Is the President's package going to stimulate me too?

[Tyjenks]

The democrats tell me the stimulus package is bad for the country. Money to the rich folks (which they classify as $100K and up, not sure 100K makes you rich, but...) middle class holding the bag, govt. programs suffering, blah, blah, blah. The republicans say the money will be freed up to grow businesses, re-invest in the market, more jobs, stronger economy.

I used to be a yellow dog dem. All they seem to do is piss and moan and enjoy money funnelling into DC. The republicans seem to make sense on occasion, but they have always been the smilin' rich white folks who will fuck you up the ass when you turn your back.

Who am I to believe? Not only in this, but in every damn political issue. There is sooo much info and research to be had out there for me to make up my own mind, but I thought that was why we elect politicians in this country. They wade through it all and do what the people want ( :wink: ).

I know it has been said, but the system is broken and I want to know what to do about it. Do any of you care? Are you eMailing your Congress persons showing your dissatisfaction? Are you satisfied as long as you and yours are doing OK and you are just going along to get along?

Is there anyone you all watch and/or listen to get actual unbiased news reports? And I don't mean the portion of a newstory that skews the truth towards one side or the other, but honest to goodness invetigative news reports.

I see now that this is a slightly scattered post and there are probably a dozen quetions here so feel free to answer all or none as you see fit. Man, it all makes me tired. However, I was cheered today when the news said, "Bush is unveiling his package today". Good stuff.

[DavidCPA]

Tyjenks, don't dispair it's only proposed legislation man.

My guesses based on incomplete knowledge of Bush's proposals:

Will pass:
1. Acceleration of tax decreases already scheduled for middle to lower income workers.
2. Acceleration of the child tax credit. It was going up to $1,000 anyway.
3. Unemployment benefits extension
4. Modification to Alternative Minimum Tax rules

Probably won't pass:
1. Dividend tax elimination. I have yet to hear how this change will improve the economy.
2. Acceleration of tax decreases for upper income individuals.

FYI...none of the proposed changes will impact your 2002 tax return. At the earliest, you might receive some benefits from decreasing tax withholding rates in 2003.

-DavidCPA

[Jim F.]

Warning: The following is a 100% selfish post.

All I know is this; the tax package isn't going to help or hurt me at all.

Bush's proposal will save the average family of 4 something like $1100 over 3 years (roughly $370 a year) in income tax. But this is being done by removing the marriage penalty on 2 household earners and bumping up the child tax credit from $600 to $1000 per child.

Now I am married but my wife isn't currently working (by choice, she's taking time off to finish her degree), so nothing there. We don't have any kids, so no tax credit there.

They are attempting to eliminate the tax on dividends, which I think is a very well thought out incentive to get folks to invest in the stock market and mutual funds. But, well, my wife and I use a money market account for our savings because, frankly, I don't want our savings to hindge on the stability of the stock market. I just don't have the income to risk it on the stock market, even with a high dividend company like Ford. So I will not benefit from it directly.

The other items I don't have a chance of getting a part of. The $3000 expense account for workers who lost their jobs in 2001 doesn't do a lot for me. The corporate tax break for companies that invest money in other companies really doesn't do much.

On the other side of the coin, Nebraska has a $600 million budget shortfall this year. They have already increased the state sales tax by 0.5% and are looking for other revenue sources. The 2 proposed sources that are being voted on in the next sessions are 1) an additional 0.5% sales tax increase coupled with a property tax increase and 2) removing the tax exemption on food and over the counter medications.

So I expect that this year my taxes are actually going to be higher than they were last year when all is said and done. Sure, Nebraska is to blame for that, but it's just one big set of government taxes as far as I'm concerned.

[Tim]

Jim F., I think you're wrong about not benefitting from the changes for married filers. My situation is similar, my wife has a small income, pretty insignificant in our overall tax situation.

But as I understand the changes, it will still benefit us. Currently the exemptions for a married couple are less than the exemption for a single person times two, and one of the key changes will be making it exactly the single filer amount times two. A similar change is being made to the standard deduction amounts, though since we've itemized since getting a mortgage that probably won't have any impact for us.

So far, people like you & me have actually been benefitting from the current 'married' filing status. It's only a 'marriage penalty' for two income couples, but what's usually unsaid is that it is a benefit for single income couples. We'd owe more if we filed singly, and our spouses would continue to owe roughly nothing if they did so. So while we're not really being 'penalized' now like married couples with comparable incomes, I think we'll still benefit from the change.

[Jason McCullough]

The dividend tax cut will only benefit you if you have dividend-paying investments outside of a 401k (which is already tax-free).

Bush's proposal will save the average family of 4 something like $1100 over 3 years (roughly $370 a year) in income tax.

The average is not the median. Like most GOP tax proposals, there's a significant difference between the two.

They are attempting to eliminate the tax on dividends, which I think is a very well thought out incentive to get folks to invest in the stock market and mutual funds.

Lots of economists disagree; they say it'll mostly just rearrange existing investments. Note that investment also has no short-term stimulative effects at ending a recession.

[Kalle]

There are no unbiased news reports. All journalists are biased, all editors are biased. Given that, get news from as many sources as possible.

For alternative news www.indymedia.org is good. It's very biased, but it's not mainstream

And this leads me in to your comment about the system being broken. I agree with you.

The question is what do you see as the faults of the current system, what do you think should replace them and are you prepared to work towards those goals.

You have to answer these questions for yourself. Depending on who you ask those questions will get very different answers, and I won't try to push my views on you.

If you are unwilling or feel unable to change the system as it stands then I'm afraid you are going to have to resign yourself to living with it. Most people do.

[Tyjenks]

Tyjenks, don't dispair it's only proposed legislation man.

-DavidCPA

I was not so much despairing as I was frustrated with the ever-present partisan politics. I want to know, honestly from one politician, is this cut good for the country or not. I am not all that concerned how much I am getting back or not as I am in knowing if this is a good idea or not.

Hell, I would pay more if I thought it was going to be spent properly and help out. :roll: We pay way too much and it is all horribly misspent. Why does balancing the budget not equal examining programs and tightening things up? Increasing a program's budget by 3% instead of 5% is called a cut in DC. Maybe offices in DC could cut out some of the movie channels in their cable boxes. Maybe they could pitch in at the coffe maker. Maybe they could pay for their own hookers rather than writing it off as entertainment expense.

David, thanks for your impressions, though. That quick outline matches up fairly well with what I thought was going on.

Kalle, I do not think getting rid of the present system is the answer at all. I think we can work within the present one, but we need people in office that are willing to affect change.

At home, when we are broke, e cut back by spending less and cutting things out and clipping coupons. Is it that hard for the folks in DC to do the same thing, simply on a grander scale? It seems like common sense to me. Am I missing something? Am I being naive?

[SpoofyChop]

There's a conservative take on Bush's stimulus package over at National Review. (http://www.nationalreview.com/nrof_malpass/malpass010803.asp)

This probably explains Bush's basic rationale for why his tax cuts will help.

[Jack]

I, like most Americans, have little sympathy for the wealthy. Of course, "wealthy" becomes a contentious word since no one can really define it.

I heard on the radio this morning, that based on Bush's proposal, someone with Cheney's wealth will stand to make over $300,000 more per year. That, my friends, is wealthy. Granted, it's a minority, but to believe that folks like that are going to happily pour their new-found booty back into the economy is a bit naive.

Rich people don't become rich by spending their money. Sure they'll invest it, but investing does not necessarily mean more jobs.

I'd rather see Bush spread his $90 billion plan to the majority of middle class folks. Now there's a sect that spends.

But then we would have an inflation problem. And don't even get me started on deficit spending....

[Kalle]

Kalle, I do not think getting rid of the present system is the answer at all. I think we can work within the present one, but we need people in office that are willing to affect change.

I did not see myself advocating revolutiong in my post but perhaps it was percieved that way. If you think the flaws in the system as you see them can be overcome by reform then you should by all means work towards that goal.

[Rob de los Reyes]

My favorite, but not exculsive, news source these days is The Economist. Having a non-American perspective on American affairs is interesting. But, because they're British, they share basic American values like personal liberty and democratic government, so it's not like wading through reports from Al-Jazeera or something. Plus, you're not spending money on absurd 5-page articles about Britney Spears or whether God is real, like in Time or Newsweek.

Moreover, The Economist makes no pretense about its editorial positions, but those positions are about ideas - not allegiance to an American political party like, say, The National Review or Salon.com (both of which I also read from time to time). I prefer the allegiance to ideals to the knee-jerk partisanship of TNR and Salon, but I'll even take partisanship over the illusion of neutrality any day. I'm troubled by the American media's tendency to lend equal weight to every crackpot idea in pursuit of the Platonic form of "unbiased reporting."

Contrary to the magazine's title, by the way, it is not strictly an economics journal, though economic analysis infuses the way it examines issues. It also does a nice job of explaining the economics in a way that an educated layman can understand. That should be particularly helpful in dealing with topics like Bush's tax plan.

[Kyle Wilson]

I, like most Americans, have little sympathy for the wealthy. Of course, "wealthy" becomes a contentious word since no one can really define it.

Sure we can. "Wealthy" means anyone who makes more money than I do. The bastards.

[Mark Asher]

"On the other side of the coin, Nebraska has a $600 million budget shortfall this year. They have already increased the state sales tax by 0.5% and are looking for other revenue sources. The 2 proposed sources that are being voted on in the next sessions are 1) an additional 0.5% sales tax increase coupled with a property tax increase and 2) removing the tax exemption on food and over the counter medications."

This is one of the issues that isn't talked about much. Federal cuts often result in shortfalls at the State level that force increased State taxes or more cuts of State programs. In Missouri we may face a $1B shortfall this year. One of the programs that is being elimanted is a modest one that has 40+ employees and is run by the State National Guard for troubled teens. It's a bootcamp where kids are both schooled and forced to straighten up. They've had a good success record in turning around some kids. It's sad that it's being eliminated.

I just have trouble stomaching tax cuts that help the wealthy. No tax on dividends? That's income! Are we eliminating tax breaks on investment losses to counter the elimination of taxes on profits? Of course not. Who can most benefit from investing? Not the poor. Not the middle class, really. Mostly the wealthy.

Maybe they should just eliminate the first $500 in taxes from divident gains. That would cover the poor and much of the middle class, while still allowing large gains to be taxed.

I also know this is one of those arguments that can never be resolved. Both sides have valid points. I just hate the idea of legislation that will further create a permanent class of rich people. We already have too much social stratification.

[Jason McCullough]

I just hate the idea of legislation that will further create a permanent class of rich people. We already have too much social stratification.

The GOP quite vocally disagrees with you.

[Desslock]

IRich people don't become rich by spending their money. Sure they'll invest it, but investing does not necessarily mean more jobs.

Yes they do, and yes, it does.

Elimination of dividend tax is pretty wild though -- that's a huge change, if it goes through.

[Jack]

The rich folks really make more money by spending it? I have less money when I spend. And I have NO experience in being wealthy, so I admit to being a bit out of my depth when discussing how one can buy million dollar mansions and expensive cars and still be in the black.

Investing is a bit different, though. I understand the theory of investing = jobs, but how much money is absorbed into executive management's pockets? Maybe they'll spend it on "entertainment" expenses. Whoopee. How many minimum-wage jobs will that create on the cruise ships and in hotel resorts?

I just don't trust such a large infusion of money into the pockets of those who least need it.

[DavidCPA]

IRich people don't become rich by spending their money. Sure they'll invest it, but investing does not necessarily mean more jobs.

Yes they do, and yes, it does.

Elimination of dividend tax is pretty wild though -- that's a huge change, if it goes through.

I would be interested to hear you elaborate on both answers. If you include the purchase of additional investments as "spending" then I agree with the first yes. I need to see the logic for the second yes.

-DavidCPA

[Desslock]

IRich people don't become rich by spending their money. Sure they'll invest it, but investing does not necessarily mean more jobs.

Yes they do, and yes, it does.

I would be interested to hear you elaborate on both answers.

Other than being a rich heirs or a talented artists/athletes, the best way to become rich is to spend money developing a busines or making astute investments, both of which involve spending a lot of money.

I retract the second yes, as I didn't see the "not necessarily". But reallocation of money generally creates jobs.

[Dave Long]

I don't even want to see the President's package, let alone have it "stimulate" me.

--Dave

[Mark Asher]

"I retract the second yes, as I didn't see the "not necessarily". But reallocation of money generally creates jobs."

So are rich people sitting on money instead of investing it? I don't really see this. People with money typically invest it. Eliminating dividend taxes might see some shifting of money from bonds to stocks, but is it really going to generate a lot of new jobs? (It would put more pressure on Microsoft to start paying dividends, heh.)

And how many new jobs will be created in the US? Companies get rewarded by the stock market for moving jobs to foreign markets where labor is cheap. But hey, the investors get tax-free dividends!

[Jim F.]

First Data Corporation received a $7 million tax break for keeping their headquarters in Omaha, Nebraska.

That same year, the CEO received a $5 million bonus (raising his salary that year to $17 million, not counting stock options).

No raises were given to First Data employees, and that same year they eliminated 150 jobs in Omaha (750 nation wide).

Trickle down economics doesn't work. The rich get richer and companies continue to do what they always do.

[SpoofyChop]

First Data Corporation received a $7 million tax break for keeping their headquarters in Omaha, Nebraska.

That same year, the CEO received a $5 million bonus (raising his salary that year to $17 million, not counting stock options).

No raises were given to First Data employees, and that same year they eliminated 150 jobs in Omaha (750 nation wide).

Trickle down economics doesn't work. The rich get richer and companies continue to do what they always do.

I call shennanigans.

You're not allowed to give an example of what everybody calls "corporate welfare" and then use that to claim that "trickle down economics doesn't work."

You'd have to give an example of why TDE doesn't work in order to make a case that it doesn't work.

This is the classic definition of the latin phrase "non sequitur" which means "does not follow." The conclusion does not follow from the premise.

Consequently, I hearby nominate you to have your board rank changed to "non sequitur."

:D

[Desslock]

Eliminating dividend taxes might see some shifting of money from bonds to stocks, but is it really going to generate a lot of new jobs? (It would put more pressure on Microsoft to start paying dividends, heh.) ... But hey, the investors get tax-free dividends!

Just to be clear, since my original post wasn't -- I think the tax free dividend proposal is wacky.

[Jim F.]

First Data Corporation received a $7 million tax break for keeping their headquarters in Omaha, Nebraska.

That same year, the CEO received a $5 million bonus (raising his salary that year to $17 million, not counting stock options).

No raises were given to First Data employees, and that same year they eliminated 150 jobs in Omaha (750 nation wide).

Trickle down economics doesn't work. The rich get richer and companies continue to do what they always do.

I call shennanigans.

You're not allowed to give an example of what everybody calls "corporate welfare" and then use that to claim that "trickle down economics doesn't work."

You'd have to give an example of why TDE doesn't work in order to make a case that it doesn't work.

This is the classic definition of the latin phrase "non sequitur" which means "does not follow." The conclusion does not follow from the premise.

Consequently, I hearby nominate you to have your board rank changed to "non sequitur."

:D

Fine fine, personal observations don't count, I'll give you that.

But the wealth of the nation hasn't spread out, as was advertised when Regan proposed TDE. The idea, as you know but others might not, was that if we give all the money to the rich, it will eventually end up in the hands of the poor. The rich will start businesses and give money to their employees. But instead we're seeing record high executive incomes. Sure, in some cases this works, but not many.

90% of the wealth is still controlled by 1% of the population. It was that way in 1980, it's that way today. I really can't get any more clear than that.

