I'm no economist...

[Serge Ibaka]

But doesn't it make more sense that the richest citizens should shoulder more of the tax burden?

Wasn't this the logic of the Bush Tax Rebates (or whatever): poor and middle-class people live hand-to-mouth. And if they have a few hundred extra dollars, they're going to spend it on something that they want or need.

Why does the GOP insist that the richest Americans should be taxed at their current rate (and not how they were taxed in the 90s--I've seen Clueless; the rich were doing just fine in the 90s)?

Wouldn't it create more jobs if a whole bunch of people are spending a little extra money (in stead of a few people putting a lot of extra money into a savings account)?

I think the Democrats are pus**es for accepting the GOP's argument as a reasonable political position; it's clearly greedy nonsense.

[Curly Bill]

Yeah, clearly greedy that the rich want to keep their money instead of giving even more to the government. Hard to believe actually. :rolleyes:

[Serge Ibaka]

Yawn. Being rich is so hard!

[Curly Bill]

So is being a troll.

[Serge Ibaka]

lol. That's not fair.

I'm open to critiques of my logic. I seriously am not an economist.

[SicEmBaylor]

I have no problem with a modest tax hike if coupled with massive cuts in spending and ratification of the BBA.

[TheLadiesMike]

http://img38.imageshack.us/img38/3084/incometaxequitypng1.png

"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income"

http://www.taxfoundation.org/news/show/250.html

The report is from last fall so data obviously lags a bit. That's almost twice as much as their share of income. Is that not "fair"?

[Eielson]

But doesn't it make more sense that the richest citizens should shoulder more of the tax burden?

I'm not an economist either, but if I'm not mistaken, they do..and it's not even close.

[Sooner5030]

economist are largely employed by research organizations, universities and governments. I wouldn't want to ask these folks 'who should pay more?'.

[MR2-Sooner86]

Simple, the one constant I've heard from every "rich" person I've talked to is that they don't trust the government with their money. When they see things like $98,000 for a walking tour through a town of under 500 people or $10 million for wine research (http://www.governmentspendsagain.com/governmentwaste/2010/04/index.html) you can understand how they think they can spend their money more wisely.

"You have to give up some to help the poor in this country."

This is a typical talking point a politician will tell a "rich" person. Basically, to help out with social security (which has been handled awfully) and medical care (which has been handled just as bad). A person will hear this but then they see $2 trillion go to bailing out banks, auto manufactures, and getting thrown down into a hole.

Not to mention when you're dealing with government, you get a cluster like no other.

A private employee goes to the store to buy a bottle of aspirin for $1.
A government employee goes to the store to buy a bottle of aspirin for $20.

Government is very open to waste and fraud. In that simple $1 transaction you have special interest, lobbyist, unions, bureaucracies, oversights, oversights to the oversights, rules, regulations, and such that get in the way to make that $1 transaction jump to $20. Remember, the Department of Energy was made to get us off foreign oil and now costs us close to $30 billion a year.

Speaking of the Stimulus, how does this help the economy? Here's just a small example.
• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.

• A $246 million tax break for Hollywood movie producers to buy motion picture film.

• $650 million for the digital television converter box coupon program.

• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).

• $448 million for constructing the Department of Homeland Security headquarters.

• $248 million for furniture at the new Homeland Security headquarters.

• $600 million to buy hybrid vehicles for federal employees.

• $125 million for the Washington sewer system.

• $150 million for Smithsonian museum facilities.

• $75 million for "smoking cessation activities."

• $75 million for salaries of employees at the FBI. (http://www.cnn.com/2009/POLITICS/02/02/gop.stimulus.worries/index.html)

So you can see how people think they know how to spend their money better than Washington. Help the poor? Give medical care to a crack baby? Most would rather write a check to an organization dedicated to that than trust a politician to do it.

Now, what kind of taxes are we talking about? When is one considered rich? We talking in the hundreds of thousands, single digit millions, double digit, triple digit, or billions? What do we tax? Do we tax money going into your bank account or do we tax it when you're writing a check at Best Buy/car dealership?

As stated before, I'm for a Fair Tax (abolishes all taxes puts in place national sales tax). As for other tax rates, I found this little gem people seem to ignore.

But the real jolt for tax-cutting opponents was that the 03 Bush tax cuts also generated a massive increase in federal tax receipts. From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history. According to the Treasury Department, individual and corporate income tax receipts were up 40 percent in the three years following the Bush tax cuts. And (bonus) the rich paid an even higher percentage of the total tax burden than they had at any time in at least the previous 40 years. This was news to theNew York Times, whose astonished editorial board could only describe the gains as a “surprise windfall.”

Unfortunately, Mr. Bush allowed Congress to spend away those additional tax revenues. (http://www.washingtontimes.com/news/2010/feb/3/bush-tax-cuts-boosted-federal-revenue/)

This is why I hate people who say, "just raise taxes!" We can't do that anymore. We don't have a revenue problem in Washington, we have a spending problem on BOTH SIDES. It doesn't address the problem but it sticks a temporary solution to that problem.

Your wife (the women will hate me I know) uses your credit card. She doesn't have a job but uses your income to fund that credit card. When her credit card is maxed-out she asks you to raise the limit. You do that. She gets it maxed-out again so you raise the limit some more. As she goes and spends this credit card she's complaining to you that you're not giving enough money to help her spending habits.

See where this is going? Eventually you have to be a man, nut up, make sacrifices (no sex), or else you're going to go down a road of financial ruin.

I mean during this recession millions of families have had to make sacrifices. Why can't I expect the same belt tightening and sacrifice from a congressman? We've done it, why can't they? Seriously, why can't they? They tell us they just need a "little more" money and they'll get this fixed right away. That's all they ask is "just a little more" yet if you ask them to cut a few dollars here and there and all of a sudden you want to kill babies and pull the plug on grandma. The economy has becoming nothing more than another political tool for those seeking reelection.

I know many will disagree. I know a few on here think I'm crazy for supporting the Fair Tax. Others will think the rich need to "pay their share because that's what got us into this mess!" Many might think it's a revenue, not spending problem. I respectfully disagree.

I have a question for you though. Lets say you're looking for a job.

State A has an income tax and is a large economy
State B has no income tax but is not as big of an economy

One of these states is about to go bankrupt and another created 48% of post-recession jobs. Which state would you rather go and try to find work in? Take your time, do your research, and think it over. No rush.

[bigfatjerk]

What happens is the rich are smart and find ways to put money into non taxable bonds or overseas where it won't be taxed as much. So in the end the rich don't get taxed as much. What happens when you raise taxes is you have fewer official millionaires so you get less revenue in the end.

What needs to change in Washington is spending. I would like to see a change in the tax system too. Have a flat or fair tax with no deductions in the tax system. But that's not going to happen because unions and corporations that are in both parties pockets wouldn't allow it.

[OU Engineer]

Simple, the one constant I've heard from every "rich" person I've talked to is that they don't trust the government with their money. When they see things like $98,000 for a walking tour through a town of under 500 people or $10 million for wine research (http://www.governmentspendsagain.com/governmentwaste/2010/04/index.html) you can understand how they think they can spend their money more wisely.

"You have to give up some to help the poor in this country."

This is a typical talking point a politician will tell a "rich" person. Basically, to help out with social security (which has been handled awfully) and medical care (which has been handled just as bad). A person will hear this but then they see $2 trillion go to bailing out banks, auto manufactures, and getting thrown down into a hole.

Not to mention when you're dealing with government, you get a cluster like no other.

A private employee goes to the store to buy a bottle of aspirin for $1.
A government employee goes to the store to buy a bottle of aspirin for $20.

Government is very open to waste and fraud. In that simple $1 transaction you have special interest, lobbyist, unions, bureaucracies, oversights, oversights to the oversights, rules, regulations, and such that get in the way to make that $1 transaction jump to $20. Remember, the Department of Energy was made to get us off foreign oil and now costs us close to $30 billion a year.

Speaking of the Stimulus, how does this help the economy? Here's just a small example.
• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.

• A $246 million tax break for Hollywood movie producers to buy motion picture film.

• $650 million for the digital television converter box coupon program.

• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).

• $448 million for constructing the Department of Homeland Security headquarters.

• $248 million for furniture at the new Homeland Security headquarters.

• $600 million to buy hybrid vehicles for federal employees.

• $125 million for the Washington sewer system.

• $150 million for Smithsonian museum facilities.

