocks. The price, above or below face value, varies with prevailing interest rates.

Anyhow, millions of retirees hold these. Just part of one's long-term investment strategy. When you're young, you look for investments with growth potential. As you near retirement, you start shifting into income-producing investments.

As a sidebar, the problem of the last dozen or more years with the stock market is that instead of being a place to put your money for long-term growth, with stability, it turned into a Las Vegas Crap Shoot. In 2000, it rolled snake eyes.

'Rat

mactastic

Sep 12, 2003, 09:27 PM

How about some examples involving people who are currently in the earning phase of their lives? It's probably more relevant. Nothing against your mom 'Rat, but she's not a good example of a typical American taxpayer.

wwworry

Sep 13, 2003, 10:07 AM

Originally posted by Desertrat
I'm still stuck with the feeling that it's just flat-out unfair to make a guy who works smarter, longer and harder than others in order to make more money, pay a higher percentage of that money as income tax. All my working life, I put in for overtime work, or did stuff at home from five to midnight or worked on weekends. Other folks were sitting on their dead butts watching TV. Why is it fair to charge me a higher RATE on my income?

'Rat

The genius of the elite super wealthy to to have been able to convince the upper middle class to ally with them instead of with the lower middle class. So many times I have heard $60 k per year men defending tax cuts for the super wealthy even if means higher taxes for middle income workers. They have fostered a hatred of lower income people.

SO, first things first: Have you ever been to New York City? I work all the time on the upper east side and this is where a lot of the super wealthy live. I work in their houses. I see them shop. They are not smarter and they do not work harder. Half of it is inherited, how hard is that? All these people in middle America defending tax cuts so a few people can build new $200,000 bathrooms. Defending "the way-of-life" for fake blond women to get plastic surgery and shop all day at expensive boutiques and go to the Wednesday matinee.

Other folks were sitting on their dead butts watching TV. or sitting for hours with expensive drinks in exclusive hotels

Why is it that the tax system is getting progressively worse for middle income earners providing less services and progressively better for upper income earners?

Why do middle income earners not call for lower income taxes for middle income earners? WHy do they just defend the super-wealthy?

edit: $50,000 man, you are one layoff away for sitting on your butt watching TV all day. One CEO deciding to move to Florida or bermuda, one mega-consolidation deal away from really needing good schools, good public transportation, cheap high-quality public universities

Desertrat

Sep 13, 2003, 11:08 AM

Well, instead of worrying so much about the wealthy, why not look at how the tax laws are written?

Stick with earned income for a moment: Those who inherited a bunch of wealth aren't involved in this issue, generally. They don't work for a salary. So, if you reduce the tax rate on salaries, it doesn't benefit these heirs.

Unearned income: This includes dividends on stocks. Many of these heirs own stocks. But, some 50% or so of U.S. households own stocks, albeit in lesser amounts. If you want to help the middle class--which needs some sort of help due to declining buying power--but not benefit the wealthy, isn't there an answer? Seems to me that you exempt dividend income up to some ceiling-amount...Just an example. One effect of this idea would be to shift people' investments into more stable corporations which have enough profit to pay dividends.

Much has been made of the lack of savings in the U.S. Okay, why not exempt the first $XXX in interest on CDs or savings accounts from taxes? We know folks are better off over the long haul if they cut back on frou-frou spending and save up some money, so some sort of incentive strikes me as a Good Thing. Lots of middle-class could get up to $100K in CDs, so make that interest at whatever rate be tax-free.

But as long as folks equate a Teddy Kennedy with some bright young IT type as having the same in style of income, the IT type is screwed by the class hatred of "the rich".

Look: If somebody is dumb enough to blow $200K on a bathroom, shame on'em. But, they buy the fixtures and hire folks to do the work, don't they? So, they're making it possible for others to eat, right? What's the problem? My advice is to go to med school and specialize in diseases of the rich! (Thanks to Tom Lehrer for that one.)

Back when Carter reduced the capital gains tax rate, the Democrats had been yowling and howling about how this only benefitted "the rich". Funny. My net take home at that time from my 8-5 job was around $1,700 a month. But, I had been buying small tracts of land (owner-financed sales) in advance of Austin's growth, and making capital gains profits. Not much land, not much gross money, but surely helpful. That reduction in tax rates danged sure benefitted me. A side benefit for the federal government was that a lot of folks sold stocks and took profits--and therefore paid taxes. No sales, no taxes paid. That's why a reduction in some tax rates increases government income--it induces economic activity which otherwise would not occur.

I still ain't rich, but at least I made myself independently not-broke.

'Rat

mactastic

Sep 13, 2003, 11:33 AM

'Rat, a quick check of some census data shows that your $1700/month job was about 150% of the median household income at the time. (I guessed 1979, since you said Carter) In today's numbers, that would equate to over $75,000 a year. Now, that's not a whole lot in my part of the country, but I would imagine that in most areas of Texas (where I got the numbers from) that would be a pretty comfortable income. It still doesn't make you rich though, and I would put you in the catagory of people who need tax relief. What you don' mention though is how much people with much higher incomes were benefiting from the same reductions. Even the tax cuts Bush has proposed benefit the middle class to some extent, and that is the good part of those reductions. But for the people who make 10 times what you did, and do, the benefits are much greater.

Oh and my understanding is that most US stockholders don't hold dividend-paying stock. Most people (unless they are super-rich or nearing retirment) prefer high-yielding value stocks over ones that pay dividends.

wwworry

Sep 13, 2003, 11:40 AM

Good for you.

Tax policies and education policies that are aimed at benefiting the middle and lower middle class almost always end up benefiting the wealthy as well.

Policies aimed at benefiting the wealthy do not have much of a trickle down effect.

There is lots of evidence that shows when real middle and lower incomes are rising everyone benefits and evidence that shows that upper income growth does not necessarily equate to middle and lower income growth.

Pretty simple. Structure tax law around middle and lower income working Americans, give them access to high quality education, the rest will follow.

What they could have done is raise the level at which the higher income tax bracket comes into effect. THey could have a more subtle sliding scale for progressive taxation. They could have targeted middle income earners. What they did do is target the wealthiest and sell a bill of goods to middle income workers.

That $200,000 bathroom was only one bathroom. It would have been better for me if there were ten $20,000 bathroom jobs.

Taft

Sep 13, 2003, 08:18 PM

Originally posted by Desertrat
Taft, municipal bonds pay interest every six months. The bonds have sheets of dated coupons attached. You take scissors and clip them off as they come due and deposit them at your bank. So, "coupon clippers". (I think there have been some changes in how this is handled; don't recall the specifics. However, the "c-c" name is still used. :) )

Municipal bonds are of two general types: Revenue bonds, paid by income from a project (e.g., a power plant) and General Obligation bonds, guaranteed by the tax revenues. The interest rates are lower as they are more secure than corporate bonds, and because they are free from federal income tax. (Some states tax this interest.) Munis can be bought and sold, just like stocks. The price, above or below face value, varies with prevailing interest rates.

Anyhow, millions of retirees hold these. Just part of one's long-term investment strategy. When you're young, you look for investments with growth potential. As you near retirement, you start shifting into income-producing investments.

As a sidebar, the problem of the last dozen or more years with the stock market is that instead of being a place to put your money for long-term growth, with stability, it turned into a Las Vegas Crap Shoot. In 2000, it rolled snake eyes.

'Rat

I'd never heard of the term "coupon clippers" associated with municipal bonds before.

But, back to our original conversation, if you count the money your mother receives from the bonds, then yes, her tax rate is low. But it is complete unfair to categorize the money she makes from municipal bonds as taxable income.

Why?

Because municipal bonds are setup so that their coupons payments are tax free. The government issues the bonds because they need cash now, and they offer the tax free status as an incentive for people to give them cash now.

It is non-taxable for a reason and to use that in your calculation of your mother's tax rate is not valid. The IRS doesn't count the coupon payments as taxable income, and there is no good reason we should either.

This example you used in no way illustrates why your assertion that the progressive income tax rate is unfair. They also don't answer my statements as to why less wealthy people pay more general, non-income taxes than more wealthy people. Your mother makes a fair amount of money every year and her rate of income taxes on her taxable income is in line with what she makes.

Your mother is in a special situation when compared to truly lower class people. She is not representative of the group we are speaking about.

Taft

zimv20

Sep 13, 2003, 10:27 PM

Originally posted by Desertrat

Much has been made of the lack of savings in the U.S. Okay, why not exempt the first $XXX in interest on CDs or savings accounts from taxes?

i agree.

pseudobrit

Sep 13, 2003, 10:39 PM

Originally posted by wwworry
Why do middle income earners not call for lower income taxes for middle income earners? WHy do they just defend the super-wealthy?

Because they still believe in the "American Dream," that someday they'll make it so big that they'll be in that class. And when they get there, they'll be glad they fought so hard for lower taxes for themselves.

The reality is that they're more likely to end up going lower than higher. The "American Dream," by and large, is dead to most people. You can only have so many rags to riches, overnight millionaire success stories before you run out of riches and millions to make them real.

But those stories are the ones we hear repeated and the ones we remember, not the ones where someone starts or buys a business and it fails.

Desertrat

Sep 14, 2003, 01:28 AM

Taft, your comment, "This example you used in no way illustrates why your assertion that the progressive income tax rate is unfair." insofar as my mother's deal wasn't meant to show any unfairness. But I'd bet greenbacks she's quite representative of a whole bunch of millions of folks, considering the bluehair Winnegbago crowd and those in places like south Florida and Sun City, AZ. Well, and in Clark County, NV, nowadays...

My example for what I consider unfairness is my own case, where I worked longer, harder, and extra, and in essence was punished for doing so. Sit on my duff with an 8-5 job and pay 13% after itemizing deductions; work another 20 or 30 hours a week and wind up paying 17%. Sucks. Unfair.

"They also don't answer my statements as to why less wealthy people pay more general, non-income taxes than more wealthy people."

They don't have to. It's a matter of choices in spending one's disposable income. However, when you get eat up by the "I wants" as inculcated by TV advertising, your billfold is gonna get burned.

mccrain: Your comment to Taft, "Except the receipt of an inheiratence or a gift or a lot of forms of corporate income." isn't quite accurate. That amount of an inheritance above $750,000 (I think that's the new amount; been climbing from $600,000) is taxable. A one-time gift of $30,000 is not taxed, nor is there tax on multiple gifts of $10,000 per year per recipient. Corporate? The only one I am familiar with is stock options, but they are taxed at the time of sale.

'Rat

wwworry

Sep 14, 2003, 07:39 AM

My example for what I consider unfairness is my own case, where I worked longer, harder, and extra, and in essence was punished for doing so. Sit on my duff with an 8-5 job and pay 13% after itemizing deductions; work another 20 or 30 hours a week and wind up paying 17%. Sucks. Unfair.

So why not complain about the person who inherits millions tax free (soon to be tax free)?

It makes me wonder when middle class people spend so much time defending tax policies designed to benefit the rich. The rich already have lobbyists, tax lawyers and politicians begging them for money. In the past few years their share of the total income has gone up. Their rate of income growth has gone up. Their effective tax rate has gone down. What has happened for middle and lower middle class workers? zip

The rich can take care of themselves. They don't need us shooting our brothers to make their lives better.

Desertrat

Sep 14, 2003, 01:39 PM

"So why not complain about the person who inherits millions tax free (soon to be tax free)?"

Why should I? What that guy's mommy and daddy did has nothing to do with the taxes on my earned money.

Besides, it's none of my business--or yours--as to what other folks do, so long as it's legal and moral by the laws of the land and the codes we live by.

I'm not particularly interested in rich folks; certainly don't particularly envy them nor am I at all jealous. I just do my own deal and let other folks do theirs.

I figured out a long time ago that rich folks control the tax codes. So, I went and learned those parts wherein I could do rich folks' doings but on a smaller scale. Capital Gains. Depreciation. All that stuff that pertains to money that's not gained from a salary or a bunch of sweat. I also figured out how to use debt as a tool, to acquire assets.

Shonuff made life easier.

Fifty years back, I was so broke that if it cost a nickel to go around the world, I couldn't have gotten out of sight. (I borrowed $20, got into a game of nine-ball; won, and never looked back. :D) Being independently not-broke beats heck out of the alternative.

'Rat

IJ Reilly

Sep 14, 2003, 02:52 PM

Originally posted by Desertrat
Why should I? What that guy's mommy and daddy did has nothing to do with the taxes on my earned money.

Sure it matters. Because if they don't pay, you do.

Taft

Sep 14, 2003, 03:47 PM

Originally posted by DesertratTaft, your comment, "This example you used in no way illustrates why your assertion that the progressive income tax rate is unfair." insofar as my mother's deal wasn't meant to show any unfairness. But I'd bet greenbacks she's quite representative of a whole bunch of millions of folks, considering the bluehair Winnegbago crowd and those in places like south Florida and Sun City, AZ. Well, and in Clark County, NV, nowadays...

My example for what I consider unfairness is my own case, where I worked longer, harder, and extra, and in essence was punished for doing so. Sit on my duff with an 8-5 job and pay 13% after itemizing deductions; work another 20 or 30 hours a week and wind up paying 17%. Sucks. Unfair.