[Met_K]

That's because the rich are protecting us from becoming communists! That's what will happen if they give us all their money! We'll all be equal... and we'll be no better than those damn commie bastards! DO YOU WANT THAT?!?!?! DO YOU WANT TO LIVE IN A COMMUNIST STATE BECAUSE THE RICH TRICKLED THEIR MONEY DOWN?!?!?!?!

Phew! It's good to be back.

[Tyjenks]

That's because the rich are protecting us from becoming communists! That's what will happen if they give us all their money! We'll all be equal... and we'll be no better than those damn commie bastards! DO YOU WANT THAT?!?!?! DO YOU WANT TO LIVE IN A COMMUNIST STATE BECAUSE THE RICH TRICKLED THEIR MONEY DOWN?!?!?!?!

Phew! It's good to be back.

Where've you been? On tour with Jackyl?

[Anonymous]

"Of course not. Who can most benefit from investing? Not the poor. Not the middle class, really. Mostly the wealthy.


Ok, this is about the dumbest thing I've seen written in this thread. The rich can benefit most by investing... why cause they have more money? Wow, you're a genius. They can also lose the most. Certainly a middle class investor can benefit even more. It's all about percentages, brainiac. That's why you pansies complaining about the rich getting more of a tax break is ridiculous. This isn't a flat tax system. The rich pay more cause they earn more. If you cut taxes across the board, guess who is going to play less? The people that paid more!

So, let's have it your way. The middle class can't benefit from investing so let's not encourage them to do so. I mean, far be it from us to let people actually get richer and become one of those horrible wealthy people you despise. Let's let the poor stay poor so the government can keep funding their existence and the horrible wealthy that earned their money keeps playing the bill.

Hate.

[Tyjenks]

I used to be a hater of the rich. Young, idealistic, and believed we should all help each other out. Then I got into the real world and you know what I found? Some people work hard and actually earn their wealth and many times continue working 60 to 80 hours a week into their later years to keep said wealth. Go figure.

You work hard and because of it you have a higher percentage of your earnings taken from you to be dispersed as politicians see fit. Then a tax cut comes along and, because you make more, you are obviously going to get more back since you are paying, let's say, $500,000 a year in taxes. Plus, you are not actually getting money back from the government, you are getting to keep a bit more of what you worked for while still paying a hefty percentage. Still people gripe. You're still paying $475,000, but you are still a greedy fucker.

I am still struggling paycheck to paycheck with a mortgage and car payment. I do not especially want to bust my ass so that I can be rewarded by moving to a higher tax bracket. However, that is the way it is. I will pay more when I make more and if I am ever "wealthy" (whatever that magic number is) I will be happy to get a tax break then, like I will be now.

[Jason McCullough]

That's why you pansies complaining about the rich getting more of a tax break is ridiculous. This isn't a flat tax system. The rich pay more cause they earn more. If you cut taxes across the board, guess who is going to play less? The people that paid more!

This is a valid objection in general, but when you cut taxes on a type of income that *only* the rich have, in general, then it's a tax cut for only the rich. Sorry.

[Met_K]

That's because the rich are protecting us from becoming communists! That's what will happen if they give us all their money! We'll all be equal... and we'll be no better than those damn commie bastards! DO YOU WANT THAT?!?!?! DO YOU WANT TO LIVE IN A COMMUNIST STATE BECAUSE THE RICH TRICKLED THEIR MONEY DOWN?!?!?!?!

Phew! It's good to be back.

Where've you been? On tour with Jackyl?

No, you fuck. Fuck Jackyl, the whores. I've been on tour with Stryper. Yeah, you heard me, Stryper. They're making a comeback, and I'm gonna be right there with 'em when they bust all ya'lls asses.

[Jack]

The rich can benefit most by investing... why cause they have more money? Wow, you're a genius. They can also lose the most.

I think it's a matter of what folks call "disposible income." My only investment is my 401k because it's all I can afford. Wealthy folks can risk higher amounts of cash they can lose, so they have the most to gain. If I lose $5,000, I'd probably lose my house. If Trump lost $5,000, he might not notice.

It's not a matter of "hating the rich," in my opinion. It's a matter of how many toys are enough toys. Does the CEO of your corporation really work hard enough to earn 100x your salary? Are his/her qualifications really all that different from yours?

As Tyjenks said, wealthy people work hard. But so does the waitress down at Denny's -- but she earns $5 an hour and will never be rich at that rate. But SOMEONE has to the low-level work. And yes, even bright, talented folks are relegated to "low-level" work for the rest of their lives. You may be such a person.

[Ben Sones]

I just don't trust such a large infusion of money into the pockets of those who least need it.

The problem is that its very difficult to provide an economic stimulus that creates jobs (and I think everyone agrees that this should be a goal of any economic stimulus package right now) without also benefitting the corporations that have to supply those jobs, and the (generally wealthy) people that own and run them. Many liberals say they want both of those things, but I have yet to hear anyone explain how this mystical bootstrap levitation act can be accomplished.

Semi-related aside: What's the deal with Bush's unemployment relief? Rather than simply extending unemployment compensation, he has this bizarre plan to give unemployed workers grants of up to $3000 or so. Which gives them a huge incentive to take the first crap job they find, because apparently, even if they get hired the day after they receive the money, they get to keep it. It reminds me of the Joker's parade from Batman: The Movie ("Who do you like? I'm giving away free money!").

Perhaps Bush later plans to have all unemployed workers gassed.

[Jack]

The problem is that its very difficult to provide an economic stimulus that creates jobs (and I think everyone agrees that this should be a goal of any economic stimulus package right now) without also benefitting the corporations that have to supply those jobs, and the (generally wealthy) people that own and run them. Many liberals say they want both of those things, but I have yet to hear anyone explain how this mystical bootstrap levitation act can be accomplished.

I'm not really a liberal, but I'll take a shot at this one. We all know pumping cash into the economy could very well create inflation -- but why not pump it in from the bottom? Give the middle and lower class folks more cash, they then buy more stuff (guaranteed USA purchases, by the way -- not investing in a factory in India) and in that way, businesses get more money.

[SpoofyChop]

Here's (http://www.nationalreview.com/nrof_bartlett/bartlett010803.asp) a VERY interesting article about why eliminating the double taxation of corporate profits (the dividend tax) is something that corporate bigwigs have fought against in the past because it prevents them from using the corporate profits to pay for their perks.

So using the "anything that is bad for corporate bigwigs is good for regular stiffs" logic, Bush's plan rocks! :D

[Anonymous]

[i]This is a valid objection in general, but when you cut taxes on a type of income that *only* the rich have, in general, then it's a tax cut for only the rich. Sorry.

Hold on, are you really saying that ONLY the rich have taxed Dividend Income? You are kidding right?

[Desslock]

eliminating the double taxation of corporate profits (the dividend tax)

"double taxation" sounds bad, but the two levels of taxation actually just equalled the nomal, single tax paid by individuals on income.

By splitting the tax into two (corporate income, and then individual dividend tax), the "double taxation" actually benefitted business owners, since it allowed them to defer tax that they'd otherwise have to pay simply by keeping the money in the corporate entity.

Stefan

[Desslock]

[i]This is a valid objection in general, but when you cut taxes on a type of income that *only* the rich have, in general, then it's a tax cut for only the rich. Sorry.

Hold on, are you really saying that ONLY the rich have taxed Dividend Income? You are kidding right?

Yeah, I don't understand either.

Bah. Anything other than a flat tax is inequitable.

[asspennies]

Even rich people "sitting" on their money helps the economy. Rich people don't have money bins. They keep their wealth in a bank. And banks re-invest money. That's how they make money.

[Mark Asher]

"If you cut taxes across the board, guess who is going to play less? The people that paid more!"

Bush is proposing an elimination of a tax, not a reduction, and for a type of income that most of us don't have access to in any significant way. It's an elimination of a tax on the rich more than anything else.

If you think that the rich getting richer by investing more in the stock market is good for all of us, then it's a good plan. I'm not convinced that it would be a big economic boost and there's something that rubs the wrong way about those who need more money the least getting a tax break that's out of reach for most of us.

[Ben Sones]

Bah. Anything other than a flat tax is inequitable.

Damn straight.

[Brad Grenz]

Bah. Anything other than a flat tax is inequitable.

I think they call it 'progressive'.

[wumpus]

Rich people don't have money bins.
I'm filing this under "everything I need to know about economics, I learned from Scrooge McDuck."

[Anonymous]

What are the only taxes ultra-rich folk who don't work for a living have to worry about?

1) Estate taxes. Republicans want to eliminate them.
2) Capital gains taxes. Republicans want to eliminate them.
3) Dividend taxes. Republicans want to eliminate them.
4) Property taxes. Republicans want them slashed.

Bush wants to eliminate all taxes on the ultra-rich. And for those only super-rich who actually work for a living even though they have millions or billions in savings, investment, real estate, etc., Bush wants to eliminate taxes on the majority of their assets.

This philosophy is a boon to rich folk who want to pass their money on to their lazy heirs. It does nothing to stimulate the economy. Rich people already have most of what they need. There's a law of diminishing returns; eventually you have pretty much everything you want.

[Anonymous]

Another thought.

Rich folk, Bush included, don't need government programs. Sure they exploit the government whenever possible to build their baseball stadiums, purchase their military machines, and educate their workers, but they don't have a great fondness for it.

The more money they take away from the government the better as far as they are concerned. This is the act of selfish people with power getting what they want without concern for us serfs. They have a lot of money. They want more.

Fuck 'em.

[VegasRobb]

What can be done?

Get rid of the IRS and go to a:

Value Added Tax (http://www.eurunion.org/legislat/VATweb.htm)

Or a little something from:

Steve Forbes (http://www.pbs.org/newshour/bb/congress/forbes_flat_tax.html)

Or is the current flawed system the best there is (ala Democracy)?

[Jason McCullough]

The current "flawed" system is a hell of a lot more progressive than a VAT (actually regressive) or flat tax (neither). Amusingly, a revenue-neutral flat tax would *raise* taxes on the middle class.

Oh, and if you add together all the taxes we have in this country (sales is the big one), then american taxation is pretty close to a straight % of your income. Those big jumps in federal rates are counteracted by state rates (fewer brackets) and sales taxes (almost entirely the bottom half).

[Jason McCullough]

I just don't trust such a large infusion of money into the pockets of those who least need it.

The problem is that its very difficult to provide an economic stimulus that creates jobs (and I think everyone agrees that this should be a goal of any economic stimulus package right now) without also benefitting the corporations that have to supply those jobs, and the (generally wealthy) people that own and run them. Many liberals say they want both of those things, but I have yet to hear anyone explain how this mystical bootstrap levitation act can be accomplished.

As a crass simplification:

In a recession, the economy has insufficient demand for consumption good. To end a recession, demand must be increased. To increase demand, you increase consumption.

The federal reserve increases demand by increasing the money supply. For technical reasons too complicated to go into, it's possible that the fed has done all it can; this is why some economists are recommending the government start trying to increase demand through spending increases or tax cuts.

Tax cuts have less of an effect on aggregate demand, per dollar expended by the government, than government spending. This is because spending goes entirely into, well, spending, which increases demand, while tax cuts, once people get 'em, are spent both on investment and consumption.

Now, as a percentage of income, the poor spend a hell of a lot more on consumption than the rich do. Therefore, an X dollar tax cut to the rich will result in a smaller stimulus effect, per dollar, than an X dollar tax cut to the poor.

So, the options, ranked in order of bang for the buck at ending a recession:

1) Government spending.
2) Tax cuts to the poor.
3) Tax cuts to the middle class.
4) Tax cuts to the rich.
5) Tax cuts to the ludicrously hyper-rich (top .1% or so).

Eliminating the tax on dividends results in a tax cut almost entirely to 4) & 5). Look at this (http://www.j-bradford-delong.net/movable_type/archives/001359.html) chart; the rest of the proposal is ok, but the dividend thing is just entirely a sop to his conservative base. The entire fucking thing goes to the top 1% of earners! It won't help us get out of the recession for shit.

Now, dividends might have some long-run growth effects, but that's an entirely different discussion. When Bush tells you the dividend tax cut will help end the recession, he's being extremely misleading.

[Brian Rucker]

I get my news from the Washington Post (especially Kurtz's media notes with the related links - that's an ideal cheat sheet for keeping up with the better editorial content) and the New York Times (especially for Friedman's columns about the middle east. I may not agree with everything he thinks but I do respect the amount of experience he has and the huge amount of work he's done sorting out the situation). All things considered, I think aside from editorial page stories these are pretty unbiased sources. Now someone that buys the Fox "Fair and Balanced" line might not agree but consider the source. After I catch up with those on my lunch break (along with visiting other vital news and editorial sites like Qt3) I'll watch The News Hour on PBS at home. I also watch Hardball just to see what the talking heads are saying, sort out the political talking points, and to see if Howard Feinman's going to be on. On Sundays I tend to watch the newshows. I'll visit alternet or motherjones once mainstream coverage starts depressing me. Sometimes I'll visit conservative sites when I'm trying to figure out what the hell those guys are thinking.

Feinman, who writes for Newsweek, states outright that making these outrageous proposals for dividend cuts is a deliberate political move on the part of Bush's team (especially Karl Rove). If he gets them, he'll never have to do another favor for his base (aside from nominating pro-life and anti-civil rights judicial candidates). If he doesn't, and he doesn't think he will entirely, when the market crashes and it will crash between the war and the deficits this administration is causing, he'll be able to blame the Democrats for 'sabotaging' Bush's plan.

[Reeko]

Therefore, an X dollar tax cut to the rich will result in a smaller stimulus effect, per dollar, than an X dollar tax cut to the poor.

Professor, you forgot one small fact. POOR PEOPLE DON'T PAY FEDERAL INCOME TAX!!!!! They pay Social Security and Medicare taxes, yes. But no federal income tax. In fact, thanks to the earned income tax credit, many poor people get more back on their tax returns than they paid in the first place.

[Desslock]

Amusingly, a revenue-neutral flat tax would *raise* taxes on the middle class.

Well, yes, because they don't pay the same proportion of their income in taxes, which is why the current system is unfair.

[Anonymous]

Well, yes, because they don't pay the same proportion of their income in taxes, which is why the current system is unfair.

What do you mean "they?" Are you independently wealthy, or are you not middle class yourself?

Progressive taxation is not "unfair." Rich people being able to hire lawyers and lobbyists to exploit and create loopholes in which to hide all their money while the lower classes have to play by the rules is quite unfair.

I think the rich can get by just fine without you worrying about them, Desslock. They have the money to buy politicians. They are running the game. If anything gets passed that's negative towards the rich, particularly under a Republican administration, it's only once in a blue moon.

I'm sure Bill Gates will be happy that you care about his bottom line, tho.

[DavidCPA]

Therefore, an X dollar tax cut to the rich will result in a smaller stimulus effect, per dollar, than an X dollar tax cut to the poor.

Professor, you forgot one small fact. POOR PEOPLE DON'T PAY FEDERAL INCOME TAX!!!!! They pay Social Security and Medicare taxes, yes. But no federal income tax. In fact, thanks to the earned income tax credit, many poor people get more back on their tax returns than they paid in the first place.

Depending on what you consider poor, here are a couple of examples of lower wage people paying taxes:

Single, no dependants, $6/hr job @ 2,080 hours
Income = $12,480
Standard Deduction = $7,700
Taxable Income = $4780
Income Tax from tax table = $478 (this would be paid via withholdings most probably)
FICA taxes for the year = 12,480 * 7.65% = $955
Total annual Federal Taxes = $1,433 (11.5% of income)

Married filing jointly, no dependants, $6/hr job @ 2,080 hours for both
Income = $24,960
Standard Deduction = $13,850
Taxable Income = $11,110
Income Tax from tax table = $1,113 (this would be paid via withholdings most probably)
FICA taxes for the year = 24,960 * 7.65% = $1,909
Total annual Federal Taxes = $3,022 (12.1% of income)

The EIC mainly applies to income tax filers with dependants or very low wage married couples with no dependants.

