Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You are confusing income with wealth. There is very little correlation.
There is no reason to increase anyone's taxes. We already pay way too much. The solution is to cut government, and cut it big. We should reduce the federal government by 40 - 50%.
I'm with you if we can take it from the defense budget
It's not the presence of Hawkeye2009 that keeps his neighbor from opening a practice.
From a philosophical point, your arguement suggests that it's more beneficial for Hawkeye to have his money and put it directly into the economy than to run it through the filter of taxation and government.
I probably agree with your last point.
I don't know the details of hawkeye's practice. But if I sell bananas and bowling balls and work 80 hours a week, reducing the size of my business and selling only bananas will certainly create an opportunity for someone else to come along and sell bowling balls.
Yes regarding money in the local economy vs in taxes -- and the middle class spends a far greater percentage of their income within their local economy compared to the upper class. That is precisely why we need a larger middle class and why we should have tax rates that discourage people from over-earning. It isn't about the government getting more money, never has been, at least to me.
Wealth is not distributed; it is earned or not earned.
The tax structure determines where the growth in the economy happens. Currently the growth is happening in the top 1%. The bottom 75% or so are actually declining. This is called wealth transfer. What happens is you loss a good paying job and can't find one that pays as well to replace it. And the good paying job isn't refilled so the economy losses that job as well. Someone up the food chain pockets a large part of the difference. Wealth transfer.
Quote:
Originally Posted by Lew_B
Why is the answer to increase/ decrease tax only to a certain segment of population? I believe that the answer is not who makes a certain dollar amount, rather the entire structure of our tax system is the problem. I like the flat tax solution, the more you make, the more you pay. No loop holes or deductions. But, given the fact that this type of approach is simple and would only require 3rd grade math skills to complete your anual taxes, our goobermint will never take part.
I like a flat tax for the bottom 99% of the wage earners. For the top 1% if the total debt is less than 150% of GDP then I'd be happy to have them enjoy the same tax rate as everyone else. But if the total debt is above that amount then tax the snot out of them.
Quote:
Originally Posted by le roi
my two cents --
the inequities in our tax system have nothing to do with the high earners vs. the low earners.
our inequities occur with how we tax wealth and assets (estate taxes/capital gains taxes/tax loopholes), compared to how we tax salaries (income tax/payroll tax). Those who own the capital vs. those who do not.
You've gotten very close to what I am looking at. We need to grow the middle class and what is happening is growth at the very top end at everyone else's expense.
Quote:
Originally Posted by Calvinist
And they just sit on their money then and never spend it? Is that really a good thing?
It is were they invest it that is the problem.
Quote:
Originally Posted by Ultralight
Becouse high income earners income is growing much faster than than the average and thus brings in more revenues if taxation is concentrated on high income earners
most important of all is to have low taxes on the middle class the broadest and most economicly important segment of society.
Also they are the true source of wealth in America. Cash them out and we are a pore third world country.
Quote:
Originally Posted by progmac
tax the top earners at 70% or more. that is how it has been for most of the past 100 years
Yip and when we were doing the best economically that is where the tax rate was.
Quote:
Originally Posted by hawkeye2009
Brilliant.
Increase capital gains, reduce the incentive for investment, and help destroy the economy further. Liberal "logic" is so contrary to common sense and historical evidence that it leads one to believe that everyday is "opposite day" for a liberal.
Increasing capital gains on short term investment and reducing it on long term investments. We want people to think in terms of what is good for the next 10 years not just this ¼. Also junk IRAs and encourage saving for retirement in credit unions. We need a high savings rate in America. Also is calling me a liberal an ad hominem atack? I don't have a political agenda or world view that I want to sell anyone. I've just looked at what works and what doesn't for the economy.
Quote:
Originally Posted by hawkeye2009
I can tell you that at a 70% tax rate (which would be over 80% with state taxes as well as social security and medicare taxes) most people would simply not work over a certain income level, as it would be a waste of time.
I personally would just shut down my practice, or get another partner and we would both work half time or less. At that tax rate, I would much rather be on the golf course or hunting, rather than working for the federal government. Only a fool would essentially work for nothing, particularly given the expenses and risk of practice.
