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Which explains all the different kinds of sales in April around the time most families their income tax return.
Tax refunds are of course not extra income at all, but more to thr point, when is this season when all sorts of sales are not occurring? Whenever it used to be, I'm afraid that a "War on it" has occurred, as the merchants in my area no longer observe it in any way.
When people living far above the median get extra cash, however, it DOES go into a savings account, a retirement plan, for stock purchases, etc. The only ones who benefit are financial institutions. That's one of the things that angers me so much about many of the 1%. They not only set aside much of their money so it has no positive impact on the economy ... they often put it in overseas accounts or handle it in other manipulative ways so it can't even be TAXED. Even if they donate to charity, they get a tax deduction for that. Yet they call themselves patriotic and say poor people need to plan better and work harder.
Do you really believe the typical person "living far above the median" puts money in offshore bank accounts? The benefits of offshore banks is tiny overall and not worth the trouble. Wealthy people put their money to work under the care of professionals. Yes they try to avoid taxes - just like everyone else. But they would rather make 7% in regular investments and pay taxes on it than part it offshore and earn 2% tax free.
As for charity, anyone that itemizes income taxes can deduct for charity. But above a low threshold, schedule A deductions disappear. Even deductible deductions just save taxes at the marginal rate. If such a person gives $20,000 to charity, deducting that amount from their income saves them about $6,000. They still emptied their bank account of $14,000. Very wealthy people set up a charitable trust, with bigger tax advantages. But don't you want rich people to be philanthropists?
Why in heaven's name should this be a surprise to anyone? It's common sense. When poor people get their hands on money they spend it ...
Now, we have data & a rigorous economic study to support it. I like data. It takes the discussion away from your common sense opinion vs. my common sense opinion vs. some politician's common sense opinion.
Now - it is possible the economic study might be flawed, and surely economists will attempt to replicate it with other data sets and timeframes. Future studies will either confirm it (most likely) or discover a flaw.
Regardless, we now have data.
Quote:
Originally Posted by Jukesgrrl
... When people living far above the median get extra cash, however, it DOES go into a savings account, a retirement plan, for stock purchases, etc. The only ones who benefit are financial institutions. That's one of the things that angers me so much about many of the 1%. ...
Don't forget that my savings money (living below my means) has a direct positive effect on the economy as well. My local community bank takes my savings, and through the magic of fractional reserves, loans it to young families purchasing their first home, small businesses who need a loan against their receivables to make payroll, and to individuals buying a car.
My investment money in the stock market helps provide the liquidity so fund managers can issue monthly pension checks to retired public sector employees.
Quote:
Originally Posted by Jukesgrrl
... That's one of the things that angers me so much about many of the 1%. ...
As a member of the 1% (but not the .1% let alone the .01%), I get that you are angry with me even though you don't know me.
Because I make a choice to save and live below my means, extra cash goes into savings accounts and the stock market, and this makes you angry with me. Please realize those savings allow me to do things such as endow professorships at universities and make substantive contributions to charities, and if I didn't have savings which you say makes you angry, well, those contributions would never occur.
If instead I matched my standard of living to my means, I would own more many more toys. I'm sure you would call it excess conspicuous consumption and you would be angry with me.
If instead I lived beyond my means owning private jets and yachts and mansions replete with butlers and maids and chefs, you would call my lifestyle obscene and you would be angry with me.
Just be intellectually honest and say you don't like members of the 1%. You are prejudiced against me simply because of my net worth. I'll go out on a limb & guess you would heap scorn on those who are prejudiced against a fellow human being simply because of the color of their skin or their choice of sexual partner -- but somehow you justify being prejudiced against me because of my net worth.
Don't forget that my savings money (living below my means) has a direct positive effect on the economy as well. My local community bank takes my savings, and through the magic of fractional reserves, loans it to young families purchasing their first home, small businesses who need a loan against their receivables to make payroll, and to individuals buying a car.
My investment money in the stock market helps provide the liquidity so fund managers can issue monthly pension checks to retired public sector employees.
You and your bank are promoting gentrification and higher rents in the neighborhood?
I find it funny how conservatives and even libertarians complain about negative income tax from individuals but rarely say anything about how companies do it (if anything libertarians claim corporations shouldn't be paying taxes at all.)
Well, given how the bottom 50% of earners pay negligible taxes compared to the upper 50%, both in terms of total dollars and as a share of their income, it seems pointless. Here's some shocking stats for you.
In 1980, the top 1% paid 19.29% of all Federal taxes. Today, earning around 21% of the total AGI, they pay around 38% of their income.
In 1980, the bottom 50% paid 7.02% of all Federal taxes. Today, earning around 11% of the total AGI, they pay 2.78%. That means, the top 50% of earners pay roughly 97% of all Federal taxes.
I realize that most people's notion of the rich is formed from old Richie Rich comic books, but people who are screaming about the wealthy not paying their fair share just aren't paying attention to the facts.
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