Be careful with your generalities.

-DavidCPA

[Tyjenks]

I think the rich can get by just fine without you worrying about them, Desslock. They have the money to buy politicians. They are running the game.

I have an accountant friend, 33 years old, who works his ass off, has a wife and two kids, and has to be out of town a lot. He works incredibly hard, invests his money and I would call him rich. I have no idea if he is a millionaire yet, but if he is not he will retire as one. He owns no politicians and is not running anything. OTOH, he is paying a crapload of taxes which he does not complain about by the way.

There are plenty of "wealthy" folks who are not in that imaginary inner circle of the powerful and rich people you mention that make good money and lose a big chunk to the government. This idea that rich have ways to cheat their way out of taxes and us poor folks are left holding the bag is all politics. Granted some ultra-rich get away with murder, but many of them are sitting in jail awaiting trial dates.

[Desslock]

Progressive taxation is not "unfair." Rich people being able to hire lawyers and lobbyists to exploit and create loopholes in which to hide all their money while the lower classes have to play by the rules is quite unfair

Don't be ridiculous - 'they' ain't out to get you, and the world isn't the scary place you imagine.

There's obviously competing views about what's "fair". Proponents of the current system have created an overly complicated labyrinth of varying tax rates; surtaxes; exemptions; incentives; credits; categorizations of income; etc. As a result, you have some people paying 40% of their income in taxes, while others pay 7%, and those fortunate enough to make the bulk of their income in capital income pay far less than those who have standard employment or business income. It's mess, and inherently unfair and political.

As far as I'm concerned, the only system that's fair would treat all forms of income equally, regardless of whether the income is from dividends, capital gains, interest, employment income, etc. (which obviously would make a lot more income taxable than under the current system), and which requires all taxpayers to pay an equal proportion of their income -- whether that's 10% or 50%, a flat tax, that requires everyone (even "they", whoever "they" are, if you have disdain for pronouns) to pay the exact same proportion of their income.

[Anonymous]

He works incredibly hard, invests his money and I would call him rich. I have no idea if he is a millionaire yet,

Then he makes a pretty piss-poor example.


He owns no politicians and is not running anything.

That's because it takes more than a million dollars in a retirement account to do so.


OTOH, he is paying a crapload of taxes which he does not complain about by the way.

GUESS WHAT? IF HE DOESN'T COMPLAIN ABOUT IT, WHY ARE YOU? He's the "rich" guy. You aren't. What are you bitching about? What is the problem with you middle-class idiots who worry about enhancing the bankrolls of rich people? That's idiotic. Pay attention to your own needs. That's what the rich are doing. I guess Fox News duped you into thinking you had something in common with the rich. Now you slit your own throat in order to feed those bloated leeches a little more blood. Pathetic.

[Anonymous]

No name calling in the virtual sandbox.

Thank you.

[Mark Asher]

Amusingly, a revenue-neutral flat tax would *raise* taxes on the middle class.

Well, yes, because they don't pay the same proportion of their income in taxes, which is why the current system is unfair.

Depends on how you define unfair. Maybe it's fair to base taxes on the ability to pay?

It's not like the wealthy pay a huge difference percentage-wise in taxes. Isn't the top tax percentage 36%? What is that? Eight percent higher than a middle-class income tax bracket?

[Anonymous]

No name calling in the virtual sandbox.

Thank you.

I think you have the wrong messageboard. This is the one where Brian Koontz is "a lunatic," Wumpus is "a faggot," etc.

[Tyjenks]

OTOH, he is paying a crapload of taxes which he does not complain about by the way.

GUESS WHAT? IF HE DOESN'T COMPLAIN ABOUT IT, WHY ARE YOU? He's the "rich" guy. You aren't. What are you bitching about? What is the problem with you middle-class idiots who worry about enhancing the bankrolls of rich people? That's idiotic. Pay attention to your own needs. That's what the rich are doing. I guess Fox News duped you into thinking you had something in common with the rich. Now you slit your own throat in order to feed those bloated leeches a little more blood. Pathetic.

I not complaining you moron, I am refuting your claim that all rich people do not pay taxes through their use of bought politicians and expensive lawyers. I use my friend as an example of the rich.

Look, if you are going to remain a poor excuse for a troll, the least you can do is come up with a semi-clever anonymous login to post under. Like..ummm...Income Redistributor Extraordinaire. Feel free to use that in your next inane post.

[Anonymous]

"I not complaining you moron, I am refuting your claim that all rich people do not pay taxes through their use of bought politicians and expensive lawyers. I use my friend as an example of the rich."

He's a very bad example.

Professional athletes can make millions PER YEAR. And the only reason they make that much is because they know the people who own the teams make many times that amount. And you expect me to call a guy who after a lifetime of hard labor manages to scrape up a single million "ultra rich" (which was the terminology I used that you were attempting to refute with your example)?

He's not who I was talking about, Captain XXY. It takes *disposable* millions to make the kind of political campaign contributions that get you the ear of politicians. Is that not clear? I think so. Your friend isn't rich enough to play that game. He hardly refutes my argument.

But in fact, he does partially prove my point. Your friend is an accountant. He most likely got as rich as he is through a well-above-average knowledge of tax law, and an ability to exploit those laws.

[Desslock]

Depends on how you define unfair.

I did so in a subsequent post.

[Tyjenks]

Anonymous guy - So you are pissed because there are a couple thousand ultra rich that are powerful and stay that way by not playing by the rules. This tax cut is helping them out and you are getting pooped on. Is that right? I don't see it. There will always be rich and powerful people. What do you propose we do then? Raise their tax rates to 40-50%?

[Anonymous]

Sounds good.

[Anonymous]

I love this hippie perception that "rich" people don't work for anything. That somehow, all they've done to get rich is somehow less significant than the guy who digs ditches all day.

And sure there are exceptions to everything but most people that are "rich" (let's say earn $150K a year or more, though even $100K is probably rich by your hard labor hippie standards), have a college degree, worked up their own corporate (or whatever) ladder or worked hard making their own business. Your perception that rich ppl are handed everything is a load of crap.

Conversely, yes, working class people work hard. Have many of them made bad decisions in their life that put them in that position (no degree, high debt), should the hard-working rich be punished for that?

Stop being such a pansy and let the people with ambition be ambitious. This is reality, tree-hugger, the number of hard-working lower class ppl who are in that position cause everything from when they were born went against them is NON-EXISTENT.

And btw, people who post anonymously and rant and rave are big pussies!

[Tyjenks]

Sounds good.

:lol: I glad we straightened that out. :lol:

Now I can go eat lunch.

[voltaic]

As far as I'm concerned, the only system that's fair would treat all forms of income equally, regardless of whether the income is from dividends, capital gains, interest, employment income, etc. (which obviously would make a lot more income taxable than under the current system), and which requires all taxpayers to pay an equal proportion of their income -- whether that's 10% or 50%, a flat tax, that requires everyone (even "they", whoever "they" are, if you have disdain for pronouns) to pay the exact same proportion of their income.

I mostly agree with you, except that I believe the "flat tax" should be a "sales tax" for a number of reasons. Primarily, you can avoid taxing certain things such as baby food, diapers, milk, school books, etc. to help out the poor people who are actually working to support a family, etc. You can also add a higher rate of sales tax to "luxury items" such as rolex watches if it will appease the "we hate the rich!" crowd. And finally it will not tax income which is saved, invested, etc. only that which is spent. So someone who is poor and saving lots of their income will actually get to save it and not have to give a bunch to the gubmint, and then go to the trouble to get it back form the IRS at no interest depending on his bracket, etc. etc.

[Anonymous]

I love this hippie perception that "rich" people don't work for anything. That somehow, all they've done to get rich is somehow less significant than the guy who digs ditches all day. [...] Your perception that rich ppl are handed everything is a load of crap.

Example: George W. Bush. Never ran a successful business. All of the business ventures he was handed failed. His daddies rich cronies offer the President's son a chance to stick a small amount of money into their baseball team and serve as a figurehead for their group of investors. Suddenly he's a business genius? Suddenly he's worked hard for his money? Ha.

[voltaic]

Interestingly, there are people who are "ditch diggers" who make three times what white-collar types can make. Example: union eletricians in Las Vegas (the hands-down center of union-love) make something approaching $30 an hour with guaranteed work, wages, bennies, etc. Do the math: $30 an hour with guaranteed 40 hr weeks (some places get LOTS of overtime but I won't count it) = $1200 per week = over $60,000 a year plus insurance and benefits and vacation and sick leave blah blah blah.

And if management screws something up big time, you can get a grievance filed resulting in a payout of hundreds of thousands or millions to the affected workers. There was recently a settlement at an employer of mine in which some of the drivers I work with (a manual labor job, mind you) receivied up to $20,000 EACH as a one-time check for settlement besides all of the other goodies mentioned above.

The point of all this is that you can be rich without being some Wall-Street executive or other "oppressive" corporation. I'm pretty sure that a single-wage earner taking home $60K a year is classified as "upper class" but I don't blame these guys for my "almost $20K a year" tax details.

[Anonymous]

Example: George W. Bush. Never ran a successful business. All of the business ventures he was handed failed. His daddies rich cronies offer the President's son a chance to stick a small amount of money into their baseball team and serve as a figurehead for their group of investors. Suddenly he's a business genius? Suddenly he's worked hard for his money? Ha.

I said their were exceptions to everything, fucktard. For every George Bush, there's thousands of 100K+ earners that worked their ass off for everything they made. And for every George Bush there are dozens of white trash welfare recipents whom would rather sit at home and use their food stamp money on beer than go out and get a paying job.

Come back to reality!

[Kyle Wilson]

Example: George W. Bush.

You can prove anything you like with argument by anecdote. The fact is, the average American millionaire is a small businessman who earned his million(s) by starting his own company and investing the time and effort required to make it a success. I'm not an entrepeneur, but I have great respect for those who are.

Maybe W. isn't a business genius. Maybe his father was, or his grandfather, but somewhere along the line someone made a fortune and chose to pass along to his heirs instead of distributing it among the workers according to need or burning it all in a gesture of solidarity with the poor. When people make money, it's theirs, and they get to do with it what they want, even if that involves giving it to people we don't think are deserving. That's one of those prices we pay for living in a free society.

[Kraaze]

I'm new to trolling, so I would ask people to be patient and understanding and hopefully include some extra vituperousness and acid in their replies, even if I haven't warranted it :D

The flat tax idea is inherently flawed in tems of simple economics.

Tax money is like an insurance premium, it's an amount paid out to maintain the status quo and make sure unexpected events don't result in drastic loss.
What's to stop poor people from improving their lot in life by killing the rich and taking their wealth? Answer: the police, courts, even the military. All paid for with tax dollars. Those who benefit most from the status quo should logically pay the most to maintain it.

[Anonymous]

Not the flat tax...tell me some braindead politician isn't gonna run on that joke again.

The only way proponents can claim a flat tax is fair is by ignoring the sales tax and the property tax, which hit the middle and lower-classes hardest. Pretending that lowering income taxes on the rich, raising them for the poor and middle-class, and leaving sales and property taxes in place, is simply willful ignorance.

[Anonymous]

"When people make money, it's theirs, and they get to do with it what they want"

They don't make money in a vaccuum. They make money by using workers who have been educated in free government schools, by using roads provided by the government, etc., etc.

How does someone get rich? They inherit a piece of land from their parents and then charge all the poor and middle class folks to live and work there. What a heroic way of life.

[Jason McCullough]

Therefore, an X dollar tax cut to the rich will result in a smaller stimulus effect, per dollar, than an X dollar tax cut to the poor.

Professor, you forgot one small fact. POOR PEOPLE DON'T PAY FEDERAL INCOME TAX!!!!! They pay Social Security and Medicare taxes, yes. But no federal income tax. In fact, thanks to the earned income tax credit, many poor people get more back on their tax returns than they paid in the first place.

Correct. The obvious "lets end the recession" plan, then, would be to cut their social security taxes, wouldn't it?

[Anonymous]

You can prove anything you like with argument by anecdote. The fact is, the average American millionaire is a small businessman who earned his million(s) by starting his own company and investing the time and effort required to make it a success.

You start by stating that anecdotes are feeble proof, then immediately make a claim of ultimate factual knowledge about how "the average American millionaire" made his money minus any proof whatsoever. That was a joke, right?

[Jason McCullough]

As far as I'm concerned, the only system that's fair would.....require all taxpayers to pay an equal proportion of their income -- whether that's 10% or 50%, a flat tax, that requires everyone (even "they", whoever "they" are, if you have disdain for pronouns) to pay the exact same proportion of their income.

I'm assuming you're going to do this to every tax? If only the federal income tax is made "flat", then the total tax incidence (state, local), will actually be regressive.

Let's assume, that for the sake of argument, the final rate would be 33%. Are you telling me that someone making $15,000 a year and paying $5000 in taxes is the same as someone making $3 million and paying $1 million?

For the poor guy, he has to forgo a car, or a decent apartment, or food, or some other obvious necessity; what does the rich guy have to forego? To be completely crass about it, ivory backscratchers?

Most flat tax proponents get around this spectacularly unpopular consequence by having a very big exemption, so the first 8-15k of income isn't taxed at all; this doesn't improve things, much though. A median family ($65k in income?) paying $13k in income just isn't the same as 3 million/1 million.

If conservatives really want to try to implement one, though, go for it; it's your congressional seat to lose. "Raising taxes on everyone but the rich" doesn't sound like a winner.


Conversely, yes, working class people work hard. Have many of them made bad decisions in their life that put them in that position (no degree, high debt), should the hard-working rich be punished for that?


Right, poor people are poor because they've made bad decisions! It's their own fault!

You might want to look into something called "productivity." People are paid for their skills; poor people, in general, have less skills. It's not "their fault."

The point of all this is that you can be rich without being some Wall-Street executive or other "oppressive" corporation.

It's pretty hilarious that your example of a high-paying blue collar job involves an incredibly strong union. We all know how much the GOP likes unions.

[Anonymous]

I'm pretty sure that a single-wage earner taking home $60K a year is classified as "upper class" but I don't blame these guys for my "almost $20K a year" tax details.

Someone who has to go into massive debt to buy a simple home is not "upper class." $60,000 a year is not "upper class." On the lower fringes of "upper middle class" maybe, but that's stretching it.

Almost $20K a year is not good. Looks like you maybe should spend time worrying about your own financial needs and less time worrying about the poor, put-upon millionaires. These guys are trying to take away the school programs and social services designed to help people in your income bracket, so they can give away that money to people who are already rich. Meanwhile, you've got your head up your ass worrying about the economic needs of people who own oil tankers and office buildings.

[Anonymous]

God, the more I think about that "rich union worker" example above the more I want to puke.

This is how conservative ideology works. They make lower-middle class and poor folks jealous of uninized workers who make $60,000 a year, calling such people rich, lazy and spoiled, in order to keep the rabble from thinking about the truly rich people on top who are taking away social programs which have been in place since pre-WWII. The Limbaugh-lovin' dittoheads then become furious about "rich" union workers and "cadillac driving" welfare mothers and vote for rich politicians who work to demolish unions and welfare and social programs, so the union workers can be driven back to lower-middle class status, and so welfare mothers can be pushed onto the streets. Pretty clever tactics. Completely evil and morally bankrupt, but clever.

[Jason McCullough]

If you're making $60k:

SS + FICA = 4700
Income taxes = (60,000 - 4550) * 15% + (60,000 - 4550 - 27000) * 12.5% = 8318 + 3556 = 11874.

