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View Poll Results: The middle class is suffering and Republicans want to cut taxes for the wealthy. Do you agree with t
Yes, the wealthy need more money and power. This will help America. 38 20.54%
No, the Republicans are dead wrong.This hasn't ever helped anyone but the wealthy and will continue to hurt the middle class. 147 79.46%
Voters: 185. You may not vote on this poll

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Old 01-10-2012, 01:44 PM
 
Location: Palo Alto
12,149 posts, read 8,381,840 times
Reputation: 4190

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Ricardo? You mean the guy born about 300 years ago? I'd like to think we have moved slightly past the aristocracy period. If you want to post theories, some of our founders thought only white, land-owning males should get a vote. Probably made sense at the time to them also.

The economy is vastly different today than even 100 years ago. We have a global economy, production of goods takes a fraction of the resources, billions more total global citizens, and dozens of other changes that render much of the old theory obsolete. Mathematics is finite. Chemistry is finite, to some degree. Economics is as much Ouija board as it is science. Yet for some reason, the die-hards hang on the words of these long-dead guys like Gospel.

 
Old 01-10-2012, 01:45 PM
 
20,577 posts, read 19,240,861 times
Reputation: 8174
Quote:
Originally Posted by HappyTexan View Post
It's only 3.8% so renters most probably can afford it and not worth selling their investment. Not all investments are "speculative"; some are done to provide income.
I am talking about economic rent. They provide income but not production.



Quote:
There was a guy at my job that bought small apt buildings (4-6 units). He was handy and did the maintenance work on them and retired when he hit his magic number. That was not speculation but investing.
That's not ground rent. Ground rent is what an empty plot in San Francisco is worth.

2. A tax on rent falls wholly on the landlord. There are no
means by which he can shift the burthen upon any one else. It
does not affect the value or price of agricultural produce, for
this is determined by the cost of production in the most
unfavourable circumstances, and in those circumstances, as we
have so often demonstrated, no rent is paid. A tax on rent,
therefore, has no effect, other than its obvious one. It merely
takes so much from the landlord, and transfers it to the state.
This, however, is, in strict exactness, only true of the rent
which is the result either of natural causes, or of improvements
made by tenants. When the landlord makes improvements which
increase the productive power of his land, he is remunerated for
them by an extra payment from the tenant; and this payment, which
to the landlord is properly a profit on capital, is blended and
confounded with rent;
which indeed it really is, to the tenant,
and in respect of the economical laws which determine its amount.
A tax on rent, if extending to this portion of it, would
discourage landlords from making improvements:

Js Mill
Quote:
The flippers are the speculators and they could care less; they don't rent out homes because it ties up their flipping money.
Also with this RE crisis many more are renting rather than buying and are driving up rents.
All that rent just gets converted into interest payments to your "friends" with fiat money.



The Michael Hudson Series - Part 1 - The Housing Market - YouTube



You always pay the land's value no matter what. If you decrease taxes then it drives up the price of the property. Then taxes are not available so must be shifted to production. It will all go to the banksters.

As to the small proprietor and owner of an apartment building, the building should be tax free. In addition he should have a small mortgage and well funded local government if the ground rent is captured by government rather than bankers. However I think an even better model is to make the mortgage industry public and make it a market land tax with all other taxes obsolete. There is no reason to give away trillions of dollars to banksters who do nothing.
 
Old 01-10-2012, 01:59 PM
 
20,577 posts, read 19,240,861 times
Reputation: 8174
Quote:
Originally Posted by TrapperJohn View Post
Ricardo? You mean the guy born about 300 years ago? I'd like to think we have moved slightly past the aristocracy period. If you want to post theories, some of our founders thought only white, land-owning males should get a vote. Probably made sense at the time to them also.

The economy is vastly different today than even 100 years ago. We have a global economy, production of goods takes a fraction of the resources, billions more total global citizens, and dozens of other changes that render much of the old theory obsolete. Mathematics is finite. Chemistry is finite, to some degree. Economics is as much Ouija board as it is science. Yet for some reason, the die-hards hang on the words of these long-dead guys like Gospel.
My text book in college was based upon Ricardian trade theory of comparative advantage. Are you even educated in economics are just an arm chair genius?