As I have previously stated, and have many others here, when the average tax rate paid on ALL taxes is about equal across all income brackets, it certainly is fair.

You keep harping on income tax, income tax, income tax, and ignore the points we are making as to total taxation. If your total taxation represented as a percentage of your total taxable income is equal to that of the majority of Americans, it certainly is fair.

When you worked your butt off and made that extra money, you income taxes went up. But I bet you also had to spend less of that money every month. If you were making $2000 bucks a month with expenses at $1800, and now you are making $2500 with expenses staying flat, you are now able to save/invest a higher percentage of that money.

Which brings me to...

"They also don't answer my statements as to why less wealthy people pay more general, non-income taxes than more wealthy people."

They don't have to. It's a matter of choices in spending one's disposable income. However, when you get eat up by the "I wants" as inculcated by TV advertising, your billfold is gonna get burned.

They do have to if you want to have a productive conversation.

I have made a point (actually echoed a point made by mcrain): total taxation across all income groups is about equal. The very poor and the very rich are the exceptions, and they pay a little less in total taxes.

You have yet to answer this point with any rational thinking or analysis.

In the above paragraph you take about the "I wants." But the point I will continually make is that many hard working, income drawing Americans are making only enough money to pay for the "I needs." Plus maybe a little extra, if they are lucky.

While their income tax rates may be low, most of those "I needs" have taxes associated with them (clothing, property taxes, gas, phone service, electricity, natural gas, not to mention sin taxes on cigs and alcohol). If you are forced through poverty or low income to spend the majority of your money on consumer goods, services, etc. and are taxed on most of that money, your tax rate (as a percentage of your taxable income) is much higher than a person who makes enough money to invest. People who make a lot of money generally spend a smaller percentage of their money than people who make less money. Since taxes are paid on those expenses (in almost all cases), a person who spends less of their money on expenses will have a lower tax rate.

Get it?

I've stated this previously, and you have yet to answer with an example outside of your mother where you seemingly included 40k of un-taxable income as taxable income.

What proof or justification do you have for the assertion that the total tax rate isn't flat across all incomes? And if you have no justification or proof, doesn't that mean that the tax system does, in fact, treat everyone (or at least most people) fairly?

How can you justify the claim of inequality when you are only looking at one tax out of the many taxes every person in this country pays?

Taft

Desertrat

Sep 14, 2003, 10:11 PM

"When you worked your butt off and made that extra money, you income taxes went up. But I bet you also had to spend less of that money every month. "

Now, just what does that have to do with anything whatsoever? That's totally irrelevant to the question I asked.

"What proof or justification do you have for the assertion that the total tax rate isn't flat across all incomes?"

'Scuse me. Other than the assertion that the rate is flat, I've seen nothing else in support of that. Sure, you provided some graphic effort, but it's not supported by any data.

And, even then, I didn't say I absolutely didn't believe it. I said that I have doubts...

Look. This has more than gotten circular. You have your views; I have mine, and I see no sign that either of us will change...

'Rat

Backtothemac

Sep 14, 2003, 10:35 PM

Originally posted by mcrain

Real estate, state income, excise, gas, sin, SS, FICA, Medicare, Medicaid, sales, etc, etc, etc...

All of those taxes are regressive, and paid primarily by the lower classes.

Ah, but since they receive the most of those benifits should they not pay the most into those taxes?

Taft

Sep 14, 2003, 11:03 PM

Originally posted by Desertrat
"When you worked your butt off and made that extra money, you income taxes went up. But I bet you also had to spend less of that money every month. "

Now, just what does that have to do with anything whatsoever? That's totally irrelevant to the question I asked.

It has everything to do with total taxation. As I've indicated, the need to spend less of your money for sustenance equates to a lower rate of overall taxation.
"What proof or justification do you have for the assertion that the total tax rate isn't flat across all incomes?"

'Scuse me. Other than the assertion that the rate is flat, I've seen nothing else in support of that. Sure, you provided some graphic effort, but it's not supported by any data.

And, even then, I didn't say I absolutely didn't believe it. I said that I have doubts...

I've been offering justification for my position, though you are right that I'm not offering any proof. I think the reasoning behind my assertion that less money would generally equate to a higher tax rate. Though I recognize limitations in the theory in that higher income generally means higher % of income spent on goods a services. I would still maintain that the more you make, the larger percentage of money you will invest and the lower your tax rate will be. A poorer person, who doesn't have the opportunities to put away money will be hit harder by the taxes on the money he is forced to spend.

I think the theory makes sense, and I don't see any arguments from you against it. Also, from the keyboard of mcrain: In fact, there are one or two examples comparing two people, one who makes a little, and one who makes a lot, and on average, they pay about the same amount as a percentage of income in taxes. The very, very wealthy generally pay less (not more as a percengate of income) as do the extremely poor. There are exceptions, but in general, that's the way it works.

I trust that he knows what he's talking about. I think I mentioned that before. Even if my theory is unsound, my position is bolstered by the words of mcrain.

Also, I've been looking for total taxation statistics (fed tax + state tax + city taxes + taxes on goods and services) broken down by income levels, but I can't find anything. I think it would be very enlightening to see those statistics.

Look. This has more than gotten circular. You have your views; I have mine, and I see no sign that either of us will change...

'Rat

I'm not sure this is really circular, I just wonder if you are looking at the specifics of my arguments as you haven't really addressed many of the points I've made. Especially in regard to my theory of necessary consumption of goods by the less wealthy, which you haven't addressed except via your mother, whom I consider to be a special case.

Taft

pseudobrit

Sep 14, 2003, 11:28 PM

Originally posted by Backtothemac
Ah, but since they receive the most of those benifits should they not pay the most into those taxes?

They do, actually. Wait, they benefit the most from those taxes? I don't think so.

Are you telling me the rich can't use Medicare or collect Social Security? They can't drive their Lexus and Mercedes S classes down the same roads I do? The police won't help them out if they need it or the fire department won't put out their burning house?

I had no idea the rich didn't benefit from taxes as much as I do... :rolleyes:

The rich are only rich because a stable capitalistic society exists. They owe a bigger debt to society, because they would be nothing without it.

pseudobrit

Sep 14, 2003, 11:37 PM

BTW, while we're on the subject of taxes.

The winds of change have visited me in the past few months and it appears, with continued luck, that part of my income for 2004 will be moving into the 27% taxable rate.

You think I give a **** that the gov't will hit me up for a quarter of the small amount that I'll go over? **** no! I'm glad as hell to be making so much money!

Only in America could jumping up a tax bracket be a bad thing...

Backtothemac

Sep 15, 2003, 01:27 AM

Originally posted by pseudobrit
They do, actually. Wait, they benefit the most from those taxes? I don't think so.

Are you telling me the rich can't use Medicare or collect Social Security? They can't drive their Lexus and Mercedes S classes down the same roads I do? The police won't help them out if they need it or the fire department won't put out their burning house?

I had no idea the rich didn't benefit from taxes as much as I do... :rolleyes:

The rich are only rich because a stable capitalistic society exists. They owe a bigger debt to society, because they would be nothing without it.

My point was that lower classes benifit the most from social programs. And sorry, but I believe that the government was given to us by very smart people. We don't owe anything to society.

Ugg

Sep 15, 2003, 01:40 AM

Originally posted by Backtothemac
Ah, but since they receive the most of those benifits should they not pay the most into those taxes?

Says who?

It would be very interesting to see an analysis of who actually receives the lion's share of government services and benefits. Is it the poor people or is it the rich people? I'm not convinced that welfare programs cost more than the benefits and services that the rich receive.

zimv20

Sep 15, 2003, 04:03 AM

Originally posted by Backtothemac
My point was that lower classes benifit the most from social programs.

everyone benefits, even if indirectly.

mcrain

Sep 15, 2003, 11:32 AM

BTTM, you have no idea how dumb that argument is.

But, if you want to stick with it, that's fine by me. I'd be happy as a poor person to pay for the social programs, so long as the rich pay the programs that benefit them and that they advocate for.

Sound fair to you?

If so, keep this in mind. The amount of the annual federal budget that goes to social programs is fairly small compared to the corporate welfare, military spending, etc...

Let the rich pay for that, and I'd be happy to pay for what I use.

mcrain

Sep 15, 2003, 12:12 PM

Sorry BTTM, I did not mean to imply that you're stupid, just that if you want to argue that people should pay in accordance with the amount of government services that people in their income bracket utilize, then you will find that the rich utilize government more than you think.

Social programs, such as welfare, are miniscule compared to the tax breaks given to corporations and the wealthy, the programs designed to pump money into large industry, and the other programs that vicariously benefit the wealthy far more than the poor.

The best way to analyze your argument would be to go program by program, tax break by tax break, tax policy by tax policy. That's something I've done before, and it is a large task, but if it will convince you that both the Republicans and the Democrats are wrong, then it is worth the effort.

Backtothemac

Sep 15, 2003, 06:19 PM

Originally posted by mcrain
BTTM, you have no idea how dumb that argument is.

But, if you want to stick with it, that's fine by me. I'd be happy as a poor person to pay for the social programs, so long as the rich pay the programs that benefit them and that they advocate for.

Sound fair to you?

If so, keep this in mind. The amount of the annual federal budget that goes to social programs is fairly small compared to the corporate welfare, military spending, etc...

Let the rich pay for that, and I'd be happy to pay for what I use.

mcrain, more than half of the federal budget goes to entitlement programs, IE social security, medicare, food stamps, etc.

Stop social security and let people invest their own money, instead of getting a wopping 1.5% return over the course of your life.

Ugg

Sep 15, 2003, 06:32 PM

Originally posted by Backtothemac
mcrain, more than half of the federal budget goes to entitlement programs, IE social security, medicare, food stamps, etc.

Stop social security and let people invest their own money, instead of getting a wopping 1.5% return over the course of your life.

Medicare and Social Security apply to all people, not just the poor.

And if you were unlucky enough to work for the Enrons of the world you would have had a whopping loss. Yeah, way to go free market policies!!

Backtothemac

Sep 15, 2003, 07:11 PM

That is not my point. mcrain knows that I don't believe what I was stirring up.

My point is that the entire system is broke. mcrain is right the tax breaks that corporations get is sick.

I don't like social security, because I could invest my money better than the government. And quite frankly, I don't think I should be forced to pay into social security.

Macco

Sep 15, 2003, 07:12 PM

Originally posted by Desertrat
I'm still stuck with the feeling that it's just flat-out unfair to make a guy who works smarter, longer and harder than others in order to make more money, pay a higher percentage of that money as income tax.
Well, that's really not fair. One of the stereotypes about poor people in this country is that they're lazy. Clearly this is not true, as many lower-wage workers work longer hours to try to support their families. Also, many people think that poor people are intentionally less well educated. Perhaps they grew up in a neighborhood with bad public education. Or maybe they have a college degree but can't find a job right now. I heard something on the radio over the summer about how teenagers couldn't find summer jobs because unemployed adults took all of them.

Macco

Sep 15, 2003, 07:17 PM

Originally posted by Backtothemac
That is not my point. mcrain knows that I don't believe what I was stirring up.

My point is that the entire system is broke. mcrain is right the tax breaks that corporations get is sick.

I don't like social security, because I could invest my money better than the government. And quite frankly, I don't think I should be forced to pay into social security.
But you see, the point of Social Security is that it's secure. The government is more or less obligated to pay benefits to you, regardless of how well the money was invested. You can't get that sort of insurance with any investment that you make on your own.

wwworry

Sep 15, 2003, 07:22 PM

Originally posted by Backtothemac
Ah, but since they receive the most of those benifits should they not pay the most into those taxes?

oh sure, crappy schools, unsafe streets, statistically more polluted environments aren't they such lucky ducks (http://www.salon.com/comics/boll/2002/12/19/boll/index.html) (never a more apt cartoon)

yes Grasso really did earn that $188 million dollars. He is so smart and worked so hard.

mcrain

Sep 15, 2003, 07:30 PM

Originally posted by Backtothemac
mcrain, more than half of the federal budget goes to entitlement programs, IE social security, medicare, food stamps, etc.

Really? Are you sure?

http://www.warresisters.org/piechart.htm

zimv20

Sep 15, 2003, 07:32 PM

Originally posted by wwworry
lucky ducks (http://www.salon.com/comics/boll/2002/12/19/boll/index.html)

ahhhhh, lucky ducky. will you ever change?

Frohickey

Sep 15, 2003, 09:00 PM

A flat tax instead of the income tax would be better. Make it a National Sales Tax.

Russia has a flat tax, and their budget is balanced, and last year, they had a surplus, so they cut their tax rates even more.

Social Security, how about allowing people to permanently opt out of that system? I'd gladly sign a binding contract saying I am forever prohibited from collecting from the Social Security funds if I can opt out of it now.

Welfare/Entitlement programs, couldn't these be structured as a low interest loan with a deferred interest and deferred payment plan to the people that can show need for such assistance, and also make it subject to a maximum amount.

IJ Reilly

Sep 16, 2003, 12:50 AM

Originally posted by Frohickey
A flat tax instead of the income tax would be better. Make it a National Sales Tax.