• $75 million for "smoking cessation activities."

• $75 million for salaries of employees at the FBI. (http://www.cnn.com/2009/POLITICS/02/02/gop.stimulus.worries/index.html)

So you can see how people think they know how to spend their money better than Washington. Help the poor? Give medical care to a crack baby? Most would rather write a check to an organization dedicated to that than trust a politician to do it.

Now, what kind of taxes are we talking about? When is one considered rich? We talking in the hundreds of thousands, single digit millions, double digit, triple digit, or billions? What do we tax? Do we tax money going into your bank account or do we tax it when you're writing a check at Best Buy/car dealership?

As stated before, I'm for a Fair Tax (abolishes all taxes puts in place national sales tax). As for other tax rates, I found this little gem people seem to ignore.

But the real jolt for tax-cutting opponents was that the 03 Bush tax cuts also generated a massive increase in federal tax receipts. From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history. According to the Treasury Department, individual and corporate income tax receipts were up 40 percent in the three years following the Bush tax cuts. And (bonus) the rich paid an even higher percentage of the total tax burden than they had at any time in at least the previous 40 years. This was news to theNew York Times, whose astonished editorial board could only describe the gains as a “surprise windfall.”

Unfortunately, Mr. Bush allowed Congress to spend away those additional tax revenues. (http://www.washingtontimes.com/news/2010/feb/3/bush-tax-cuts-boosted-federal-revenue/)

This is why I hate people who say, "just raise taxes!" We can't do that anymore. We don't have a revenue problem in Washington, we have a spending problem on BOTH SIDES. It doesn't address the problem but it sticks a temporary solution to that problem.

Your wife (the women will hate me I know) uses your credit card. She doesn't have a job but uses your income to fund that credit card. When her credit card is maxed-out she asks you to raise the limit. You do that. She gets it maxed-out again so you raise the limit some more. As she goes and spends this credit card she's complaining to you that you're not giving enough money to help her spending habits.

See where this is going? Eventually you have to be a man, nut up, make sacrifices (no sex), or else you're going to go down a road of financial ruin.

I mean during this recession millions of families have had to make sacrifices. Why can't I expect the same belt tightening and sacrifice from a congressman? We've done it, why can't they? Seriously, why can't they? They tell us they just need a "little more" money and they'll get this fixed right away. That's all they ask is "just a little more" yet if you ask them to cut a few dollars here and there and all of a sudden you want to kill babies and pull the plug on grandma. The economy has becoming nothing more than another political tool for those seeking reelection.

I know many will disagree. I know a few on here think I'm crazy for supporting the Fair Tax. Others will think the rich need to "pay their share because that's what got us into this mess!" Many might think it's a revenue, not spending problem. I respectfully disagree.

I have a question for you though. Lets say you're looking for a job.

State A has an income tax and is a large economy
State B has no income tax but is not as big of an economy

One of these states is about to go bankrupt and another created 48% of post-recession jobs. Which state would you rather go and try to find work in? Take your time, do your research, and think it over. No rush.

/thread

[diverdog]

http://img38.imageshack.us/img38/3084/incometaxequitypng1.png

"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income"

http://www.taxfoundation.org/news/show/250.html

The report is from last fall so data obviously lags a bit. That's almost twice as much as their share of income. Is that not "fair"?

"Of adjusted gross income"! There are billionaires who pay little or no taxes. The rich need to pay more or you will pay a lot more!

[diverdog]

/thread

Your atrticle is misleading in so many ways. First of all in case you missed it there was a huuuuuuuuge housing bubble during 2004-2008. All of those additional revenues completely evaporated when Bush bailed out the banks.

Secondly the stimulus money you are bitching about is a drop in the bucket compared to the trillion dollars we waisted in Iraq. But I never hear you righties complain about that.

Third tax rates are lower than have ever been since I have been alive. Revenues are 16% of GDP. We have had tax cuts and extension of tax cuts. The rich have gotten a lot richer. So that begs the questions.....where are the jobs and where is the additional revenue?

[SanJoaquinSooner]

Your atrticle is misleading in so many ways. First of all in case you missed it there was a huuuuuuuuge housing bubble during 2004-2008. All of those additional revenues completely evaporated when Bush bailed out the banks.

Secondly the stimulus money you are bitching about is a drop in the bucket compared to the trillion dollars we waisted in Iraq. But I never hear you righties complain about that.

Third tax rates are lower than have ever been since I have been alive. Revenues are 16% of GDP. We have had tax cuts and extension of tax cuts. The rich have gotten a lot richer. So that begs the questions.....where are the jobs and where is the additional revenue?


Good points dd

[bigfatjerk]

Your atrticle is misleading in so many ways. First of all in case you missed it there was a huuuuuuuuge housing bubble during 2004-2008. All of those additional revenues completely evaporated when Bush bailed out the banks.

Secondly the stimulus money you are bitching about is a drop in the bucket compared to the trillion dollars we waisted in Iraq. But I never hear you righties complain about that.

Third tax rates are lower than have ever been since I have been alive. Revenues are 16% of GDP. We have had tax cuts and extension of tax cuts. The rich have gotten a lot richer. So that begs the questions.....where are the jobs and where is the additional revenue?

I think you are right in some ways and I think the other post is right in a lot of ways. It all adds up. We spent our way out of any revenue increases we could ever have the last decade. When Bush left office the debt was only at 7 or 8 trillion. I say only because it's nearly 15 trillion now.

[picasso]

You hit the nail on the head with your title.

[dwarthog]

The hard life of being poor in America....

http://www.heritage.org/research/reports/2004/01/understanding-poverty-in-america




For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 35 million persons classified as "poor" by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or welloff just a few generations ago. Today, the expenditures per person of the lowestincome onefifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.1

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

* Fortysix percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a threebedroom house with oneandahalf baths, a garage, and a porch or patio.
* Seventysix percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
* Only 6 percent of poor households are overcrowded. More than twothirds have more than two rooms per person.
* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
* Nearly threequarters of poor households own a car; 30 percent own two or more cars.
* Ninetyseven percent of poor households have a color television; over half own two or more color televisions.
* Seventyeight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
* Seventythree percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

[sheepdogs]

When the tornado went through Joplin and turned the town into a nightmare for many there were those who donated money to the cause. Is this not an accurate assessment? People also donated foodstuffs, toiletries, clothes etc. Is this not accurate as well? And people also donated their time. Is this also not true? What we have here is a failure in understanding in regards to those taxpayers who virtually pay no taxes and that is if they aren't willing to pay their fair share then they need to donate their time instead. But worms will be worms, for rather than do the appropriate thing they request that those who already shoulder the onus of paying most of the taxes bear more of the responsibility. Those who are selfish should be spoken to and not heard.

[Partial Qualifier]

When the tornado went through Joplin and turned the town into a nightmare for many there were those who donated money to the cause. Is this not an accurate assessment? People also donated foodstuffs, toiletries, clothes etc. Is this not accurate as well? And people also donated their time. Is this also not true? What we have here is a failure in understanding in regards to those taxpayers who virtually pay no taxes and that is if they aren't willing to pay their fair share then they need to donate their time instead. But worms will be worms, for rather than do the appropriate thing they request that those who already shoulder the onus of paying most of the taxes bear more of the responsibility. Those who are selfish should be spoken to and not heard.

Appropriate? Selfishness?? WTF, this is America dude. This ain't Denmark.

I bet most of those people donating food, clothing, and their time were NOT the type of people who sit around bitching about the "unfairness" of America.

[KantoSooner]

Can we all simply agree that the largest law ever written (the IRS code) and a law which no one has ever read completely through (according to my tax law prof at OU....in the 1980's, the law is more complex now) and whose interpretation requires, quite literally, over 500,000 professional 'interpreters' (CPA's, tax preparers, attorneys, IRS agents, etc) and its own court system is simply too complex. And that said complexity breeds at least the appearance of, if not the reality of, unfairness. (Afterall, the wealthy can hire their own interpreters to pay the least amount legally due. To the not wealthy, even if they are paying much less and a lower percentage of their income, this must, by definition, seem unfair.)

I've lived in several other highly developed, civilized countries and in none were the taxes as big a pain as here. In Japan, my taxes took 15 minutes to prepare, I did it myself (and my Japanese, while peachy in a bar setting, is not 'technical') and I paid within a percent or two of what I paid here.

