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[personal profile] bajahyena
The economic policy brainwashing of America began in the time of Reagan. There became a mantra repeated that if you lower taxes, the economy will do better and thus greater tax revenue will be generated. We now know that his policy has failed again and again. Lowering tax rates for the rich/companies does not result in increased tax revenue.

From Wikipedia on Supply-side economics (i.e. Trickle down economics): --------------------

"Andrew Samwick, who was Chief Economist on Bush's Council of Economic Advisers from 2003-2004 responded to the claim:

You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one."

...

Before President Bush signed the 2003 tax cuts, the progressive, nonpartisan Economic Policy Institute (EPI) released a statement signed by ten Nobel prize laureates entitled "Economists' statement opposing the Bush tax cuts", which states that:

“Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income."
---------------------------------------------------------------------------


I think it's clear that we need cute spending and raise taxes, especially on those that own most of the nations wealth to pay for the Great Recession deficits. These are many of the same people that benefited from risky practices and that took our tax money to bail them out. They are again writing themselves huge checks (27% CEO pay increase in 2010) as they are in a new class of untouchables and unafraid of the government, the workers, or the voters.

Next, we need to fix loopholes in the tax code for corporations. When we see GE which is one of the biggest U.S. companies in the world paying no taxes, I find myself a bit outraged. The company earned 14.2 billion in profits in 2010 and paid NO TAXES. This is because of the ability of U.S. companies to shift profit centers offshore. So, not only have companies been given tax breaks for offshoring jobs but they have been given a pass on taxes by offshoring their profit centers.

While all of this was going on, what was the American worker doing? Busting his ass, that's what!!

American workers have become amazingly productive without reward for their efforts. To understand this you need to realize the job outlook.

From Wikipedia: ---------------------------------------------------------
With further overall employment reduction in 2009 not reflected in the chart above (changes since March 2009), there ultimately was zero net job creation in the 2000-2009 decade in the USA. This is even worse than it seems, given US population growth during that time with no new jobs created for them, creating a shortage of about 18 million jobs relative to previous decades by one estimate by Paul Krugman if this ground was to be made up in five years. To understand such a calculation from another perspective, looking at the chart above, about 17 million net new jobs were created in the 1990-1999 decade relative to population growth. Assuming continuing population growth at about the same rate, for the USA to return to the level of employment of 2000 relative to population, starting from a lost decade, overall about 34 million net new jobs would need to be created by the end of the 2010-2019 decade (new jobs beyond replacements for jobs that are normally lost). By whatever calculation, this vast "jobs deficit", completely unpredicted by almost all mainstream economists, is causing "leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth."
----------------------------------------------------------------------

This is in a time when GDP increased by 40% or $4 trillion a year. Meanwhile, real hourly wages for the american worker declined. http://www.capitalspectator.com/033111d.html

So, we've become vastly more productive and companies are making record profits, but they pay workers less while paying themselves astronomic wages even when they have lead the country into economic catastrophe. In addition, while companies have the benefit of operating in the security of the U.S. they do not pay for this benefit as loopholes in the tax system have allowed these giants to move their profit centers offshore.

I think it's clear that we have achieved not a Democracy but a Plutocracy in this country. In 2005, Citigroup claimed the achievement of this state in the U.S. in a letter that was supposed to remain for the eyes of only it's richest investors. http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-Plutonomy-Report-Part-1

I think it's clearer why we don't see campaign finance reform, corporate tax changes closing these loopholes, or some kind of "non-compete" clause like the ones we all sign to obtain a job that says politicians cannot be employed by large corporate entities up to 5yrs after they leave office (Lobbyists, Board of Directors, etc). Companies are in control. The politicians are bought and paid for. We see the politicians far more worried about who will pay for their re-election campaign than they fear us, the voter.

Yet, even Citigroup mentioned the one risk to this Plutocracy! That we, the voters, would wake up one day and see what was happening. Their one fear was "one person, one vote". I pray that we will wake up, stop fighting each other, and see our government for what it is (bought and paid for) then start tossing out those that do not fight for a balance between the big corporate interests and us. Right now, we are just human collateral damage in the rise of the Corporate State.

Date: 2011-04-06 05:56 pm (UTC)
From: [identity profile] dukehyena.livejournal.com
I'm not sure taxing corporations does anything but lower wages and increase prices. Shareholders, employees and consumers all bear the brunt of any corporate tax on income. They will pass along any tax on income to the employees (lower wages), consumers (higher prices), and shareholders (lowered dividends).