Russia has a flat tax, and their budget is balanced, and last year, they had a surplus, so they cut their tax rates even more.

A national sales tax would not be a flat tax, it would be a regressive tax.

Russia can have a low flat tax on income because employers must pay several other stiff employment taxes, like health care and pensions for their employees. If the US was willing to go to a system where employers were compelled to pay for these things on behalf of their employees, then we could go to a low flat tax too. I don't see it happening, do you?

mcrain

Sep 16, 2003, 11:12 AM

For some reason, people don't seem to think that we already to have a fairly flat tax in this country.

They see income taxes, and they know those are progressive, so they assume that if you make more money, you pay more in taxes.

But, that is not true if you look at taxes as a percentage of income.

Over a very wide range of income levels, the overall amount of taxes paid is fairly flat. Someone who makes 30,000 pays almost the same percentage as someone who makes 300,000.

I know that doesn't seem possible, but it's true.

The only way to make the taxing system truly fair is to eliminate special breaks, and treat everyone, and EVERY type of income the same.

While that sounds like something the Republicans would support, they NEVER would, because it would mean eliminating their favorite special breaks (capital gains taxes, deductions, exemptions, tax free incomes, tax free inheiratences, etc...)

Well then, you'd think that the Democrats would support something like that? Oh no. They get a lot of money from wealthy contributors too, and it would mean that all of the social tax incentives and programs that are designed for their constituants would be eliminated, plus, it would eliminate the floor on taxes, which while not increasing the amount of taxes paid by the people who now don't pay any fed. income taxes, it would freak them out to have to file every year.

pseudobrit

Sep 16, 2003, 06:43 PM

Originally posted by Frohickey
A flat tax instead of the income tax would be better. Make it a National Sales Tax.

Russia has a flat tax, and their budget is balanced, and last year, they had a surplus, so they cut their tax rates even more.

Holy ****ing ****!

You're advocating that the US follow Russian economic policy?

Dude, do me a favor and don't ever run for office. Holy crap... I can't believe my eyes... the US needs to be more like Russia?!?!?

pseudobrit

Sep 16, 2003, 06:50 PM

Originally posted by Frohickey
Social Security, how about allowing people to permanently opt out of that system? I'd gladly sign a binding contract saying I am forever prohibited from collecting from the Social Security funds if I can opt out of it now.

SS is like a union; if one person leaves, the whole wall of bricks falls down. If everyone stays, the wall is strong as solid steel. Unless, you know, the politicians go dipping into the fund to pay for tax cuts for the disgustingly wealthy.

Welfare/Entitlement programs, couldn't these be structured as a low interest loan with a deferred interest and deferred payment plan to the people that can show need for such assistance, and also make it subject to a maximum amount.

Wow, the government can make money off of the impoverished! Just like the sub-prime credit (loan shark) banks do!!

'Cause when you don't have a pot to piss in, the only thing you really need is to worry about paying off the debt you built up feeding your kids... :rolleyes:

Get off it; people need to eat. Unless you just really don't care about your fellow man, I can't see how you can so strongly oppose a program that costs so little.

Frohickey

Sep 16, 2003, 11:00 PM

Originally posted by pseudobrit
You're advocating that the US follow Russian economic policy?

Dude, do me a favor and don't ever run for office. Holy crap... I can't believe my eyes... the US needs to be more like Russia?!?!?

Nope. I was advocating that the US follow a flat tax policy, that has been talked about prior to the Soviet Union ever collapsing.

Frohickey

Sep 16, 2003, 11:06 PM

Originally posted by pseudobrit SS is like a union; if one person leaves, the whole wall of bricks falls down. If everyone stays, the wall is strong as solid steel. Unless, you know, the politicians go dipping into the fund to pay for tax cuts for the disgustingly wealthy.

'Cause when you don't have a pot to piss in, the only thing you really need is to worry about paying off the debt you built up feeding your kids... :rolleyes:

Get off it; people need to eat. Unless you just really don't care about your fellow man, I can't see how you can so strongly oppose a program that costs so little.

SocialSecurity is like a Ponzi scheme.

When you are not making enough to feed yourself, why should you be making kids? There are the budget-conscious ones here that plan their lives, and do not become a burden on their fellow man. Those are the people that you want more of.

Besides, if I want to take care of the poor, I am perfectly able to donate my money to them (or organizations that do), and I would not resent it one bit. As it is now, government is donating my money to the poor, and I resent it... plus, its doing so at the point of a gun (or threat of jail time).

zimv20

Sep 17, 2003, 04:26 AM

Originally posted by Frohickey

When you are not making enough to feed yourself, why should you be making kids?

you really want the gov't involved in deciding who can and who can't have kids?

why, that removes nearly as much freedom as raising mileage requirements on SUVs!

Desertrat

Sep 17, 2003, 08:36 AM

mccrain, in your "Over a very wide range of income levels, the overall amount of taxes paid is fairly flat. Someone who makes 30,000 pays almost the same percentage as someone who makes 300,000." comment, are you meaning that both of these people are on salary?

I've noticed that several posters make comments which don't seem to distinguish between wage-earners and those whose incomes derive from returns on assets. IMO these aren't comparable when talking about tax rates.

Without great detail, I'd appreciate some examples of "corporate welfare". I'm just looking for personal definitions, here, to get a feel for what folks are meaning by the term.

'Rat

Desertrat

Sep 17, 2003, 09:12 AM

Macco, "One of the stereotypes about poor people in this country is that they're lazy." is not at all what I'm talking about.

I was working as a civil engineer during that period. While I was doing other stuff five to midnight, other co-worker engineers and geologists and suchlike were duff-sitting. From a basic-salary standpoint, they were as well off as I. I went out and worked harder and longer and earned additional money, which threw me into a higher tax bracket--and I say that's punishment and unfairness.

Which makes me favor a flat tax rate, insofar as earned income. "Earned", as defined by IRS, which means salary and wages--W-2 Forms and all that.

Leaving out the issue of deductions and suchlike: If I lollygag around and make $10K, I pay $1K. If I get off my duff and get a good IT job at $100K, I pay $10K. Fine by me.

'Rat

mactastic

Sep 17, 2003, 09:43 AM

Link (http://www.newyorker.com/talk/content/?030922ta_talk_surowiecki)
Apparently, the Air Force never got the memo. It’s now trying to close a deal with Boeing in which it will lease a hundred planes to use as refuelling tankers for six years. Then, presumably, it will buy them. (It needs the approval of the Senate Armed Services Committee before it can sign the contracts.) The Congressional Budget Office estimates that simply purchasing the planes would cost sixteen billion dollars. Leasing and then purchasing them will cost at least six billion more. So why, when the defense budget is close to half a trillion dollars, is the Air Force acting like a deadbeat shopping for a couch at a Rent-a-Center?

In part, it’s a familiar story of corporate welfare in the “iron triangle” (Congress, defense contractors, the Pentagon). The deal was conceived almost two years ago, in some measure as a handout to Boeing, which was struggling after September 11th. It was slipped into a congressional appropriations bill at the last minute, without any congressional hearings or even a formal request from the Air Force. And though it had come under withering criticism from the Congressional Budget Office, the General Accounting Office, lawmakers like John McCain, and numerous taxpayer watchdog groups on the left and the right, it survived, helped along by the ardent lobbying campaign of Boeing and its congressional allies (again on the left and the right). And the Air Force official with whom Boeing was negotiating the deal last year left this year to work for, yes, Boeing.
What makes this deal distinctive is that the Air Force wants to lease the planes rather than buy them. Leasing a car makes sense if you want a new one every few years. But that logic doesn’t apply to these tankers. After all, many of the tankers that the Air Force has now have been in use for forty years. So the Air Force will either spend more than sixteen billion dollars leasing planes that it will then give back to Boeing (leaving it without the tankers it says it so desperately needs) or spend much more than that to lease and then buy them. (As a congressional aide said last week, “If it looks, walks, and talks like a lease-purchase, it is a lease-purchase.”) Wouldn’t it make more sense just to buy the tankers right now for sixteen billion?

It would, unless you wanted to have the tankers now and pay for them later. To buy them outright, the Pentagon would have to allocate money from its budget, which would mean cutting some other program or coming clean about the bill it was racking up. No one wants to do that. But with a lease the Air Force gets its tankers and everything else. It’s really little more than an accounting gimmick, the kind of sleight of hand that corporate America indulged in during the nineties, to its enduring embarrassment.

mactastic

Sep 17, 2003, 09:54 AM

Link (http://www.ctj.org/html/corp0402.htm)
A startling surge in corporate tax welfare is expected to drive corporate income taxes over the next two years down to only 1.3 percent of the gross domestic product. That will be the lowest level since the early 1980s—and the second lowest level in at least six decades.

Driven in part by the new corporate tax breaks just enacted in the so-called “stimulus” bill, the total cost to ordinary American taxpayers of corporate tax welfare will exceed $170 billion annually in each of the next two years.

In fact, for the first time since the early eighties, corporate tax loopholes will actually cost more than companies pay in income taxes in fiscal 2002 and 2003.
From 1996 through 2000, just ten large profitable companies enjoyed a total of $50 billion in corporate tax breaks. That brought their combined tax bills down to only 8.9 percent of their $191 billion in U.S. profits over the five years. In just the most recent two years for which data are available, these ten companies got $29 billion in tax welfare, and paid a mere 5.9 percent of their profits in federal income taxes.

Microsoft enjoyed more than $12 billion in total tax breaks over the past five years. In fact, Microsoft actually paid no tax at all in 1999, despite $12.3 billion in reported U.S. profits. Microsoft’s tax rate for the past two years was only 1.8 percent on $21.9 billion in pretax U.S. profits.

General Electric, America’s most profitable corporation, reported $50.8 billion in U.S. profits over the past five years, but paid only 11.5 percent of that in federal income taxes. That low tax rate reflected almost $12 billion in corporate tax welfare for GE.

Ford enjoyed $9.1 billion in corporate tax welfare over the past five years. It reported $18.6 billion in U.S. profits over the past two years, but paid a tax rate of only 5.7 percent.

Worldcom paid no taxes at all in two of the last three years, despite reported U.S. profits of $15.2 billion. Worldcom’s total tax rate over the three years was only 1.6%. Corporate tax welfare slashed Worldcom’s tax bill by $5.3 billion over the past five years.

IBM reported $5.7 billion in U.S. profits in 2000, but paid only 3.4 percent of that in federal income taxes. In 1997, IBM reported $3.1 billion in U.S. profits, and instead of paying taxes, got an outright tax rebate. Over the past five years, IBM enjoyed a total of $4.7 billion in corporate tax welfare.

General Motors paid no taxes at all in three of the last five years, despite $12.5 billion in reported U.S. profits. GM’s tax rate for the past three years was negative 1.3 percent. Its corporate tax welfare totaled $3.6 billion over the past five years.

Enron paid no income taxes at all in four of the past five years, despite $1.8 billion in reported U.S. profits. Enron’s total taxes over the five years were a negative $381 million. Its corporate tax welfare totaled $1.0 billion.

El Paso Energy reported $1.6 billion in U.S. profits over the past five years, but paid less than nothing in federal income taxes, getting tax rebates of $254 million. El Paso’s tax rate over the five years was negative 15.5 percent. Its corporate welfare totaled $827 million.

Colgate-Palmolive paid no taxes at all in three of the past five years, despite $1.6 billion in reported U.S. profits. Colgate’s total tax rate over the five years was negative 1.3 percent, due to $595 million in corporate tax welfare.

Navistar, on $1.4 billion in U.S. profits over the past five years, paid only $28 million in federal income taxes, a tax rate of only 2 percent. Navistar’s corporate tax welfare totaled $451 million.
(emphasis mine)

IJ Reilly

Sep 17, 2003, 11:40 AM

Originally posted by Frohickey
Nope. I was advocating that the US follow a flat tax policy, that has been talked about prior to the Soviet Union ever collapsing.

Whatever that means. As nearly as I can tell, you are advocating a regressive system of taxation.

zimv20

Sep 17, 2003, 02:04 PM

Originally posted by Desertrat

I've noticed that several posters make comments which don't seem to distinguish between wage-earners and those whose incomes derive from returns on assets. IMO these aren't comparable when talking about tax rates.

why not? they're taxed at the same rate.

Taft

Sep 17, 2003, 02:35 PM

Originally posted by zimv20
why not? they're taxed at the same rate.

Well, their incomes are taxed on the same schedule (ie if you are making 50k a year on interest from investments, you'll be taxed the same amount as a person making 50k a year from an employer). But most people living off of savings earn far less a year on interest than they did while working. So their income taxes are a lot smaller.

But I also fail to see where 'rat was taking this line of thinking? Why should we distinguish between a salary collecting individual and a person living off of interest/gains on investments? And if their total tax rate is similar, why should we care at all?

Taft

zimv20

Sep 17, 2003, 02:56 PM

Originally posted by Taft
most people living off of savings earn far less a year on interest than they did while working. So their income taxes are a lot smaller.

indeed. i'd meant to compare two people making the same amount by different means, rather than the same person in two different stages of their life.