While it's way too late for this year, next or the next five years, even, WE NEED A NEW TAX CODE. AND PREFERABLY ONE THAT IS NO MORE THAN ABOUT 20-30 PAGES IN LENGTH.

You want fair? eliminate progressivity in tax rates AND writeoffs and credits. We will of course always want 'more' for 'less'; if the code is simple, at least we'll be able to see, clearly, the nature of the bargain.

[sheepdogs]

Appropriate? Selfishness?? WTF, this is America dude. This ain't Denmark.

I bet most of those people donating food, clothing, and their time were NOT the type of people who sit around bitching about the "unfairness" of America.

Come again? Seems this discussion involves two groups of people. One group statistically pays the brunt of the taxes while the other group does not. So are both groups wrong or is one group more right than the other?

[My Opinion Matters]

Why is there never a shortage of people rushing to the defense of the wealthy? I've never been able to wrap my ahead around this mentality. I promise you, it is not a mutual loyalty. The rich have no loyalty to you, and they're not recruiting. Throughout history they've done everything they can to ensure their club remains a small and exclusive one.

Spare me the "wealthy take a disproportionate amount of the risk and are therefore entitled to a disproportionate amount of the reward" line. Yeah, that was a helluva risk Christy Walton and Forrest Mars took by leaving the womb.

[sheepdogs]

Why is there never a shortage of people rushing to the defense of the wealthy? I've never been able to wrap my ahead around this mentality. I promise you, it is not a mutual loyalty. The rich have no loyalty to you, and they're not recruiting. Throughout history they've done everything they can to ensure their club remains a small and exclusive one.

Spare me the "wealthy take a disproportionate amount of the risk and are therefore entitled to a disproportionate amount of the reward" line. Yeah, that was a helluva risk Christy Walton and Forrest Mars took by leaving the womb.

Doesn't it work both ways or does logic only make pit stops in your line of thinking?

[DIB]

Hike up taxes on the wealthy. Create a new tax credit for job creation equal to the expected income taxes of said position. The rich that aren't willing to create jobs will pay a lot more in taxes; those that are will stimulate the economy while replacing their taxes paid with a new position.


I am a ****ing genius

[TheHumanAlphabet]

But doesn't it make more sense that the richest citizens should shoulder more of the tax burden?

NO!

[jk the sooner fan]

Why is there never a shortage of people rushing to the defense of the wealthy? I've never been able to wrap my ahead around this mentality. I promise you, it is not a mutual loyalty. The rich have no loyalty to you, and they're not recruiting. Throughout history they've done everything they can to ensure their club remains a small and exclusive one.

Spare me the "wealthy take a disproportionate amount of the risk and are therefore entitled to a disproportionate amount of the reward" line. Yeah, that was a helluva risk Christy Walton and Forrest Mars took by leaving the womb.

rich people dont bother me - i'm not threatened by them

and i hope to one day be one of them - even though its not likely

i dont get the class envy, but jealousy being what it is....

how many people get pay checks from poor people?

[sooner_born_1960]

"Of adjusted gross income"! There are billionaires who pay little or no taxes. The rich need to pay more or you will pay a lot more!
So, you are suggesting that wealth, in and of itself, be taxed? Not just income?

[dwarthog]

Why is there never a shortage of people rushing to the defense of the wealthy? I've never been able to wrap my ahead around this mentality. I promise you, it is not a mutual loyalty. The rich have no loyalty to you, and they're not recruiting. Throughout history they've done everything they can to ensure their club remains a small and exclusive one.

Spare me the "wealthy take a disproportionate amount of the risk and are therefore entitled to a disproportionate amount of the reward" line. Yeah, that was a helluva risk Christy Walton and Forrest Mars took by leaving the womb.

Those two examples of extreme inherited wealth are not representative of the class designated as wealthy in this country, but instead a very small fraction.

Not that being a millionaire these days is anything special, far and away the largest percentage of folks falling within that definition are average folks living in middle class neighborhoods.

BTW, since Forrest Mars Sr is dead, you probably mean Forrest Mars Jr.

[KantoSooner]

I really don't have a personal problem with some people being fabulously rich. Nor with the fact that many are far richer than I am or will ever be. Frankly, Bill Gates' bank account has little, if anything, to do with my sense of well being and happiness.
If it does, to anyone else, let me suggest that your problems have more to do with your own sense of self worth than with any external economic 'problem'.
I think inherited wealth is just fine. It can be a blessing or curse, largely dependent on how well adjusted your parents are/were. That the Duponts and Bushs have nifty estates that my family will never enjoy does not bitch me out at all.
What I would like to see is some fundamental fairness in the tax code. I'd like to eliminate corporate subsidies. All of them. And I'd like to elminate corporate taxes. All of them. You can't tax a corporationi. It's like a worm. You can only tax their customers, stock holders and employees. So, tax individuals, preferably at a fixed percentage with no deducts and be done with it. Tax dividends and capital gains as normal income. End interest deductions. Tax increases in home value as normal income if not immediately reinvested in another house.
get the government out, as much as possible, from the business of 'directing' society through tax policy. Human beings are not perfect. We can't foresee all the outcomes of our actions. That's the magic of capitalism: we let millions of decisions balance each other out. Why do we believe that people in government are smarter than the rest of society? Why do we continue to let them pretend they know how to run the economy?

[pphilfran]

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

In 2008 (latest data, AGI) we had 3.75 million people making more than 200k per year...we had a total of 142.4 million returns filed..

If, on average, we take 100k from each of those 3.75 million "Rich" folks and "distribute" the wealth to those less well off we get a total of 375 billion dollars

Now lets take that 375 billion and distribute it equally to the 139 million folks that are not as well off...

Each of those folks would get, on average, $2,700 over a year...52 bucks a week...

Now...how many new cars, homes, or other high ticket items will the less well off buy with that additional 52 bucks a week? Keep in mind that the $52 bucks is before any taxes...

How many high ticket items will not be bought by the nearly 4 million that are now paying an additional 100k in taxes?

Going back to the Clinton tax rate will not come close to the numbers that I quoted....we might pull in 1/5 of the numbers I used...$10 bucks a week...

We might sell more bread and milk but we won't sell more cars and homes...

[pphilfran]

Why is there never a shortage of people rushing to the defense of the wealthy? I've never been able to wrap my ahead around this mentality. I promise you, it is not a mutual loyalty. The rich have no loyalty to you, and they're not recruiting. Throughout history they've done everything they can to ensure their club remains a small and exclusive one.

Spare me the "wealthy take a disproportionate amount of the risk and are therefore entitled to a disproportionate amount of the reward" line. Yeah, that was a helluva risk Christy Walton and Forrest Mars took by leaving the womb.

Cause we can tax the snot out of them and it won't make a bit of difference with the loopholes and deductions that they legally use...

[sappstuf]

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

In 2008 (latest data, AGI) we had 3.75 million people making more than 200k per year...we had a total of 142.4 million returns filed..

If, on average, we take 100k from each of those 3.75 million "Rich" folks and "distribute" the wealth to those less well off we get a total of 375 billion dollars

Now lets take that 375 billion and distribute it equally to the 139 million folks that are not as well off...

Each of those folks would get, on average, $2,700 over a year...52 bucks a week...

Now...how many new cars, homes, or other high ticket items will the less well off buy with that additional 52 bucks a week? Keep in mind that the $52 bucks is before any taxes...

How many high ticket items will not be bought by the nearly 4 million that are now paying an additional 100k in taxes?

Going back to the Clinton tax rate will not come close to the numbers that I quoted....we might pull in 1/5 of the numbers I used...$10 bucks a week...

We might sell more bread and milk but we won't sell more cars and homes...

Are you suggesting that we tie the dollar to bread and milk? ;)

[pphilfran]

A worksheet I completed last year...at the time 2007 was the latest data available...

http://i264.photobucket.com/albums/ii187/pphilfran/agichange.jpg

[pphilfran]

Are you suggesting that we tie the dollar to bread and milk? ;)

I think our leadership is voting on that today...

[achiro]

Do any of you arguing that it's ok to increase taxes on anyone really think the government needs more income?

[pphilfran]

Do any of you arguing that it's ok to increase taxes on anyone really think the government needs more income?

We are so f'd that we can't get out of the hole without sizable tax increases...no way in hell can we cut a trillion a year....servicing the debt will eat out lunch in 10 years...