Good for you then. I been out of work for 8 years and am now working for free rather than doing nothing. So I think that you would still be working just not making as much as you use to.
Quote:
Originally Posted by progmac
And i'd rather have you out on the golf course. You'd leave room for more people to open up practices, plus you'd be putting money into the hands of the golf course and your caddy. And apparently you'd be hiring an associate yourself. All in all sounds good for the economy. Plus it might be good for society if rich work-a-holics spent more time with their families because it would be a "waste of time" to work more. I don't know you and I'm not calling you a rich work-a-holic, that is more of a philosophical point.
Quote:
Originally Posted by Ultralight
In an modern industrilized nation the taxsystem need to benefit and stimulate the wellbeing and growth of the middle class who above that of the narrow and limited group of rich those who truly deserve the lowest taxes are also the most overall productive and that is the middle class. This is in the self intresst of the rich since lower taxes and increased purchasing power of the middle class stimulates purchasing product the rich produce so lower taxes on the middle class means even higher earnings and income for the rich upper income groups.
Well said, growing the pie rather than trying to get a larger share of a shrinking pie.
The tax structure determines where the growth in the economy happens. Currently the growth is happening in the top 1%. The bottom 75% or so are actually declining. This is called wealth transfer. What happens is you loss a good paying job and can't find one that pays as well to replace it. And the good paying job isn't refilled so the economy losses that job as well. Someone up the food chain pockets a large part of the difference. Wealth transfer.
That's quite creative.
The amount of money the top 1% makes has no negative impact on the rest of the population. In fact, you should not be concerned about how much I make or anyone else.
Two things happen when the top 1% makes more money. Either they spend it or they save it. If they spend, that helps create jobs for the other 99%. If they save it, that creates capital which can be used for new businesses or business expansion. So if the top 1% makes twice as much next year as this year, we all benefit.
We should focus more energy on growing the pie rather than trying to find ways to take one person's part of the pie and giving it to another.
How about the 50% who don't pay taxes start paying their fair share instead of leeching off the earners. Or maybe they can just off themselves and have done with it. They're a drain on society as it is.
The amount of money the top 1% makes has no negative impact on the rest of the population. In fact, you should not be concerned about how much I make or anyone else.
I am not wha I am concerned with is how you and everyone else invests there money.
Quote:
Originally Posted by Roadking2003
Two things happen when the top 1% makes more money. Either they spend it or they save it. If they spend, that helps create jobs for the other 99%. If they save it, that creates capital which can be used for new businesses or business expansion. So if the top 1% makes twice as much next year as this year, we all benefit.
That is a very big over simplification. The problem is that where you get the best return on your money is necessarily in everyone’s best interest. In the 1920’s and again starting in the 1980’s with Reagan, you had large debt bubbles. Loaning someone money to do something now can get you a very large return if you borrow 20X your initial investment on margin then buy some short term bonds. It is something like 100% return on your initial investment each year. Borrowing at 1% and buying bonds at 5%. Making stuff is a low return investment. You only do that where you have a high national savings rate. //www.city-data.com/forum/politics-other-controversies/925200-how-two-fractional-banking-systems-interact.html Here is a thought experiment that I’ve run. A high tax rate on the very top end makes them hide their income. It is the hiding of their income that affects the growth of the economy.
Quote:
Originally Posted by Roadking2003
We should focus more energy on growing the pie rather than trying to find ways to take one person's part of the pie and giving it to another.
That is exactly what I am talking about. Top tax rate dependant of total debt. Less than 150% of GDP for total debt and it would be the same as everyone else. At 200% it would be a 100% tax. That will keep “them†from screwing the little guy for their money, growing the middle class that is what I am talking about. I’m not against the top 1% having a lot of money. What I am against is taking money out of the middle class and putting it somewhere else. Growing the pie much better thing to do.
How about the 50% who don't pay taxes start paying their fair share instead of leeching off the earners. Or maybe they can just off themselves and have done with it. They're a drain on society as it is.
Take a look at the payroll tax it comes out of the workers pocket.
We are currently experiencing wealth redistribution from the middle class to the rich. This is having the effect of making us pore as a nation. http://www.sustainablemiddleclass.com/Income-inequality.html We are very close to bankrupt as a nation.