Why should we distinguish between a salary collecting individual and a person living off of interest/gains on investments? And if their total tax rate is similar, why should we care at all?

i'm guessing he thinks they're taxed differently.

Desertrat

Sep 17, 2003, 05:05 PM

Yeah, interst income is taxed at the same rate as wages. That's one of the reasons folks in high tax brackets buy Munis; the lesser interest rate is okay because it's tax-free income.

But if you buy land, or a house, or stocks or bonds, and later sell at a profit, that profit is taxed at a lower rate than for wages.

More of the wealthy buy and sell real-property assets than do working stiffs. So, when CapGains rates dropped to 20% under Carter, I started small-time in land; the profits allowed my deals to get bigger. Not stupendous, but my billfold could sure feel it. I took the money I'd made from doing tuneups and overhauls and valve jobs, and made down payments on small tracts and run-down rent houses. (I always looked at salary money as "easy" money. Money that had my own blood on it was different. My hands have more scar tissue than skin, after some 30 years of active wrench-bending on cars. Lotsa sharp edges, under the hood.)

The nice thing about a rent house is that you can fix it up and that fix-up becomes part of the investment cost. Halfway-smart choice in "location, location, location" means you can eventually sell it for more than you paid for it. Plus, you can have depreciated it while you were renting it, which reduces one's apparent rental income.

Like I say, I don't make the rules, but I learned'em. Didn't have to sweat macaroni and cheese for the Old Lady and The Kid.

Hey, mac: In your example, "Navistar, on $1.4 billion in U.S. profits over the past five years, paid only $28 million in federal income taxes, a tax rate of only 2 percent. Navistar’s corporate tax welfare totaled $451 million." I would be interested in knowing the form of the "welfare". That is, what did the government actually do to be happy with that tax, or what did Navistar do to justify it, somehow...What sort of deductions? Were other losses used to offset profits? No way the gummint sez, "Aw, you're good guys; we'll settle for 2%."

Corporations own other corporations. Parent "A" might be profitable, but subsidiary "B" might be losing its shirt. GE makes money, but if NBCTV loses money, the loss is deductible off GE's profits.

Which sorta angles off toward the problem of corporate giantism. Folks think of Philip Morris and cigarettes, but cancer-sticks are just a part of the overall operation. Same for RJ Reynolds: RJR-Nabisco. Nabisco? Cookies, etc.? Economy of scale provides low prices for consumers, but the paperwork for the tax folks is a bitch--and makes tax lawyers rich.

'Rat

mactastic

Sep 17, 2003, 07:42 PM

Best I could do on short notice. Will look for more later.

Among the staggering revelations to emerge from the Enron Corp. debacle: The now-bankrupt Houston energy company wiped out much, if not all, of its tax liability despite reporting nearly $2 billion in profits from 1996 through 2000.

Some analysts believe the company may have paid a small amount of tax--and Congress has begun an investigation to find out. But one thing is clear: Enron is hardly alone in finding creative ways to slash taxes. Scores of highly profitable U.S. corporations pay little or no federal tax despite ringing up billions in profits and facing a tax rate of 35%. How? By aggressively using tools as diverse as tax shelters, deferred taxes, balancing current income against past-year losses--and handing out stacks of stock options.
Some companies, such as Navistar, the Warrenville (Ill.) maker of trucks and engines, used past losses to reduce current tax liability.

Aw rats, the link won't post correctly for now, I'll save it though.

Desertrat

Sep 17, 2003, 09:35 PM

Well, Congress writes the laws; I, you and the corporations all use them to follow the IRS dictum: "Don't pay more than you owe."

(I gotta go play with the doctors, tomorrow. Dunno what time I'll get back. Gota do minor out-patient chop job at 6:15 AM. 6:15 AM? Up that early, and it ain't even deer season!!! No hurry on that link...)

Another question: If certain items (food, medicine, clothing below some value) were exempted from a national sales tax, could a mix of flat-rate income tax and national sales tax be fair and non-regresive? I'd have incomes of $20,000 and below exempt from income tax, as example.

I've not understood the penchant for "only" a flat rate income tax, or "only" a national sales tax. Why not a mix? I think my exemptions would leave more of their money in the hands of the lower level of the economic pyramid.

'Rat

Frohickey

Sep 17, 2003, 09:57 PM

Originally posted by zimv20
you really want the gov't involved in deciding who can and who can't have kids?

why, that removes nearly as much freedom as raising mileage requirements on SUVs!

I did not say anything of the sort!

Why should welfare mothers be given more money when they have more children out the chute?
Maybe its just better that I keep my own money, and I'll voluntarily give to poor mothers/children/people.

No government program to meddle in who gets what, and from who it takes it from.

Frohickey

Sep 17, 2003, 10:01 PM

Originally posted by IJ Reilly
Whatever that means. As nearly as I can tell, you are advocating a regressive system of taxation.

Regressive. Whats so regressive about that?

I, a private citizen, should consume the same amount of government programs and resources as the next fellow, and I should also pay the same amount as the next fellow.

One citizen, one vote, one tax bill (for the same amount).

Or is it better that since I make more money, that I should pay more, and hence, government is more beholden to me because I contribute more to society than the next fellow?

IJ Reilly

Sep 17, 2003, 10:10 PM

Originally posted by Frohickey
Regressive. Whats so regressive about that?

Sales taxes are regressive, meaning, people with lower incomes pay a larger share of their incomes then wealthier people.

Taft

Sep 17, 2003, 11:21 PM

Originally posted by IJ Reilly
Sales taxes are regressive, meaning, people with lower incomes pay a larger share of their incomes then wealthier people.

Not that I disagree with you, but good luck convincing people on these forums of this. Its hard. ;)

Taft

Desertrat

Sep 18, 2003, 05:09 AM

5AM's too bleepin' early!

Sure, sales taxes are regressive. Texas went from 3% in 1965-ish to its present 7-1/8% state plus one and two percent more for local add-ons.

This brings in money for programs for the poor. Isn't that compassionate?

Duh? Pardon the sarcasm.

'Rat

mactastic

Sep 18, 2003, 10:00 AM

Originally posted by Desertrat
5AM's too bleepin' early!

Sure, sales taxes are regressive. Texas went from 3% in 1965-ish to its present 7-1/8% state plus one and two percent more for local add-ons.

This brings in money for programs for the poor. Isn't that compassionate?

Duh? Pardon the sarcasm.

'Rat

I find it hard to believe that all of that increase goes to the poor. Do you have anything that backs that up?

And 7.125% +1 or 2 more points gives you an 8 to 9% sales tax. I thought I (in Kommunist Kalifornia) was in the highest tax and spend state. Our sales tax here is 7.25%!

Seperately, Frohickey argues for allowing people to donate to charity rather than pay taxes, but do you think the level of money spent on charitable giving would be equal to the amount from taxes? And if it's not, how do we make up the difference? Or do we just let the poor starve, not get medical help, etc.?

Taft

Sep 18, 2003, 11:17 AM

Originally posted by Desertrat
5AM's too bleepin' early!

Sure, sales taxes are regressive. Texas went from 3% in 1965-ish to its present 7-1/8% state plus one and two percent more for local add-ons.

This brings in money for programs for the poor. Isn't that compassionate?

Duh? Pardon the sarcasm.

'Rat

So that 7 1/8 % goes where in the state? To roads? Airports? state police?

And where does that 1-2 % for local taxes go to? Schools? Local roads? Department of sanitation?

Sure SOME of the money goes to help the poor, but a lot of it goes into things nearly everyone uses. Unless the rich don't drive, ever send their kids to public schools, use city trash services or travel via airplanes from public runways.

Duh.

Taft

Desertrat

Sep 18, 2003, 03:46 PM

Well, of course the sales tax increases don't all go to "the poor". However, as state funding of social programs has increased, so has the sales tax rate.

Many states have local-option sales tax add-ons of a cent or more, over and above the basic state rate.

In Texas, most of the school taxes are raised by an ad valorem on real property, and in some counties some categories of personal property are also taxed.

I guess where I have a large problem with "liberal thought" and government programs and suchlike is what seems to me to be an incredible amount of worry about "the poor". I'm more interested in helping them by virtue of job creation, rather than programs which go beyond the "safety net" concept.

Some of this stems from watching these decades of LBJ's "War on Poverty". We've spent over a trillion dollars on helping the poor and disadvantaged, yet in raw numbers there are more poor, today, than when the programs initiated. Something's wrong, somewhere. And I don't see where "more money" is the solution. Something's wrong in the methodology.

And I'm not yawping about "end all this welfare". I'm looking for a valve job to get the engine running right, not wanting to toss out that "bad" engine...

Regardless, governmental tax "needs" seem to me to have gone beyond all rationale--else, folks wouldn't be worrying so much about taxes.

'Rat

zimv20

Sep 18, 2003, 03:49 PM

Originally posted by Desertrat

We've spent over a trillion dollars on helping the poor and disadvantaged, yet in raw numbers there are more poor, today, than when the programs initiated. Something's wrong, somewhere.

something is, indeed.

do you think that if that money hadn't been spent, there would be fewer poor?

IJ Reilly

Sep 18, 2003, 04:14 PM

Originally posted by Desertrat
I guess where I have a large problem with "liberal thought" and government programs and suchlike is what seems to me to be an incredible amount of worry about "the poor". I'm more interested in helping them by virtue of job creation, rather than programs which go beyond the "safety net" concept.

I suspect that 95 out of 100 people would agree with this statement, no matter what ideology they profess. Hardly anybody talks about eliminating poverty by throwing massive amounts of taxpayer dollars at the problem; at least, not anymore. What was Bill Clinton's mantra for eight years? "Grow the economy." Fortunately for him, and for us, the economy did grow during his tenure, and he could sign onto welfare reform without looking like Simon Legree.

So the questions arises -- what do you do when the economy doesn't grow, and the job market shrinks, as it's done for the last three years? That's where the rubber really hits the road, politically and philosophically.

Desertrat

Sep 18, 2003, 06:18 PM

Zim, I believe it oughta be reasonably clear from what all I've said here that I think it's HOW money is spent, not particularly how much.

As a for instance: One problem with the way things are done is that in the social money-transfer agencies, the overhead represents some 40% or more of the budget. Staff, buildings, utilities, travel, etc. We oughta be able to do as good, percentage-wise as the more widely-approved charities--that have overhead/fundraising cost of some 12% to 18% of income.

In communication with Rep. Sanford Bishop's office (D-GA), I asked why there couldn't be a percentage reduction in benefits of some 50% (e.g.) of the money above benefits earned by somebody trying to get off "welfare", rather than the 100% now lost. His response was that he got no Congressional support for such bills that he had introduced. No co-sponsors. A partial reduction in benefits would be an incentive to seek work.

Couple this with more free or low-cost day-care centers. However, have you ever seen the health and safety requirements for a federal day-care center? Or, nowadays, the rules mandated for privately-owned centers? Never in my life or my son's life has a house and yard that I've lived in been able to meet such standards--and I never ever really lived "poor". Lotta love, though. But today, no way a commercial endeavor could be "low in cost".

IJ, when the economy contracts, I'm in accord with the "safety net" concept--as I've said before. That has little to do for whom life on the public dole is a permanent generational sequence.

When one works in a governmental pyramidal hierarchy, one's advancement depends on both tenure and workload/responsibility. Employees in any of the human services agencies have a vested interest in increasing the number of their "clients". Human nature itsownself says you don't try to work yourself out of a job. (Unless you're a consultant.) Another vested interest is in avoiding losing clients--that is, finding ways for them to escape the controls inherent in obtaining publicly funded support.

'Rat

Frohickey

Sep 18, 2003, 07:20 PM

Originally posted by IJ Reilly
Sales taxes are regressive, meaning, people with lower incomes pay a larger share of their incomes then wealthier people.

Either a person consumes a product, or they do not. If they do, they pay the tax, if they don't, they do not pay the tax.

Let me ask you this.

If you own/operate a restaurant/store, do you ask the customers coming in what their salary is, before telling them what price you are going to sell your widget for?

Frohickey

Sep 18, 2003, 07:29 PM

Originally posted by mactastic
I find it hard to believe that all of that increase goes to the poor. Do you have anything that backs that up?

And 7.125% +1 or 2 more points gives you an 8 to 9% sales tax. I thought I (in Kommunist Kalifornia) was in the highest tax and spend state. Our sales tax here is 7.25%!

Seperately, Frohickey argues for allowing people to donate to charity rather than pay taxes, but do you think the level of money spent on charitable giving would be equal to the amount from taxes? And if it's not, how do we make up the difference? Or do we just let the poor starve, not get medical help, etc.?

Texas does not have a state income tax, at 9% sales tax, its a relative bargain to live there.

Kalifornia has both a 8.25% sales tax, as well as almost 10% state income tax (for the high tax brackets)!

I'm not arguing for allowing people to donate to charity. People either will or will not. I will not force people to do either one. When you force people to do something, they resent it. Either they voluntarilly donate, or not. But its not me to decide.