Debt servicing is growing over 15% a year through 2016...it will grow to 562 billion a year by 2016...we will spend over a trillion a year to service the debt within 10 years and that is without any "unforeseen" increase in interest rates...

http://www.whitehouse.gov/omb/budget/Historicals

Table 3.1

[achiro]

We are so f'd that we can't get out of the hole without sizable tax increases...no way in hell can we cut a trillion a year

I could do it in a few hours. :D

[sappstuf]

We are so f'd that we can't get out of the hole without sizable tax increases...no way in hell can we cut a trillion a year....servicing the debt will eat out lunch in 10 years...

Debt servicing is growing over 15% a year through 2016...it will grow to 562 billion a year by 2016...we will spend over a trillion a year to service the debt within 10 years and that is without any "unforeseen" increase in interest rates...

http://www.whitehouse.gov/omb/budget/Historicals

Table 3.1

I wonder if that includes Obamacare. Don't forget taxes are going up in 2013... Maybe twice.

[pphilfran]

I wonder if that includes Obamacare. Don't forget taxes are going up in 2013... Maybe twice.

He has to have those increases in his budget...he shows revenue growing to 19.3% of GDP by 2016...and he won't pull that number at current tax rates and deductions...we have only hit 19.3% or higher 6 times since 1940...twice during WWII and four times with Clinton with a booming stock market that accounted for most of the revenue gains due to cap gains....Clinton also had a long term trend of lower interest rates...and we ain't gonna see lower interest rates...

http://www.whitehouse.gov/omb/budget/Historicals

Table 1.3

[oudavid1]

The idea of discriminating against someone because of how much money they make isnt very American and not the governments job.

[NormanPride]

****, the government hasn't been doing its job since the 19th century.

[Gandalf_The_Grey]

Everyone should pay the same tax rate. Mary Jo Teacher and Mary Jo Billionaire. We shouldn't punish them for being successful. The Government needs to cut ALL non essential money. EPA checking water safety - keep that. EPA checking to see if water beetle path is deviated by up to 10 degrees by coal emission - cut that. Get the military back home, guard the borders and actually throw out the illegals and we will save more than enough money.

[diverdog]

So, you are suggesting that wealth, in and of itself, be taxed? Not just income?

No. The rich like a lot of people do not pay taxes on all their income.

[TheHumanAlphabet]

He has to have those increases in his budget...he shows revenue growing to 19.3% of GDP by 2016...and he won't pull that number at current tax rates and deductions...we have only hit 19.3% or higher 6 times since 1940...twice during WWII and four times with Clinton with a booming stock market that accounted for most of the revenue gains due to cap gains....Clinton also had a long term trend of lower interest rates...and we ain't gonna see lower interest rates...

http://www.whitehouse.gov/omb/budget/Historicals

Table 1.3

What a bunch of crap! This is smoke and mirrors and is not real. This is use of a fairy tail forecast. What a bunch of crap!

[TheHumanAlphabet]

Everyone should pay the same tax rate. Mary Jo Teacher and Mary Jo Billionaire. We shouldn't punish them for being successful. The Government needs to cut ALL non essential money. EPA checking water safety - keep that. EPA checking to see if water beetle path is deviated by up to 10 degrees by coal emission - cut that. Get the military back home, guard the borders and actually throw out the illegals and we will save more than enough money.

^^^This

[jkm, the stolen pifwafwi]

But doesn't it make more sense that the richest citizens should shoulder more of the tax burden?

Wasn't this the logic of the Bush Tax Rebates (or whatever): poor and middle-class people live hand-to-mouth. And if they have a few hundred extra dollars, they're going to spend it on something that they want or need.

Why does the GOP insist that the richest Americans should be taxed at their current rate (and not how they were taxed in the 90s--I've seen Clueless; the rich were doing just fine in the 90s)?

Wouldn't it create more jobs if a whole bunch of people are spending a little extra money (in stead of a few people putting a lot of extra money into a savings account)?

I think the Democrats are pus**es for accepting the GOP's argument as a reasonable political position; it's clearly greedy nonsense.

You are oversimplifying the issue here. The reason that you lower taxes on the "Rich" is to get them to pay taxes at all.

Lets talk about the richest guy in the US Bill Gates.

Bill Gates is worth 40-60 Billion depending on MSFT's stock price.

90% of that wealth is tied up in MSFT Stock (50 million shares or somesuch). This is untaxable until he sells it (called an unrealized capital gain). When he sells it, it is taxed at the long term capital gains rate (since he's held it for more than a year).

Now this stock does pay a dividend so that quarterly dividend is taxable as ordinary income. For simplicity sake, lets say that its a $1 a year (so 50 million per year in dividends).

Gates sells about a 250k shares a quarter (which he has done since the bush tax cuts) so lets say that he sells 1 million shares @ $25/share for $25 Million.

I don't think he takes a salary at the foundation, so for simplicities sake lets say that is all of his income.

So his taxes (simplified) are:

$50 Million @ 38% = $19 Million
$25 Million @ 15% = $3.75 Million

Now $22.75 Million seems like a healthy tax bill. Now lets consider year 2, you jack up all of these rates (Top Ordinary Rate 50%, Capital Gains 30%)

He takes that leftover 52 Million and puts it in municipal bonds @4% netting 2 Million Tax Free

So for year 2,

Gives $24.5 Million to Charity
$24.5 Million @ 50% = $12.25 Million
No Stock Sales

He's left with income of 14 Million which then gets put into munies for next year and sits on the stock. The government's net revenue falls by $10 Million. On a more humorous note, none of these tax types are subject to social security or medicare. So he is providing $0 funding into either system.

This is proven time and time again that when you raise taxes on the rich, your net tax revenue goes down because they can "bootstrap" through bad tax policies.

Now, that being said, there is a segment of the population that gets absolutely hammered by these newer taxes -> the people who make just enough to qualify, but not enough to bootstrap. Most of the time, these are small business owners.

[OUMallen]

You are oversimplifying the issue here. The reason that you lower taxes on the "Rich" is to get them to pay taxes at all.

Lets talk about the richest guy in the US Bill Gates.

Bill Gates is worth 40-60 Billion depending on MSFT's stock price.

90% of that wealth is tied up in MSFT Stock (50 million shares or somesuch). This is untaxable until he sells it (called an unrealized capital gain). When he sells it, it is taxed at the long term capital gains rate (since he's held it for more than a year).

Now this stock does pay a dividend so that quarterly dividend is taxable as ordinary income. For simplicity sake, lets say that its a $1 a year (so 50 million per year in dividends).

Gates sells about a 250k shares a quarter (which he has done since the bush tax cuts) so lets say that he sells 1 million shares @ $25/share for $25 Million.

I don't think he takes a salary at the foundation, so for simplicities sake lets say that is all of his income.

So his taxes (simplified) are:

$50 Million @ 38% = $19 Million
$25 Million @ 15% = $3.75 Million

Now $22.75 Million seems like a healthy tax bill. Now lets consider year 2, you jack up all of these rates (Top Ordinary Rate 50%, Capital Gains 30%)

He takes that leftover 52 Million and puts it in municipal bonds @4% netting 2 Million Tax Free

So for year 2,

Gives $24.5 Million to Charity
$24.5 Million @ 50% = $12.25 Million
No Stock Sales

He's left with income of 14 Million which then gets put into munies for next year and sits on the stock. The government's net revenue falls by $10 Million. On a more humorous note, none of these tax types are subject to social security or medicare. So he is providing $0 funding into either system.

This is proven time and time again that when you raise taxes on the rich, your net tax revenue goes down because they can "bootstrap" through bad tax policies.

Now, that being said, there is a segment of the population that gets absolutely hammered by these newer taxes -> the people who make just enough to qualify, but not enough to bootstrap. Most of the time, these are small business owners.

Doesn't even have to be THAT much money. I make good, not amazing, money and even I get hit with things like not being allowed to deduct my student loan interest. That is my single biggest expense annually, so it's a large deduction I am missing out on that I would oterhwise really benefit from. Other people who make less can deduct it, but I can't.

Now, I'm not complaining. I am happy I have earned my way into and been lucky enough to be where I am salary-wise. I was just wanting to illustrate that you don't have to be a $300k+ person per year for some of these tax policies to hit you when you make enough to qualify for certain less-favorable treatment, but not eneough to help yourself out of that.

[diverdog]

I wonder if that includes Obamacare. Don't forget taxes are going up in 2013... Maybe twice.