So, the absolute most you can pay at $60,000 of income is 16,500. This is an upper bound, as most people have deductions/credits they can apply to lower this.

[Tyjenks]

Guest - I think there is room for us all somewhere in the middle. 30% of voters are nutty conservatives like the Limbaugh goofs. 30% are yellow dog democrats like, well, you. Nutty in your own "can't we all just share and get along" kinda way. I am in that middle 40% that politicians rush to capture once the primaries are over. I want to know what is going on and make the best and fairest decision based on actual facts. Not idealogical party and class warfare.

The spin eminating from the administration is no different from yours. Its just coming from an opposite pole in the political spectrum.

[Anonymous]

I want to know what is going on and make the best and fairest decision based on actual facts.

The actual facts are that your accountant friend is rich in comparison to you, but not in comparison to George Bush and Dick Cheney, both of whom being far richer than your friend.

[Bullhajj]

Yellow dog democrats? What's that mean?

[Ben Sones]

Progressive taxation is not "unfair." Rich people being able to hire lawyers and lobbyists to exploit and create loopholes in which to hide all their money while the lower classes have to play by the rules is quite unfair.

Both of these things are unfair. A truly equitable flat tax would also do away with tax shelters. And I'm not convinced that middle class tax rates would rise. Several different groups claiming this (such as the Citizens for Tax Justice) have used fabricated numbers to make their arguments.

Though I would not begrudge the higher payments on my own behalf if my payments did rise, in the interest of fairness.

[Tyjenks]

Yellow dog democrats? What's that mean?

If the Democrats put up a yellow dog as a candidate, some would vote for the dog rather than a sentient Republican counterpart. Basically partisanship in the extreme. It may just be a Southern term. Sorry for springing it on all you Yanks and tree-hugging westerners.

[Mark Asher]

If you really wanted to do a flat tax, I think you should have to factor in some kind of big exemption for living expenses. For example, maybe average living expenses for a family of four, rich or poor, might be set at $30,000 year. Make that first $30,000 of income exempt from taxes and then tax everything over $30,000 at a flat rate, maybe 30%. In fact, cut out all tax breaks, including interest on mortgage payments, just to make the tax system simpler and fairer.

If a family of four makes $3M a year, they pay 30% of $2,970,000 in taxes, no matter how much they are spending on a home, cars, boat, etc. The family of four making $60,000 a year pays taxes of 30% on only $30,000 after the deduction. The family of four making only $30,000 wouldn't pay any taxes.

Think something like that would ever fly? Probably not, but it seems inherently more fair.

[Ben Sones]

"When people make money, it's theirs, and they get to do with it what they want"

They don't make money in a vaccuum. They make money by using workers who have been educated in free government schools, by using roads provided by the government, etc., etc.

Yeah, paid for mostly by them. Under a flat tax, it would still be paid for mostly be them. So what's your point? That rich people owe rich people a debt of gratitude for supporting our nation's infrastructure?

How does someone get rich? They inherit a piece of land from their parents and then charge all the poor and middle class folks to live and work there. What a heroic way of life.

This is such an absurdly broad generalization that I have trouble believing that you aren't joking.

If you really wanted to do a flat tax, I think you should have to factor in some kind of big exemption for living expenses.

Most of the plans that I have seen have some sort of provision of this nature. The Armey-Shelby plan (H.R. 1040), for instance, calls for a 20 percent flat tax on all income (which falls to 17 percent in the third year) with various basic allowances ($11,600 for a single person, $23,200 for a married couple filing jointly, and $5,300 for each dependent child).

[Jason McCullough]

[quote=Anonymous]And I'm not convinced that middle class tax rates would rise. Several different groups claiming this (such as the Citizens for Tax Justice) have used fabricated numbers to make their arguments.

Made-up interest group numbers or not, it's a mathematical identity.

Currently, the rich pay a greater % of their income in taxes than everyone else. A flat tax would reduce the total income tax they pay. Therefore, the shortfall must be made up by raising taxes on everyone else.

[Jason McCullough]

If you really wanted to do a flat tax, I think you should have to factor in some kind of big exemption for living expenses. For example, maybe average living expenses for a family of four, rich or poor, might be set at $30,000 year. Make that first $30,000 of income exempt from taxes and then tax everything over $30,000 at a flat rate, maybe 30%. In fact, cut out all tax breaks, including interest on mortgage payments, just to make the tax system simpler and fairer.

If a family of four makes $3M a year, they pay 30% of $2,970,000 in taxes, no matter how much they are spending on a home, cars, boat, etc. The family of four making $60,000 a year pays taxes of 30% on only $30,000 after the deduction. The family of four making only $30,000 wouldn't pay any taxes.

Think something like that would ever fly? Probably not, but it seems inherently more fair.

It wouldn't, because a) getting rid of the morgage deduction would ignite a shitstorm like you wouldn't believe and b) it wouldn't redistribute the tax burden to the poor and middle class, which is the entire ideological point of a flat tax.

[Mark Asher]

"Currently, the rich pay a greater % of their income in taxes than everyone else. A flat tax would reduce the total income tax they pay. Therefore, the shortfall must be made up by raising taxes on everyone else."

Or by cutting expenditures or borrowing more heavily. Good thing this conservative Republican adminstration is against the idea of deficit spending!

[Mark Asher]

"It wouldn't, because a) getting rid of the morgage deduction would ignite a shitstorm like you wouldn't believe and b) it wouldn't redistribute the tax burden to the poor and middle class, which is the entire ideological point of a flat tax."

Heh -- yeah, I know. But if poor and middle class realized they got a big deduction every year out of which they were expected to finance a home, car, living expenses, etc., they might buy into it.

The tax code has proven to be somewhat invulnerable to change. There are too many special interest groups with pet tax shelters and deductions that will shoot down any attempts to make it simpler and fairer.

[Ben Sones]

Currently, the rich pay a greater % of their income in taxes than everyone else. A flat tax would reduce the total income tax they pay. Therefore, the shortfall must be made up by raising taxes on everyone else.

The Armey-Shelby plan makes up about $100 billion in the reduced compliance costs inherent in a drastically simpler tax code. And the rich may not get as much of a break as you'd think if abusive tax shelters are also eliminated.

The tax code has proven to be somewhat invulnerable to change. There are too many special interest groups with pet tax shelters and deductions that will shoot down any attempts to make it simpler and fairer.

It has proven somewhat invulnerable to reduction and simplification, but it has changed an awful lot. Even the income tax is a fairly recent addition, and that's a pretty major change.

[Jason McCullough]

Yeah. Cutting spending or increasing borrowing could be done *anyway*, though, and it's a classic GOP tactic to promise spending cuts which never materialize to offset their tax cuts.

There's a serious line of thinking among insider conservatives that deficits themselves are a good thing, as they pressure everyone to hold down spending. There's no actual evidence for this, and it'd be a spectacularly bad idea if it was (hey, if I have high credit card bills I'll spend less, so I'll run up my credit card), but that doesn't seem to stop them.

[Oppressor]

I personally wouldn't vote for anyone advocating a plan that can't be explained patiently to a 10 year-old. That's a sure sign of subterfuge in my book.

It's like when I get a game with a 100+ page manual and I try to play without reading the thing cover to cover and I get lost. That's a sure sign the developer was targeting a really narrow audience. I think the same can principle can be applied to this tax plan.

[Bullhajj]

If the Democrats put up a yellow dog as a candidate, some would vote for the dog rather than a sentient Republican counterpart. Basically partisanship in the extreme. It may just be a Southern term. Sorry for springing it on all you Yanks and tree-hugging westerners.

Oh, you mean yellow dawg democrat. I gotcha now. Why didn't you just say so in the first place?

[Kyle Wilson]

You start by stating that anecdotes are feeble proof, then immediately make a claim of ultimate factual knowledge about how "the average American millionaire" made his money minus any proof whatsoever.

I apologize for not citing sources. I read that the average millionaire made his money by starting his own business in "The Millionaire Next Door," by Thomas Stanley.

This online discussion of the book:

http://www.mrcranky.com/movies/angelsandinsects/10/17.html

Says the average millionaire would tell you:

About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

And furthermore:

Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.

How did they get rich?

About two-thirds of us work between forty-five and fifty-five hours per week... On average, we invest nearly 20 percent of our household realized income each year.

Now I'm not rich, but instead of sticking it to those who are, I'd rather join them. For all it's faults, America really is a country where you can make a fortune out of nothing if you're willing to put in the hard work it takes to do so.

[Jason McCullough]

Now I'm not rich, but instead of sticking it to those who are, I'd rather join them. For all it's faults, America really is a country where you can make a fortune out of nothing if you're willing to put in the hard work it takes to do so.

.....and get lucky, and banks will loan you capital, and a recession doesn't wipe you out, and you don't come down with a serious medical condition, and you don't get squeezed out of your market by a competitor, and so on for pages.

To bastardize Tolstoy: each business success is alike, but each failure is unique.

[Anonymous]

"About two-thirds of us work between forty-five and fifty-five hours per week... On average, we invest nearly 20 percent of our household realized income each year."

I am a self-employed "entrepreneur" who works up to 80 hours per week in peak deadline times.

I made $35,000 last year. And I don't have health insurance.

Sure there's room for a lot of improvement, and I plan on increasing that income.

But this silly equation that "hard work" = "millionaire" is useless as a guide to human behavior.

[Brad Grenz]

.....and get lucky, and banks will loan you capital, and a recession doesn't wipe you out, and you don't come down with a serious medical condition, and you don't get squeezed out of your market by a competitor, and so on for pages.

You make it sound like god is playing whack-a-mole!

The problem with this discussion is that hardworking professionals who've worked their way up to a low 6 figure income get lumped in with obscenely rich, old money, dinner parties where they serve marrow-mixed-with-gold-leaf in the bone types in that top 1%. Hey, if you've got 4 billion and all the tax shelters in the world your high tax rate isn't a huge problem. But the independant farmer with a 1 million dollar far can't pass it on to his son because he won't be able to come up with hundreds of thousands of dollars for the inheritance tax. Perhaps there should be more brackets in the top end. There are a bunch between 0 and 100,000, but after that it's like the sky's the limit.

One must remember that when you're talking about tax law for the rich, it doesn't start at 10 million dollars. If you have to cough up 50% of that, well, you've still got five mil. But if you have to send away half of your 100K, you're down to fifty. Hardly worth being six figures.

[Rywill]

This whole discussion is ignoring the fact that the government uses tax law for more than just raising money. They also use it to encourage behavior seen as being beneficial. Tax incentives for things like owning property or saving for retirement--stuff the government thinks everyone should try to do. Tax penalties for certain kinds of pollution and spending (like luxury taxes). If we move to a flat tax, the government loses the ability to influence society in that way, and most people think that's probably not a good thing.

Now, you might be thinking, Hell, with all the money we save, the government can just give cash handouts for stuff that it wants to encourage. And it can charge money for things it wants to discourage.

Probably not. If you set up a system where people are given cash handouts for certain behaviors, you might as well just keep the tax system, because it's going to be just as byzantine. And taking people's money because they committed a socially unacceptable act is called a "fine" and involves lots of costs--like a court trial--that might be just as much (or more) than administering the tax system.

On top of all of that, you've got the problem of peoples' reasonable expectations. Someone said eliminating the mortgage interest deduction would cause a shitstorm. Boy howdy. And with good reason: lots of people (and I confess to bias: I'm one of them) made a very, very important financial decision based on the fact that the writeoff would be available. Take that away, and suddenly their financial picture is hugely worse: they just took out an enormous line of credit that they can't afford to pay back. Hello, foreclosure. Which way to the bankruptcy court?

I'm not trying to say the tax code shouldn't be simpler, and I'm not even saying a flat (or flatter) tax couldn't work. But there are major problems that I don't see anybody addressing. Maybe it all works out--I definitely agree that the current tax system is enormously destructive of wealth. The cost of compliance is astronomical. I think I read a few years ago that Ford Motor's tax return was six feet high. Six feet! All of that money spent on accountants and tax attorneys and all that other crap is money that is lost to no tangible gain.

But still, any plan to get out of it needs to address not just the raw economics, but also the issues of 1) how is the government going to influence societal behavior without the tax code? and 2) how are you going to adjust the millions and millions of property owners that are about to have the rug pulled out from under them? (And they're just one example...businesses, obviously, have also made enormous investments based on the assumption that the tax code is relatively static.)

[voltaic]

Someone who has to go into massive debt to buy a simple home is not "upper class." $60,000 a year is not "upper class." On the lower fringes of "upper middle class" maybe, but that's stretching it.
I don't know where you live, but there is lots of decent housing in the western US for $80K. Now if you have a single-income house earning $60K a year, hell he'd have that shit paid off in ten years. Is it the best system? No. But it's not too bad and it's what we've got.

Almost $20K a year is not good. Looks like you maybe should spend time worrying about your own financial needs and less time worrying about the poor, put-upon millionaires. These guys are trying to take away the school programs and social services designed to help people in your income bracket, so they can give away that money to people who are already rich. Meanwhile, you've got your head up your ass worrying about the economic needs of people who own oil tankers and office buildings.
You won't be able to quote in this thread anything with me worrying about the rich. I simply challenged your notion that all rich people are greedy corporations and that ilk. Incidently, you obviously haven't read my past posts that I am Libertarian and pretty fucking good at juggling credit card debts and such to get my finances in order one step at a time. One thing I'm not going to do, though, is place myself on others as a financial burden, including taxing someone else who has their shit more together.

[Anonymous]

I'm not going to do, though, is place myself on others as a financial burden, including taxing someone else who has their shit more together.

Interesting to hear that you think such rich folk as Michael Jackson, OJ Simpson and Anna Nicole Smith "have their shit together" more than you do. We mustn't tax them because they have more money than us and thus they've proven themselves superior, dontcha know.

[Jason McCullough]

.....and get lucky, and banks will loan you capital, and a recession doesn't wipe you out, and you don't come down with a serious medical condition, and you don't get squeezed out of your market by a competitor, and so on for pages.

You make it sound like god is playing whack-a-mole!

The problem with this discussion is that hardworking professionals who've worked their way up to a low 6 figure income get lumped in with obscenely rich, old money, dinner parties where they serve marrow-mixed-with-gold-leaf in the bone types in that top 1%. Hey, if you've got 4 billion and all the tax shelters in the world your high tax rate isn't a huge problem. But the independant farmer with a 1 million dollar far can't pass it on to his son because he won't be able to come up with hundreds of thousands of dollars for the inheritance tax.


Here's a funny thing about that "small farmer who can't keep his parent's farm farm because of the inheritance tax": they don't exist. No one has produced a single one. Assets below 650k are exempt, and beyond that they're taxed at a rate that linearlly increases from 37% to top at around 55% (3 million).

If the GOP really cared about "saving poor farmers from estate taxes", they'd raise the exemption to 5 million or so. They didn't: they completely eliminated it to benefit the people passing on estates in the 100 million range. The poor farmers are just a rhetorical tool, like calling it the "death tax," trotted out to serve the interests of the plutocracy.

This is even before getting into the equity arguments; I'm sorry, but you can't possibly argue the US has anything even resembling equality of opportunity if parents can pass *everything* to their kids. I guess we just don't have enough of an indolent aristocracy, for some people.

One must remember that when you're talking about tax law for the rich, it doesn't start at 10 million dollars. If you have to cough up 50% of that, well, you've still got five mil. But if you have to send away half of your 100K, you're down to fifty. Hardly worth being six figures.

That's a good question: why don't the hyper-rich have their own bracket? The answer is that Reagan eliminated them. Draw your own conclusions why this was done.