Besides, its better to have private charities do it. They are closer to where the aid needs to be, and more responsive to what type of aid it needs to be. Plus, once the need for aid passes, the private charity could either repurpose themselves, or dissolve themselves. When was the last time you have seen a government program disappear when the purpose for it has come and gone?

zimv20

Sep 18, 2003, 07:42 PM

let's try this...

a below-the-poverty-line family of four ($240/week post-taxes) consumes 4 gallons of milk a week @ $3/gallon. that's 5% of their takehome pay.

a wealthy family of four ($2400/week post taxes) consumes 4 gallons of milk a week @ $3/gallon. that's .5% of their takhome pay.

the FDA provides a milk subsidy, lowering the price to $2/gallon.

family A gets a 1% "tax cut".
family B only gets a .1% "tax cut".

is anyone going to argue family B is getting cheated?

(forgive if i messed up my math -- i'm running out the door)

IJ Reilly

Sep 18, 2003, 07:55 PM

Originally posted by Frohickey
Either a person consumes a product, or they do not. If they do, they pay the tax, if they don't, they do not pay the tax.

Uh-huh. And people with higher incomes spend a smaller percentage of their incomes on taxable consumables. It's a fact. You could look it up.

Sales taxes are regressive. Property taxes are regressive. Social Security taxes are (very!) regressive. About the only taxes that are even somewhat progressive (at least in theory) are income taxes. So go ahead, advocate replacing the federal income tax with a national sales tax. But understand, you are suggesting making the tax system clearly net-regressive.

Frohickey

Sep 18, 2003, 08:22 PM

Originally posted by IJ Reilly
"Grow the economy." Fortunately for him, and for us, the economy did grow during his tenure...

I agree. You grow the economy.

JFK did it right when he cut taxes, the economy grew, but it was not instantaneous.

Reagan did the same thing, but it did not kick in until close to the end of his 1st term. Congress spent a lot, so he got deficits.

Bush raised taxes, and he got his recession.

Clinton raised taxes, but Congress did spending cuts, thats how you got your surplus.

Bush cut taxes, but Congress is spending a lot too, so, you have deficits, just like Reagan.

http://www.tcf.org/Publications/Basics/Tax/fig3b.gif

History is in the side of tax cuts. Europe has high taxes, and their economy has had lackluster growth for decades.

Frohickey

Sep 18, 2003, 08:31 PM

Originally posted by IJ Reilly Uh-huh. And people with higher incomes spend a smaller percentage of their incomes on taxable consumables. It's a fact. You could look it up.

Why does percentage of income even matter? I don't see the hang-up at all on regressive/progressive. What I do see is that its not an equal amount of taxes paid per person.

If a person pays more in taxes paid to the government, I think that the government would tend to be more beholden to that person. This is what your 'progressive' tax rate is doing.

Okay, how about this? No taxes then? Wouldn't that solve your regressive/progressive formula? Now, you will bring up that rich people would spend a less percentage of their income on 'necessary' consumables. That the poor should be given hand-outs to bring their percentage-of-income-spent-on-necessary-consumables on par with the richer.

My parents taught me not to steal.

Frohickey

Sep 18, 2003, 08:34 PM

Originally posted by Taft
Sure SOME of the money goes to help the poor, but a lot of it goes into things nearly everyone uses. Unless the rich don't drive, ever send their kids to public schools, use city trash services or travel via airplanes from public runways.

I know, why don't we just have government tax everyone 100%. That way, there will be no rich or poor. Everything will be equal.

Well, thats been tried before. And that was called the feudal system. Serfs, peasants, lords, kings.

end-sarcasm

Frohickey

Sep 18, 2003, 08:59 PM

Originally posted by zimv20
a below-the-poverty-line family of four ($240/week post-taxes) consumes 4 gallons of milk a week @ $3/gallon. that's 5% of their takehome pay.

a wealthy family of four ($2400/week post taxes) consumes 4 gallons of milk a week @ $3/gallon. that's .5% of their takhome pay.

the FDA provides a milk subsidy, lowering the price to $2/gallon.

family A gets a 1% "tax cut".
family B only gets a .1% "tax cut".

Nope... you have discount confused with tax cut.

Both groups of 4 people used to spend $12 for milk a week. Now, both groups of 4 people spend $8 for milk a week. Both groups got a $1/gallon discount. Also, where is the milk subsidy coming from?

For a tax cut example, you should try this instead.

a below-the-poverty-line family of four farmers (2600 ears of corn a year) pays 0 ears of corn to the government, thats 0% tax rate.

a wealthy family of four farmers (313,650 ears of corn a year) pays 37,278 ears of corn to the government, thats 11.9% tax rate (but a marginal tax rate of 35%)!

the government passes a 2% marginal tax rate cut.

family A still pays no ears of corn to the government.

familiy B pays 35,752 ears of corn to the government.

family A gets a 0% "tax cut", because they don't pay any before, and still don't pay any now.

family B only gets a 2% "marginal rate tax cut", from 35% to 33% (total tax rate from 11.9% to 11.4%).

Federal Tax Rates (http://www.payroll-taxes.com/PayrollTaxes/00000447.htm)

wwworry

Sep 18, 2003, 09:06 PM

Frohickey, you keep forgetting that the rich benefit more from how our society is set up than the poor, so shouldn't they pay more? People always think there is some "natural" political or economic state. There is not. Specific laws regarding property, taxation and representation have been made.

I guess Frohickey must be rich because he is arguing for less taxes for the rich. 40% of the last tax cut went to 1% of the population - the part of the population with the least need for extra money. I can never understand why middle class people want to shift the tax burden from those with lots of money to themselves.

It is very strange. Decisions about taxes have gone from direct interest to symbolic interest.

Then there is the people who equate programs that benefit the poor with poverty. Some of this stems from watching these decades of LBJ's "War on Poverty". We've spent over a trillion dollars on helping the poor and disadvantaged, yet in raw numbers there are more poor, today, than when the programs initiated. Something's wrong, somewhere. And I don't see where "more money" is the solution. Something's wrong in the methodology. but think of percentage...
we also have more cars and tvs per person, maybe cars and TVs cause poverty
we also have more money spent on political advertising, maybe misleading political advertising causes poverty

or maybe an economy that encourages short term profit, that shifts middle class manufacturing jobs out of the country, that does not account for the cost of polution, that encourages economic classes to isolate themselves rather than living together could be the problem

maybe the federal government has been off loading a lot of it's mandated funding onto the states (true)

maybe property taxes are a stupid way to fund education - encouraging inequality

wwworry

Sep 18, 2003, 09:13 PM

Originally posted by Frohickey
... am radio bull-crap

oh look, there is state and local governments that have to raise taxes to pay their higher bills caused by federal policy. By law, states can not run a huge deficit.

Family B gets a tax cut. Family A pays more taxes, gets worse schools, to pay for family B's tax cut. Thanks.

Frohickey

Sep 18, 2003, 10:29 PM

Originally posted by wwworry Frohickey, you keep forgetting that the rich benefit more from how our society is set up than the poor, so shouldn't they pay more?

I guess Frohickey must be rich because he is arguing for less taxes for the rich. 40% of the last tax cut went to 1% of the population - the part of the population with the least need for extra money. I can never understand why middle class people want to shift the tax burden from those with lots of money to themselves.

or maybe an economy that encourages short term profit, that shifts middle class manufacturing jobs out of the country, that does not account for the cost of polution, that encourages economic classes to isolate themselves rather than living together could be the problem

maybe property taxes are a stupid way to fund education - encouraging inequality

Government should not be an agent of wealth redistribution. Let me say that again. Government should not be an agent of wealth redistribution. Because government is like fire, you do not want it to get very big because it can burn you.

People pay for what they use, and in order to do it, they pay other people to work for them, or are paid by other people for work done. This is the way things are. If you are saying that the 'rich' benefits more from the way society is, that is because they are able to pay more for these goods and services. The 'rich' guy benefits more from the large $15 porterhouse steak than the poor guy and $5 hamburger. What is your point? That government should take $5 from the rich guy and give it to the poor guy so both can have a $10 salisbury steak?

Need has nothing to do with it. If I earn it, I want to be able to keep it, spend it, give it away, waste it away, save it for my kids, spend it on a night on the town, help the guy that lost his house to a hurricane, buy myself a Benz, etc. What does need have to do with it. I earned it, I made it, I made it possible by my effort, or luck. Its not yours. Period.

Other countries have already went along the path of having the state determine the needs of its citizens and give them what they need.

Rich? Hah. Hardly. All I want is what I have earned. If I want to, I can give to the poor. I do not need government to take some off the top and give it away for me. Its called 'choice'.

IJ Reilly

Sep 18, 2003, 10:34 PM

Originally posted by Frohickey
Why does percentage of income even matter? I don't see the hang-up at all on regressive/progressive. What I do see is that its not an equal amount of taxes paid per person.

It doesn't need to matter to you. Paying taxes based on ability to pay just happens to be the measurement of fairness used by nearly everybody else.

Frohickey

Sep 18, 2003, 10:34 PM

Originally posted by wwworry
oh look, there is state and local governments that have to raise taxes to pay their higher bills caused by federal policy. By law, states can not run a huge deficit.

Family B gets a tax cut. Family A pays more taxes, gets worse schools, to pay for family B's tax cut. Thanks.

Nope, I don't listen to AM radio. I don't even have a radio. Everything is web-based. :D

Family A already doesn't pay any taxes! Did you see the comparison of tax rates? New plan or old plan, Family A's tax rate is already at 0, zero, zilch, nada. How is Family A paying for Family B's tax cut when its not paying any to begin with???

Ugg

Sep 18, 2003, 10:57 PM

Well, if the IMF is correct in its prognosis, the recent tax cuts will be the proverbial straw that broke the camel's back.

Link (http://www.guardian.co.uk/usa/story/0,12271,1045369,00.html)

The International Monetary Fund yesterday warned that the colossal United States trade deficit was a noose around the neck of the economy, emphasising that the once mighty dollar could collapse at any moment.

Arguing that the world's big economies were already too dependent on the willingness of American consumers to live beyond their means, the IMF said the US could not continue to run a current account deficit of 5% of GDP.

Frohickey

Sep 18, 2003, 11:09 PM

Originally posted by IJ Reilly
It doesn't need to matter to you. Paying taxes based on ability to pay just happens to be the measurement of fairness used by nearly everybody else.

So, if you are the general store owner of a town, and everyone in the town says that you have to give everyone in the town something in your store for free, that everyone else is correct?

Sounds like mob rule to me.

Ugg

Sep 18, 2003, 11:22 PM

Or maybe rule by government? Did you ever think of that? Governments have been in place for thousands of years now, they're not exactly something new.

Why are you so anxious to do away with government? You'd do well to reread a bit of early 20th century US history, it is rather enlightening and especially significant given the current US oligarchy.

Sayhey

Sep 18, 2003, 11:46 PM

Originally posted by Frohickey
Government should not be an agent of wealth redistribution. Let me say that again. Government should not be an agent of wealth redistribution. Because government is like fire, you do not want it to get very big because it can burn you.

People pay for what they use, and in order to do it, they pay other people to work for them, or are paid by other people for work done. This is the way things are. If you are saying that the 'rich' benefits more from the way society is, that is because they are able to pay more for these goods and services. The 'rich' guy benefits more from the large $15 porterhouse steak than the poor guy and $5 hamburger. What is your point? That government should take $5 from the rich guy and give it to the poor guy so both can have a $10 salisbury steak?

Need has nothing to do with it. If I earn it, I want to be able to keep it, spend it, give it away, waste it away, save it for my kids, spend it on a night on the town, help the guy that lost his house to a hurricane, buy myself a Benz, etc. What does need have to do with it. I earned it, I made it, I made it possible by my effort, or luck. Its not yours. Period.

Other countries have already went along the path of having the state determine the needs of its citizens and give them what they need.

Rich? Hah. Hardly. All I want is what I have earned. If I want to, I can give to the poor. I do not need government to take some off the top and give it away for me. Its called 'choice'.

Frohickey,

your libertarian view of the world has some very large holes in it. First, from a philosophical point of view I would point out that we are social animals. We live socially and as such we have responsiblities to each other. Part of that is in the form of following the laws we set as a society. Those laws include everything from not killing each other to paying our taxes so that our society can function. The idea that we are totally independant of each other and can ignore the tasks we have to do to ensure that society functions is somekind of utopian nightmare that has no basis in the real world.

We have come a long way from the days of laissez faire. That world meant one of no education for the majority of people. It meant Corporations had no responsibility for the despoiling of the environment. It meant desperate poverty and literally starvation for those deemed surplus population by Employers. And it meant that those with money had all the power and rights and those who didn't had none. We are not going back to that world no matter how much the few in this adminstration wish it.

Part of the real world is that we must through our government provide a safety net for those of us unable to work and provide the basic necessities of life. It is a collective responsiblity (I know you must hate that phrase) we have as a society. We also have a responsibilty to make sure that in the course of commerce that the interests of society as a whole are not lost. In other words, corporations cannot pollute our air and water without consequence, etc. All of that, plus such little niceties like providing for national defense, police, fire protection, etc. must be paid for from a tax structure that should be as fair as possible. All the moaning about stealing of people's money doesn't deal with the needs of a modern society.