You are so f***ed sapp and I don't think you know it. The only way you get your benefits is if taxes go up.

[REDREX]

Anyone that thinks the Gov't will do anything with new revenue but spend it is a fool

[diverdog]

Anyone that thinks the Gov't will do anything with new revenue but spend it is a fool

So for the record are you willing to cut Sapp's federal benefits?

[jkm, the stolen pifwafwi]

Doesn't even have to be THAT much money. I make good, not amazing, money and even I get hit with things like not being allowed to deduct my student loan interest. That is my single biggest expense annually, so it's a large deduction I am missing out on that I would oterhwise really benefit from. Other people who make less can deduct it, but I can't.

Now, I'm not complaining. I am happy I have earned my way into and been lucky enough to be where I am salary-wise. I was just wanting to illustrate that you don't have to be a $300k+ person per year for some of these tax policies to hit you when you make enough to qualify for certain less-favorable treatment, but not eneough to help yourself out of that.

You fall into that 2nd category - you make a lot of money, but not enough to do fancy stuff with your taxes.

[REDREX]

So for the record are you willing to cut Sapp's federal benefits?---Don't know anything about his benefits but I am willing to cut the Federal work force just as any private company would do if it was this far in debt

[diverdog]

---Don't know anything about his benefits but I am willing to cut the Federal work force just as any private company would do if it was this far in debt

What about federal retirement benefits like health care and 50% plus of pay after 20 years of service that can start as young as 37 and be paid for the rest of their life with generous cost of living increases?

[REDREX]

What about federal retirement benefits like health care and 50% plus of pay after 20 years of service that can start as young as 37 and be paid for the rest of their life with generous cost of living increases?---Programs like this is what is wrong with the Gov't---Why do you think that giving them more money to spend will not result in more stupid progams like this ?

[diverdog]

---Programs like this is what is wrong with the Gov't---Why do you think that gving them more money to spend will not result in more stupid progams like this ?

Red:

The point is for better or worse we made a promise to pay these benefits. In the case of the military I think we should pay. The same with social security and medicare. What most of us did not sign onto is bailing out the banks and Wall Street or two unnecessary wars.

[REDREX]

Red:

The point is for better or worse we made a promise to pay these benefits. In the case of the military I think we should pay. The same with social security and medicare. What most of us did not sign onto is bailing out the banks and Wall Street or two unnecessary wars.---This is why we need less Gov't---a lot less---Not more

[jkm, the stolen pifwafwi]

Red:

The point is for better or worse we made a promise to pay these benefits. In the case of the military I think we should pay. The same with social security and medicare. What most of us did not sign onto is bailing out the banks and Wall Street or two unnecessary wars.

The 20 year guys are what 60 now? You had to enlist before like 76 to not be on the 30 year plan.

[jkm, the stolen pifwafwi]

Third tax rates are lower than have ever been since I have been alive. Revenues are 16% of GDP. We have had tax cuts and extension of tax cuts. The rich have gotten a lot richer. So that begs the questions.....where are the jobs and where is the additional revenue?

Lets study this question:

You own a business with 20 employees in today's environment. Your business is doing well, but with all the fear around (debt ceiling, obamacare, etc) you can't be sure about how good you are doing beyond your current orders.

Some notes

Employees currently work 40/hrs week
Accounts Overdue has risen 5% in the last year
Your suppliers have changed their terms from net 60 to 2%net10 or net 30
Your customers have changed their terms to net 60

You get 2 big orders with promises of more that mean you need 2 more people.

Do you:

1) Hire 2 people
2) Pay 80 hours of overtime to get the orders done
3) Bring in some temp to perms

Analysis:

Number 1 nets you the most profit, but also runs the highest risk because of separation costs (i have no idea how much employers are having to pay of the 99 weeks of unemployment but i'm sure its not pretty).

Number 2 nets you less profit, but there is no separation risk. Normally there is no shortage of workers who will take time and a half. The only negative is that it can't be sustained for more than 6 months before quality suffers.

Number 3 splits the difference but might have a negative effect on morale.

What you see in today's economy is businesses doing 2 then 3 then finally 1

[OUMallen]

You fall into that 2nd category - you make a lot of money, but not enough to do fancy stuff with your taxes.

Yep, enough to lose cool tax breaks, but not enough to not give a nut.

[sappstuf]

Lets study this question:

You own a business with 20 employees in today's environment. Your business is doing well, but with all the fear around (debt ceiling, obamacare, etc) you can't be sure about how good you are doing beyond your current orders.

Some notes

Employees currently work 40/hrs week
Accounts Overdue has risen 5% in the last year
Your suppliers have changed their terms from net 60 to 2%net10 or net 30
Your customers have changed their terms to net 60

You get 2 big orders with promises of more that mean you need 2 more people.

Do you:

1) Hire 2 people
2) Pay 80 hours of overtime to get the orders done
3) Bring in some temp to perms

Analysis:

Number 1 nets you the most profit, but also runs the highest risk because of separation costs (i have no idea how much employers are having to pay of the 99 weeks of unemployment but i'm sure its not pretty).

Number 2 nets you less profit, but there is no separation risk. Normally there is no shortage of workers who will take time and a half. The only negative is that it can't be sustained for more than 6 months before quality suffers.

Number 3 splits the difference but might have a negative effect on morale.

What you see in today's economy is businesses doing 2 then 3 then finally 1

And this is what you end up with..

http://media.hotair.com/wp/wp-content/uploads/2011/07/Heritage-Chart.jpg

[Serge Ibaka]

Well, I certainly believe that there is wasteful spending by our governments, and I think that things need to be tightened up some.

BUT that fact alone does not necessarily suggest that government or taxation is a bad thing. And it certainly doesn't mean that very-rich people shouldn't be taxed like they were under Clinton.

Even now, the very-rich pay less in taxes than they have during most of recent history. And the GOP argues that a marginal hike to a 90s-rate is unthinkable?

It doesn't make sense.

[pphilfran]

Great posts, jkm...

[Caboose]

Well, I certainly believe that there is wasteful spending by our governments, and I think that things need to be tightened up some.

BUT that fact alone does not necessarily suggest that government or taxation is a bad thing. And it certainly doesn't mean that very-rich people shouldn't be taxed like they were under Clinton.

Even now, the very-rich pay less in taxes than they have during most of recent history. And the GOP argues that a marginal hike to a 90s-rate is unthinkable?

It doesn't make sense.

Have you even read any of the responses? Why are you still asking this?

A. The rich already pay more than their "fair share" of taxes.
B. Raising taxes on the rich won't necessarily increase tax revenue.
C. We don't have a problem with revenue we have a problem with spending.

[Serge Ibaka]

Have you even read any of the responses? Why are you still asking this?

A. The rich already pay more than their "fair share" of taxes.
B. Raising taxes on the rich won't necessarily increase tax revenue.
C. We don't have a problem with revenue we have a problem with spending.

A: "fair" is an arbitrary and subjective notion. For instance, I don't think it's fair that some people suffer or die because of curable injuries or diseases (while neighbors and countrymen sit by idly).

B: I missed that. Where?

C. I nearly agree. Spending isn't bad; the money just needs to be spent more effectively.

[jkm, the stolen pifwafwi]

Well, I certainly believe that there is wasteful spending by our governments, and I think that things need to be tightened up some.

BUT that fact alone does not necessarily suggest that government or taxation is a bad thing. And it certainly doesn't mean that very-rich people shouldn't be taxed like they were under Clinton.

Even now, the very-rich pay less in taxes than they have during most of recent history. And the GOP argues that a marginal hike to a 90s-rate is unthinkable?

It doesn't make sense.

So these are the 2 laws that are the "Bush Tax Cuts"

http://en.wikipedia.org/wiki/Economic_Growth_and_Tax_Relief_Reconciliation_Act_ of_2001

http://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2 003

So the key tax provisions that we are talking about are as follows:

[Ordinary Income]

a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000.
the 15% bracket's lower threshold was indexed to the new 10% bracket
the 28% bracket would be lowered to 25% by 2006.
the 31% bracket would be lowered to 28% by 2006
the 36% bracket would be lowered to 33% by 2006
the 39.6% bracket would be lowered to 35% by 2006

These were the provisions that shifted most of the tax burden up by lowering the tax burden at the bottom. Note that the Median income in the US hits at the 15% bracket sans earned income credits. The Earned Income Credit (IE extra money for having kids) was done under Clinton and these new brackets have turned it into a form of welfare for those in the 10% bracket.