Economics is certainly a science but one of human pattern recognition. Did you know that the current neoclassical theory failed in 2008? It failed because of ironically Ricado's view of money neutrality. The current Keynesian rebirth is from the long dead Malthus who saw finance as having a big role. Add the Austrians in this camp as well that see control of finance as all important. That's why post Keynesians and Austrians both predicted the bubble while the main stream failed. Its as embarrassing for current neoclassical thought as was the Philip's curve in the 70s which should have recalled long lost "resource rents" which would predict stagflation. Funny how an oil producer is known as a rentier state too. Current economic thought sucks.

The law of rent is alive and well in price discrimination applied to charging maximum pricing rather than a flat price to all.

Microeconomics - Price Discrimination
Price discrimination or yield management occurs when a firm charges a different price to different groups of consumers for an identical good or service, for reasons not associated with costs.

That's Ricardo's law.





Interesting how I was also taken to the table by Tex there for introducing MMF which is hot off the press.



UNDERSTANDING MODERN MONETARY THEORY (MMT) & OUR MODERN MONETARY SYSTEM | PRAGMATIC CAPITALISM



Hudson up there not only predicted the bust, but is alive and well.




Don't blame me for your complete ignorance of economics. That's your problem.
 
Old 01-10-2012, 02:21 PM
 
Location: Great State of Texas
86,052 posts, read 84,178,581 times
Reputation: 27718
Well Gwynedd1..the governnent is going to tax property rents to the tune of 3.8% and they didn't check with Ricardo either.

Plenty of businesses charge different prices to different groups. I get a discount when I buy a big ticket item with cash. Over 55 get discounts at stores.

Honestly I'm not debating theory here but pointing out reality.
 
Old 01-10-2012, 02:24 PM
 
20,577 posts, read 19,240,861 times
Reputation: 8174
Social Democracy for the 21st Century: A Post Keynesian Perspective: Austrians Predicted the Housing Bubble? – But so did Post Keynesians and Marxists

Feel free live in the modern age of junk economics.

However you will need this update.

Social Democracy for the 21st Century: A Post Keynesian Perspective: Austrians Predicted the Housing Bubble? – But so did Post Keynesians and Marxists


The common thread can be seen from Malthus. I choose to credit the progenitor.


Economic: Keynes On Malthus And Ricardo Theories

The idea that we can safely neglect the aggregate demand function is fundamental to the Ricardian economics, which underlie what we have been taught for more than a century. Malthus, indeed, had vehemently opposed Ricardo's doctrine that it was impossible for effective demand to be deficient;
 
Old 01-10-2012, 02:36 PM
 
20,577 posts, read 19,240,861 times
Reputation: 8174
Quote:
Originally Posted by HappyTexan View Post
Well Gwynedd1..the governnent is going to tax property rents to the tune of 3.8% and they didn't check with Ricardo either.

Plenty of businesses charge different prices to different groups. I get a discount when I buy a big ticket item with cash. Over 55 get discounts at stores.

Honestly I'm not debating theory here but pointing out reality.

That is what I am talking about. Business does it to maximize the use of their product. In other word charging someone who will pay more does not change the quantity demanded. If 2 units are sold and one pays $2 and another will pay $3 the same production will occur.

Income from rents not having to do with the costs of production are in the trillions of dollars. Think of the ground rents in Manhattan alone. You have Microsoft doc formats which is a monopoly rent( they purposely don't publish the spec). You have deep water ports, fishing rights, domain names, oil wells , mineral deposits, land, laws, subsidies, monopolies, money power etc. Taxes on that aspect of the business has no effect on production. Its trillions of dollars.


The money in ground rents is huge. Why are we taxing people who work or create capital?

Over 1.50 Acres Of Developable Land On Main Street - portland, oregon acreage, land for sale - wweek.com

Last edited by gwynedd1; 01-10-2012 at 03:11 PM..
 
Old 01-10-2012, 02:36 PM
 
Location: Palo Alto
12,149 posts, read 8,381,840 times
Reputation: 4190
My Masters degree was in finance.

Your buddy Friedman also once said "predictions are difficult - especially when they are about the future.".

He admitted that the best theory was no match for actual results, and once stated there were too many variables for anyone to truly present a definitive economic theory because of the changing calculus of man.