I agree that no one really thinks small self-made businessman are taxed too lowly. Tax-free dividend income isn't a tax cut on them; it's a tax cut to the richest people on the planet.

[Brad Grenz]

Here's a funny thing about that "small farmer who can't keep his parent's farm farm because of the inheritance tax": they don't exist. No one has produced a single one. Assets below 650k are exempt, and beyond that they're taxed at a rate that linearlly increases from 37% to top at around 55% (3 million).

Really? That might be more telling of consolidation in the industry than anything else. I have trouble believing this kind of thing never happens though. I only used the farm example because it was conveinient and familiar. Admitedly I'm far from an expert on tax law, but it sounds like to me if, when my father died, he wanted to leave me his (hypothetically) $1 million dollar dental equipment business, I'd have to come up with $370,000. Being that I don't have that kind of cash on hand I'd either have to sell the company outright just to repay taxes assets my father had previously been taxed for, or sell a partnership, or take out a massive loan. None of these are particularly attractive options, considering it is for a tax I'm not convinced is even constitutional.

This is even before getting into the equity arguments; I'm sorry, but you can't possibly argue the US has anything even resembling equality of opportunity if parents can pass *everything* to their kids. I guess we just don't have enough of an indolent aristocracy, for some people.

What, so parents shouldn't be allowed to pass anything on? What about things like a better education? Working up the generational latter is a multi-generational effort. Immigrant families which start with nothing build themselves up by giving each generation advantages the previous did not enjoy. I don't believe I suggested this coutry has equality of opprotunity, none do. If the only way this can be accomplished is to force every generation to start from zero again, I don't want it. Capitalism is a Darwinian system. Life itself is, there's no getting around this. Every living organism is in competition with the rest of the world. The ultimate goal is to reproduce and give your progeny every possible advantage, genetic, economic, social, or otherwise. But, whatever.

If you ask me, the real problem is the market economy. It makes what could be a closed system into one that is open ended.

[Jason McCullough]

Once you start talking about how a tax that has been around since 1797 "might not be consitutional", you're on pretty shaky grounds. It was repealed in 1802, reinstated in 1862, repealed in 1870, reinstated in 1898, repealed in 1902, and finally reinstated in 1916. It hasn't been a constant feature, but its quite clearly constitutional for the governmen to tax transfer of property between individuals.

What, so parents shouldn't be allowed to pass anything on?[quote]
[quote]Immigrant families which start with nothing build themselves up by giving each generation advantages the previous did not enjoy.

As if anyone's talking about taking every dime; maybe it's just me, but I think there's a real difference between leaving your kids, say, 500k, and Bill Gates's fortune. The difference is that Gates's progeny can live a life of gilt-encrusted luxury, never lifting a finger a day of their lives, while for everyone else it's just a nicer house, or paying off bills, or something reasonable.


I was just fine with the old system; with a $1 million exemption (it was ramping up to that in 2006) and 37-55% taken after that, it did a pretty good job at stopping the growth of a US aristocracy without violating the concept of working to better your kids.

Going back to the "why, the rich earned it, they shouldn't have to pay greater taxes on it" line seen above: the lack of inheritances taxes plays real havoc with this. You can't have both a flat tax and no inheritance taxes, and pretend to subscribe to a notion of equal opportunity.

Capitalism is a Darwinian system.

.....and democracy isn't.

Admitedly I'm far from an expert on tax law, but it sounds like to me if, when my father died, he wanted to leave me his (hypothetically) $1 million dollar dental equipment business, I'd have to come up with $370,000.

If it's after 2006, when the exemption increase is fulled phased in, you wouldn't pay a dime. If it was today, and the repeal hadn't passed, you'd pay 37% of 400k, which is $148,000. Call me crazy, but an effective 15% tax rate is not all that punitive for handing over a business free of charge to someone.

Oh, you can also give up to $100k of stuff tax free to each kid every year, so parents with even the vaguest grasp of taxes can give an awfully significant amount previously.

[Brad Grenz]

If it's after 2006, when the exemption increase is fulled phased in, you wouldn't pay a dime. If it was today, and the repeal hadn't passed, you'd pay 37% of 400k, which is $148,000. Call me crazy, but an effective 15% tax rate is not all that punitive for handing over a business free of charge to someone.


Ah, OK. That makes sense. Not so bad as I thought.

[mtkafka]

Late to thread, but I was thiking the president should have given incentive for US companies to invest in American production. Iread last month that over 2 million people lost factory jobs last year (edit- it was over the last two years), and then couple that where I work I see every piece of electronic equipment from american compnies (Dell, HP, Gateway, Compaq) the boxes all say made in Malaysia, China, Mexico... don't you think it would be good to give incentive for companies to reinvest there money to american workers? I believe in free trade... but not at the expense of fattening a few peoples pockets with cheap sweatshop labor in some Asian country. Ah, looks like were getting too focused as a country of servicing instead of producing. It all seems wrong imo.

etc

[Kyle Wilson]

Late to thread, but I was thiking the president should have given incentive for US companies to invest in American production.

I believe in free trade... but not at the expense of fattening a few peoples pockets with cheap sweatshop labor in some Asian country.

Oh, please. All protectionist trade tactics accomplish is to transfer wealth from consumers (currently enjoying wonderfully low computer prices) to factory workers. Hiding taxes and handouts that way is a good way to get votes (hence Bush's coddling of the steel industry) but it's a lousy way to run an economy.

[Desslock]

As far as I'm concerned, the only system that's fair would.....require all taxpayers to pay an equal proportion of their income -- whether that's 10% or 50%, a flat tax, that requires everyone (even "they", whoever "they" are, if you have disdain for pronouns) to pay the exact same proportion of their income.

Let's assume, that for the sake of argument, the final rate would be 33%. Are you telling me that someone making $15,000 a year and paying $5000 in taxes is the same as someone making $3 million and paying $1 million?.

Exactly, since they're paying the same proportion of their income. You think it's appropriate to penalize someone who made more, while I think it's unfair. The flat tax rate would be considerably lower than 33%, by the way, if all income was included regardless of source, and if you presume that the goal is to raise the exact same amount of money as under the current system -- it would be more like 6%.

[Desslock]

Both of these things are unfair. A truly equitable flat tax would also do away with tax shelters. And I'm not convinced that middle class tax rates would rise..

It would actually decrease significantly, under the scenario I proposed (all income regardless of source -- like you said, no shelters or differentiated tax treatment regardless of income).

[Desslock]

b) it wouldn't redistribute the tax burden to the poor and middle class, which is the entire ideological point of a flat tax.

That's not necessarily the case under the proposal I described, since more income would be taxable. But even if that was the end result - it wouldn't be the ideological point. The point would be that everyone should be taxed equally. You believe "equal" means some people paying a larger percentage of their income than others because they have more money.

I think that's inherently unfair -- not to worry though, because it'll never happen, since if the majority were adversely affected, they wouldn't accept it regardless of whether or not it's more fair.

By the way, most countries (including Canada) don't the mortgage deduction, but it would be difficult to take away.

[Jason Levine]

By the way, most countries (including Canada) don't the mortgage deduction, but it would be difficult to take away.

Damned near impossible I'd say, given the lobbying (read "campaign contribution") power of the U.S. housing industry.

[voltaic]

I'm not going to do, though, is place myself on others as a financial burden, including taxing someone else who has their shit more together.

Interesting to hear that you think such rich folk as Michael Jackson, OJ Simpson and Anna Nicole Smith "have their shit together" more than you do. We mustn't tax them because they have more money than us and thus they've proven themselves superior, dontcha know.

Until there is a tax law which can divide those that do from those that don't, well I can only hope we'll put you in charge of arbitrarily making that call. Fortunately you chose a set of rich people so small and so specific as to completely obliterate my argument. Incidently, way to go on avoiding the point of what I was saying by focusing on some small aspect of the wording I chose.

It's pretty hilarious that your example of a high-paying blue collar job involves an incredibly strong union. We all know how much the GOP likes unions.

What's even funnier is how I was agreeing with you that setting a ridiculously low level of, say, $100K as the dividing line to "being rich" is completely idiotic, and you still found some irrelevant tangent on which to disagree with me.

[Mark Asher]

"I was just fine with the old system; with a $1 million exemption (it was ramping up to that in 2006) and 37-55% taken after that, it did a pretty good job at stopping the growth of a US aristocracy without violating the concept of working to better your kids."

The exemption is a million already. The first million isn't taxed at all, which means that eliminating the "death tax" as the Republicans like to characterize it is another tax break for the wealthy.

As to the fairness of progressive vs. flat tax rates, I think fair is a misleading term. We're a society and the laws have to be aimed at achieving goals that are good for the majority of us but don't always promote fairness . As Jason pointed out, a flat tax that hits a low income family and makes it difficult if not impossible to maintain a meagre standard of living is not a good thing. If the same flat tax hits a wealthy family and the impact is that they replace their luxury car every four years instead of two, that's not a hardship.

I also think laws that will have the effect of creating an even larger permanent wealthy aristocracy in the US are a bad idea.

I'm also curious to know how a flat tax can reduce everyone's taxes to 6%. I'm assuming that eliminates every single tax break available now, including deducting business losses?

Finally, about housing, 80k will buy you a house in St. Louis, but it won't be a good house in what most of us would consider a nice neighborhood. It will either be a house that's small and cramped for families or the kind of house you have to sink a chunk of money into each year for house repairs.

[Desslock]

The exemption is a million already. The first million isn't taxed at all, which means that eliminating the "death tax" as the Republicans like to characterize it is another tax break for the wealthy.

Why should estate inheritance be taxed? It's already "after-tax" money -- it was taxed when acquired by the original owner.

We're a society and the laws have to be aimed at achieving goals that are good for the majority of us but don't always promote fairness .

So if the majority decides it's a good idea to discriminate against certain individuals, it's a reasonable result? Frankly, one of the primary purposes of government should be to prevent individuals from being discriminated against, in spite of the will of the majority. Majority opinion is obviously very important in a democracy, but the fundamental rights of individuals to not be treated unfairly is arguably an even more important component of any democratic society, as evidenced by the Bill of Rights.

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

Stefan

[Anonymous]

I'm also curious to know how a flat tax can reduce everyone's taxes to 6%.

He formulated this theory through extrapolating average incomes from the gold held by enemies killed in Baldur's Gate.

[Xaroc]

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

Stefan

It is simple, people under poverty level should not have to pay as much as people who can wipe their asses with 20s. That is not a difficult or unfair concept. It makes all the sense in the world.

-- Xaroc

[Desslock]

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

It is simple, people under poverty level should not have to pay as much as people who can wipe their asses with 20s.

No one suggested otherwise.

[Xaroc]

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

It is simple, people under poverty level should not have to pay as much as people who can wipe their asses with 20s.

No one suggested otherwise.

Ok are you for or against progressive taxes? From your previous response I thought you were against them because there were no good reasons for them but your reply leaves me puzzled.

I honestly think the best system would be a hybrid system. With a flat tax on any earnings over poverty level. Pretty simple and straight forward.

-- Xaroc

[Desslock]

I honestly think the best system would be a hybrid system. With a flat tax on any earnings over poverty level. Pretty simple and straight forward.

We are in complete agreement.

[Anonymous]

a flat tax on any earnings over poverty level. Pretty simple and straight forward.

Not when you get into the definition of "earnings."

* Inheriting an estate
* Dividends from stocks
* Capital gains

For the very rich, job income is a very small fraction of total income. The real action is in their stock and real estate holdings.

If a rich man doesn't have to work a job, should he get away with paying no taxes, even though he uses the government's infrastructure and benefits from its services?

[Desslock]

a flat tax on any earnings over poverty level. Pretty simple and straight forward.

Not when you get into the definition of "earnings."

* Dividends from stocks
* Capital gains

All of which would be caught in "income", under the flat tax proposal I outlined. I don't believe in estate taxes, since the income has already been taxed, but any interest or growth in inherited cash would be taxable.

[Jason McCullough]

As far as I'm concerned, the only system that's fair would.....require all taxpayers to pay an equal proportion of their income -- whether that's 10% or 50%, a flat tax, that requires everyone (even "they", whoever "they" are, if you have disdain for pronouns) to pay the exact same proportion of their income.

Let's assume, that for the sake of argument, the final rate would be 33%. Are you telling me that someone making $15,000 a year and paying $5000 in taxes is the same as someone making $3 million and paying $1 million?.

Exactly, since they're paying the same proportion of their income. You think it's appropriate to penalize someone who made more, while I think it's unfair. The flat tax rate would be considerably lower than 33%, by the way, if all income was included regardless of source, and if you presume that the goal is to raise the exact same amount of money as under the current system -- it would be more like 6%.

Explain to me how a federal government that spends ~19% of GDP is going to fund itself with a tax rate of 6%. That's before state & local spending, too, which are another 13% or so.

But even if that was the end result - it wouldn't be the ideological point.

I'm sure its not your point, but it's definitely what the hyper-rich funding those think tanks & Steve Forbes are after.

[Jason McCullough]

The exemption is a million already. The first million isn't taxed at all, which means that eliminating the "death tax" as the Republicans like to characterize it is another tax break for the wealthy.

Why should estate inheritance be taxed? It's already "after-tax" money -- it was taxed when acquired by the original owner.


Name another occurence of property transfer that doesn't require the payment of tax.

We're a society and the laws have to be aimed at achieving goals that are good for the majority of us but don't always promote fairness .

So if the majority decides it's a good idea to discriminate against certain individuals, it's a reasonable result? Frankly, one of the primary purposes of government should be to prevent individuals from being discriminated against, in spite of the will of the majority. Majority opinion is obviously very important in a democracy, but the fundamental rights of individuals to not be treated unfairly is arguably an even more important component of any democratic society, as evidenced by the Bill of Rights.

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

Stefan

Ah, the old "the poor will gang up and take our money" thing. Here's a question: isn't a flat tax discrimination too? After all, isn't making people pay different amounts of money "discrimination?"

Why not switch to a head tax?

[Anonymous]

So if the majority decides it's a good idea to discriminate against certain individuals, it's a reasonable result? Frankly, one of the primary purposes of government should be to prevent individuals from being discriminated against, in spite of the will of the majority.

Whoo! I missed that one.

What about my right to live in a society where a few rich people and corporations are controlling the agenda of my government? Why am I "discriminated against" because I have less money than those people? Me and thousands of other people would like health care, but a few corporations that control health insurance don't want me to, and pay my politicians in campaign contributions to make sure I don't get it. Seems like a sure case of discrimination to me.

[Anonymous]

And back on the income tip -- it sure seems like "discrimination" that some people are allowed access to more justice than I am because they can afford to take cases to court, and through multiple appeals and I can't.

It seems like "discrimination" that the rich can afford better tax preparation and better tax loopholes than I can, and thus get by with paying a lower share of their income than I do.

I'm glad that some purehearted individuals are out there making sure that protection of the endangered rich folk is top priority, rather than health insurance, campaign finance reform, access of the less affluent to equal justice. We gotta keep our priorities straight. If we middle class people don't watch out for the rights of the rich, they might be helpless! They can't afford to lobby politicians, take their complaints of tax unfairness to the supreme court, and buy expensive TV campaigns to make their case for themselves, after all.

[Oppressor]

Why not switch to a head tax?

Because if we do that, then they'll want to tax intercourse as well!

[Desslock]

I'm glad that some purehearted individuals are out there making sure that protection of the endangered rich folk is top priority, ...If we middle class people don't watch out for the rights of the rich, they might be helpless!.

Your "rich folk, poor folk, middle-class folk" is just embarrassing, Groucho Marx. Do you always stereotype individuals by their socioeconomic backgrounds? Do you generally associate individuals into groups, and revel in spreading prejudice about those that "ain't you"?