I'm not sure what the solution would be, however. Perhaps a requirement that for every $1M of profit, they have to create some number of jobs, or show an investment that created jobs. This is a tough one that could be full of loopholes like that which created the zero tax liability for GE.

As far as the Plutocracy, the voters need to be reminded of who voted for what, and where they work after. Continue to show the "incest" from politician to corporate lobbyist. Use the power that the Internet has to beat the drums whenever possible. With facts (WikiLeaks).

Date: 2011-04-06 06:19 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
So, then we shouldn't tax corporations? By that logic, it would be best to just not tax corporations at all which would lead to lower prices, higher wages, and higher shareholder dividends. Could you please show me the theory behind these thoughts?

In fact, they do show that there is a break-over between taxation of corporations and increased tax revenues. It is at 70%. We are very well below that for a corporate tax rate.

As far as companies charging "less", we all know they will charge what the market will bare. More wages means they charge more because there are more dollars competing for the same product. They can't really charge more when workers make less or they will simply go to lower cost alternatives. Look at the rise of Walmart.

I think the idea of the internet being a fix-all is misleading. These companies can flood the internet with fallacies and there is NO fact checking built in. We've learned that if you say something often enough, it becomes common knowledge which is in no way related to actual knowledge.

Date: 2011-04-07 02:05 am (UTC)
From: [identity profile] equinas.livejournal.com
In fact, they do show that there is a break-over between taxation of corporations and increased tax revenues. It is at 70%. We are very well below that for a corporate tax rate.

Not in oregon, Measures 67 and 68 made it so corporations now pay the minimum corporate tax based on their gross income, NOT their profits. Those two bills are driving businesses out of this state in droves and are directly responsible for our unemployment rate being well above the national average.

Date: 2011-04-07 05:05 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
So, where are those companies going?

Date: 2011-04-08 04:43 am (UTC)
From: [identity profile] equinas.livejournal.com
To Michigan and other states that offer tax breaks.

Date: 2011-04-10 02:39 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
Don't really get what OR is thinking. They have always had a lot of issues attracting and keeping jobs.

Date: 2011-04-06 06:07 pm (UTC)
From: [identity profile] xzadfor.livejournal.com
I disagree. The Reagan era worked fine until this new era of irresponsible giving away money to bail out all kinds of programs and companies.

In fact now, no matter who you tax at any rate, take all of the money the rich (job creators) and large companies (the employers) make and you still cannot pay off the debts this government has been creating. And until you get the value of the dollar up, nothing will improve.

If you decide to take the money that wealthier people earn, they will move to keep it. They have the means and they will. In fact, New York saw a nice exodus when they started taxing higher incomes disproportional. If you tax the businesses, they will move as well and take with them jobs. Now you have less tax payers and a government that is still spending like there's no tomorrow.

Soon enough, even those of us with jobs will see the value of the dollar go so far down and the need to tax so great that even the middle class get nailed. Now why work when you can just jump on the welfare programs?

No one will solve anything with these idiots steering the ship and this class-warfare idea that because someone has more, they should have to give it up.


[Robin Hood] is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don't have to produce, only to want, that the earned does not belong to us, but the unearned does. -Ayn Rand, Atlas Shrugged

Date: 2011-04-06 06:35 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
Take a look at the gap between "rich" and the rest of us. A staggering increase between this gap can clearly be tracked back to the beginning of trickle down economics. In addition, as stated above, supply side economics simple don't work in stimulating the economy to the extent promised. Lets put it this way, you've got $100 to invest. Because someone gives you $2 more dollars, do you suddenly invest your $102 even though the economic environment is bad or do you hold it and wait until the economic environment improves? If you hold it, wouldn't you have invested your $100 anyway now that things have improved?

Simply, it doesn't stimulate spending by corporations as they will still not create jobs in a poor economic environment and you've taken $2 from the middle class with the promise it would help them in the hard times.

As for companies moving, well, they can do that but it's just a shuffling. If they move from NY to NV, they still pay federal tax. If they actually move headquarters overseas, they take a risk that the government they operate under will be unpredictable. It's why they keep their headquarters here and move "profit centers" overseas. They don't have to take the risk of what an India or Chinese government will do to them tax-wise and have the security of operating in the secure environment that the american people have created.