Meeting those needs benefit us all. For example, do you seriously think that a corporation such as Apple computer could function without workers educated to a level to be able to perform the complex tasks of that modern industry? Apple benefits from those taxes spent on education, on infrastructure, and many other areas of government expenditures. In fact corporations, such as Apple, benefit much more than most by the government's use of taxes. Does it all work smoothly? Of course not. And of late it is getting rougher for most of us. But trying to make it work better does not mean destroying the framework of our society that has been developed over at least the past 70 years.

In short, Frohickey, you do have a choice. That is either to participate in society and as such take on the responsiblities we have to each other or to opt out and find youself in isolation from the rest of the world.

IJ Reilly

Sep 19, 2003, 12:47 AM

Desertrat

Sep 19, 2003, 03:11 AM

IJ said, "Paying taxes based on ability to pay just happens to be the measurement of fairness used by nearly everybody else."

Well, a flat rate for all would be based on ability to pay that flat rate; thus a guy making $100K a year would pay five times as much as a guy making $20K a year. (Omitting deductions and such.)

Near as I can tell, "fairness" seems to be in the eye of the beholder. But, who am I to tell you what's fair? Or vice versa?

I say it's unfair and quite discriminatory to use public funds to benefit small groups who've successfully lobbied Congress to support them. :D Depending on the group, it's racist or sexist or corporate welfare...

:), 'Rat

zimv20

Sep 19, 2003, 03:23 AM

i could see myself supporting a flat tax, for individuals and corporations. but i imagine all write-offs would have to be null and void.

Taft

Sep 19, 2003, 10:28 AM

Originally posted by Frohickey
Need has nothing to do with it. If I earn it, I want to be able to keep it, spend it, give it away, waste it away, save it for my kids, spend it on a night on the town, help the guy that lost his house to a hurricane, buy myself a Benz, etc. What does need have to do with it. I earned it, I made it, I made it possible by my effort, or luck. Its not yours. Period.

Other countries have already went along the path of having the state determine the needs of its citizens and give them what they need.

Need has everything to do with it. The whole reason for welfare is that society has assigned a value to human life and is willing to pay to preserve it.

Some people can't survive on their means alone. Let me repeat that. Some people cannot survive on their means alone. They need help. Need is the most important word in that last sentence.

Now I appreciate the fact that you earned your income. You worked for it. It isn't anyone elses money. But that doesn't mean you should get a free pass on giving back to society.

Sure the current welfare system is very flawed, but the idea of giving to those in need is not flawed. In fact, I would argue that the concept of forcing people to give to those in need is not a flawed concept. A lot of people say things like, "if there weren't any taxes, more people would give to charity." Where's the proof?

If anything, historically, people have shown a great tendancy to hoard wealth and NOT give back to society. Could we really expect the amount of money going to charitable donations to be comparable to the current tax money flow into welfare and social programs? Would the effect of donating to thousands of smaller charities equal the effect of all Americans donating to a single "charity" (aka the government)? And would any of these charities provide the kind of safety net to protect the poor that welfare currently provides? Welfare might be flawed, but it provides a very real solution to the problem of temporary job loss and poverty.

Or should those who lose their jobs, can't get work and run out of money be forced onto the streets with their families? Can't find work? Too bad! Die like the lazy dogs you are!

Taft

Taft

Sep 19, 2003, 10:38 AM

Originally posted by Frohickey
I know, why don't we just have government tax everyone 100%. That way, there will be no rich or poor. Everything will be equal.

Well, thats been tried before. And that was called the feudal system. Serfs, peasants, lords, kings.

end-sarcasm

WTF are you talking about?!?!?!

I was making the point that the vast majority of tax money doesn't go to programs to help to under priviledged. The majority actually goes to things like roads, schools, infrastructure, law enforcement, military, etc.

These are things that ALL Americans benifit from, not just the poor. I was not advocating taking away everyone's money, that is just your knee jerk reaction to people talking about a simpathetic society where taxation isn't thought of as "evil" but as a necessary part of running a society.

Also, sales taxes ARE regressive. And while a slightly disproportionate amount of the money goes to programs that benifit the poor, that doesn't necessarily justify the huge percentage of income the less wealthy pay in sales/service taxes.

And go back and read my previous posts on this thread. I made it very clear why the sales tax is regressive and why it isn't simply a matter of "Either a person consumes a product, or they do not." The poor are FORCED (through their own poverty) to spend most/all of their income on products to keep their family alive. Most of these products are taxable. Therefore, the poor have a VERY HIGH rate of taxation on goods represented as a percentage of their income.

Income tax rates are based off of the amount of income you make and so are sales taxes. One is just an inverse of the function of the other.

Taft

Taft

Sep 19, 2003, 10:42 AM

Originally posted by Desertrat
Well, a flat rate for all would be based on ability to pay that flat rate; thus a guy making $100K a year would pay five times as much as a guy making $20K a year. (Omitting deductions and such.)

I could support a flat tax rate on three conditions:

1. Sales taxes and other regressive taxes were done away with.

2. Deductions were largely done away with as were corporate tax shelters and loop holes.

3. There was some kind of safety net for the impoverished in severe circumstances.

Taft

Taft

Sep 19, 2003, 10:51 AM

Originally posted by Frohickey
Why does percentage of income even matter? I don't see the hang-up at all on regressive/progressive. What I do see is that its not an equal amount of taxes paid per person.

If a person pays more in taxes paid to the government, I think that the government would tend to be more beholden to that person. This is what your 'progressive' tax rate is doing.

Okay, how about this? No taxes then? Wouldn't that solve your regressive/progressive formula? Now, you will bring up that rich people would spend a less percentage of their income on 'necessary' consumables. That the poor should be given hand-outs to bring their percentage-of-income-spent-on-necessary-consumables on par with the richer.

My parents taught me not to steal.

You have to clarify the point your are making.

Are you talking about the dollar amount? (ie a "rich" person making 1,000,000 a year might pay 333,000 dollars while a less wealthy person making 33,000 migh pay 11,000)? Or are you talking about taxes as a percentage of income. (ie, in the above case both people paid 33% of their income in taxes).

In the former case, you'd be effectively saying that since the rich guy paid waayyy more money in taxes, the majority of the services should go to him. That means roads should be built primarily for the rich peoples' benifit, water system should give overwhelming priority to the rich, schools and education should only be available to the rich, etc. The poorer people might get a service here or there, but they didn't pay, why should they collect, right?

Do you know how sh***y that would be? It would be like friggin' 14th century England. The rich have everything, and the poor have NOTHING. NOTHING. Poor people would be living in hovels built of dirt with no roads, water, electricity of gas and the rich would be living like we currently are, only better because all of the tax money would be focused on keeping the rich society running.

In the case of percentages, the government would focus on both the less weathly guy and the more wealthy guy equally as they both pay approximately the same amount in taxes as measured as a percentage of income.

That is the ONLY way the tax system could make sense. This, combined with a reasonable safety net for the truly unfortunate is, IMO, a very reasonable system.

Your analogy to stealing is disingenuous and mean spirited. It isn't stealing. Its valuing life and paying to preserve it. To call it anything else is a perversion.

Taft

Taft

Taft

Sep 19, 2003, 11:06 AM

Originally posted by Frohickey
So, if you are the general store owner of a town, and everyone in the town says that you have to give everyone in the town something in your store for free, that everyone else is correct?

Sounds like mob rule to me.

So what you are effectively saying is that no-one should force you to do anything. If you don't want to contribute to society, why should you? If I don't want to pay taxes, I should be able to opt out and not use the government services, right?

OK, go ahead. Where are you going to live? In some shack somewhere in the middle of nowhere? You going to grow your own food? I hope so, because you can't use public roads to go into a town in get your food. Or will you build your own roads? You better start digging a well, too, because you won't be able to get public water. Or could you find a company willing to sell you running water at a tremendous loss?

Taxes serve a very real purpose. Your statements don't address the reality of living in a society and a community where everyone has needs and the best way to meet many of those needs is to rely on a central source where each person contributes. In a perfect world, that entity would be able to distribute funds fairly without corruption or waste.

We don't live in a perfect world, but this government, while flawed, is still one of the best in history. It does a pretty damn good job at representing its people fairly and without bias, and also does a good job of putting the tax money where it is needed. There are problems (welfare abuse, corruption, waste), but I'm willing to work with the system to get things done.

So if you think that taxes are analogous to mob rule, how do YOU propose we run things? How do we rid ourselves of taxes and still manage to keep society running? Is capitalism your one word answer to all of my questions?

Taft

IJ Reilly

Sep 19, 2003, 11:57 AM

Originally posted by Desertrat
IJ said, "Paying taxes based on ability to pay just happens to be the measurement of fairness used by nearly everybody else."

Well, a flat rate for all would be based on ability to pay that flat rate; thus a guy making $100K a year would pay five times as much as a guy making $20K a year. (Omitting deductions and such.)

Near as I can tell, "fairness" seems to be in the eye of the beholder. But, who am I to tell you what's fair? Or vice versa?

Taft pretty much spoke for me on this point already, but to expand on it, federal income taxes are by no means the only ones we pay (as if I need to tell anyone that!), and most of the others are regressive. For instance, as a self-employed person I pay 15.3% of my income right off the top in "self employement taxes" (the employer and employee shares of social security). This tax isn't assessed on (1) unearned income and (2) beyond a certain level of earned income -- I think it's $60k, but I'm not sure.

Now, that's a pretty darned regressive tax. Make some of these taxes flat, then we can talk about the federal income tax!

Frohickey

Sep 24, 2003, 03:58 PM

I've heard a lot from each of you...

Man is a social animal, responsibility for others... (Sayhey)
Need is the overriding concern. Its right to take from one person to give to another person... (Taft)
Taxes are not all used in entitlement programs, some are used for universal services, such as roads, schools, etc...(Taft)

Legitimate use of taxes are in such universal services, such as roads, schools, military. These uses benefits everyone. Everyone will use the roads, everyone will use the schools, everyone is protected by the military. Everyone pays their equal share since everyone uses such things to the same degree. That fair enough.

But, some of you also want taxes to provide for entitlement programs for the needy. And since the poor are needy, we will give them a tax break. So, now, the needy will not pay for universal services, such as roads, schools, etc, even though they are still consumers of these universal services. To top this all off, we are going to increase the taxes on the non-needy, and give to the 'needy'. So, the 'needy' just got a double bonus, zero taxes and entitlement programs, while the 'non-needy' just got penalized. Remember, so far, these are all via income taxes, so the 'non-needy' got penalized, and its at the point of a gun (or threat of jailtime).

Now, we have Sayhey's man is a social animal and responsibility. This is to justify to the 'non-needy' that their property is being taken for their own good, and to just shut up, smile and take it. But this sentiment will still work if the 'needy' are assisted via private charities. In fact, this sentiment is required for private charities to work. The 'non-needy' will give to private charities, VOLUNTARILY, and the 'needy' will be helped. The private charities are closer to where the aid needs to be, and the contributions are more likely to be closer as well.

The upside to all of this is...
The needy still gets help.
The 'non-needy' voluntarily give, and feel good about giving.
The government is only concerned with universal services, and would have no reason to treat different citizens differently.

The downside to all of this is...
Government is smaller.... wait, thats not a downside.

mactastic

Sep 24, 2003, 07:44 PM

You are still ignoring that fact that not all taxes are income taxes. And that poor people use things like roads less than rich people do. Rich people have businesses that utilize the road system in addition to driving their 5000 pound SUV (which deteriorates the road surface faster than a lighter, more efficient car) or their RV. Our taxes pay for things like the building department, utilized much more frequently by the well-to-do than the "needy". They also pay for other things the rich use more than the poor.

Doesn't mean there aren't aspects of government that the poor use more than the rich, but you conviently ignore the aspects of government that do benefit the rich more than the poor.

Sayhey

Sep 24, 2003, 09:01 PM

Originally posted by Frohickey
I've heard a lot from each of you...

Man is a social animal, responsibility for others... (Sayhey)
Need is the overriding concern. Its right to take from one person to give to another person... (Taft)
Taxes are not all used in entitlement programs, some are used for universal services, such as roads, schools, etc...(Taft)

Legitimate use of taxes are in such universal services, such as roads, schools, military. These uses benefits everyone. Everyone will use the roads, everyone will use the schools, everyone is protected by the military. Everyone pays their equal share since everyone uses such things to the same degree. That fair enough.

But, some of you also want taxes to provide for entitlement programs for the needy. And since the poor are needy, we will give them a tax break. So, now, the needy will not pay for universal services, such as roads, schools, etc, even though they are still consumers of these universal services. To top this all off, we are going to increase the taxes on the non-needy, and give to the 'needy'. So, the 'needy' just got a double bonus, zero taxes and entitlement programs, while the 'non-needy' just got penalized. Remember, so far, these are all via income taxes, so the 'non-needy' got penalized, and its at the point of a gun (or threat of jailtime).

Now, we have Sayhey's man is a social animal and responsibility. This is to justify to the 'non-needy' that their property is being taken for their own good, and to just shut up, smile and take it. But this sentiment will still work if the 'needy' are assisted via private charities. In fact, this sentiment is required for private charities to work. The 'non-needy' will give to private charities, VOLUNTARILY, and the 'needy' will be helped. The private charities are closer to where the aid needs to be, and the contributions are more likely to be closer as well.

