income inequality

[DosEquis]

YouTube

Found this to be right on the money.

[stolz25]

Originally Posted by DosEquis

http://www.youtube.com/watch?v=bBx2Y5HhplI

Found this to be right on the money.

I agree with him about most everything except his conclusions.

He started off with the premise that the only reason taxes are lower on the rich is because they create jobs. It isn't. The rich are extremely mobile and to keep them countries are now competing on taxes the way businesses compete on price to keep customers. In addition, some of us just oppose tax increases on anyone because the government already takes way more than enough tax money to pay for anything they should reasonably be doing.

Also, he ends with stating that increasing the taxes on the rich to provide programs that help the poor and middle class is a great deal for the country. Problem is that most programs don't do that. Government is filled with waste and ineptitude and even the programs that were intended to help the poor and middle class often don't work out the way they intended.

If you could guarantee that adding a tax to the rich would help people out a certain amount, then I imagine you'd get a lot of support. But you can't, because government has a terrible record of a) knowing what the result of their programs with be and b) telling the truth about it when they do know.

[DosEquis]

I think the guy is intending to speak in generalities...that the ideology that taxes the rich... in general... is going to kill jobs... in general. That keeping it off limits for this specific reason is a bunch of bullshit. That people hire people based on the demand for needing them and not really based on their taxation.

[CayLargo]

There is an easy way to make tax equality. Tax everybody from the can man to the rich man the same amount, and eliminate all deductions & other tax tricks. Prohibit government from spending more than the collected amount, and disallow borrowing and other econ-tricks.

Basing taxes on percentages, income, and other gimmicks is completely ludicrous.

[The Great Catpiss]

Originally Posted by CayLargo

Basing taxes on percentages, income, and other gimmicks is completely ludicrous.

It seems so.

The thing is, we live in a society. People at some point can and will only take so much before change happens. Change could be anything from voting a jackass to office to blood on the streets. Picking the most acceptable methods and policies help keep everything and everyone in order.

[DosEquis]

Originally Posted by Dumpy Dooby

To expand on this, he claims that the rich have seen the "biggest tax exemptions" and "lowest tax rates," which is mostly incorrect (I'll explain the qualifier in a second). There are a few very wealthy folks that manage to shuffle things around or whatever and they bring down the averages.

I say it's "mostly incorrect" because the rich have seen some of the biggest tax exemptions (he's right about that, but only because the topmost brackets used to be 90+% and it was exemptions that brought their effective tax rate down to rates much more reasonable), but the "effective tax rate" (a term he even uses in the video) for the wealthiest has always been higher than everyone else. Moreover, the rich have seen the smallest reduction in "effective tax rate" in the last 50 years.

1970 fed. tax % -> 2005 fed. tax %
1st quintile:  8.0 ->  4.3 (46% reduction)
2nd quintile: 14.3 ->  9.9 (31% reduction)
3rd quintile: 18.6 -> 14.2 (24% reduction)
4th quintile: 21.2 -> 17.4 (18% reduction)
Top 1%:       37.9 -> 31.1 (18% reduction)

("fed. tax" = all combined federal taxes paid by individuals, including both income and corporate gains)

Sources
- elsa.berkeley.edu
- cbo.gov

Exemptions, deductions, and things of that sort were there to encourage them to put their money in to circulation. If they didn't there would be taxes to have the govt do it for them.

For example if they donate 2 million dollars to their favorite charity they dont pay taxes on it. If their business hires a person they don't pay taxes on the new employees income.

And the 90% rate you speak of was 50 years ago. Today, with the rates where they are, the guy is right. And our society has determined that taxation is based on %. Guys like Mitt, the guy in the video, buffett, their primary source of income is taxed at 15%.

The reality is we need money flowing in a circle like that guy mentions. Reality is taxing everyone $500 regardless of income, won't support things like a massive military.

[stolz25]

Originally Posted by DosEquis

If their business hires a person they don't pay taxes on the new employees income.

While this is true, you (and the guy in the video) are ignoring new businesses with this model. It takes a certain amount of capital accumulation to make a new business possible, especially in areas like manufacturing. Once the business is established the income circle is far more important than making sure the owners keep their money, but it disincentivizes starting businesses in the first place.

Originally Posted by DosEquis

Reality is taxing everyone $500 regardless of income, won't support things like a massive military.

Good.

[DosEquis]

I would need more information on how the CBO determined they pay 31%.

The 4.5% (formerly 6.5%) payroll tax for SS stops at like $105k. The top bracket is 36% and the cap gains is 15%. I believe their % to be missing details. I dont see them paying 31%.

In my quintile (I suspect I belong in the 2nd or 3rd) I can tell you thats not what I pay and I consider myself to have a good number of deductions. In fact, even if I was in the 4th group ..thats still not what i pay.

So yes, for the time being i disagree with the CBO on this matter.

[stolz25]

Originally Posted by DosEquis

I would need more information on how the CBO determined they pay 31%.

The 4.5% (formerly 6.5%) payroll tax for SS stops at like $105k. The top bracket is 36% and the cap gains is 15%. I believe their % to be missing details. I dont see them paying 31%.