I agree about idiots steering but, it's the idiots at the head of this Plutocracy. I don't hate the rich by any means. But, I guess I was taught in business school that there should be ethics in business and I'm not seeing that and I think we see that with the steady stream of CEOs and CFOs being arrested and brought up on charges. Its a continuous stream of greed.

Funny that our country was built on the idea of revolution and that you bring up Robin Hood. Do you not think he was a symbol of rebellion against the Monarchy who used its people to the point of excessive greed? Please, don't tell me that you feel that unbounded greed is fine and corporations owe nothing to workers and the societies they operate within?

Date: 2011-04-06 07:54 pm (UTC)
From: [identity profile] xzadfor.livejournal.com
Some things I can discuss, some things I cannot. I cannot state anything, fact, philosophy or otherwise that will make any difference if you believe in your heart that when someone has more than someone else, they should give up what they have. That’s how your arguments read to me. But I’ll quote you and ad my own comments.

***
Take a look at the gap between "rich" and the rest of us. A staggering increase between this gap can clearly be tracked back to the beginning of trickle down economics. In addition, as stated above, supply side economics simple don't work in stimulating the economy to the extent promised. Lets put it this way, you've got $100 to invest. Because someone gives you $2 more dollars, do you suddenly invest your $102 even though the economic environment is bad or do you hold it and wait until the economic environment improves? If you hold it, wouldn't you have invested your $100 anyway now that things have improved?

Simply, it doesn't stimulate spending by corporations as they will still not create jobs in a poor economic environment and you've taken $2 from the middle class with the promise it would help them in the hard times.
***

When you compare the ‘Rich’ and ‘the rest of us’ the premise is that ‘the rest of us’’ somehow deserve what the ‘rich’ have because we were somehow screwed out of getting that wealth ourselves. Somehow we are entitled to what rich people have even though we never created Apple or Microsoft or whatever company or were never born into the family that had wealth.

The stimulant to the economy is when the companies have more money to invest. I don’t know how old you are, but I remember that from about 1992 – 2000 companies were going gangbusters expanding, upgrading, hiring and building. The end of the 1990’s created a lot of uncertainty when the government began acting erratically (Anti-monopoly lawsuits and so on). When companies don’t know WTF to expect next, they stop spending and get defensive (we see this now in fact).

The 2000’s saw congress telling banks to lend and banks finding ways that making home loans to high risks looked good because who defaults on a home loan? And of course we saw what that lead to. We can converse for days over that fiasco – the one that put banks in need of bailouts. We’re enjoying the financial climate of that now.

***
As for companies moving, well, they can do that but it's just a shuffling. If they move from NY to NV, they still pay federal tax. If they actually move headquarters overseas, they take a risk that the government they operate under will be unpredictable. It's why they keep their headquarters here and move "profit centers" overseas. They don't have to take the risk of what an India or Chinese government will do to them tax-wise and have the security of operating in the secure environment that the American people have created.
***
Companies can, will, have left. The President of Intel said (I think 2 years ago), the reason he builds overseas is that it costs a third and there’s less red tape. As I was looking for the article I see now he’s building in Arizona. That’s good news, I need to catch up on that one. But the reality is this: our economy is not secure, larger businesses enjoy a lot of courting to move to places like India and Tiawan and China. Right now with the health care bill and a lot of other decisions going on, no one know WTF is happening and what it will cost if you hire someone today, and they pass something else, tomorrow will it cost me more to have that employee? Hence a large part of why jobs that went away are not coming back in the same numbers. These knee jerk reactions to fix the economy are killing it in so many ways. And they help make overseas prospects look even better. The risk for what can happen (Tariffs? Pressure?) if you move overseas are nothing compared to the risks you face here (right now) trying to run a large company.

Date: 2011-04-06 07:55 pm (UTC)
From: [identity profile] xzadfor.livejournal.com

***
I agree about idiots steering but, it's the idiots at the head of this Plutocracy. I don't hate the rich by any means. But, I guess I was taught in business school that there should be ethics in business and I'm not seeing that and I think we see that with the steady stream of CEOs and CFOs being arrested and brought up on charges. It’s a continuous stream of greed.
***

Is this about greed – people having more than other people? Or is this about officers in companies breaking the law? Ethics is subjective. I might like doing business with a company that does or doesn’t act in a charitable manner. The absolute bottom line that should govern a business is what makes it profitable within the boundaries of the law. Each dollar anyone spends can be seen as a way to express an opinion as to who is doing business the way you like. Some people don’t shop WalMart because they don’t like their ethics. WalMart is a very profitable company to be sure – Does that make them greedy? Why should a company be in business if not to make money?