We are having a debt bubble. The low capital gains tax is in part fueling this bubble. A higher tax rate on short term capital gains would put the dampers on the carry trade. http://www.dailyreckoning.com.au/images/dr20100609a.jpg The top tax rate was dropped in the 1920's and what followed was a debt bubble. First we loaned money out abroad then we loaned it out domestically. The the economy contracted and the debt went up even farther as a % of GDP. We need to grow the real economy so the the total debt we be a smaller % of GDP.
You get a much higher return on your investment in China than you do in the US. This is a function of the long term Macro picture. China is emerging as a nation and we are maturing into economic old age. Long term growth here is not what it is in China. There are some things that need to be addressed here so that we can have domestic growth long term.
Why we should have a high top tax rate is to control the growth of the economy. We need to grow the middle class, and a high top tax rate is part of that.
Quote:
Originally Posted by progmac
I didn't know you were talking about a medical practice.
It is better for the economy for two people to be making 50k than for one person to make 100k. And better still, four people making 50k than one 200k.
Work is a virtue, not disagreeing with that.
If you make $100 / hr, 80% tax would have you at $20 / hr, which is still triple the minimum wage. Lots of people would be happy to work for that, even if it is beneath you. Okay, that one was a red herring
Although to be honest, if we're going to do a 70% rate we'll need to redo the brackets. A typical doctor certainly wouldn't earn enough to be in an appropriate top bracket.
Quote:
Originally Posted by progmac
I don't know the details of hawkeye's practice. But if I sell bananas and bowling balls and work 80 hours a week, reducing the size of my business and selling only bananas will certainly create an opportunity for someone else to come along and sell bowling balls.
Yes regarding money in the local economy vs in taxes -- and the middle class spends a far greater percentage of their income within their local economy compared to the upper class. That is precisely why we need a larger middle class and why we should have tax rates that discourage people from over-earning. It isn't about the government getting more money, never has been, at least to me.
your arguments are based on a fallacy that the economy is a zero sum gain, which it is not. taxing the rich more only shifts the tax burden to the lower income classes. back in the 50's through the 70/s when the top marginal rate was 70%, the top 1% of wage earners paid only 19% of the taxes collected by the government. when the top rate was lowered to 28%, the top 1% of wage earners started paying 40% of the taxes collected by the government. currently the top 1% of wage earners still pay 40% of the taxes collected, and the top 50% of wage earners pay 97% of the taxes collected by the government.
when you raise taxes on a thing, you get less of a thing. for instance every time the governments raises taxes on fuel, people used less fuel. not a great deal, but less regardless.
the big problem with raising taxes is that not only to prices go up, and unemployment goes up, the tax base goes DOWN, which means less revenue to the government. if you raise capital gains taxes, either the short term or the long term it doesnt matter, you get less investment in business, and the economy stagnates. often times short term capital investments are used for making money to invest in long term investments to avoid borrowing money and paying interest on borrowed money.
the other fallacy is about the debt bubble. it has nothing to do with taxes, but everything to do with interest rates. higher interest rates, tightens up the credit markets, which makes it tougher for people to get credit, and that is not necessarily a bad thing, as indicated by the housing bubble in 2008, and the lead up to the market crash in 1929.
the time leading up to the housing bubble, interest rates were, and still are, extremely low, the prime rate being .25%. that meant that people could borrow money rather cheaply, even though they did not have enough income to cover the mortgage payment. so they got low initial rate arm's, and interest only loan payments, with a balloon in ten years for all the principle that was not paid, and fannie and freddy were covering mortgages up to $700k, about 10 times what they hsould have been covering. when the oil prices spiked, people on the edge couldnt make mortgage payments, and buy fuel and buy food, so the mortgage got put off, and homes got forclosed on.
in 1929, easy credit allowed people to buy stocks on margin, and as long as they could sell the stocks when they moved in the right direction, they could make the margin calls. however a small correction in the markets caused a lot of people to default on the margin calls, which forced the sale of a lot of stock to cover the margin call, which killed the markets, which caused a run on the banks, which collapsed the economy as a whole.
easy credit is the problem not low taxes. what needs to happen is that the prime lending rate needs to go up to about 6-9% so the debt can come down, and the financial pump can be primed again to get credit flowing again.