The upside to all of this is...
The needy still gets help.
The 'non-needy' voluntarily give, and feel good about giving.
The government is only concerned with universal services, and would have no reason to treat different citizens differently.

The downside to all of this is...
Government is smaller.... wait, thats not a downside.

Frohickey, you seem to divide all of this into "legitimate" uses of taxes and charities for the "needy." As to the use of taxes for these "legitimate" universal services you list roads, education, and the military. These are hardly universal services.

Why should I be forced to pay through my Federal Highway taxes for building and maintaining roads in New York or Florida? Heck, I don't really need a car to get around in SF so why should I pay for upkeep of Hwy 5? So, I guess it is robbery to make me pay State taxes for roads outside my city. Why don't we turn our roads back into toll roads that are privately owned so only those who use them pay?

Education? If I don't have any kids and I'm educated in private schools why should I be forced to give tax money to support public education? Seems like theft to me! If you want to have kids shouldn't you have to have the finances to pay for all their education?

The military only seems to be universal on the surface. If I don't have a problem with Iraq or North Korea or Iran why should I have to give my tax money for those who want to use the military for their own purposes.

If we carry the ideas of libertarianism to their logical conclusions we end up in a situation where all uses of taxes can be called into question.

Even if we assume that we should limit it to those areas you approve and all others are viewed as stealing the rightful resources of individuals, we end up in a society that doesn't work. As I said before, we tried it your way. It lead to such huge differences in the prospects of life that the only way for societies to survive was the recognition of our social responsiblities. That is what the New Deal was all about.

Specifically, your view toward turning our social safety net over to private charities would mean going back to the situation were those who did not have the abilities to support themselves or their families face the possiblility of starvation. It is what happened in the past. Are we so much more moral than our predecessors that we know voluntary contributions will cover all those in need? Is that what you really want? It in not the kind of society I want to live in.

The reality is that we discovered in the struggles to win Social Security, Medicare, Welfare, Public Education, etc. that such measures helped EVERYONE in society.

wwworry

Sep 24, 2003, 09:30 PM

maybe you do not have a radio Frohickey, but you are making the same lame brained arguements that completely ignore facts, history and your own self-interest that one hears all the time on the radio (unless you are in the top 1% of income - then continue your sales job all you want).

I am not going to mention all the evidence that progressive taxation helps the economy. I am not going to mention the three million jobs lost, huge deficits, growing number of people in poverty that the Bush tax cuts have wrought. All of it is obvious.

Let's go back to pre- New Deal America, nirvana for the block-headed libertarians.
Poverty among the elderly was huge. Disabled people were pretty much forced out into the streets to beg. The US kept a minimal standing army. and most importantly THE US WAS ON THE VERGE OF A SOCIALIST/COMMUNIST REVOLT.

That's right, The new deal saved the US from communism. In fact that is the case with every industrialized country. I am too tired actually to tell you all this history. Just look it up.

But as an example I will say that if I saw Richard Grasso on the street I would throw a tomato at him and spit on his car. Greedy bastard. I see the stock exchange is still running without him.

Frohickey

Sep 24, 2003, 10:44 PM

Originally posted by mactastic You are still ignoring that fact that not all taxes are income taxes. And that poor people use things like roads less than rich people do. Rich people have businesses that utilize the road system in addition to driving their 5000 pound SUV (which deteriorates the road surface faster than a lighter, more efficient car) or their RV. Our taxes pay for things like the building department, utilized much more frequently by the well-to-do than the "needy". They also pay for other things the rich use more than the poor.

Gasoline taxes pay for the roads, as it should be. Then, drivers or the ones paying for the vehicle's operation are the ones paying for the roads the vehicle travels on. This cost would trickle down to where it needs to be. If its businesses, then its priced in the cost of goods/services rendered.

Next tax use...

Frohickey

Sep 24, 2003, 10:58 PM

Originally posted by wwworry
...snip personal attack...

Let's go back to pre- New Deal America, nirvana for the block-headed libertarians.
Poverty among the elderly was huge. Disabled people were pretty much forced out into the streets to beg. The US kept a minimal standing army. and most importantly THE US WAS ON THE VERGE OF A SOCIALIST/COMMUNIST REVOLT.

What happened was a collapse of the banking structure, and people wanted order from the chaos that ensued. You do not need big entitlement programs and big government for that.

I guess what that really means is that in order for a free country to exist, you need honest and honorable people in places that count. That is really what you are saying.

How the New Deal Prolonged the Great Depression? (http://www.cato.org/pubs/policy_report/v25n4/powell.pdf)

Great Depression and the New Deal (http://history.searchbeat.com/greatdepression.htm)
Many economists argue that the Great Depression was both caused and prolonged by government action. Richard Rahn wrote, "After the stock market crash in 1929, government revenues fell because of the drop in economic activity. The Hoover administration and the Congress increased taxes in a futile attempt to balance the budget. The tax increase only caused a further drop in economic activity, which enlarged the deficit even more.

BTW, I'm waiting for your apology. :)

Frohickey

Sep 24, 2003, 11:12 PM

The paragraph that I liked the best...
It is known that Roosevelt's New Deal programs were initially struck down by the Supreme Court, so that his initial interventions in the economy were all halted. During this time the economy was on a slow improving trend. After the Court began to uphold his interventionist legislation, the economy took a shark downward dip, which has been called a depression within a depression, from which it was only slowly recovering when the US entered WWII. Thus it is claimed that his intervention delayed the economic recovery that had been underway. This argument is supported by the fact that his programs significantly increased business costs and uncertainty about future government interventions, thus inhibiting business investment and hiring.

Desertrat

Sep 24, 2003, 11:43 PM

For many decades, fuel taxes supported our highway infrastructure. Thus the San Francisco bicycle rider benefits via the semi that hauls in his food--among other things.

I still like my idea of a mix of income tax at a flat rate, and a national sales tax on items other than food, medicine, and apparel costing less than $XX.

No income tax on individuals earning less than $20K; (to pick a number) 10% on income above that.

I'd need some analysis on the issue to get into such things as tax-free Municipal Bonds.

For commercial business/corporations, "What did you gross? What did it cost to make it? Send us 10% of the profit. (Gota figure out a rational method of depreciation for investment in new plant.)

wwworry said, "I am not going to mention all the evidence that progressive taxation helps the economy. I am not going to mention the three million jobs lost, huge deficits, growing number of people in poverty that the Bush tax cuts have wrought. All of it is obvious."

It's not obvious to me. Were taxation not progressive, for instance, there would be more money in circulation for goods and services--without governmental overhead in the way.

The three million jobs lost have nothing to do with tax cuts. They're a result of the ongoing (right at 30 years, now) decline in profitability of almost all corporations of whatever size.

It's a bit difficult to blame a $35 billion/yr cut for $500 billion/yr deficits.

The growing number of people in poverty is due to the decline in the economy, most notably the collapse of the stock-market bubble which began in 2000--a campaign year. Rhetorical question: Clinton's fault?

'Rat

Sayhey

Sep 24, 2003, 11:49 PM

Frohickey,

you can change the subject to what policies got us out of the Great Depression if you want (I'd disagree with your view), but it doesn't change the lessons learned from that era and in the many years since of the importance of a social safety net.

Sayhey

Sep 24, 2003, 11:54 PM

Originally posted by Desertrat
For many decades, fuel taxes supported our highway infrastructure. Thus the San Francisco bicycle rider benefits via the semi that hauls in his food--among other things.

'Rat

'Rat, in case my tone did not come across, I was trying to show the absurd lengths Libertarianism takes us. I know that I benefit from taxes spent on infrastructure and many other things throughout the US.

Sayhey

Sep 25, 2003, 02:46 AM

Originally posted by Desertrat
... It's a bit difficult to blame a $35 billion/yr cut for $500 billion/yr deficits.

'Rat

Cheney dissembles about taxes, deficits and more (9/17)
By Ben Fritz

The Bush administration's inability to tell the truth about the relationship between tax cuts and deficits continues to amaze.

On Sunday it was Vice President Cheney who dissembled about the impact of the tax cuts on the federal budget deficit and the relative size of the deficit.

Speaking on NBC's "Meet the Press," the Vice President said, "Tax cuts accounted for only about 25 percent of the deficit." This statement was left unchallenged by host Tim Russert. But as we have previously observed when President Bush made the same claim, tax cuts actually account for 39 percent of the 2003 deficit according to figures from the White House's own Office of Management and Budget (OMB). Tax cuts do account for 25 percent of the difference between projections of a federal budget surplus in April 2001 and current deficit projections, but that's not the same thing.

Cheney also made a second misstatement about the deficit. "The deficit that we're running today, after we get the approval of the $87 billion, will still be less as a percentage of our total capacity to pay for it, our total economic activity in this country, than it was back in the '80s or the deficits we ran in the '90s. We're still about 4.7 percent of our total GDP," the Vice President said. This is incorrect, however, according to historical tables provided in OMB's 2004 budget. In fact, while the deficit did exceed 4.7 percent of GDP from 1983 through 1986, the highest it got in the 1990s was exactly 4.7 percent in 1992.

from:

http://www.spinsanity.org/

mcrain

Sep 25, 2003, 03:15 AM

I'll give you an interesting homework assignment.

Look up rates of economic growth in the US vs. Time.

Then, go look up income tax rates.

Then, compare the two.

You'll be very, very surprised.

mactastic

Sep 25, 2003, 10:06 AM

Originally posted by Frohickey
Gasoline taxes pay for the roads, as it should be. Then, drivers or the ones paying for the vehicle's operation are the ones paying for the roads the vehicle travels on. This cost would trickle down to where it needs to be. If its businesses, then its priced in the cost of goods/services rendered.

Next tax use...

Wait! I'm not done here yet.

Link (http://eastbay.bizjournals.com/eastbay/stories/2003/07/28/editorial2.html)
Current gas taxes don't even cover road maintenance needs, let alone costs of road widening and new construction. And when simple, inexpensive road surface treatments are deferred too long, roads must be reconstructed at gargantuan costs.

Why are we in this fix? Better fuel economy means cars go roughly twice as far per gallon as they did 50 years ago. As a result, the amount of gas tax revenue per mile driven has plunged. Moreover, gas taxes haven't kept up with inflation, while road construction costs have outpaced inflation. In California, gas taxes were 6 cents a gallon in 1957. Today they are 18 cents per gallon. If state fuel taxes had merely kept even with inflation, gas taxes would be 32.5 cents per gallon.

When gas taxes paid by users aren't high enough to pay for the roads, general taxes, such as sales taxes, must make up the difference. Though expedient, this is not fair. Why should someone who drives very little have to pay for road use when they dine at a neighborhood restaurant or buy a new suit? Which is a "hidden" tax - gas taxes paying for the costs of gas use or sales taxes on a DVD player footing transportation bills?

Now, if we are using general fund money (read, our tax dollars) to make up the difference between what we make off the gas tax and what we spend on road construction, what should we do? Would you suggest that we raise the gas tax to a level that would pay for road construction? Let the roads deteriorate? Or ask the middle and lower classes to foot the bill via regressive sales taxes?

Try again my friend.

Taft

Sep 25, 2003, 10:39 AM

Originally posted by Frohickey
What happened was a collapse of the banking structure, and people wanted order from the chaos that ensued. You do not need big entitlement programs and big government for that.

I guess what that really means is that in order for a free country to exist, you need honest and honorable people in places that count. That is really what you are saying.

You two are arguing about two different things.

You are arguing about economic recovery, he is arguing about quality of life issues. You, and many other libertarians, make the argument that an increase in economic stability and growth equates to a higher quality of life for all Americans.

While superficially true, this still doesn't address the fact that even in good economies, if certain individuals aren't supported by their community or society, they will not be able to survive. The New Deal was one of the ways that our government tried to help those who can't help themselves.

Immediately, I can gauge your reaction to this statement. "But if people pay less in taxes, they'll help their fellow man more," you'll say. I say, where's the proof? What evidence is there that people will not act in their own self-interest? Look at the news, look around you, look at the greed and selfishness you see all around you. How would these people react if they got 10 % more of their money every month?

Would they give back all, most, or any of that money to the less fortunate or to charities? Or would they buy that pair of shoes/TV/computer gadget/car they've had their eyes on for so long?

My point? In a low to no tax scenario, would the increase in charitable donations (assuming there is one) offset the loss of government programs and the money/aid they provide?

I personally doubt it. Call me a cynic, but I really doubt it.

Taft

Frohickey

Sep 25, 2003, 04:15 PM

Originally posted by Sayhey
Frohickey,

you can change the subject to what policies got us out of the Great Depression if you want (I'd disagree with your view), but it doesn't change the lessons learned from that era and in the many years since of the importance of a social safety net.

Wasn't me that mentioned New Deal. You might want to reread the thread.

Importance of a social safety net, I guess it would be important to the ones that like the idea and would like to partake in that social safety net. But there are some in our society that do not want to participate in the social safety net, and would gladly opt out of it. Shouldn't these people have a choice to opt out of a program that they do not want to participate in?