How about judging individuals on their own merits, and trying to ensure that individuals are treated fairly and equally, instead of just frothing over your imaginary "us vs. them" scenarios?

[Desslock]

Why should estate inheritance be taxed? It's already "after-tax" money -- it was taxed when acquired by the original owner.


Name another occurence of property transfer that doesn't require the payment of tax.

Well, estate tax, in most jurisdictions. Again, anything passed down through inheritance has already been taxed -- why tax the heirs of such property?

You're trying to equate the voluntary transfer of property (which doesn't impose income tax on the purchaser, in any event) with kids/spouses taking over their deceased parents' assets. I don't think the situations are analagous.

What are the estate tax rates, out of curiosity? Are they equivalent to sales tax rates or are they more punitive, like Income Tax rates?

So if the majority decides it's a good idea to discriminate against certain individuals, it's a reasonable result? Frankly, one of the primary purposes of government should be to prevent individuals from being discriminated against, in spite of the will of the majority. Majority opinion is obviously very important in a democracy, but the fundamental rights of individuals to not be treated unfairly is arguably an even more important component of any democratic society, as evidenced by the Bill of Rights.

You may believe there's other, more important principles, which justify taxes some people at 4% and others at 40% and discriminating on that basis, but I do not.

Ah, the old "the poor will gang up and take our money" thing.?

Naw, just the older "people should be treated fairly and equally" thing, even if that doesn't benefit the majority.

[Kyle Wilson]

Why am I "discriminated against" because I have less money than those people? Me and thousands of other people would like health care...

Oh, for Pete's sake. I'd like a BMW and a free trip to the Bahamas and a nice house in Aspen with hot and cold running blow jobs. But I cope, you know? Wanting things you can't afford isn't unfair discrimination. It's life.

If you want to see a doctor, I suggest you earn some money and pay the man. You'll find it a lot more productive than trying to coerce him into treating you for free.

[Jason McCullough]

You're trying to equate the voluntary transfer of property (which doesn't impose income tax on the purchaser, in any event) with kids/ spouses taking over their deceased parents' assets. I don't think the situations are analagous.

Economically, it doesn't matter which party is taxed in a transaction; the tax incidence ends up distributed based on the relative position of buyers and sellers.

Explain to me again while estate transfers should be the only class of asset transfer that's untaxed. I can't think of a single property transfer that doesn't tax someone. There's also the interesting combination with dividends; if there's no dividend tax, and no estate tax, families could hand down dividend bearing assets for, well, practically forever, without paying a whit of tax on asset appreciation or cash flow.

Before the repeal; the rates were:

1st million exempt.
37% beyond that, linerally increaseing to 55% at 3 million and above.
Also, $100,000 of gifts per year are tax-free, so anyone can give quite a bit to the kids in later years.

Net effect:
Up to 1 million: no tax.
2 million: 400k
3 million: 1 million
past that: 55% of all extra dollars

Oh, I'm still curious: why is a flat tax "fair," but a head tax isn't? If we're treating people equally, and not their income, then every person should pay the same, shouldn't they?

[Anonymous]

Wanting things you can't afford isn't unfair discrimination. It's life.

Medical care isn't a BMW. You can get it for free in many other nations. Though the concept is apparently too big to fit in your gerbil skull, it's not a fantasy.

[Anonymous]

Your "rich folk, poor folk, middle-class folk" is just embarrassing,

And your unwillingness to recognize class as a factor in society is just ignorant.


Do you always stereotype individuals by their socioeconomic backgrounds? Do you generally associate individuals into groups, and revel in spreading prejudice about those that "ain't you"?

We're not talking about individuals. We're talking about social groups. If you can grasp that concept, nod your head twice. Thank you. And thank you for looking out for those poor rich people who are being unfairly prejudiced against when I state that they have political advantages that are absolutely obvious to anyone paying a lick of attention to world events. Money buys political power. By the way, you never answered my question -- are you or are you not middle class? Or are you an "unclassifyable individual," utterly unique, sharing no economic similarities to those around you?

How about judging individuals on their own merits, and trying to ensure that individuals are treated fairly and equally, instead of just frothing over your imaginary "us vs. them" scenarios?

Again with the "individuals" cry. The only "individuals" I slighted were OJ Simpson, Michael Jackson, and Anna Nicole-Smith. Or is all this defensiveness an indicator that you yourself are wealthy and feel like the rabble hurting your feelings by pointing out some uncomfortable facts?

[Kyle Wilson]

Medical care isn't a BMW.

Nor is it a petunia, or a housecat. However, like BMWs, petunias and housecats, medical care is not a public good. It's excludable. It doesn't suffer from the free-rider problem. As such, medical care can be most efficiently provided through market mechanisms. Like BMWs.

You can get it for free in many other nations.

No, you can't. You can get it paid for by other people. Clearly not too many of those people are eager to pay for your medical care voluntarily, or they'd be doing it already. But hey, maybe if you get enough votes together you can coerce them into paying for it anyway.

Though the concept is apparently too big to fit in your gerbil skull, it's not a fantasy.

I'm starting to think that the quality of discourse around here is going downhill.

[Anonymous]

medical care is not a public good.

Tell me that the next time someone rams your car because he can't afford glasses, or has fallen asleep at the wheel due to using alcohol as self-medication to dull pain. Tell me that when you contract hepatitis at a restaurant. Tell me that when you or someone close to you catches a disase that could have been contained if more people could have afforded to have been innoculated. Jesus, these aren't complex ideas. You do not live in a hermetically sealed coccoon of self-sufficiency.

[Anonymous]

Not to mention the simple "public good" of not seeing those around you ravaged by curable illnesses in an affluent society. It makes a place nicer for everybody. Don't you think it might just make you feel better not to see people in the street hobbling around with running scabs on their faces, hacking up bloody phlegm? Apparently you don't care about that kinda shit, but some of us might.

[Jason McCullough]

I think the big problem isn't stuff like communicable diseases (which are actually mostly covered already), or secondary stuff like dental or glasses. It's that if you're lower middle class or poor, and you get *curable* cancer before you hit retirement and the gravy train of medicaid, you're going to die.

It's simply impossible for the bottom 25-33% of society to afford mainstream life-saving care. It's a goddamn travesty; I don't begrudge the rich their nice cars or what have you, but fucking life itself?

[wumpus]

It's simply impossible for the bottom 25-33% of society to afford mainstream life-saving care. It's a goddamn travesty; I don't begrudge the rich their nice cars or what have you, but fucking life itself?
It's all about money, ultimately. We have to subsidize those costs. I don't know if you noticed, but medical care is insanely expensive. I'm totally comfortable with assigning a monetary value to people's lives, and making decisions based on that. It's an unspoken fact in the real world of insurance; I just prefer it all out in the open, so we're clear.

Health care costs spiral never-endingly upward because there is no effective upper bound on how much can be charged. Capitalism doesn't work here because the inevitable answer to "how much will you pay for us to save your life" is, uh, 100% of your income in perpetuity.

[Kyle Wilson]

Don't you think it might just make you feel better not to see people in the street hobbling around with running scabs on their faces, hacking up bloody phlegm?

What the fuck kind of Black-Death-infested plague den of a neighborhood do you live in? I mean, I hardly live in Beverly Hills, but I can't remember the last time I tripped over a dead neighbor in the stairwell.

Do you ever feel like you might be just slightly exaggarating the horrors of modern life, considering that you're living in a country that provides the most comfortable quality of life in human history?*

*Assuming you're an American, since you don't have a profile. And technically Canada might beat us out, because of the longer life expectancy. But close enough.

[Bub, Andrew]

The free government mandated medical care the poor recieve comes in the form of Emergency Room visits and are incredibly expensive and a complete tax payer burden. Universal preventative health care would probably be cheaper in the long run. The problem now is that the very poor only go in when things become extremely serious (requiring long hospital stays or surgery) rather than the checkups that most of us take for granted, and the preventative care that could solve these problems before they start.

The people who get thoroughly hosed, aside from children, are the "working poor". The people working 40+ but unable to find a job that provides Health Insurance. They don't qualify for the government Medicare/Medicade and don't have access to regular insurance.

[Ben Sones]

The free government mandated medical care the poor recieve comes in the form of Emergency Room visits and are incredibly expensive and a complete tax payer burden. Universal preventative health care would probably be cheaper in the long run.

Except that it isn't. Look at any of the myriad of countries that have it. Now look at what they pay in taxes.

[Rywill]

God damn you and everyone like you, guest. I work hard to pay my bills and pay for my health insurance. What makes you think I should work my ass off to pay for your health insurance too? Get your own goddamn health insurance.

[Jason McCullough]

The free government mandated medical care the poor recieve comes in the form of Emergency Room visits and are incredibly expensive and a complete tax payer burden. Universal preventative health care would probably be cheaper in the long run.

Except that it isn't. Look at any of the myriad of countries that have it. Now look at what they pay in taxes.

European countries spend between half and two-thirds the share of GDP that we do on health care, and they have higher life expectancy than us.

Now, you can do some hand-waving about "US medical research, blah blah blah", but you really have to strain to get over a price difference that big.

[Anonymous]

God damn you and everyone like you, guest. I work hard to pay my bills and pay for my health insurance. What makes you think I should work my ass off to pay for your health insurance too? Get your own goddamn health insurance.

I'd like to see you say this pithy little piece of verbiage to the face of a 10-year-old kid who lives on the street in a car.

Ebeneezer Scrooge got nuttin' on you... "Tiny Tim can get his own goddam health insurance! I paid for mine! Fuck him and his lazy fucking family!"

[Jason McCullough]

Speaking of, here's an article sticking up for the the poor, misunderstood Scrooge, by the Von Mises Institute, kook central for Austrian (flaming libertarian, and with this wierd fetish for the gold standard) economists.

Scrooge Defended (http://www.mises.org/fullarticle.asp?control=110&month=3&title=Scrooge+Defended&id=3).

So let's look without preconceptions at Scrooge's allegedly underpaid clerk, Bob Cratchit. The fact is, if Cratchit's skills were worth more to anyone than the fifteen shillings Scrooge pays him weekly, there would be someone glad to offer it to him. Since no one has, and since Cratchit's profit-maximizing boss is hardly a man to pay for nothing, Cratchit must be worth exactly his present wages.

No doubt Cratchit needs—i.e., wants—more, to support his family and care for Tiny Tim. But Scrooge did not force Cratchit to father children he is having difficulty supporting. If Cratchit had children while suspecting he would be unable to afford them, he, not Scrooge, is responsible for their plight. And if Cratchit didn't know how expensive they would be, why must Scrooge assume the burden of Cratchit's misjudgment?

As for that one lump of coal Scrooge allows him, it bears emphasis that Cratchit has not been chained to his chilly desk. If he stays there, he shows by his behavior that he prefers his present wages-plus-comfort package to any other he has found, or supposes himself likely to find. Actions speak louder than grumbling, and the reader can hardly complain about what Cratchit evidently finds satisfactory.

They don't make comedy better than this, folks.

[Anders Hallin]

What the fuck kind of Black-Death-infested plague den of a neighborhood do you live in?
That was very funny :)

Do you ever feel like you might be just slightly exaggarating the horrors of modern life, considering that you're living in a country that provides the most comfortable quality of life in human history?*
UN Human Development Index 2002 (aka Index of Living Conditions)
1 Norway
2 Sweden
3 Canada
4 Belgium
5 Australia
6 U.S.A.
7 Iceland
8 Netherlands
9 Japan
10 Finland
11 Switzerland
12 France
13 U.K.
14 Denmark
15 Austria

Of course, that counts the entire population medium, including poor people so...

[Ben Sones]

They don't make comedy better than this, folks.

What's comedic? His reasoning has some flaws (the fact that workers tend to be better motivated when they are treated well, for instance), but no more than yours does. You seem to be promoting philathropy through force, correct? Can you honestly say that is any less comedic? Is it the government's job to coerce me (or anyone else) into being generous, or nice?

Your "A Christmas Carol" would have had a different ending. Instead of trying to convince Scrooge to be a more generous person by showing him the results of his actions and encouraging him to take responsibility for the choices that he makes, the government would step in and liberate money for Tiny Tim and the rest of Cratchit family by force of law. This is a pretty big departure from Dickens' message, and no more in the spirit of the book than the scenario outlined above.

[SpoofyChop]

UN Human Development Index 2002 (aka Index of Living Conditions)
1 Norway
2 Sweden
3 Canada
4 Belgium
5 Australia
6 U.S.A.
7 Iceland
8 Netherlands
9 Japan
10 Finland
11 Switzerland
12 France
13 U.K.
14 Denmark
15 Austria

Of course, that counts the entire population medium, including poor people so...

The UN has zero credibility. It's purely political. It is not neutral.

Take the "Global Warming crisis" for instance. You would think the UN would take into account all sides, right? It would show concern for countries that can't afford to green it up right now? Nope.

Everybody, check out this article (http://www.nationalreview.com/comment/comment-georgia022301.shtml) on NRO, or just do some basic research and get some differing perspectives on the UN.

It's not the heroic selfless body you might think.

[Rywill]

Yeah, I'd have to agree. I mean, I wonder what standards they used to decide that list, and how many of them were objective and how many were subjective. To me, the compelling evidence is this: I don't think there are that many people emmigrating to Norway and Sweden, but the US gets tons and tons of new people (both legally and illegally) every year, many of whom stay here forever. I think that leads to a snowball effect--the more immigrants we get, the better the country gets, which leads to yet more immigration--but as a barometer of quality of life, that's the most reliable indicator I can think of.*


*realizing, of course, that everyone likes different things, so what one person considers a high-quality life might be mediocre or even bad to another person. But as a general consensus.

[Anonymous]

I don't think there are that many people emmigrating to Norway and Sweden,

1) Based on what information?
2) Maybe they have tougher immigration laws.

[Rywill]

I agree, based on nothing but a general sense of things. I haven't done any research. I don't think that Norway and Sweden have huge populations. I don't see anything in the news about massive influxes of people to Norway and Sweden (and I do for places like the US, although, granted, about 80% of the news I read is written and distributed in the US). Are you saying you think that Norway and Sweden get a lot of immigrants every year? More than the US (which would be the only relevant point to this discussion)? I really doubt it, but I'd be interested to see your research.

As for the immigration law thing, I don't think that would make much of a difference. The US has somewhat strict immigration laws, but they get broken all the time. If a country has a very high quality of life, people will go there, legally or not. Laws definitely make a difference, but not a monumental one. If Norway and Sweden had a "higher quality of life" (by general consensus) than the US, I would expect Norway and Sweden to each have more immigrants per year than the US. I am guessing--although again I haven't done any research--that the US even gets more immigrants from Europe than either Norway or Sweden, despite being so much further away.

[Mark Asher]

a flat tax on any earnings over poverty level. Pretty simple and straight forward.

Not when you get into the definition of "earnings."

* Dividends from stocks
* Capital gains

All of which would be caught in "income", under the flat tax proposal I outlined. I don't believe in estate taxes, since the income has already been taxed, but any interest or growth in inherited cash would be taxable.

You'd also have to eliminate tax breaks, too, to be fair. The rich can take advantage of many breaks out of the reach of normal people simply because they have the capital to invest. I still think you need inheritance taxes too. Just make those flat as well.

What my fear about a flat tax is that the breaks wouldn't be eliminated. The rich would, after tax breaks, be paying a lower tax percentage than the average joe.

