bamaslammer, let me ask you this, do you agree with the revenue sharing plans in place in the major sports? NFL and MLB for example do you think revenue sharing is a *good* thing for the over all health of the leagues?
Andy, I've yet to go into the Krugman thread though there is a writeup about his new book in Business Week. I believe that along with having a flat tax, that we eliminate tax shelters as well. I don't think its fair to have shelters in the form of trusts and other entities to limit the tax payments for those in the know. Buffets lower tax structure is based more on the fact that 99% of his assets are within Berkshire Hathaway which reinvests virtually every penny and has sold next to nothing in the last few years. The 4% is based on interest and dividends that were paid out and subject to short term holding tax. This is similar to a stock that is held, as it appreciates your capital gain (which is taxable) rises, but you don't pay it until you sell out of it. If Warren sold all his Berkshire today (which he'll probably never do), then the government would realize a taxes of over 10 billion dollars, enough to pay 13% of what the President wants for Iraq. I do agree that many through trusts and other entities legally shelter assets and limit their tax payments. Such as the depreciation of the cost of an SUV over a certian weight ( originally for farmers ) if you own your own business. A flat tax without exemptions etc would benefit everyone greatly. It would have everyone pay the equal % of their income in taxes. If they decide to have 10 kids or 1 kid, thats their own problem, why should you recieve a credit for it?? And as for social security, an IRA allows money annually to be invested tax free for your retirement. I can save myself and don't need the government to force my savings and give me a deplorable rate of return and give it to those who didn't save.
I'd *much* rather have a flat-tax (with a minimum tax, regardless of write-offs) than the Swiss cheese tax code we have now. A flat tax isn't fair, but it's a small step in that direction.
On Clark's plan, I think he doesn't have one foggy clue what he's talking about. A household making over 200 grand a year is rich in some areas (the South) and simply middle class (California, NYC), especially when they are in the lower end of that scale. So why should treat something equally when it is not due to COL? And as for Clark's idea that the Federal govt should bail out states and municipalities, that is utter hogwash. I'm not paying more money tax-wise so California and other cash strapped states can continue their free-spending ways, only this time using my money even though I don't live there. Force each state and city to individually right their own sinking ships. That will teach them to spend more than they make in revenue. No one owes society for their success or failure. The whole point of this country is a society where that is decided by individual merit and hard work. I don't come from a background of wealth and priviledge, I come from a solidly middle-class background, and no...society had nothing to do with that. It was my father busting ass at the oil refinery and my mother teaching school who were responsible for that. I pay taxes just like you do and they are nothing more than bastardized user fees. Did I go to a public university, of course, I'm not wealthy. I drive on interstates, but I pay for it with gas taxes. But just because I utilize those things doesn't mean I OWE something to everyone in society, even those who did not contribute one dime in taxes. Collectivism is not a good thing, it stifles individual ambition and drive and fosters a dependency mentality on "society." Personally I'm a big believer in personal responsibility and taking care of things yourself. The only thing our govt owes us is protection from foreign enemies and criminals seeking to deprive us of life, liberty and property. I'm sorry you did not get a tax cut (I did...), but such is life. The more money that the wealthy are allowed to keep, the more they will invest and spend, which puts more money into the economy than through govt, which produces nothing except senseless regulation, corruption and waste. Let people keep more of their earnings, it is the only moral thing to do. I know you are wracked with jealousy at the evil rich, thus your attitude toward "they're not paying their fair share" nonsense, but why do you want to screw over what you wish to become. And spare me with the reply I wouldn't want to be rich or I'd give it all away because I know that isn't true at all. You covet and can not have and therefore you seek to plunder. Dreadful indeed. Take some ownership, become rich yourself and see how you like having to have a tax attorney on constant retainer to keep the Federal govt from confiscating most if not all of the fruits of your labor. And as for the environment, we can't do anything without some nutjob group condemning any project. They come out of the woodwork to oppose development and economic expansion. They seek to curb liberty, freedom and property rights to protect their sacred mother earth, which to them they worship. The problem is that in their view, we are a pestilence on the Earth, not a part of the natural world and that the world would be a pristine paradise without us. We are part of the natural world. If a species can not survive because it only lives in one little area and we have to choose between economic prosperity and some dumbwitted, useless little creature, I choose economic prosperity. And lastly, I thought that I'd illustrate to you (using the Hitler quote) to illustrate how similar your viewpoint (how we owe society) is to both Hitler and Krushchev and Lenin and Mussolini, folks who wanted people to lose their individuality to serve the state and their fiendish desires. I wasn't calling you a Nazi or a communist, I just wanted to show you that being a collectivist rather than an individualist puts you in the same sad camp as them.