***
Funny that our country was built on the idea of revolution and that you bring up Robin Hood. Do you not think he was a symbol of rebellion against the Monarchy who used its people to the point of excessive greed? Please, don't tell me that you feel that unbounded greed is fine and corporations owe nothing to workers and the societies they operate within?
***
Robin Hood: The story is about 1) greed? Or 2) overthrowing an oppressive government? I think 2.

Would you tolerate an oppressive government if they distributed the wealth of others?

What’s unbounded greed? Is the desire for more wealth greed or reasonable?

Why should a man do anything if it is not in some way benefitting him or his interests?

If a man works and does not get a benefit to himself (or by assumption, something he wants his effort to go to willingly) then is he not a slave?

Should men start companies that are not profitable? How do you fund and grow the companies? What’s the point?

Rich – Wealth – Greed – Desire to be profitable does not equal criminal activity. It is the reason why people work, drive to better themselves and so on. Viewing it as anything other is some kind of personal philosophy and unrealistic. I’m sure you went to college with the idea you would get out and get a good job. Is that not motivation to be better to be worth more to get more? Is that greed?

****
Please, don't tell me that you feel that unbounded greed is fine and corporations owe nothing to workers and the societies they operate within?
****

How can a company owe more to its workers than it pays them in a society where a worker can go work for someone else of their own free will? If a person feels underpaid, they can move on or maybe they have an unrealistic view of their value. It’s all what the market bears in wages, prices, you name it.

What does a company owe its society? Hire people, pay them a wage and maybe have some other benefits, pay taxes and? What else? In terms of smaller communities, say a small town – if they don’t like a company there, they can tax, regulate, etc and that company may close or move. But what else is owed? Companies aren’t some treasure chest or gold sitting unspent waiting for someone to legislate that their value is up for grabs because someone ‘feels’ they owe it.

I’m not trying to beat you up, I see we have very different views on things. I enjoy a good debate! I think maybe you are frustrated with things and your outlook (philosophy?) seems to reflect that. Ultimately it's your journal and you can post whatever you like, I take it that you're open to some debate and I hope I'm right. If not I apologize and let you return to your regularly scheduled opinions. :3

-X

Date: 2011-04-06 09:26 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
First, you need to understand what a corporation is and how it is required to operate. This is where you will find a somewhat disturbing story and basis for greed. Look at the terminology used in corporate law. Look up Corporate personhood. Corporations were very rare. They were given very narrow charters and would/could be dissolved after that charter was met. In the late 1800's the Supreme Court ruled that corporations had the same rights as people. That's right, a corporation was a person and had the rights under the constitution afforded by the Fourteenth amendment.

This is very profound. Think about that for a moment.

Now, take a person and remove his conscience, then make it a law that he must act always in the best interest of a select few, it's owners. Thats right, corporations get sued for not maximizing their return to the owners. This means they should exploit, externalize, push off onto the society in which they live all risks and damages that they will absorb and thus reduce cost to the company in order to make a few much more money. This is greed. And since a corporation has been ruled by the Supreme Court to be a person, this is how one must judge the corporation. I say this person is greedy but you may disagree. Maybe an example would be useful.

If a neighbor bought a house on your block, then tossed his garbage and sewage into your backyard to reduce the cost of water and garbage pickup to save money, what would you think of him? You see, he's acting like a corporation. He's lowering his cost to get more money in his bank account. By the way, this is what the term Externalization means. if you are a car company and roads are required for your product, isn't it nice to make the government take on the burden and cost of providing something necessary for your product to be successful? Again, that comes out of our tax dollars and thus, the car companies have externalized a cost of doing business. Follow this analogy for a lot of things we pay for one way or another...such as chemical waste. Anything a corporation can dump into the environment results in externalized costs as other people absorb the effects and cost of eventual clean up. Getting the idea of how "ethics" plays a roll. Sure, ethics is subjective but that doesn't discount that I think about anyone has lines of what they would call ethical while corporations are by design, sociopaths.

This is what I mean by corporations owing society and it's workers. I'm talking about human rights and equal protections for it's workers not just here but overseas. The model now is to move to a country with desperate citizens. Pay them almost nothing until they reach a moderate wage, then move on to the next inexpensive labor market where you can exploit people and the government looks aside at the externalized costs.