[Kyle Wilson]

Just to bring some facts to the "people voting with their feet discussion"... U.S. immigration stats, by country, can be found at

http://www.ins.usdoj.gov/graphics/aboutins/statistics/IMM01yrbk/IMM2001.pdf

Similar statistics for Norway can be found at

http://www.ssb.no/english/subjects/02/02/20/flytting_en/tab-2002-08-27-06-en.html

Now in 2001, 588 people moved from Norway to the U.S. and 1717 people moved from the U.S. to Norway. Results for the three previous years were similar. According to the CIA factbook (http://www.cia.gov/cia/publications/factbook/), the United States has a population of 280 million and Norway has a population of 4.5 million. So 1.3 people per 10,000 in Norway decide to move to the U.S. each year. 0.06 people per 10,000 in America decide to go the other way. That is, a Norwegian is over 21 times as likely to emigrate to the U.S. as vice versa.

Someone else can look up the stats for Sweden.

[Ben Sones]

I think stats for overall immigration would be more useful. Movement between the US and Norway is awfully tiny, in both directions. A better sample would be to compare how many people immigrate to Norway altogether, from all other countries, as opposed to the US. Or, to put it another way, if a person in some third country has the choice of moving to either Norway or the US, which is that person more likely to choose?

To save others the trouble, here are the numbers from the sites listed above:

Total Immigration to Norway in 2001: 34,264
Total Immigration to the US in 2001: 1,064,318

And, as Ry predicted, even people from Europe are more likely to move to the US than to Norway (~177,000 vs. ~19,000 for the year 2001).

I'm not sure why the existing population is statistically significant in this argument. Unless you are saying that people are more likely to immigrate to a country that already has a higher population, for some reason.

[Desslock]

You're trying to equate the voluntary transfer of property (which doesn't impose income tax on the purchaser, in any event) with kids/ spouses taking over their deceased parents' assets. I don't think the situations are analagous.

Economically, it doesn't matter which party is taxed in a transaction; the tax incidence ends up distributed based on the relative position of buyers and sellers. ?

You missed the point -- I wasn't intending to highlight which party is taxed (which is the same, in any event - the recipient), but the fact that (a) one transfer is a planned, voluntary economic transaction, while the other is someone just inheriting a deceased person's assets; and (b) sales tax is considerably lower than income/estate tax, in any event, even if your situation was analagous.

Explain to me again while estate transfers should be the only class of asset transfer that's untaxed. ?

Because it's not a volunatary transfer, it's not a sale that benefits the original owner, because there's no cost to the government associated with the transfer (unless there's real estate, which has its own transfer taxes).

I can't think of a single property transfer that doesn't tax someone.

Well, there's literally hundreds of situations where that's not the case. There are many tax-exempt transfers: rollovers, butterfly transactions, sales of all or substantially all of the assets of a business; sales of certain classes of intangible assets, etc.

But the bigger point is why do you think taxes are necessary in that situation? How does that transfer cost the government anything? The individual heir has to already pay all applicable real property taxes, bank administration fees, etc. The transfer costs the government nothing, it's to a related party of someone who has already paid tax on those funds, etc.

I don't know of any country that has estate taxes, other than the U.S.

Oh, I'm still curious: why is a flat tax "fair," but a head tax isn't? If we're treating people equally, and not their income, then every person should pay the same, shouldn't they?

I thought you were being glib previously. Who proposed not taxing people based upon their incomes? Of course people who have more income should pay more tax, but they should pay the same proportionate rate. You think that's unfair because you believe it places an unfair burden on someone who makes $30,000 year vs. someone who makes $500,000, while I think it's the exact same relative burden.

[Rywill]

I'm not sure why the existing population is statistically significant in this argument. Unless you are saying that people are more likely to immigrate to a country that already has a higher population, for some reason.

You're absolutely right, for the numbers you're comparing (which are the best measure, for the reasons you said). In Kyle's defense, though, the populations are significant for the numbers he's comparing, because he is looking at how many people from one of the countries decide to move to the other. Obviously, a country with more people is going to have more people who move away, so it's not really fair to compare raw numbers there.

But Ben's numbers are the ones that I was looking for. Thanks to you and Kyle for finding them. Although really, I think everyone knew that already anyway. "Guest" is just being cussed. Anyone who's seriously going to sit there and tell me that they think there may have been more immigrants to Norway than the US last year is not someone I'm going to waste a lot of time having a reasoned debate with.

[Jason McCullough]

They don't make comedy better than this, folks.

What's comedic? His reasoning has some flaws (the fact that workers tend to be better motivated when they are treated well, for instance), but no more than yours does. You seem to be promoting philathropy through force, correct? Can you honestly say that is any less comedic? Is it the government's job to coerce me (or anyone else) into being generous, or nice?

Your "A Christmas Carol" would have had a different ending. Instead of trying to convince Scrooge to be a more generous person by showing him the results of his actions and encouraging him to take responsibility for the choices that he makes, the government would step in and liberate money for Tiny Tim and the rest of Cratchit family by force of law. This is a pretty big departure from Dickens' message, and no more in the spirit of the book than the scenario outlined above.

You just don't "get it", do ya? (makes finger motions)

I don't think there are that many people emmigrating to Norway and Sweden

That's because they a) don't let them in and b) don't have a border that they half-heartedly attempt to control, because everyone kinds of likes the illegal immigrant cheap labor. No illegal immigration + restricted legal = not that much.

If Norway and Sweden had a "higher quality of life" (by general consensus) than the US, I would expect Norway and Sweden to each have more immigrants per year than the US.

Where are they going to come from? Russia?

Here's a quick summary:

The U.S. has a higher average.
Europe has an identical (or higher) median.

This is because in the US, one guy at $15k/year + one at $15,000,000/year averages out to $7,507,500/year. For countries with high amounts of inequality, averages are pretty useless.

Medians (half the population is on one side of this number, half is on the other) are a better representation of what people are asking when they want to know how it is to live there.

Edit: Oh yeah, the UN is often full of fuckheads, but you should never, ever, trust a word written in National Review; triple-checking of any claims would be in order.

[Ben Sones]

You just don't "get it", do ya? (makes finger motions)

I guess not. What am I not getting?

That's because they a) don't let them in and b) don't have a border that they half-heartedly attempt to control, because everyone kinds of likes the illegal immigrant cheap labor. No illegal immigration + restricted legal = not that much.

The immigrants certainly do, and the businesses employing them appreciate the cheap labor. I wasn't aware that Norways borders were so heavily guarded, or their immigration laws so much stricter than ours. Do you actually know this, or are you guessing? For the record, I don't know either way.

But even if Norway opened its borders wide, would their immigration approach the US's? Remember, the equivalent of one-quarter of the population of Norway immigrates--legally--to the US every year.

Where are they going to come from? Russia?

Or anywhere else that has a lower standard of living, such as most of Eastern Europe.

The U.S. has a higher average.
Europe has an identical (or higher) median.

I assume we're talking income (and not immigration) now. I agree with this statement above; those sorts of numbers are going to be a given any time you compare a liberal (using the term in its traditional form, here) democracy to a social democracy.

[Guestacy]

But even if Norway opened its borders wide, would their immigration approach the US's?
This is totally out of left field, but how much does weather play into this? I don't know this to be true 100%, but doesn't a large percentage of immigration into the US come into warm weather regions like Florida and California? Maybe if Norway had the climate of a Florida, there'd be more immigration. Doesn't "quality of life" incorporate a lot more than just economics?

[Jason McCullough]

Europe is famously more restrictive about immigration than the US, and they don't wink-and-nod about illegal immigration like we do. Pretty much the only land route to get into Norway is from Sweden anyway, which isn't exactly poor; the closest source is Eastern Europe (thousand miles away), from which there actually hasn't been all that much emigration. Estonia's closer, but they're doing pretty well.

I agree with this statement above; those sorts of numbers are going to be a given any time you compare a liberal (using the term in its traditional form, here) democracy to a social democracy.

Uh, if you assume that the US just *has* to have inequality, the numbers look like that. My point was: the "middle of the road" person is about the same in both countries, the poor there are much better off, and the rich here are much better off.

[Ben Sones]

This is totally out of left field, but how much does weather play into this?

It's not out of left field at all. In fact, it's a good point. Norway is really cold. Even if it were a utopia, I'm not sure I would move there... ;)

So, uhm, good point.

Uh, if you assume that the US just *has* to have inequality, the numbers look like that. My point was: the "middle of the road" person is about the same in both countries, the poor there are much better off, and the rich here are much better off.

Yes, that was my point also. I agree with that statement.

[Chris Nahr]

In addition to Norway being kind of cold and not a geographically obvious immigration target (i.e. bordered only by the hostile North Sea and countries with a similarly high standard of living), Norwegians have that funny habit of speaking... Norwegian. If you're emigrating to a country with a different language then obviously you'd rather pick a country with the world language English, as opposed to a country with an oddball language like Norwegian.

To estimate the perceived U.S. standard of living by immigration statistics you'd not only have to discount weather conditions and illegal immigration from Mexico (there are no other two countries in the world sharing such a long land border, whose living standard differs so dramatically, and with the poorer country having such a massive population), you'd also have to compare U.S. immigration figures to those of other English-speaking countries. Canada, Australia, and New Zealand are all very popular emigration targets.

On the other hand, you'd also have to take into account that people might not want to move to America simply because they hate it. I'm not aware of any rampant anti-Canadianism or anti-Australianism in the world, so immigration numbers might be skewed in favour of Anglophone countries that are not America.

So this is all rather difficult, even if I weren't too lazy to look up some actual numbers...

[Desslock]

Your "rich folk, poor folk, middle-class folk" is just embarrassing,

And your unwillingness to recognize class as a factor in society is just ignorant.

Well, Che Guevara, some day you'll grow up and realize that there's no such thing as homogeneous groups of people, even if individuals have the same colour of skin, speak the same language, are each full of gravy or happen to have as much money as you consider acceptable for them to be meaninglessly classified as be rich, or poor. We're all unique delicate snowflakes. Tyler Durden was wrong.

Do you always stereotype individuals by their socioeconomic backgrounds? Do you generally associate individuals into groups, and revel in spreading prejudice about those that "ain't you"?

We're not talking about individuals.

Sorry to pop your bubble, comrade, but like it or not, you're just an individual - albiet a hateful one - not part of some immutable collective construct that you use to rationalize your disappointing existence.

How about judging individuals on their own merits, and trying to ensure that individuals are treated fairly and equally, instead of just frothing over your imaginary "us vs. them" scenarios?

Again with the "individuals" cry.

You use the word "individuals" as if it's an insult. Yeah, you've caught me, I actually treat all persons individually, and judge them by their own actions, and believe in treating all individuals the same way and not prejudging or stereotyping them.

Like I indicated, some day you'll mature and realize how simplistic your views are, or you'll remain an irrelevant simpleton and continue to see the world in stereotypes.

[Anonymous]

Kill all the rich, white, Canadian, lawyers.

[Kalle]

In addition to Norway being kind of cold and not a geographically obvious immigration target (i.e. bordered only by the hostile North Sea and countries with a similarly high standard of living), Norwegians have that funny habit of speaking... Norwegian. If you're emigrating to a country with a different language then obviously you'd rather pick a country with the world language English, as opposed to a country with an oddball language like Norwegian.


Language is a fairly minor factor I think. People in search of a better life, people escaping persecution, people fleeing from wars, they will all come to any country which offers them a prospect of a better future. Languages can always be learned. People would probably prefer a country where they can speak the language from the start, but I think the most important thing is to leave, the actual destination is not as important.

I doubt climate is even taken into consideration, unless people plan to emigrate to places outright hostile to human life. Norway is fairly temperate, and with proper clothes and housing the cold is not much of an issue.

[Anonymous]

Well, Che Guevara, some day you'll grow up and realize that there's no such thing as homogeneous groups of people, even if individuals have the same colour of skin, speak the same language, are each full of gravy or happen to have as much money as you consider acceptable for them to be meaninglessly classified as be rich, or poor. We're all unique delicate snowflakes.

And you call my worldview simplistic.

If individuality precludes dividing people into groups, then why do we need border patrols? According to you, there's no such thing as "Americans."

At this point I doubt you're being sincere. You're just too full of yourself to give a single inch in an argument.

[Anonymous]

Here, I'll simplify my point for Snowflake Boy.

PRECIOUS, UNIQUE INDIVIDUALS, when they gain access to lots of money through whatever means, have the power to manipulate our political system in ways that PRECIOUS, UNIQUE, SPECIAL INDIVIDUALS without said money cannot. SOME of these DARLING, LOVING INDVIDUALS WHO MUST NOT BE CATEGORIZED FOR ANY PURPOSE, AS THAT WOULD BE UNFAIR DISCRIMINATION IN THE MIND OF SENSITIVE, PRETENTIOUSLY PEN-NAMED RPG NERDS choose to use that power to manipulate our political system and some do not. Nevertheless, it cannot be denied that the only people who can exert this pressure are CUTE WIDDLE INDIVIDUALS WITH LOTS AND LOTS OF CASH. Therefore, our political system has become tailored over the years to cater to the needs of these DARLING PRECIOUS INDIVIDUALS WITH LOTS OF MONEY (including those STRAPPING, FUN-LOVING INDIVIDUALS known as multinational corporations, as they are defined as persons in this country), as they are the ones who have enough money to exert said pressure.

I HOPE THAT DIDN'T HURT THE FEELINGS OF ANY ANY HEROIC, SELF-MOTIVATED, SELF-MADE MILLIONAIRES! Now go fuck yourself.

[Brad Grenz]

Fuck that noise, lets kill this thread now. I'm tired of listening to Sinner tirades.

[Guestacy]

Fuck that noise, lets kill this thread now. I'm tired of listening to Sinner tirades.
Bah, I learned a lot about taxes reading this thread. Seriously.

And it has one of the best subjects ever.

[Anonymous]

Fuck that noise, lets kill this thread now. I'm tired of listening to Sinner tirades.

See the link on the "Everything Else" page for this thread? Don't click it.

[Met_K]

Who the fuck shit in your Subway turkey coldcuts, Sinner?

[Anonymous]

Coming from you, that's a compliment, Pere Ubu.

[Anonymous]

The point is simple:

Anyone that worked hard to get where they are and earn more than 60K+ a year (I mean, do people REALLY need 60K a year?) should be forced to give up a large portion of that hard earned cash and donate it to the white trash who wanna pump out more kids, keep broken down El Caminos in their trailer yard, and drink lots of lots of beer. It's their right! Every 60K+ earner should have to adopt a white trash family of 8.

Guest, I'm totally with ya!

[Anonymous]

Sarcasm is a delicate instrument. Put it down before you hurt yourself.

[graller]

Have any of you spent much time in the wonderful land of socialized healthcare? I work out of the UK for a large portion of my time. One of our biggest customers is the NHS. Lets see:

1) UK Income Tax rate is 48%
2) The majority of individuals in the UK even though they have the wonderful "free" healthcare system pay for private care and insurance. Why?

Because the NHS service will make you wait for months for basic care. Because the care they do provide is "crappy". The doctors are not as good, they don't recommend expensive treatments etc. All the good dr's go to private clinics where they can charge what they want for their services. There is no universal solution but given what I have seen in other countries vs. what we have in the States? I will take my country's solution any day. Get a job with benefits, get good coverage, and get choice. Its the American Way. Its about doing instead of expecting.

[Jason McCullough]

Jesus, Sinner's still here?

[Jason McCullough]

Have any of you spent much time in the wonderful land of socialized healthcare? I work out of the UK for a large portion of my time. One of our biggest customers is the NHS. Lets see:

1) UK Income Tax rate is 48%
2) The majority of individuals in the UK even though they have the wonderful "free" healthcare system pay for private care and insurance. Why?

Because the NHS service will make you wait for months for basic care. Because the care they do provide is "crappy". The doctors are not as good, they don't recommend expensive treatments etc. All the good dr's go to private clinics where they can charge what they want for their services. There is no universal solution but given what I have seen in other countries vs. what we have in the States? I will take my country's solution any day. Get a job with benefits, get good coverage, and get choice. Its the American Way. Its about doing instead of expecting.