I agree that the tax structure needs some serious changing. I wouldn't object that much to a flat tax as long as there were no loopholes like deductions, exemptions, etc., but I personally prefer a consumption tax with a minimum exemption (first $5000 or so untaxed) as this method taxes us on what we consume rather than what we make. With a consumption tax, I could decide myself how much of my money goes to tax every year.
Andy, I think a consumption tax would be wonderful but I don't see many people in the Democratic party going for it. With the lack of savings by most in this country, especially in the case for those that make the least, there would be a significant backlash. The level of debt in this country, especially amongst the lower to lower-middle class, is astounding. If their tax was based on what they spend, in which much is borrowed, then that may be an considered by too many 'uneven'.
That is why I think there needs to be a minimum that someone needs to spend to qualify for the tax in the first place to cut down on the regressive nature of sales taxes. In addition, I would exempt used items, which would help to encourage recycling of products and might even return some of the quality to American products. Imagine if one of the premium reasons for buying something was it's usable lifetime and resale value. We would get products that could be used and passed on over and over again instead of the cheap disposable crap that we are deluged with every time we go shopping. This type of system would also be a true consumption tax in that one would be taxed for new items that they consume. In addition, a consumption tax would make many think twice about going out and spending frivolously as opposed to saving or investing their money. People would continue to go out and buy, they would just tend to be more selective about what they buy and what they spend their money on. If we are going to truly aim at eliminating social security, Kahn, we will have to change the mentality of our people.
You and I are on complete agreement on that. But here's a side benefit as well. My wife always tells me about how much debt most of our population is swimming in, so I figure a consumption based tax would likely cut back on the amount people spend on taxes, because it would be subject to the tax. More people would be more Japanese-like, saving and investing 50 percent of their salary, which would spur our economy. Add to the mix that there would be no loopholes and no dadgummed forms to fill out (hallaleuah!) this is a win-win proposition. The only obstacle is our entrenched political class, would lose a major source of perks to issue to contributors and would make sure it would never see the light of day.
Yeah, just like it has spurred theirs for the last 15 years into stagnation and desperate attempts by the Japanse central bank to get people to save less (0% interest rates) My god, if people started saving 50% of their salary, the consequences would be nothing short of catastrophic on a global scale; I mean, it would be great to invest all that money, unfortunately, all that money would be invested in businesses that would sell products and services that nobody would buy because they are saving so much. Say hello to the double D's, deflation and depression.
All true. I invest around 40 percent of what I make, but when your ancestry is like mine (father's family-depression era poor Southern white and mother's family- Japanese immigrants who came over in the late 1960's right after I was born), it's hard not to do so. I think that investment like that is not a problem, but you are correct about the Japanese situation. We can't help it, we're tightwads.