So, if you believe that corporations should act like sociopaths, then really, we don't have much common ground and there is probably no argument or example grievous enough to make an impression. I am also not saying that all corporations act this way. But, I do have some perspective being around for some time and seeing two economic catastrophes of modern times caused by my sociopathic neighbors.

Date: 2011-04-06 10:04 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
"When you compare the ‘Rich’ and ‘the rest of us’ the premise is that ‘the rest of us’’ somehow deserve what the ‘rich’ have because we were somehow screwed out of getting that wealth ourselves."

This is absolutely false. It's a matter of benefit to society relative to what one takes from society. Let me ask you, do you think that the CEO that makes $5 million a year plus bonuses is really worth more than the $50k engineer that actually designed and built his product? What risk did he take with his huge pay and golden parachute guaranteed? This is really a philosophical question about relative worth to society.

"The stimulant to the economy is when the companies have more money to invest. I don’t know how old you are, but I remember that from about 1992 – 2000 companies were going gangbusters expanding, upgrading, hiring and building. The end of the 1990’s created a lot of uncertainty when the government began acting erratically (Anti-monopoly lawsuits and so on). "

Well, in the early 90's I was on my second career. My first was as a hardware engineer in a company during the mid 80's to early-90's. I certainly remember the Keating 5 and the S&L scandal which cost the tax payers $124 billion+ and lead into the 90-91 recession. During that downturn, I got another degree in Computer Science and went on to work in the tech sector.

As for our gov acting irrationally, thats also true but not in the way you mention. Anti-monopoly law suits were nothing new. Ask IBM and AT&T. The government hammered on IBM for some 20yrs before they turned their sights on Microsoft. Anti-monopoly law suits are relatively rare and isolated. This didn't cause any disruption in business as usual.

Are you really blaming the healthcare bill for economic disruption? Business can plan for about anything. What they don't like is surprises. This is why many bills, including the healthcare bill don't go into effect till sometime in the future. It gives business time to plan. Complaining is not the same thing as disruption. There are many things business doesn't like but they are fine as long as they have time to plan around events.

As for why companies go overseas? Thats easy. Many countries have little idea of human rights. It's easy to see why they go when they aren't held to maintaining standards for the reasonable level of existence and safety for the people that create their products. Remember when Nike admitted to massive labor exploitation overseas? Please see my previous post for the idea of Externalized costs and how corporations are encouraged to act as sociopaths.
Edited Date: 2011-04-06 10:06 pm (UTC)

Date: 2011-04-07 02:11 am (UTC)
From: [identity profile] equinas.livejournal.com
The 2000’s saw congress telling banks to lend and banks finding ways that making home loans to high risks looked good because who defaults on a home loan? And of course we saw what that lead to. We can converse for days over that fiasco – the one that put banks in need of bailouts. We’re enjoying the financial climate of that now.

Yep, and in fact, in 2003, Bush (on whom the left insist on blaming the recession) went to Fannie and Freddie AND Congress saying they had to rein in this irresponsible lending, and you had democrats like Barney Frank stating that would be class-ist because (in the liberal mindset) everyone should own their own home. And well all know where that got us.

Date: 2011-04-07 05:18 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
Please, reference links showing this is the case.Barney Frank hardly spoke for the bulk of the Democratic party. Freddie and Fannie were no doubt told to increase home ownership for low income people. This lead to a contradiction with a publicly held company and their charter. However, they were FAR from the only culprit in the downfall of lending institutions. To quote: "He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush."

Date: 2011-04-07 05:21 pm (UTC)
From: [identity profile] equinas.livejournal.com
Happy to:

From the New York Times, 9/11/2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates....Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. ”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Most liberals conveniently forget that Bush and McCain actually tried to stop this train wreck 5 years before it happened.

Full article archived here: http://bellalu0.wordpress.com/2008/09/17/bush-and-mccain-proposed-oversight-of-fannie-mae-and-freddie-mac/


Date: 2011-04-06 07:20 pm (UTC)
From: (Anonymous)
There's no room for reason to contend with blind assertions. Reality hasn't helped them, so what can you do by your comments? This is their religion. Move on.

Date: 2011-04-06 10:18 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
It's hard for anyone to overcome many years of "programming". When I see generalized arguments instead of details in one's argument, I know that they really haven't thought about the topic independently but are regurgitating the programming they've been fed. We all are products of the information we have available be it books, discussion, documentaries, studies, etc.