For example, Single Mom making $30k a year with 3 kids

$30,000 income
$6,700 adjusted gross income (Head of Household, 3 kids)
$670 Taxes @ 10% bracket
-$3,000 for the Earned Income Credit

= Net Tax Rebate of $2,330 tax free

Now do you see why it shifted tax burden? Most people think of the poor paying no taxes, but in effect they pay negative taxes.

[Capital Gains]

The capital gains tax on qualified gains of property or stock held for five years was reduced from 10% to 8%

---> Notice the 5 years portion, buy and hold indeed

[Estate and Gift Tax]

Yes, this is a bypass for the rich. Even if you remove it, Trusts are exempted

From 2003

[Accelerated credits and rate reductions]

Dude, we need the credits faster - also AMT adjustment


In addition, the capital gains tax decreased from rates of 8%, 10%, and 20% to 5% and 15%. Capital gains taxes for those currently paying 5% (in this instance, those in the 0% and 15% income tax brackets) are scheduled to be eliminated in 2008. However, capital gains taxes remain at the regular income tax rate for property held less than one year. Certain categories, such as collectibles, remained taxed at existing rates, with a 28% cap. In addition, taxes on "qualified dividends" were reduced to the capital gains levels. "Qualified dividends" excludes most income from foreign corporations, real estate investment trusts, and credit union and bank "dividends" that are nominally interest.

This is the rich guys portion. Basically they pulled qualified dividends out of the above brackets and into the 5/15 brackets. This resulted in MSFT having that huge dividend payout way back when. Honestly, its not as big of a deal as most people make it out to be, but whatever.

[KantoSooner]

How about as 'fair' that we go an 18-20% flat tax with no deductions allowed?
You make $10, pay $1.90, say.
Make a Billion, pay $190 million.
The Hapsberg Emperors of Spain made due on 20%. Hell, Jesus Christ only demanded 10%; surely the United States government could scrape by on a fifth of the national weal. No?

Oh, and for those who are getting twisted knickers about American 'poverty', recalibrate. Poverty is what you have in the garbage dumps of Manila or Brazilian Favelas. We have very little of that here. We have a lot more of people who are unhappy with their lot in life. I'm all for helping the hungry and destitute. I've got less use for the others.

[jkjsooner]

And I'd like to elminate corporate taxes. All of them. You can't tax a corporationi. It's like a worm. You can only tax their customers, stock holders and employees. So, tax individuals, preferably at a fixed percentage with no deducts and be done with it. Tax dividends and capital gains as normal income. End interest deductions.

I was going to post something like this the other day. The idea is intriguing to say the least.

I was curious about everyone's thoughts on the details of this. The details can get tricky.

Would you tax capital gains yearly or only when the person sells the stock (as it is done right now)? If you do it only after someone sells a stock then you're taking a risk that rich people would just hold onto their stocks for decades without paying any taxes and since the company isn't taxed that would be a huge problem in both terms of lost/delayed revenue and fairness.

If you tax yearly then you're punishing someone who might hold volatile stocks that may go up one year and down the next.

How would you treat non-public companies. If an owner rolls all profits back into the company would the owner still have a tax burden or since the owner personally hasn't received the gains would that never be taxed.

I like the idea of taxing only individuals but I'm not sure how well that concept has been ironed out.

[jkm, the stolen pifwafwi]

B: I missed that. Where?

Its been generally proven that raising taxes on the rich results in a net loss of total revenue since the rich can do things ordinary citizens can't do.

For example, New Jersey raised taxes, they moved away.

http://www.nj.com/business/index.ssf/2010/02/nj_loses_70b_in_wealth_over_fo.html

or they don't sell their stock

http://www.cbo.gov/doc.cfm?index=3856&type=0

note this graph

http://www.cbo.gov/docimages/38xx/doc3856/385602.gif

The bottom lines show you the capital gains tax rates, the line shows you people selling.

[NormanPride]

But if they don't sell it it's not actual income...

[NormanPride]

Honestly, I don't mind there not being a ton of stock sales all the time. A little less volatility might be nice.

[pphilfran]

Its been generally proven that raising taxes on the rich results in a net loss of total revenue since the rich can do things ordinary citizens can't do.

For example, New Jersey raised taxes, they moved away.

http://www.nj.com/business/index.ssf/2010/02/nj_loses_70b_in_wealth_over_fo.html

or they don't sell their stock

http://www.cbo.gov/doc.cfm?index=3856&type=0

note this graph

[/img]http://www.cbo.gov/docimages/38xx/doc3856/385602.gif[/img]

The bottom lines show you the capital gains tax rates, the line shows you people selling.

But, but, but, but, but....

[StoopTroup]

Are there any stats about how many folks have or haven't decided to go to Medical School since Obamacare was announced? Or how many have decided to go to Nursing School?

[StoopTroup]

http://www.heritage.org/research/reports/2010/07/~/media/Images/Reports/2010/bg2433/b2433_table1.ashx?w=500&h=1003&as=1

[StoopTroup]

http://californiacitynews.typepad.com/.a/6a00e39824d7c48833014e8974d5c6970d-500wi

[jkm, the stolen pifwafwi]

C. I nearly agree. Spending isn't bad; the money just needs to be spent more effectively.

Government is a trillion times better at being bad cop then it is at being good cop. I can almost guarantee you that if they privatized medicare 100% we would run a surplus on it for the next 20 years.

[jkm, the stolen pifwafwi]

I was going to post something like this the other day. The idea is intriguing to say the least.

I was curious about everyone's thoughts on the details of this. The details can get tricky.

Would you tax capital gains yearly or only when the person sells the stock (as it is done right now)? If you do it only after someone sells a stock then you're taking a risk that rich people would just hold onto their stocks for decades without paying any taxes and since the company isn't taxed that would be a huge problem in both terms of lost/delayed revenue and fairness.

If you tax yearly then you're punishing someone who might hold volatile stocks that may go up one year and down the next.

How would you treat non-public companies. If an owner rolls all profits back into the company would the owner still have a tax burden or since the owner personally hasn't received the gains would that never be taxed.

I like the idea of taxing only individuals but I'm not sure how well that concept has been ironed out.

The problem with capital gains is that it isn't just stock that is at play here. Its your house, your car ie anything that can be sold for more than you paid for it (this includes depreciated assets in businesses as well). Think about the craziness of the housing bubble, we'd have all been paying out the wazzou on the unrealized gains and now NONE of us would owe taxes because of the property value losses that we've sustained (Well over 150k on average in Seattle).

[pphilfran]

I love this...I can sit back and not get my hands dirty while jkm does all the work...

[bigfatjerk]

Government is a trillion times better at being bad cop then it is at being good cop. I can almost guarantee you that if they privatized medicare 100% we would run a surplus on it for the next 20 years.

There's a good small time example of this from Indiana. A few years back they sold a toll road for billions of dollars as long as that company did this, this, and this for the road. And so far they've done that and Indiana is currently running on a surplus if I'm not mistaken.

Why can't the federal government do this at a higher level? Give private companies at a chance at land, highways, even programs as long as they meet certain criteria.

[jkm, the stolen pifwafwi]

But, but, but, but, but....

I had to read that article twice to make sure it was accurate (it was from the CBO after all).

[StoopTroup]

I love this...I can sit back and not get my hands dirty while jkm does all the work...

:pop:

[sappstuf]

Its been generally proven that raising taxes on the rich results in a net loss of total revenue since the rich can do things ordinary citizens can't do.

For example, New Jersey raised taxes, they moved away.

http://www.nj.com/business/index.ssf/2010/02/nj_loses_70b_in_wealth_over_fo.html

or they don't sell their stock

http://www.cbo.gov/doc.cfm?index=3856&type=0

note this graph

http://www.cbo.gov/docimages/38xx/doc3856/385602.gif

The bottom lines show you the capital gains tax rates, the line shows you people selling.

Yep, Obama has admitted that raising capital gains taxes isn't about raising more revenue, but is about "fairness".

[jkm, the stolen pifwafwi]

There's a good small time example of this from Indiana. A few years back they sold a toll road for billions of dollars as long as that company did this, this, and this for the road. And so far they've done that and Indiana is currently running on a surplus if I'm not mistaken.

Why can't the federal government do this at a higher level? Give private companies at a chance at land, highways, even programs as long as they meet certain criteria.