Quote:
Originally Posted by Roadking2003
You are confusing income with wealth. There is very little correlation.
There is no reason to increase anyone's taxes. We already pay way too much. The solution is to cut government, and cut it big. We should reduce the federal government by 40 - 50%.
your arguments are based on a fallacy that the economy is a zero sum gain, which it is not. taxing the rich more only shifts the tax burden to the lower income classes. back in the 50's through the 70/s when the top marginal rate was 70%, the top 1% of wage earners paid only 19% of the taxes collected by the government. when the top rate was lowered to 28%, the top 1% of wage earners started paying 40% of the taxes collected by the government. currently the top 1% of wage earners still pay 40% of the taxes collected, and the top 50% of wage earners pay 97% of the taxes collected by the government.
You are neglecting to look at the payroll tax. The split between payroll tax and income tax is about 50/50. Also the higher tax burden reflected the higher percentage of total income in the lower income brackets.
Quote:
Originally Posted by rbohm
when you raise taxes on a thing, you get less of a thing. for instance every time the governments raises taxes on fuel, people used less fuel. not a great deal, but less regardless.
Yes and if you raise taxes on the payroll as was done under Clinton then you lower taxes on the top end under Busch a few years later then you get less middle class income and more top end income. This is using your argument. And also wealth redistribution.
Quote:
Originally Posted by rbohm
the big problem with raising taxes is that not only to prices go up, and unemployment goes up, the tax base goes DOWN, which means less revenue to the government. if you raise capital gains taxes, either the short term or the long term it doesnt matter, you get less investment in business, and the economy stagnates. often times short term capital investments are used for making money to invest in long term investments to avoid borrowing money and paying interest on borrowed money.
So the theory goes.
Quote:
Originally Posted by rbohm
the other fallacy is about the debt bubble. it has nothing to do with taxes, but everything to do with interest rates. higher interest rates, tightens up the credit markets, which makes it tougher for people to get credit, and that is not necessarily a bad thing, as indicated by the housing bubble in 2008, and the lead up to the market crash in 1929.
http://www.heritage.org/Research/Rep...5/figure2.ashx
I tryed and failed to coppy a graph of the total debt load in America. google it for yourself and look at the two graphs when one is high the other is low when one is low the other is high go figure.
Looking at these two graphs. When the top tax rate is low the total debt load is high. When the top tax rate is high the total debt load is low. This does not prove cause and effect. Look at 1981. Reagan and supply side economics. The debt bubble started then.
Quote:
Originally Posted by rbohm
the time leading up to the housing bubble, interest rates were, and still are, extremely low, the prime rate being .25%. that meant that people could borrow money rather cheaply, even though they did not have enough income to cover the mortgage payment. so they got low initial rate arm's, and interest only loan payments, with a balloon in ten years for all the principle that was not paid, and fannie and freddy were covering mortgages up to $700k, about 10 times what they hsould have been covering. when the oil prices spiked, people on the edge couldnt make mortgage payments, and buy fuel and buy food, so the mortgage got put off, and homes got forclosed on.
We are headed for a really hard time. How are we going to service that debt load? How are we going to pay it back?
Quote:
Originally Posted by rbohm
in 1929, easy credit allowed people to buy stocks on margin, and as long as they could sell the stocks when they moved in the right direction, they could make the margin calls. however a small correction in the markets caused a lot of people to default on the margin calls, which forced the sale of a lot of stock to cover the margin call, which killed the markets, which caused a run on the banks, which collapsed the economy as a whole.
The same thing is set up to happen now. There is so much stuff bought on margin it is unreal.
Quote:
Originally Posted by rbohm
easy credit is the problem not low taxes. what needs to happen is that the prime lending rate needs to go up to about 6-9% so the debt can come down, and the financial pump can be primed again to get credit flowing again.
The two go together. We can't raise the interest rates because we wouldn't be able to service the national debt. And we are just blowing another really big bubble. Well trying too. But it looks like it isn't going very well this time. What we need to do is to tax the payment of interest on debt. That way we can have an effective interest rate of 6~9% and a real interest rate on the national debt that is still low. The total debt needs to come down and we can't raise the interest rates.
Wealth is the product of labor times the skill level of the labor, not the units of exchange.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