In fairness to your observation, I'm an arm-chair economist. In my defense, I made tons of loot over my career. I just sold my business in 2011 as well. I know a thing about making money, running a business, and paying taxes.

Theory is nice, in theory. Most of my decisions were made on basic NPV analysis, risk/reward analysis, and simple ROI/ROE calculations. I'll leave the voodoo to Kananga. Solitaire is a much better game. You old Bond fans know what I'm talking about...
 
Old 01-10-2012, 02:58 PM
 
20,577 posts, read 19,240,861 times
Reputation: 8174
Quote:
Originally Posted by TrapperJohn View Post
My Masters degree was in finance.

Your buddy Friedman also once said "predictions are difficult - especially when they are about the future.".

Friedman is Chicago school and not my buddy. Its just so obvious even the him form the Chicago school gets a land value tax.


Quote:
He admitted that the best theory was no match for actual results, and once stated there were too many variables for anyone to truly present a definitive economic theory because of the changing calculus of man.
It isn't that complicated. The current false model has labor and capital with value according to marginal utility. Its totally lobotomized even though we had it 150 years ago.

The real actors in economics are these and created in this order

labor
capital
rent
money

Thus it is the removal of the latter two and the complete removal of the labor theory of capital which closely tracts marginal utility.



Quote:
In fairness to your observation, I'm an arm-chair economist. In my defense, I made tons of loot over my career. I just sold my business in 2011 as well. I know a thing about making money, running a business, and paying taxes.

Theory is nice, in theory. Most of my decisions were made on basic NPV analysis, risk/reward analysis, and simple ROI/ROE calculations. I'll leave the voodoo to Kananga. Solitaire is a much better game. You old Bond fans know what I'm talking about...

The nice thing about the theories I believe in is because it predictive.

//www.city-data.com/forum/7948094-post12.html
The truth is government debt is far better than bank credit for us but not for banks because they want us to use their bank credit money at interest. That 300 billion will sit in the Federal Reserve and by law all those profits go back to the treasury. Its interest free money.


As far as a new debt carrying capacity I see that government debt will rise but you can be sure they want bank credit, not federal reserve created money in this system. So I expect the national debt rhetoric to come on strong. Hopefully we can somehow pay down the consumer debt but they will try to thwart such attempts. The more we can pay down commercial credit the more we can expand government debt. Along side government debt my guess is some new debt absorbing industry will be created with the same government guarantees that made billions for banks in the housing market. Perhaps a green energy Fannie and Freddie. That is what I would do if I were an Oligarch trying to keep siphoning off the wealth. So perhaps they will make massive loan guarantees into green energy to absorb new commercial credit.
That turned out to be foreign sovereign debt like Greece.

//www.city-data.com/forum/15433222-post20.html
Its kind of hard to have inflation when consumer debt drops. Business credit is following suit.

Until the national debt is increased by the removal of taxation, expect further deflationary pressure as our real estate/asset backed currency continues to make wet flapping noises.
 
Old 01-10-2012, 03:33 PM
 
Location: Long Island, NY
19,792 posts, read 13,886,589 times
Reputation: 5661
The general tone from conservatives here is that they just reject the very notion of a progressive tax system, which makes them out of touch with the history and the idea of tax fairness. As Politifact states:

Quote:
Obama's tax policy relies on the same progressive approach that has been the cornerstone of American tax policy since the federal government first collected an income tax in 1863, an approach embraced by Republicans and Democrats. It was based on the Tax Act of 1862, which President Abraham Lincoln signed, and which imposed a "duty of three per centum" on all income over $600, and five percent on income over $10,000.

The idea is that the wealthy pay a larger share of their income because they are more able to afford it. To the extent the government then gives some of the money to the less-wealthy through various programs, you could say the income is being redistributed. But that concept has been embraced by Republicans and Democrats for well over a century.
 
Old 01-10-2012, 03:38 PM
 
Location: Palo Alto
12,149 posts, read 8,381,840 times
Reputation: 4190
Quote:
Originally Posted by MTAtech View Post
The general tone from conservatives here is that they just reject the very notion of a progressive tax system, which makes them out of touch with the history and the idea of tax fairness. As Politifact states:
I can't speak for all conservatives, but I recognize the need for a progressive tax system. I also believe that everybody should have to pay something into the system.
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