It's really more important that people start to look into the very small details of their assumption to see if they hold up. I never ask anyone to agree but do hope they do some of their own research and find the strengths and weaknesses in their position. I am certainly open to changing my mind but, I need to see details and real support other than "common sense" and supposition.

Oh, who are you? Your not logged in.

Date: 2011-04-06 06:31 pm (UTC)
From: [identity profile] p0lecat.livejournal.com
I think a Flat Tax is the best tax. 17% for everyone!Regardless of how much they make or have and if you want something elts, MAYBE a fed. sales tax of 1%

Date: 2011-04-06 06:32 pm (UTC)
From: [identity profile] xzadfor.livejournal.com
This is a good way to see to it that even people here illegally pay taxes! The downside is that the Government will never let go of the power.

Date: 2011-04-06 11:43 pm (UTC)
From: [identity profile] kurtmrufa.livejournal.com
They do, generally. They pay sales taxes. They also pay payroll taxes, property taxes, etc etc.


Why is it that someone getting paid a million dollars a year has a lower marginal tax rate than someone getting 80K a year?

Why is it that someone just *getting* a million a year from investments pays less tax again than either of the two above?

True facts.

Date: 2011-04-07 03:49 am (UTC)
From: [identity profile] otterdoc.livejournal.com
Our new governor wants a flat tax rate on businesses in the state. I'm curious how that will play out for attracting business.

As far as individuals go, I think you've raised the most salient points in the discussion.

-M.

Date: 2011-04-07 12:04 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
"I’m not trying to beat you up, I see we have very different views on things."

Oh, you don't have to worry about that as long as mutual respect is maintained. You have every right to your thoughts and I actively put my view out there in the hopes that others will bring new information and thoughts to the discussion. The best way to do this is to have detailed examples and respected sources to reference. I'd hope that an open mind would also be brought to the discussion but it's not required. I've often debated with people that I knew no matter what I said or how strong my argument and sources, they would never give an inch on their perspective. I let the readers decide for themselves based on the arguments given.

Date: 2011-04-06 06:38 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
I like the idea of a flat tax!

I'm not so keen on a consumption tax (not that you mentioned it) as this puts a greater burden on the poor as the must spend a greater percentage of their income on the necessities.

Date: 2011-04-06 07:56 pm (UTC)
From: [identity profile] megadog.livejournal.com
I've for some decades been an advocate of flat-taxes. If *everyone* is paying tax, they'll all have a vested interest in voting, and in holding Government to account for its tax/spend policies.

And it could be argued that 'the poor' generally benefit proportionally more from Government programs etc. than the rich, so it's only fair that they pay more towards it. The current setup means that 'the poor' will always vote for policies that mean they get more Government handouts, because they're not paying towards it. You shouldn't be able to take-out unless you pay-in [and yes I freely extend this approach to all forms of 'corporate welfare' too!]

Date: 2011-04-06 09:36 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
Well, the poor aren't the majority so, I'd doubt they could themselves (if we are talking collectively) vote in their own freebies. While I'm not for giving people a free ride, I think there are benefits to such programs for society as a whole. Lower crime? Reduction in slums? Better health for all citizens? However, I kind of like the idea of work for your welfare.

Date: 2011-04-06 11:41 pm (UTC)
From: [identity profile] kurtmrufa.livejournal.com
The poor do pay a flat tax. It's a payroll tax. 15% if you count the employer contribution which you should.

The rich don't pay that tax - it rolls off at about 106.8K. So it's actually regressive...

Date: 2011-04-07 02:14 am (UTC)
From: [identity profile] equinas.livejournal.com
Anybody who makes less than the poverty rate gets all that payroll tax back at the end of the year.

Date: 2011-04-07 02:23 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
So?

What about the single person making $10/hour? They're not getting it back.

Is it something to be proud of that in the US the average person can be bankrupted by a medical emergency while in every other western democracy this is impossible?

Now we got Ryan proposing to take away Medicare on retirement from anyone under 55 and to give all the savings and more to a tax cut to the top 10$, with the majority of it to the top 2%...

I happen to be in the top 10% and I'm telling you I am undertaxed.

Date: 2011-04-07 05:09 pm (UTC)
From: [identity profile] equinas.livejournal.com
The single person making $10/hour isn't at the poverty line.

If you think you're undertaxed, go live in Europe, and see how well their 50% income tax and 27% sales tax works for you.

Date: 2011-04-08 03:20 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
It works pretty fucking well if I get value for money!