I don't care WHERE you live, $200K is a LOT of money. Clark is talking about taking away only SOME of the tax cut from those families. What are they going to have to do? Sacrifice a latte once a week. Clark wants to make sure that businesses hire people, homeland security is fully funded, and wants to give schools more resources to ride out the recession. You act like he is proposing universal health care, a federally funded university system, AND the highest tax rate the rich have ever seen. What? 40% of the money goes to Homeland Security, a further 10% goes to local and state law enforcement. 20% goes to business tax credits that are much more likely to provide jobs (and workers paying taxes) in the short term than Bush's "Economic Stimulus Package." 20% goes to make sure that our higher education system can continue to operate without raising fees during this recession and 10% goes to make sure that secondary and early education teachers don't have to spend any MORE money out of their own pockets to educate our children. Tell me, which of those initiatives do you have a problem with? And I guess it is just do as I say and not as I do from the federal government on fiscal responsibility, huh? BULLSH1T! We all owe a large debt ot our country, to our forefathers, and to the founders of the greatest nation on Earth. We owe the biggest debt there is because we live in the most prosperous land that God has yet put forth on this planet. We OWE for the lives of the millions who have died for America. We OWE for the dreams of the people who brought forth the Declaration and Constitution. We owe big time and it is sad that you cannot see that. Again, I call bullsh1t. You owe the public education system which is funded by the tax dollars that Bush cut out of the budget. I have experienced first hand what the cuts that you say are due to "state overspending" and what it meant to my college was not running ANY classes this summer. Period. That is what the dividends you got from Bush are buying you, school closures, cutbacks, and tuition increases. Bravo. You do not owe any particular person in society, but you do owe the society itself. I agree with you that too much collectivism is a bad thing, which is why communism does not work in the real world. We are not talking about collectivism here, we are talking about creating a working system of government that does what it needs to do and wastes as little as possible. Not according to the mandate we have given it over the last eighty years or so. We have decided that we don't want throngs of elderly living in the street and begging on corners. We had that once and we decided it was passe, didn't you get the e-mail? Trickle down economics has been debunked. Over and over again, we have seen that giving tax cuts to the rich results in recession and lost jobs because of profiteering. People are ready to cash out when the capital gains tax is low and only the Rockefellers and Vanderbilts atake a real hit from the Estate Tax. I understand why you avoided trying to argue with the Krugman article. You have just bought their bunk theories and somehow have been convinced to defend them even though all evidence points to supply side economics being nothing more than a sad failure as an economic model. I have no jealousy for the rich, nor do I think that any of them are necessarily more evil than anyone else. I have no wish to "screw them over," but I pay what my government asks because, for the most part, I believe we do owe a lot for our country. If I wanted, I could be rich right now, I just didn't think that a career in law would have made me very happy. Looking back on it, I am thrilled to be in the place I am in now as opposed to where I see that I could have been. And if I did make that kind of money, I would have no problem paying what my government asks. I certainly believe that we can cut out some waste, but in hard economic times, people are supposed to buckle down and sacrifice for the country's good. Thankfully, you are well in the minority on this. I would prefer that my children have a planet with breathable air, drinkable water, and a climate that is cooler than the baste setting on the oven. We certainly have to moderate our regulations to make sure we do not overly impact our economic prosperity, but we do need to take care of the planet for our kids and grandkids. I am not a collectivist. BTW, EVERY government expects their people to serve the state in some form or fashion, whether it be as a soldier, civil servant, or taxpayer. Of course everyone should embrace their individuality. Nobody should ever give that up or even think that they must, except in limited cases like the military. We do need to help the people around us, though. We are all ultimately on the same side. While I agree that you will be able to find abuses of any government system or program, and you will always be able to find waste, many more people are helped by some of these programs than ever take advantage of the system.