The history of Waste Management is an awesome business case for privatization. Its also a cautionary tale for government to not sign anything longer than a 10 year deal.

When Waste Management first started growing in the US they would go into small towns and buy up the rights to the entire town for trash service. They agreed to pay the city what they were currently getting for trash service from the citizens. The cities thought this was awesome as trash service was a losing proposition. So WM comes in and makes 25-35% margin on these trash services that were losing money and did it better (ie less complaints) than the city services before. They grew into one of the biggest companies in the US through this strategy.

And then, competitors came into the market. When those 10 year leases came around the cities were like whoa you made 20% and ripped us off, we want more. So the margins dropped into the 7-8% range and WM is now just a solid performer (though they are buying up their competitors which should increase margins).

This is the pattern for the government. They are going to bid out things like SS/Medicare to private companies and get raped on the first contract. But from there, they start squeezing the margins and get it to the point to where it is long term sustainable.

Think about Social Security Fraud. The only time that the government does an in person interview with the person receiving the check is when they turn 65 and turn 100. I think that a private company could sniff that stuff out.

[jkm, the stolen pifwafwi]

Yep, Obama has admitted that raising capital gains taxes isn't about raising more revenue, but is about "fairness".

Yes but most of the time this is followed by the phrase "pay a little more" which wouldn't happen. The funny thing about Obama is that he tends to attack the "loopholes" that he doesn't use. I can also see Buffet's hand in this as he's spoken openly about people not being able to "cash out" their shares (but give them to charity).

[KantoSooner]

on cap gains, you'd have to go with time of sale. No other way.

And that opens a whole other can of worms: why tax cap gains at all? Do we not want, as a society, to encourage long term investment? Worth thinking about.

[sooner59]

Politics has confused my religious historical clarity! I don't know what to think anymore!!!

Is it: http://www.internetweekly.org/images/jesus_christ_socialist.jpg

Or is it: http://img2.imagesbn.com/images/66320000/66329058.JPG

I don't know...but it doesn't matter, anyway.

Because he was American: http://dannykhaos.com/wp-content/uploads/2011/02/american-jesus.jpg

...and that's all that matters.

http://i304.photobucket.com/albums/nn182/lowdownkennels43/ChuckNorrisThumbsUp.png

[diverdog]

Have you even read any of the responses? Why are you still asking this?

A. The rich already pay more than their "fair share" of taxes.
B. Raising taxes on the rich won't necessarily increase tax revenue.
C. We don't have a problem with revenue we have a problem with spending.

We have a problem with revenue.

[pphilfran]

on cap gains, you'd have to go with time of sale. No other way.

And that opens a whole other can of worms: why tax cap gains at all? Do we not want, as a society, to encourage long term investment? Worth thinking about.

LTCG should be kept low...STCG you can tax the chit out of...

[bigfatjerk]

We have a problem with revenue.

I think most of our revenue problems would be fixed if we simply got rid of deductions. It's not really that simple but that's pretty much all we would have to do.

[jkm, the stolen pifwafwi]

on cap gains, you'd have to go with time of sale. No other way.

And that opens a whole other can of worms: why tax cap gains at all? Do we not want, as a society, to encourage long term investment? Worth thinking about.

I think you need to look at your statement again because that is what we do. The tax structure of Capital Gains rewards those who hold onto their investment for a long time. Much like an annuity, the tax penalty for selling decreases with times until you get to the lowest tax level.

[diverdog]

Lets study this question:

You own a business with 20 employees in today's environment. Your business is doing well, but with all the fear around (debt ceiling, obamacare, etc) you can't be sure about how good you are doing beyond your current orders.

Some notes

Employees currently work 40/hrs week
Accounts Overdue has risen 5% in the last year
Your suppliers have changed their terms from net 60 to 2%net10 or net 30
Your customers have changed their terms to net 60

You get 2 big orders with promises of more that mean you need 2 more people.

Do you:

1) Hire 2 people
2) Pay 80 hours of overtime to get the orders done
3) Bring in some temp to perms

Analysis:

Number 1 nets you the most profit, but also runs the highest risk because of separation costs (i have no idea how much employers are having to pay of the 99 weeks of unemployment but i'm sure its not pretty).

Number 2 nets you less profit, but there is no separation risk. Normally there is no shortage of workers who will take time and a half. The only negative is that it can't be sustained for more than 6 months before quality suffers.

Number 3 splits the difference but might have a negative effect on morale.

What you see in today's economy is businesses doing 2 then 3 then finally 1

Don't tell me.....you are in business school. I deal with businesses all the time and not one has said a damn thing about Obamacare. They are worried about access to capital and getting clients.

[diverdog]

I think most of our revenue problems would be fixed if we simply got rid of deductions. It's not really that simple but that's pretty much all we would have to do.

I agree and hope we can grow the economy.

[pphilfran]

Don't tell me.....you are in business school. I deal with businesses all the time and not one has said a damn thing about Obamacare. They are worried about access to capital and getting clients.

I don't care if he is a Sanitation Engineer...he makes great points...

[jkm, the stolen pifwafwi]

We have a problem with revenue.

This needs to be phrased a little differently - we have a TEMPORARY problem with revenue based on foreign policy decisions. Thus we need a TEMPORARY method to support our military campaigns.

Hopefully at some point, we can get someone in the White House that understands that you can't go about getting in extended conflicts with every Tom, Dick, and Harry that you don't agree with. Shoot some cruise missiles at them and be done with it.

[diverdog]

I don't care if he is a Sanitation Engineer...he makes great points...

I did not mean it as an insult. 2 of his comments were text book business school case studies.

[diverdog]

This needs to be phrased a little differently - we have a TEMPORARY problem with revenue based on foreign policy decisions. Thus we need a TEMPORARY method to support our military campaigns.

Hopefully at some point, we can get someone in the White House that understands that you can't go about getting in extended conflicts with every Tom, Dick, and Harry that you don't agree with. Shoot some cruise missiles at them and be done with it.

I agree with you . These wars are bleeding us dry.

[pphilfran]

I did not mean it as an insult. 2 of his comments were text book business school case studies.

I don't care if he got the info from a Superman comic...

I have always had a lot of confidence in your judgement, DD...

[jkm, the stolen pifwafwi]

Don't tell me.....you are in business school. I deal with businesses all the time and not one has said a damn thing about Obamacare. They are worried about access to capital and getting clients.

I got my MBA 14 years ago and have been an independent software consultant at 22 Fortune 500 firms. I've been at Microsoft for the last 10 years.

I also, as volunteer work, volunteer helping small businesses with financials. The above was a real situation that I encountered 2 months ago. Like I said, the only point that I didn't get too was how much L&I in the state of Washington is punishing businesses for the 99 week extension. As I told them at the time, the big risk was in their cash flow. When you have both customers and suppliers squeezing you on terms, you can quickly end up in a negative cash flow situation. As it stood, they were sitting at a 46 day float between AP payment and AR receivable.

[sappstuf]

I did not mean it as an insult. 2 of his comments were text book business school case studies.

I am reminded of something...

Ah yes.

YlVDGmjz7eM

[jkm, the stolen pifwafwi]

I did not mean it as an insult. 2 of his comments were text book business school case studies.

The Waste Management situation WAS a case study from my MBA 14 years ago. We also did one on Margaret Thatcher, Intel/AMD, and Anderson Consulting. I worked at Worldcom at the time so the irony was delicious 4 years later.

This was also where our group presented a fictitious product that gave driving directions via GPS satellites to restaurants. This guy (http://www.osu-tulsa.okstate.edu/basu/) (who I liked in general) told me it was the most idiotic idea he'd ever heard. Who would pay for a device that gave them directions somewhere.

[jkm, the stolen pifwafwi]

Don't tell me.....you are in business school. I deal with businesses all the time and not one has said a damn thing about Obamacare. They are worried about access to capital and getting clients.

So they are worried about sales and investors? I think my scenario pretty much outlined your worries -> IE you got the big sale, how do you allocate your capital?

[diverdog]

I got my MBA 14 years ago and have been an independent software consultant at 22 Fortune 500 firms. I've been at Microsoft for the last 10 years.

I also, as volunteer work, volunteer helping small businesses with financials. The above was a real situation that I encountered 2 months ago. Like I said, the only point that I didn't get too was how much L&I in the state of Washington is punishing businesses for the 99 week extension. As I told them at the time, the big risk was in their cash flow. When you have both customers and suppliers squeezing you on terms, you can quickly end up in a negative cash flow situation. As it stood, they were sitting at a 46 day float between AP payment and AR receivable.