And where do you pay 50% total income tax on $50K of income and 27% sales tax too?

The UK certainly has the 17.5% VAT, yes, and their top marginal rate is about 50%, I think, but I am sure that doesn't kick in until you're making quite a lot.

And, y'know, that money goes to pay for things. Things such as NOT BEING BANKRUPT when you get sick, well, how about that?

I sure can't buy a lifetime guarantee of that in the US, can I?

The fact that we pay double what, (for instance) the UK pays for health care yet get about the same average outcome suggests that maybe, just maybe, we are Doing It Wrong Here.

Date: 2011-04-08 04:42 am (UTC)
From: [identity profile] equinas.livejournal.com
Yeah? My family lives in Ireland. My mom waited for 6 months for an MRI. Sure it's free. But she had to wait half a year to find out why she couldn't walk. I don't call that "value for money".

I worked there and paid 50% income tax on a $40,000/year job. And their VAT is 21%. Prices on anything are insane, and they pay $7/gallon for gas.

The only country I've been to that seems to have quality enough services to justify that kind of tax is Norway.

Having said that, yes we are doing it wrong here. But the answer isn't higher taxes.

Date: 2011-04-10 01:46 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
I think 'having access at all' is a huge value.

OK, so what year in Ireland did you pay half of your total gross income of $40K equivalent in tax, and were you a regular citizen of the place at the time?

For the purposes of this question, 'tax' counts as mandatory payments to the state, so in the US it would include SS and Medicare taxes.

In the US, if you are unemployed (hence uninsured) you don't /get/ that MRI at all if you don't pay it out of pocket or are destitute. MRIs are a special example - there's plenty of stuff short of a MRI (like diabetes care, etc) that are cheap to provide but that people can't count on.

Date: 2011-04-10 05:11 am (UTC)
From: [identity profile] equinas.livejournal.com
Having worked 20 years in emergency medicine, I can assure you that if you show up to an ER or urgent care suddenly unable to walk, you will for damn sure get the imaging you need to figure out why. You'll have a massive bill afterwards, but you'll get the care you need.

To answer your question, the year was 1998, and I was a legal resident, not a citizen, of Ireland. They had two tax brackets, 25% and 50%, and you paid 50% on anything over £25,000 Irish, which at the time was about $37k. That was during the "Celtic Tiger" economy; now things are that much worse with people who work in Dublin unable to even afford to live there, and their economy on the verge of following Greece into bankruptcy.

Date: 2011-04-10 03:30 pm (UTC)
From: [identity profile] kurtmrufa.livejournal.com
Then what you said originally was wrong.

You didn't pay 50% income tax. You paid about 25% of the total amount you earned. If it was anything like it is now, there may have been some standard tax credits (now the PAYE and the personal one amounting to somewhat over 3K euros) - making it likely that you paid less than $10K in tax. Which is hell of a lot less than 20K.

My /marginal/ tax burden between state and federal (counting FICA) is about 41% (28% + 7% + 6%) but after deductions, etc etc, I only pay about 25%. If one moved over what I pay and what my employer pays on my behalf for health care (Kaiser) I might be better off in RoI -- and I get paid well more than twice 40K.

Pointed out elsewhere, in the US under Reagan the top marginal rate was 50%...

It's also pretty obvious that Ireland is suffering in large part because it doesn't have its own currency. When this happens you devalue the currency, imports get more expensive, but you get out of it. It's what Iceland did - they were worse bankfucked than Ireland was but now they're doing better.

Presenting with acute problems in the ER, yes, you will get the care you need - often much more expensive care than if you had free access to the basics. And if you weren't destitute before, you will be destitute when you're done - and there's no way to avoid that risk.

My cousin is a vascular surgeon, very expensive - why does he so often need to operate on people suffering complications from untreated diabetes?

Date: 2011-04-10 04:48 pm (UTC)
From: [identity profile] equinas.livejournal.com
Umm, no, I meant what I said. When I got my check it was 50% of what I had earned. Ireland does not have the deductions that we have...you can't deduct mortgage interest, you can't deduct capital loss.

It's true they have other problems (mainly paying the price for for the EU's socialism and liberal immigration policy), but high taxes aren't saving them.

Date: 2011-04-10 06:37 pm (UTC)
From: [identity profile] kurtmrufa.livejournal.com
My take home is half of my gross too, here in the us, but not all of the deductions are taxes due to federal and state entities. Some are things such as defined-contribution retirement, my share of the health insurance, private disability insurance, etc etc - and those are as much as the tax.