Heck, people have a right to vote, but they also do not HAVE to vote. Why should people HAVE to put money into the social security kitty?

Sayhey

Sep 25, 2003, 04:32 PM

Originally posted by Frohickey
Wasn't me that mentioned New Deal. You might want to reread the thread.

Importance of a social safety net, I guess it would be important to the ones that like the idea and would like to partake in that social safety net. But there are some in our society that do not want to participate in the social safety net, and would gladly opt out of it. Shouldn't these people have a choice to opt out of a program that they do not want to participate in?

Heck, people have a right to vote, but they also do not HAVE to vote. Why should people HAVE to put money into the social security kitty?

The New Deal includes many other topics than what brought us out of the Great Depression. In this case my reference was to the advent of the social safety net from that period.

Yes, you have a right to not vote. This is, however, a phony analogy because you don't have a right not to pay taxes. Although we have established social programs such as welfare, SSI, etc. you still have a right to not get the benefits if you choose; you don't have a right not to pay your taxes that make those benefits possible for others.

Desertrat

Sep 25, 2003, 05:29 PM

Hey, mccrain, in your "Look up rates of economic growth in the US vs. Time. Then, go look up income tax rates. Then, compare the two.": Question, is that constant dollars?

Given the drop in marginal tax rates under Reagan and after the cut in the capital gains tax rate under Carter, it looks like there is a hump in the tax-rate curve, with a rate-decline followed by the overall boom of the '80s/'90s.

Two problems with certain funds.

1. The original Highway Trust Fund was raided by Congress for other purposes than highway construction. Mostly, some sorts of subsidies for "mass transit"; studies of various sorts, and buses. The rise in energy costs in the 1970s with no rise in the road fuel tax meant a shortfall in money for construction and maintenance. However, when the issue of a raise in the federal tax came up during the Clinton era, a mighty roar erupted against it. And, so, dearly beloved, we're back to TANSTAAFL.

2. The Social Security deal was originally set up as an old-age assistance program, not as a total-support for retirement. It also considered widows and orphans. It was supposed to be a dedicated trust fund.

Other benign purposes were added, such as SSI. Under SSI, you can bring an aging relative from the "Old Country" and get him into SSI, receiving payments. You get direct deposit into a joint bank account, and send the Old Fart back home. Giant shuck, and very common.

And then Congress changed the rules, where Social Insecurity taxes go into the general fund and the bookkeeping games begin.

While I am for at least partial privatization, the gigantic problem is that of who determines what investments are made, and of what sort. The amount of money involved is like a 400-pound gorilla in a kindergarten. The buy/sell decisions can make or wreck markets.

'Rat

Frohickey

Sep 25, 2003, 07:48 PM

Originally posted by Sayhey
Yes, you have a right to not vote. This is, however, a phony analogy because you don't have a right not to pay taxes. Although we have established social programs such as welfare, SSI, etc. you still have a right to not get the benefits if you choose; you don't have a right not to pay your taxes that make those benefits possible for others.

So, what you are saying is that we are slaves?

mcrain

Sep 25, 2003, 08:17 PM

Originally posted by Desertrat
Hey, mccrain, in your "Look up rates of economic growth in the US vs. Time. Then, go look up income tax rates. Then, compare the two.": Question, is that constant dollars?

Given the drop in marginal tax rates under Reagan and after the cut in the capital gains tax rate under Carter, it looks like there is a hump in the tax-rate curve, with a rate-decline followed by the overall boom of the '80s/'90s.

Two problems with certain funds.

1. The original Highway Trust Fund was raided by Congress for other purposes than highway construction. Mostly, some sorts of subsidies for "mass transit"; studies of various sorts, and buses. The rise in energy costs in the 1970s with no rise in the road fuel tax meant a shortfall in money for construction and maintenance. However, when the issue of a raise in the federal tax came up during the Clinton era, a mighty roar erupted against it. And, so, dearly beloved, we're back to TANSTAAFL.

2. The Social Security deal was originally set up as an old-age assistance program, not as a total-support for retirement. It also considered widows and orphans. It was supposed to be a dedicated trust fund.

Other benign purposes were added, such as SSI. Under SSI, you can bring an aging relative from the "Old Country" and get him into SSI, receiving payments. You get direct deposit into a joint bank account, and send the Old Fart back home. Giant shuck, and very common.

And then Congress changed the rules, where Social Insecurity taxes go into the general fund and the bookkeeping games begin.

While I am for at least partial privatization, the gigantic problem is that of who determines what investments are made, and of what sort. The amount of money involved is like a 400-pound gorilla in a kindergarten. The buy/sell decisions can make or wreck markets.

'Rat

So, you rambled, but didn't explain what you found.

Sayhey

Sep 25, 2003, 08:46 PM

Originally posted by Frohickey
So, what you are saying is that we are slaves?

That really doesn't deserve a response. Paying taxes that are mandated by law is not slavery and you should know the difference. It is not theft either. If you want to argue that this or that program should not be part of our government we can have that discussion, but discribing making people follow the law in such terms, a law that enables our society to function, is just total nonsense.

Frohickey, stop with the distortions and the evasions. If you want to explain how we are going to have a functioning country without a safety net, I'd like to hear it. I don't believe for one minute that private charities are the answer, but I'd like to hear a "reasonable" plan.

wwworry

Sep 25, 2003, 08:49 PM

Originally posted by Frohickey
So, what you are saying is that we are slaves?

yes, all those people in who enjoy higher standards of living, less crime, universal healthcare, better elementary schools, more vacation time are slaves.

let's not educate people so that they can just rob you instead - at least we won't be "slaves"

let's let old people die. Who cares about starvation? Why spend money enforcing environmental laws in places you are not in at the moment?

We went from big surpluses to huge deficits. Local taxes rise. Services rot. Rich people get richer (income gap is the widest it's been since 1936). What are you - blind? Get a grip! Bush is a loser who is totally crapping out our economy.

Back to history - of course the economy was slowly improving - it really could not get much worse. Yes we could have waited for it to MAYBE improve but people were dying, people were losing their homes. Faced with sure desperation from THE UNSTABLE UNEQUAL ROBBER-BARON ECONOMY working people were ready to take drastic measures. WHy do you think facism took hold in Europe? Why do you think so many people heree were clamoring for socialist revolution?

THe other point is that you seem to think your "earnings" exist in some sort of vacume. Progressive taxation and the labor movement created the large middle class in the United States.

Tell me - what was so great about pre new deal America? And how much do you give in charity? Why is it that low income people give more to charity than high income people? Really, that talk about ending progressive taxation is indicative of greedy losers.

Desertrat

Sep 26, 2003, 08:05 AM

mccrain: Didn't found. Dunno an easy path to follow in a search. Went off to eat supper and then play moderator at another website.

No le hace...

'Rat

mcrain

Sep 26, 2003, 10:32 AM

Originally posted by Desertrat
mccrain: Didn't found. Dunno an easy path to follow in a search. Went off to eat supper and then play moderator at another website.

No le hace...

'Rat

Statistically, the highest rates of economic growth occur during times of the highest income taxes.

There is a reason for that. If you have a lot of money, you know that there are a lot of opportunities to make money. Investments primarily. However, when tax rates are low, it requires far less income to generate the disposable income needed to support a fairly extravagant lifestyle. However, when tax rates go up, the amount of gross income required to support that same lifestyle goes up. Therefore, wealthy people are forced to take their investments from the relatively safe stock and bond markets, and invest in other, riskier (with associated higher return rates) investments such as investment in small/new businesses. It is that type of risky investment that spurs on the biggest economic growth. (IBM gaining one point in value does far less for the economy than 10 brand new small companies starting and 4 succeeding).

wwworry

Sep 26, 2003, 07:19 PM

What's better for the economy - five hundred people buying $200 TVs or one person buying a $2000 TV?

Chart taxes and the state of the middle class and you will get an idea of what's going on. Tenements and palaces are not "natural" nor are they to be desired - no matter what George-the-second, eliminator-of-inheritance-taxes, got-into-Yale-on-special-preferences, made-millions-on-the-last-name-of-Bush says.

It just came out that For the second straight year, the proportion of Americans living in poverty rose in 2002, the Census Bureau reported today.

One in four people making under $40,000 were laid off while GWB has been president.

This president is destroying the economy. If you can't see that then you are blinded by ideology.

Desertrat

Sep 26, 2003, 08:29 PM

wwworry, corporate profitability began declining in the 1970s. "Increased productivity" was achieved by layoffs; fewer people doing the same or more work. With the increasing cost of skilled labor and such overhead as employee health insurance, "jobs were shipped overseas".

The stock market bubble began to pop in 2000.

All this is Dubya's fault?

About the only tool to work with would have been the lowering of interest rates, but that's been used up by the wondrous mumbler, Greenspan. All gone, bye-bye.

It's neither Clinton's nor Dubya's fault that the American consumer has been loading up on debt and helping the U.S. import half-a-trillion more dollars' worth of stuff, annually, than we export.

Now, some may call for bailing out of NAFTA and the GATT and imposing tariffs, but I suggest those folks do some review of the Smoot/Haawley tariff act and its effects on trade, worldwide.

I don't think anybody in either party has any idea whatsoever as to how to "get back on track" with economic growth. Or, rather, any idea that really will work. I sure don't claim to.

'Rat

wwworry

Sep 26, 2003, 08:45 PM

If none of it is Bush's fault and nothing he would do would have any effect anyway (which seems to be what you are saying) then why did he do anything? I'm willing to bet that had he done nothing it would have been better than this. I'm sick of everyone I know getting laid off.

All I'm saying is the evidence is there that Bush's economic policies are a disaster. ANd you have to agree with that or say, as you did, that enonomic policies have no effect on the American economy.

So, if cutting funding for Americore, cutting funding for education, decimating future social security has no effect then why don't we decide, for instance, to keep funding for Americore? Why don't we decide to fully fund education in America? I mean, it makes no difference, right?

Why not run surpluses and pay off that debt that eats 10% of the current budget just paying interest on the debt. Wouldn't it be nice to have 10% more so we could cut taxes for the middle class. A real tax cut - not borrowing against future generations. But then again, I heard from the republicans that deficits are now meaningless. Interest payments are meaningless.

Yes all is crap and it does not matter that it gets worse.

wwworry

Sep 26, 2003, 09:07 PM

Originally posted by Desertrat
I don't think anybody in either party has any idea whatsoever as to how to "get back on track" with economic growth. Or, rather, any idea that really will work. I sure don't claim to.

Trickle up works. Trickle down does not.

Desertrat

Sep 27, 2003, 12:38 PM

Remember the bit about, "A billion here, a billion there, pretty soon it adds up to real money." That was then, this is now.

Sure, cutting some number of millions from any program hurts those who are dependent on the program. To me, the problem is that "The Problem" is measured in hundreds of billions of dollars, just from an annual standpoint, and the running sub-total is in the trillions. Doesn't matter if it's the federal deficit or the balance-of-payments deficit, The Problem is huge.

This present bad time is just part of an economic cycle that the early lowering of interest rates staved off until 2000. Various governmental actions might make it a little bit worse or a little bit better for some particular small group, but the cycle will run its course no matter who thinks what.

And I ain't sure but what that cycle ain't gettin' ready to shift gears from 2nd to 3rd...

'Rat

wwworry

Sep 27, 2003, 04:24 PM

Originally posted by Desertrat
And I ain't sure but what that cycle ain't gettin' ready to shift gears from 2nd to 3rd...

??

Sayhey

Sep 27, 2003, 05:50 PM

Originally posted by wwworry
??

I think that is 'Ratese for the economy is getting ready to take off.;)

zimv20

Sep 27, 2003, 05:54 PM

Originally posted by Sayhey
I think that is 'Ratese for the economy is getting ready to take off.;)

which will happen once taxes are raised to a level where the budget can be balanced

Sayhey

Sep 27, 2003, 06:14 PM

Originally posted by zimv20
which will happen once taxes are raised to a level where the budget can be balanced

I don't know that the economy can't have short term growth without a balanced budget. I do think that long range we are setting up huge structural problems that will inhibit growth as well as playing havoc with resources for needed programs.

Desertrat

Sep 27, 2003, 11:32 PM

I'm pretty much a pessimist about any near-term real growth in the economy.

The GDP is roughly ten or eleven trillion dollars, about one-third of the world total. The federal budget is some, what, 2.2 trillion? Roughly? We're running a deficit of a half-trillion a year? How are you gonna suck enough taxes to balance the budget? From whom? "The Wealthy" don't have anywhere near that much. Or, from what excise, etc., taxes?

The dollar is falling against the Euro and the Yen. That means imports are gonna cost more, except those from China.

The present official unemployment rate is some six percent. Another three to four percent of the workforce is no longer looking for work. Another three or so percent of the workforce is "underemployed"--which means low pay or part-time, with minimal buying power.

And who's hiring?

But it's not just the feds who are in a shortage for money. Remember that good old California is a long way from solvency, along with a bunch of other states. The local and state governments are raising taxes and/or fees--and this sucks money out of everybody's pockets.

"But this is the best of all possible worlds!"

Not.

'Rat