Andy, I always enjoy reading your posts and I actually agree with you on quite a few issues. But let me just agree to disagree. COL= cost of living means that 200 grand will go much further in Georgia, where gas is the cheapest in the nation and housing is rather inexpensive. In California, 200 grand a year is nothing with the average home going for much more than the national average. So taxing a family in GA and a family making the same in CA is unfair to the one in CA, because they are anything but rich. One thing about education is that we spend more on education than ever before at every single level and yet.....we get less in terms of results. When are we going to spend enough on education? If you ask the teacher's unions who have destroyed government education in this country, never. And as far as Bush "cutting" money from education, he did no such thing. He, by passing that horrid Kennedy education bill, INCREASED spending for education. And as for blaming your state's budget problems on Bush, Andy, I know you're better than that. It's not true. Name one cut that Bush has made. Name one spending bill he vetoed. The answer is that he didn't veto a single bill in his admin and despite having control of Congress, the cowards in the GOP let the Dems run all over them when they put together the budget as usual. And as for this Homeland Security and other spending he proposes, for chrissakes, the budget is now in the TRILLION range and Clark wants to spend MORE? How is that fiscally prudent? I'm just being internally consistent here, because I've hammered Bush on signing too many bad, bloated spending bills. I think the Homeland Security is just another Federal bureaucratic boondoogle that will be a source of corruption and waste for years to come. And as for Krugman's dislike of supply-side and all of his facts and figures, I don't even want to tackle the issue because I'm not an economist. Suffice to say, the man has lived his life (I read his bio) in the ivory tower of academia, which is unfortunately of the liberal persuasion. The real world knowledge gained by a lifetime in the real world is as foreign to Krugman as modern art is to me. And I've always believed that anyone with half a brain can manipulate various facts and figures to prove any point. Krugman just manipulates them to "prove" his ideological points that Americans don't pay "their fair share" in taxes. Now as for this owing business....of course we owe our Founding Fathers and those who died for our country. That's not the point I was making. That's sidestepping the point I made that we as individuals don't owe society at large from our property for any of your success. We of course pay taxes, but I don't see myself with a debt to others. Taxes are nothing more than a way to pay for services, a kind of bastardized user fee as I said before, but how can you say I owe something. In a way, according to your rationale, you owe something to me for my service to our country. Of course I don't see it that way, I signed up willingly, but you see the point. We are founded on individual responsibility and too big a govt. safety net leads to a lack of that.
First, what do you mean 'filtered down'? Second, I don't think you can treat SS like that. It's essentially forced retirement savings...to be paid back. And even though those that fall into the upper marginal brackets will pay-in the same amount (or more) to SS, their reimbursements from SS will probably be limited due to their large fixed incomes that they will receive when retired. So their 6% (up to the annual max) will go to subsidize others, which is a tax.
First, what do you mean 'filtered down'? Employers are going to pay employees whatever they are ultimately worth. If they have to pay an additional 6.2% tax on the wages, that's going to be accounted for when determining the net pay to the individual. For example, if I'm worth $10/hr to a company, but they have to pay a 6.2% tax on that, they are going to pay me $9.41, along with $0.59 in taxes so that my net cost to them is $10. If there's a tax on wages, the company will deal with that by providing lower wages. If there was no SS tax on the company, in the long run, that money would be transferred to wages in a competitive market. It's "paid" by the employers to make it seem like you're paying a lower amount, but ultimately it all comes out of what you (as an employee) get. Thus, the net rate is actually 12.4%, whether its being pulled out of your paycheck or your employer's account. If the 12.4% was all paid by the employer, your wages would simply be lower. If it was all paid by the employee, your wages would be higher. The net cost to the company, however, would be the same because their wage structure is based on your value to them rather than the amount you get in net-total. Second, I don't think you can treat SS like that. It's essentially forced retirement savings...to be paid back. Maybe - depending on how the program gets adjusted as it slowly becomes insolvent. However, as far as the average person on the street is concerned, whereever the money is going, the middle class person is getting less of his or her paycheck than the upper class person. Whether they are going to get some of that money back in some bizarre form 20-40 years from now isn't really that important in the here and now.