In my quintile (I suspect I belong in the 2nd or 3rd) I can tell you thats not what I pay and I consider myself to have a good number of deductions. In fact, even if I was in the 4th group ..thats still not what i pay.

So yes, for the time being i disagree with the CBO on this matter.

Deductions matter less a you get more earned income. If you got 10 mill of stock options this year you take most of same deductions of a person making 200k. And this 15% that keeps being touted is usually supplemental to the higher earners. There are people who make their living entirely off of capital gains, but not nearly as many as you'd think from these discussions.

[DosEquis]

Originally Posted by stolz25

Deductions matter less a you get more earned income. If you got 10 mill of stock options this year you take most of same deductions of a person making 200k. And this 15% that keeps being touted is usually supplemental to the higher earners. There are people who make their living entirely off of capital gains, but not nearly as many as you'd think from these discussions.

When you get to upper 1% money, most of your income is going to be in the capital gains category, unless you are in the NBA/NFL/MLB.

There are few companies that will actually pay those amounts in straight cash.

And I am pretty sure those numbers posted above are leaving something out. Average federal taxes, if they are just regular income taxes, that percentage in the chart makes sense. I do not believe it includes things like capital gains. Thats why Mitt pays 14%, Warren pays 17%, etc, and Mitt is no where near Warren's league, so its not just billionaires.

[Swift]

Originally Posted by DosEquis

When you get to upper 1% money, most of your income is going to be in the capital gains category, unless you are in the NBA/NFL/MLB.

There are few companies that will actually pay those amounts in straight cash.

And I am pretty sure those numbers posted above are leaving something out. Average federal taxes, if they are just regular income taxes, that percentage in the chart makes sense. I do not believe it includes things like capital gains. Thats why Mitt pays 14%, Warren pays 17%, etc, and Mitt is no where near Warren's league, so its not just billionaires.

I'm not going to argue with any of that. But the bottom line is not that the rich don't pay a lot, no matter how you measure it. It's that it's easy to demonize those that have over those that have not. I believe it's been used by every leader that wanted to seize power over human history. Not calling Obama Hitler or Stolin, just saying that the democratic party has adopted a platform of, "You're having a hard time because there are rich people that won't pay more in taxes." That's a false platform.

[SonicBoom]

Originally Posted by Dumpy Dooby

We should be focusing more on how we're spending and wasting our money than on how we're going to get more of it. Special interest groups have our economy by the balls.

THIS. We should be looking at Return On Investment.

[DosEquis]

Originally Posted by Swift

I'm not going to argue with any of that. But the bottom line is not that the rich don't pay a lot, no matter how you measure it. It's that it's easy to demonize those that have over those that have not. I believe it's been used by every leader that wanted to seize power over human history. Not calling Obama Hitler or Stolin, just saying that the democratic party has adopted a platform of, "You're having a hard time because there are rich people that won't pay more in taxes." That's a false platform.

I just want them to pay the same percent of income as me. Which is some place between 25-30%. I am slowly but surely becoming a flat tax fan for everything over the 15% income bracket. So anything over $62k-ish if you are married is the same percentage for everyone with very few deductions.

And I would call capital gains income, so it falls within the income tax percentages.

[The Great Catpiss]

QE3 just happened. The rich will get richer.

Yay stocks. Boo savings.

Nothing as wonderful as political smoke and mirrors right before an election.

[DosEquis]

Originally Posted by The Great Catpiss

QE3 just happened. The rich will get richer.

Yay stocks. Boo savings.

Nothing as wonderful as political smoke and mirrors right before an election.

I thought when you gave rich people more money they'd create jobs......

[The Great Catpiss]

Originally Posted by DosEquis

I thought when you gave rich people more money they'd create jobs......

Apparently, the people in charge think so.

Contrary to the liberal brainwashing machines, they will create some jobs. I don't think that they will create enough jobs to justify the cost.

Question:
The government is buying $40 Billion in Mortgage Backed Securities every month. What happens when interest rates are increased?

[The Great Catpiss]

Marc Faber: If I Were Bernanke, I Would Resign- Business News - CNBC

Faber said this latest round of QE would not help the “man on the street”

“QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with Higher Costs Of Living with price rises."

[stolz25]

Originally Posted by The Great Catpiss

Marc Faber: If I Were Bernanke, I Would Resign- Business News - CNBC

Faber said this latest round of QE would not help the “man on the street”

“QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with Higher Costs Of Living with price rises."

Is this surprising news? I can point to several economists who have been saying the same thing since Greenspan was in office (and I'm sure people said it before that, with the exception of the new phrase of the week being "quantitative easing").

Now some random retard pushing a book repeats it for the hundredth time and you think that's gonna be the one that changes everyone minds?

[The Great Catpiss]

Originally Posted by stolz25

Is this surprising news? I can point to several economists who have been saying the same thing since Greenspan was in office (and I'm sure people said it before that, with the exception of the new phrase of the week being "quantitative easing").

Now some random retard pushing a book repeats it for the hundredth time and you think that's gonna be the one that changes everyone minds?

Do you disagree?

[CharlieK]

Another question: what happens to Bernanke in the likely event that Romney gets elected?