Thanks. Tell them to get a working line of credit to smooth over the rough times.

Do you work with the SBA?

[diverdog]

So they are worried about sales and investors? I think my scenario pretty much outlined your worries -> IE you got the big sale, how do you allocate your capital?

No access to loans for the most part. Start ups in software are having a hard time getting angel investors or venture capital. I do C & I lending for the most partl.

[jkm, the stolen pifwafwi]

I am reminded of something...

Strange, I'm on the Rodney Dangerfield side of this argument. The one saying that this stuff isn't as easy and clear cut as its being made out to be.

Hiring people in this economy SUCKS. I've had to hire 5 people in the last 4 months and have done over a 100 interviews. 60% of them were lying out their rear about their qualifications or skills. So when I just got told today that I need to hire another one and I was like "WHY DO YOU HATE ME?". If I owned my own company you'd better believe I go out and ask my current employees if they'd like a little extra OT instead of bringing someone on.

[pphilfran]

Strange, I'm on the Rodney Dangerfield side of this argument. The one saying that this stuff isn't as easy and clear cut as its being made out to be.

Hiring people in this economy SUCKS. I've had to hire 5 people in the last 4 months and have done over a 100 interviews. 60% of them were lying out their rear about their qualifications or skills. So when I just got told today that I need to hire another one and I was like "WHY DO YOU HATE ME?". If I owned my own company you'd better believe I go out and ask my current employees if they'd like a little extra OT instead of bringing someone on.

I am in the same boat with ya...just letting you row a little more...

[jkm, the stolen pifwafwi]

Thanks. Tell them to get a working line of credit to smooth over the rough times.

Do you work with the SBA?

Local CoC. In general, I advise the LoC is for Emergencies only. You get used to dipping into it more than 20% you are going to be screwed if you get hit with 2-3 bad things. Most of the guys I work with have a TON tied up in working capital and you have to figure out ways to unwind it into Cash.

[sappstuf]

Don't tell me.....you are in business school. I deal with businesses all the time and not one has said a damn thing about Obamacare. They are worried about access to capital and getting clients.


Business Feedback on Today’s Labor Market

Dennis P. Lockhart
President and Chief Executive Officer
Federal Reserve Bank of Atlanta

Conference on Employment and the Business Cycle
Atlanta, Ga.
November 11, 2010

Here's what doesn't feel normal. In addition to slow and uncertain revenue growth, contacts in this recovery are frequently citing a number of other factors that are impeding hiring. Prominent among these is the lack of clarity about the cost implications of the recent health care legislation. We've frequently heard strong comments to the effect of "my company won't hire a single additional worker until we know what health insurance costs are going to be."

http://www.frbatlanta.org/news/speeches/lockhart_111110.cfm

[jkm, the stolen pifwafwi]

No access to loans for the most part. Start ups in software are having a hard time getting angel investors or venture capital. I do C & I lending for the most partl.

Angels/VCs are always up and down with the economy. If their holdings are sucking (as probably the case now) they tend to be in bad moods for anyone coming to them for money. Whereas if they are doing well they tend to be a little looser with the purse strings.

Loans are a different story. One of the things about the dot.com boom was that companies were able to artificially lower startup costs by deferring compensation through stock options and grants. This doesn't work anymore so startup costs have increased dramatically. The other problem is risk vs return on capital. Making Widget A is 10x more risky for less return than dropping a MickeyDs or a Sonic on a corner and netting 12%.

[AlboSooner]

has this been resolved yet? you all better hurry before our country defaults.

[REDREX]

Rachel Maddow is an idiot

[jkjsooner]

on cap gains, you'd have to go with time of sale. No other way.

And that opens a whole other can of worms: why tax cap gains at all? Do we not want, as a society, to encourage long term investment? Worth thinking about.

So you're saying no corporate tax AND no capital gains tax?

[diverdog]

Angels/VCs are always up and down with the economy. If their holdings are sucking (as probably the case now) they tend to be in bad moods for anyone coming to them for money. Whereas if they are doing well they tend to be a little looser with the purse strings.

Loans are a different story. One of the things about the dot.com boom was that companies were able to artificially lower startup costs by deferring compensation through stock options and grants. This doesn't work anymore so startup costs have increased dramatically. The other problem is risk vs return on capital. Making Widget A is 10x more risky for less return than dropping a MickeyDs or a Sonic on a corner and netting 12%.

we are lucky that marc eckos venture capital firm is near us. i have referred a couple of clients to them.

[tommieharris91]

I just wanna echo Phil's thoughts and say this thread is flat out great.

Carry on.

[jkm, the stolen pifwafwi]

So just to show you what I mean by OT. The BLS has an amazing website for pulling stats for various questions -> http://data.bls.gov/pdq/querytool.jsp?survey=ce

Unfortunately it spits it out as HTML which sucks pulling over to bulletin boards

anyway, if you pull data for AVERAGE WEEKLY OVERTIME HOURS,PRODUCTION/NONSUPERVISORY EMPLOYEES,QUARTERLY AVG,SEASONALLY ADJUSTED the data looks like this

2008 Q1 4.1
2008 Q2 3.9
2008 Q3 3.6
2008 Q4 3.2
2009 Q1 2.7
2009 Q2 2.8
2009 Q3 3.0
2009 Q4 3.4
2010 Q1 3.6
2010 Q2 3.9
2010 Q3 3.8
2010 Q4 4.0
2011 Q1 4.2
2011 Q2 4.1

Note that if you look at the stats for 1991-1995 you see the same behavior (albeit much quicker) as OT went up to over 5 before it came down 4 years later.

[StoopTroup]

So is being a troll.

lol

[BOOMERBRADLEY]

Lower taxes on the rich. Generally speaking, they have a lot of money and create businesses which hire workers. The rich get used to a lifestyle and someone comes along and says I'm going to raise your taxes. The rich guy says, ok I will just fire a couple of people.

Simple, but thats how I see it.

Someone once said "I've never been hired by a poor person"

[Gandalf_The_Grey]

I am shocked no one has put


"....no, but I did stay at a Holiday Inn Express last night"

[KantoSooner]

So you're saying no corporate tax AND no capital gains tax?

I'd like to think about it. If you have $X and invest it and leave it invested in a company, what are we, as a society, trying to achieve by taxing you on your increase in $ when you sell the investment? (yes, I can supply about a thousand answers to the rhetorical question, but I find it worthwhile to herding my own thoughts to try to get as close to foundational questions as possible.)
I'm not decided. It is worth questioniing, however.
When you look at different tax regimes around the world, one point that becomes startlingly clear is that small choices in the tas code produce big differences in national economies and business cultures.
We shouldn't accept the way we do things now as somehow cast in stone. We're the damn people, we are sovereign; if our system needs changing, we can change it.

Again, I'm just thinking out loud here.

[Romulus]

when did jk get so smart?

[BOOMERBRADLEY]

JK,

have you just studied on this stuff or what? I am taking my series 7 in about a month or so. Do you have yours or any other series tests since you give financial advice?

[jkm, the stolen pifwafwi]

I'd like to think about it. If you have $X and invest it and leave it invested in a company, what are we, as a society, trying to achieve by taxing you on your increase in $ when you sell the investment? (yes, I can supply about a thousand answers to the rhetorical question, but I find it worthwhile to herding my own thoughts to try to get as close to foundational questions as possible.)
I'm not decided. It is worth questioniing, however.
When you look at different tax regimes around the world, one point that becomes startlingly clear is that small choices in the tas code produce big differences in national economies and business cultures.
We shouldn't accept the way we do things now as somehow cast in stone. We're the damn people, we are sovereign; if our system needs changing, we can change it.

Again, I'm just thinking out loud here.

But along with this, having low corporate taxes does not translate into jobs. A perfect example is Ireland where everyone pays their taxes. The country has no revenue.

[jkm, the stolen pifwafwi]

Also, to me, there are several "safe" items that you can tax that will bring in revenue but have no impact on the economy. The most obvious are political contributions. Obama was targeting raising a BILLION dollars for his campaign, just insane.

[KantoSooner]

Like I said, just thinking.

As to Ireland, I'm not sure their woes are on the income side. They had some pretty lavish social spending going on.

On campaigns...why not limit them to 8 weeks? 1,2,3, GO! It'd be hilarious.