Likewise, the tax on your paycheck in the RoI was evidently a quarter, not half, and there were evidently other things going on as well.

If you don't get the difference, hey.

Date: 2011-04-07 02:02 am (UTC)
From: [identity profile] equinas.livejournal.com
Absolutely a flat tax is the best idea. The eastern European countries who have gone to it are all showing major growth in their GDP (check wikipedia for examples).

Date: 2011-04-06 11:40 pm (UTC)
From: [identity profile] kurtmrufa.livejournal.com
It looks like that one supreme court seat in Wisconsin flipped at least.

When this shit snaps it's going to snap ugly, otherwise 99% of the country winds up like SE Ohio and the rest winds up like Scottsdale.

Date: 2011-04-06 11:55 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
I agree. I've never seen such a hostile and divided social environment. I'm amazed at how quickly civility and the idea of compromise has eroded. It's going to be really ugly when things snap.

Date: 2011-04-07 12:32 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
I'm not interested in 'compromise', actually.

Interested in 'the deficit' or whatever? Ok, great - let the top marginal rates go back to what they were under Clinton then we can talk.

But no, that's been defined as an 'extreme' position from which I must compromise.

In that case, fuck them all and watch them die.

Date: 2011-04-07 01:23 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
Well, under Clinton the top marginal rate was 39.6% (the same Obama is suggesting) as opposed to Bush which was 35%. So, start negotiations at 50% and work your way to 40%. Win-win! ;)

Oh, For Reagan it was 50% at the top bracket. Now, who's the socialist?

Date: 2011-04-10 01:58 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
Exactly. This isn't about numbers. This is about something else.

Date: 2011-04-07 02:01 am (UTC)
From: [identity profile] equinas.livejournal.com
So, we've become vastly more productive and companies are making record profits, but they pay workers less while paying themselves astronomic wages even when they have lead the country into economic catastrophe.

http://www.youtube.com/watch?v=661pi6K-8WQ

You don't raise taxes in a recession. Any true economist (not the stupid Keneysians) will tell you that.

The answer is to lower taxes in corporations but require they put so much of that into the work force.

Date: 2011-04-07 02:27 am (UTC)
From: [identity profile] kurtmrufa.livejournal.com
Actually, raising or lowering taxes on the rich has less short term fiscal impact because it has less of a multiplier effect on consumption.

The Keynsians are actually correct. What's being argued for is a short term stimulus (infrastructure investment) together with long term return to fiscal balance.

The long term part is bringing health care costs under control and getting taxes back into balance with expenditures.

Instead what we have is stupid short term cuts in expenditures coupled with long term givebacks to the richest of the rich. Pretty obvious what's going on.

I don't care about the average income. I care only about the median income.

Date: 2011-04-07 05:36 am (UTC)
From: [identity profile] baja-hyena.livejournal.com
I'm not against that corporations be required to put much of their tax write-offs into the workforce. I wouldn't call the Keneysians stupid. Many past presidents have used their theories including Bush and Obama.

Date: 2011-04-07 05:09 pm (UTC)
From: [identity profile] equinas.livejournal.com
And they are both idiots. You can't tax, spend, or print your way out of a recession.

Date: 2011-04-07 05:34 pm (UTC)
From: [identity profile] baja-hyena.livejournal.com
Actually, there has never been a recession that didn't include deficit spending. Every one required that the government spend their way out of it. Go look up Okun's Law. The government spends and creates a market. This puts people to work and for every 1% drop in unemployment the GDP grows by ~2%.

Sorry that you hate Keynesian economics but these theories have shown validity in the past and there have been no indications that they have suddenly become invalid.

As for that link, what does that prove?

"Mobs disrupting the legislative process." I see this guy doesn't believe in peoples right to voice their displeasure with conservative politics in WI. I see he also doesn't look at the gap that has been ever increasing over the last 30yrs between the "middle class" and the rich. There is a growing displeasure in the "have-nots" that is almost at the point of boiling over. This isn't unfounded as they have watched their tax dollars go to companies because they were "too big to fail".

Nobody is talking about taxing only the rich or taking everything they own. The only discussion I've heard is about raising the top marginal tax rate. this guy is doing nothing but showboating.

I also see that he disabled comments. I guess he doesn't like discussion or any facts that rocks his conservative view.

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