I think Clark, for having just gotten into the race, has come out with an excellent plan that I support. Quote: I really like the fact that a great deal of it is helping the states. This plan would help Texas a lot, and Texas needs all the help it can get. Man, you guys are something else. I'll give you credit for the "back and forth", but I'm not sure how much is relevent to Clark's economic policy outline. (because that's what it is... an outline) As an aside, I heard that he did pretty well in the debate today, for someone just getting his feet wet. I didn't get to see it, being busy. By the accounts I read, it's not a bad beginning. While I was driving around, I listened to Rush on the radio. He devoted a large chunk (well, the entire part I heard) giving the other 9 Democratic candidates advice on how to run against Clark. I'm not kidding! I found it very bizarre. And telling. Limbaugh was making suggestions to Dean and Kerry in particular about how to attack Clark and lambasted them for what they've done in that regard so far. Until Clark jumped into the race, Rush was spending much of his time vilifying Kerry and Dean. Now he's chastising them for not running a good campaign against Wes Clark. And some of you think Clark doesn't scare the hell out of the Republicans?? Right.
Originally posted by Major Employers are going to pay employees whatever they are ultimately worth. If they have to pay an additional 6.2% tax on the wages, that's going to be accounted for when determining the net pay to the individual. ... That's what I thought. Well, we could probably go back and forth on that all day, and that's because different businesses view that expense differently, and differently at different times. For instance, I never heard 'well job candidate Tom can be had for $40k, well, really $42.4 with employer share of SS. More often, it probably gets lost with other additional expenditures like office space and furniture for the hire. There are times, particulalrly during budgeting, when it will make a difference. Maybe - depending on how the program gets adjusted as it slowly becomes insolvent. However, as far as the average person on the street is concerned, whereever the money is going, the middle class person is getting less of his or her paycheck than the upper class person. Whether they are going to get some of that money back in some bizarre form 20-40 years from now isn't really that important in the here and now. Very American of you...to treat retirement savings as 'bizarre' and 'not important in the here and now'. That view is why this program was needed in the first place. Whether or not people can appreciate it is irrelevant. We all have assets in this program and they will be paid back to you (IIRC, the program was supposed to be insolvent by now, as the chicken-littles said years ago). If you happen to not earn a sizable income when you're older, your savings will have been subsidized by the more wealthy (a point which you elected to ignore in your previous response). It is not accurate to use these forced savings to claim that the marginal tax rate is greater for the lower bracket. If anything, it is an additional tax on the wealthy.
Well, we could probably go back and forth on that all day, and that's because different businesses view that expense differently, and differently at different times. For instance, I never heard 'well job candidate Tom can be had for $40k, well, really $42.4 with employer share of SS. More often, it probably gets lost with other additional expenditures like office space and furniture for the hire. On an individual basis, I agree with you. However, over time, if the total labor costs for a company dropped 6.2%, I'm almost positive that would eventually filter into wages. It certainly wouldn't be instantaneous, but it would happen in the long run. And this certainly applies more to larger companies than smaller ones, as their wage structure is much more objective and based on true value of employees as opposed to the more subjective small company. This will happen as a result of a competitive labor market as opposed to just the benevolence of an employer. Very American of you...to treat retirement savings as 'bizarre' and 'not important in the here and now'. That view is why this program was needed in the first place. But they aren't retirement savings - SS is more of an insurance type system than anything else. The amount you put in isn't directly correlated to the amount you get out (it is to an extent, but not directly, especially with random legal changes). Its not like your money is going into some type of private account of yours - that's what I mean when I say you get it back in some bizarre form. SS really functions more as an insurance system and thus it should be treated as such. In terms of how it functions in reality (regardless of how its accounted for), it should be treated as just another social program that needs a massive overhaul. In other words, the SS tax is just another tax not much different than the income tax - that's why I lump them all together when considering the taxes you pay on income. If you happen to not earn a sizable income when you're older, your savings will have been subsidized by the more wealthy (a point which you elected to ignore in your previous response). Again, this is why I say its an insurance system and that you get the money back in some bizarre form.
It's another tax whose proceeds get paid back at a higher rate to lower income individuals than higher income individuals. You honestly think your calculation was valid?