.....but if you can't get a job, you die. It's expected!

You know what I'd settle for, even if I couldn't get single-payer? A guarenteed basic level of medical care for all full-time workers and their dependents. I mean, should being a car repairman cut 10-20 years off your life?

Oh, and the total size of government in the UK is 40% of GDP, compared to 33% in the US. Less of a difference than you'd think (http://www.hhs.se/personal/suzuki/o-English/go01.html).

[Tyjenks]

Fuck that noise, lets kill this thread now. I'm tired of listening to Sinner tirades.
Bah, I learned a lot about taxes reading this thread. Seriously.

And it has one of the best subjects ever.

I made my attempt to be civil with our little anonymous buddy, but to no avail. I had hoped the more learned members would take over a skewer him/her. Mission accomplished, I would say. "Guest" is either totally ignorant of how a "real" capitalist system works or is an incredibly persistent troll. Things are in dire need of repair as I started out by saying, but if the only solutions are socialism or communism, I am going to have to say no thanks.

[Desslock]

Here, I'll simplify my point. PRECIOUS, UNIQUE INDIVIDUALS, when they .

Whoops, failed already. No longer treating people as individuals, and already into pronoun abuse. No reason to read the rest. Next post:

If individuality precludes dividing people into groups, then why do we need border patrols? According to you, there's no such thing as "Americans.".

Nobody said that you couldn't divide people into groups. You can divide the world into people who wear boxers, and those who wear briefs; those who eat McDonalds every day while howling at the injustice of the American way, and those who do not. And yes, people who live south of Canada, and north of Mexico, or in Hawaii, are Americans.

No one is disputing that those are groups. It's your inane assignment of other characteristics to the individuals of those groups that demonstrates your lack of cognitive reasoning. "People I think are rich are screwing me", as you routinely ape, is just as moronic as stating "all Americans/Polish/Irish are racist", or "all rich/indigent/middle class people are lazy".

[Mark Asher]

"Get a job with benefits, get good coverage, and get choice. Its the American Way. Its about doing instead of expecting."

I wonder how many signers of the Constitution were self-employed? Get a job with benefits? Tough luck you wig wearers!

Why can't the American Way include providing affordable health insurance to anyone willing to pay? Why should you be required to work for a large corporation? Is the American Way now insistent that we be corporate drones? How depressing. I'd go see a shrink, but my expensive-yet-thin health care plan won't pay for it!

[Anonymous]

No longer treating people as individuals, and already into pronoun abuse.

It's forbidden to refer to multiple people! Holy shit, I referred to more than one person at once! Heresy!

What a dope.

[graller]

Mark nicely taken out of context and stretched. I don't work for some huge corporation. I pay over 3000 dollars a year out of my pay into my benefits package. I don't get free prescritpions and 100% coverage. I get what I consider to be an average deal. I put a lot of money in, I get prescription co-pay, per visit co-pay and if something awful happened to me I get coverage beyond a deductible for 80% of the costs...There is no such thing as a free ride. What I don't agree with is providing a free service for those unwilling to work to get healthcare that I have to work my ass off to subsidize. That offends me....sorry but it does and I have a right to that opinion. As an aside I looked at buying my own coverage at one point and the cost per year was about the same. The only difference was the deductible for major expenses was set at 1000 instead of 500.

Define what you mean by "affordable" healthcare. In a world of budget deficits if this means you expect that the government is going to subsidize this to make it affordable I want you to explain where the money is going to come from without raising my taxes.

[Desslock]

No longer treating people as individuals, and already into pronoun abuse.

It's forbidden to refer to multiple people! Holy shit, I referred to more than one person at once!

You really are thick, ain'tchya? It's not the reference to more than one person, it's the conclusion that you can ascribe additional attributes/behaviour/motivations/characteristics (beyond the single characteristic you've arbitrarily choosen to define the group) to those persons (none of whom are known to you).

You don't like individuals who "ain't you", and your delusions require you to assume that they're all out to get you, so you propogate hateful stereotypes to deal with your own insecurities. You're a prejudiced, hateful moron -- you will, at least, admit that.

[Bullhajj]

You're a prejudiced, hateful moron -- you will, at least, admit that.

Classic! Look, Sparky, another QT3 classic quote for a Christmas ornament. Or maybe given that Christmas has passed, we can do an easter egg with this written on it? I want mine to be pink.

[Tyjenks]

How depressing. I'd go see a shrink, but my expensive-yet-thin health care plan won't pay for it!

I know you are joking, but that is a huge concern. At $135.00 an hour and up, there's a lot of depressed people dragging around out there who cannot afford crazy doctor fees. And have you seen the obscene costs of anti-depressants. I have "a friend" who has been on those and if it was not for some free samples he'd be depressed and in the poor house.

[Bullhajj]

And have you seen the obscene costs of anti-depressants. I have "a friend" who has been on those and if it was not for some free samples he'd be depressed and in the poor house.

Interestingly I had a "friend" who had to pose as being depressed to get medication to quit smoking. As it turns out, there is an anti-depressant that is just a kick ass anti-nicotine medication, but my pal's insurance woudn't cover it as a quit smoking aid--you have to be clinically depressed.

[Jason McCullough]

You're trying to equate the voluntary transfer of property (which doesn't impose income tax on the purchaser, in any event) with kids/ spouses taking over their deceased parents' assets. I don't think the situations are analagous.

Economically, it doesn't matter which party is taxed in a transaction; the tax incidence ends up distributed based on the relative position of buyers and sellers. ?

You missed the point -- I wasn't intending to highlight which party is taxed (which is the same, in any event - the recipient), but the fact that (a) one transfer is a planned, voluntary economic transaction, while the other is someone just inheriting a deceased person's assets; and (b) sales tax is considerably lower than income/estate tax, in any event, even if your situation was analagous.


"Voluntary" gets into some definitional issues, but estate transfers are quite clearly planned; they're called "wills." And you're not arguing for "sales tax level taxation" of estates; you're arguing for no taxes at all.


Explain to me again while estate transfers should be the only class of asset transfer that's untaxed. ?

Because it's not a volunatary transfer, it's not a sale that benefits the original owner, because there's no cost to the government associated with the transfer (unless there's real estate, which has its own transfer taxes).


It 90% of deaths, where there's a will dictating who gets what, I'd call it a "voluntary transfer;" if "I don't want to sell it but I have to" makes it involuntary, than I'd assume "my mother needs nursing home funds/I'm leaving the country/etc." also qualify as "involuntary." And since when does cost to the government matter for anything? Taxes are levied to raise revenue, hopefully in a fairly equitable and just manner; they're not determined on a per-transaction basis to offset government transaction costs.


I can't think of a single property transfer that doesn't tax someone.

Well, there's literally hundreds of situations where that's not the case. There are many tax-exempt transfers: rollovers, butterfly transactions, sales of all or substantially all of the assets of a business; sales of certain classes of intangible assets, etc.


I'll admit I don't know much about these, but they're all untaxed because the government wishes to encourage them, right? That's the reasoning behind 401ks, I know.


But the bigger point is why do you think taxes are necessary in that situation? How does that transfer cost the government anything? The individual heir has to already pay all applicable real property taxes, bank administration fees, etc. The transfer costs the government nothing, it's to a related party of someone who has already paid tax on those funds, etc.


a) For the same reason taxes are necessary in *any* property transfer situation that the government isn't specifically setting out to encourage by lack of taxation and b) because without estate taxes, the US will develop a European-style aristocracy, which is just absolute poison for the health of the nation.


I don't know of any country that has estate taxes, other than the U.S.


Countries with estate taxes: All of Europe except Italy; Japan; Canada & Australia (which actually don't tax the full amount, just the asset appreciation; it's virtually the same, however). So every 1st world country except the US (at least until 2010, hah!) and Italy.

Oh, I'm still curious: why is a flat tax "fair," but a head tax isn't? If we're treating people equally, and not their income, then every person should pay the same, shouldn't they?

I thought you were being glib previously. Who proposed not taxing people based upon their incomes? Of course people who have more income should pay more tax, but they should pay the same proportionate rate. You think that's unfair because you believe it places an unfair burden on someone who makes $30,000 year vs. someone who makes $500,000, while I think it's the exact same relative burden.

I wasn't being glib; your comments about "treating people equally" imply that, logically, you should support a head tax. Should *income* be taxed "equally", or *people* be taxed "equally"? If it's people, *then all people should be treated equally*, e.g. every person should pay the same total amount of tax. What does income matter in that case? It becomes an irrelevant personal detail like height, weight, and eye color.

If you agree that income should be taxed, however, it's just arguing over what's the most just system to distribute taxation over income. I don't think "loss due to income taxes" is a linear function of income, but you do. My response: $6000 in taxes for someone making $18000 is *not* the same in terms of justice as someone paying $1,000,000 while making $3,000,000. Neither is $20,000 for someone making $60,000.

[Qenan]

I am baffled as to why folks think a flat tax is "fairer". Any of you remember the parable of the Widow's mite? Maybe we have different ideas about what is "fair".

I'm not "rich" (which I define as not needing to work to live at the median income), but my wife and are reasonably well paid and it is possible that Bush's plan will help me. Will I stimulate the economy? No, I'll just save it. My wife and I already live in a nice house (yes, with a mortgage), and live comfortably. We don't need the money.

Everyone wants more money, but listening to well-off folks bitch about their taxes makes me want to puke. Yeah, we pay a lot of taxes. And it's a very nice country to live in, at least for us. "To whom much is given, much is expected." Somebody has to pay to educate the poor kids of this country. Or is it guilt by association? Damn, they should have chosen better parents.

Someday, a politician will show up who knows how to inspire by asking for sacrifice for the greater good ... Bush just offers handouts to his pals.

[Bub, Andrew]

Someday, a politician will show up who knows how to inspire by asking for sacrifice for the greater good ... Bush just offers handouts to his pals.

"Ask not what your country can do for you..."
(Note: I'm praising the speech here more than the speaker.)

My wife and I do well enough, we'd be considered middle to lower class, but I don't quibble about my tax payments even though they pinch me in more obvious ways than someone in the 40-50% bracket feels it. My father, however, is in the mid-6 figures range. Still, he came from poverty. He taught me that taxes were a responsibility and the better you do the greater your share. Therefore, everything about the flat tax just sounds irresponsible to me.

Or to put it in a way Desslock might better appreciate:

"With great power comes great(er) responsibility."

;-)

[Desslock]

You missed the point -- I wasn't intending to highlight which party is taxed (which is the same, in any event - the recipient), but the fact that (a) one transfer is a planned, voluntary economic transaction, while the other is someone just inheriting a deceased person's assets; and (b) sales tax is considerably lower than income/estate tax, in any event, even if your situation was analagous.


"Voluntary" gets into some definitional issues, but estate transfers are quite clearly planned; they're called "wills." And you're not arguing for "sales tax level taxation" of estates; you're arguing for no taxes at all.

Most people actually die without a will, so they're not as planned as you suggest (probably not true for the large estates subject to the tax though). Sure, I'm not arguing for sales tax level taxation -- I was just refuting your assertion that estate transfers were analogous to other property transfers-- they're not, since the rates are exponentially higher.

since when does cost to the government matter for anything? Taxes are levied to raise revenue, hopefully in a fairly equitable and just manner; they're not determined on a per-transaction basis to offset government transaction costs.

That's a good retort, and a fair comment. It just seems weird to tax after-tax money to me, just because someone died, when from the government's perspective, nothing has been done to that money.

Well, there's literally hundreds of situations where that's not the case. There are many tax-exempt transfers: rollovers, butterfly transactions, sales of all or substantially all of the assets of a business; sales of certain classes of intangible assets, etc.

I'll admit I don't know much about these, but they're all untaxed because the government wishes to encourage them, right? That's the reasoning behind 401ks, I know.

No, they're not taxable because nothing meaningful has changed (the government could care less whether or not such transfers occur, and it's difficult to see how they benefit the public interest). The business/asset is unchanged, it's just changed owners. All of those situations I mentioned involve a change in ownership of the asset, just like an estate inheritance.

...because without estate taxes, the US will develop a European-style aristocracy, which is just absolute poison for the health of the nation.

Is that a commonly given rationale? It's interesting -- I've never heard it before. So the premise is that estate tax limits the development of a hereditary rich faction, and that's a good thing? I'm not sure it accomplishes that objective, but I never viewed it in that light.


I don't know of any country that has estate taxes, other than the U.S.


Countries with estate taxes: Canada & Australia (which actually don't tax the full amount, just the asset appreciation; it's virtually the same, however). So every 1st world country except the US (at least until 2010, hah!) and Italy.

There's no estate taxes in Canada, and I'm skeptical about some of the others you mentioned (if the primary goal, as you indicated, is to avoid the creation of a European style Aristocracy, how can that work if all of the European countries have estate taxes as well?).

Are you referring to the fact that for fixed assets (only), there's a deemed disposition on death that adjusts the cost base of the asset (with taxes payable on the difference by the estate?) That might be the case in those countries, but it's not as comprehensive as a formal estate tax (it wouldn't catch "cash", for instance).

Who proposed not taxing people based upon their incomes? Of course people who have more income should pay more tax, but they should pay the same proportionate rate. You think that's unfair because you believe it places an unfair burden on someone who makes $30,000 year vs. someone who makes $500,000, while I think it's the exact same relative burden.

I wasn't being glib; your comments about "treating people equally" imply that, logically, you should support a head tax. Should *income* be taxed "equally", or *people* be taxed "equally"? If it's people, *then all people should be treated equally*, e.g. every person should pay the same total amount of tax. What does income matter in that case? .

Er, it matters because the topic is income tax, so, yeah, I was talking about the equal treatment in the context of "income" tax.

If you agree that income should be taxed, however, it's just arguing over what's the most just system to distribute taxation over income. I don't think "loss due to income taxes" is a linear function of income, but you do..

Oh, I know -- that's exactly where we disagree (as I tried to highlight in my previous post excerpted above). I think the individual cost, in relative terms, is linear. Again, that's subject to having a baseline standard of living that's not taxable - but I believe that everyone should have a basic guaranteed annual income, which doesn't exactly make me conservative.

[Desslock]

Yeah, we pay a lot of taxes.

You actually pay very little in taxes, compared to the rest of the western world. If Bush's current tax cut proposal goes through, for instance, an average American family, with a few investments and income worth 60K/year, will pay one-fifth as much in taxes as the same family in Canada, for instance. The same family in Canada would pay 46% tax on all income above 60K US. Many European countries have even higher rates.

I can't believe you guys complain at all!

[graller]

Exactly Desslock - And I believe that tax is going to the causes like socialized healthcare...personal opinion on my part of course.

[Qenan]

Yeah, we pay a lot of taxes.

You actually pay very little in taxes, compared to the rest of the western world. If Bush's current tax cut proposal goes through, for instance, an average American family, with a few investments and income worth 60K/year, will pay one-fifth as much in taxes as the same family in Canada, for instance. The same family in Canada would pay 46% tax on all income above 60K US. Many European countries have even higher rates.

I can't believe you guys complain at all!

I completely agree... of course, there is no safety net to speak of. But for the well-off, it's a great life.

[Jason McCullough]

but I believe that everyone should have a basic guaranteed annual income, which doesn't exactly make me conservative.

Wow, shades of Milton Friedman. You do realize that what things would look like with a flat tax & estate tax, but without a guarenteed annual income?

Are you referring to the fact that for fixed assets (only), there's a deemed disposition on death that adjusts the cost base of the asset (with taxes payable on the difference by the estate?) That might be the case in those countries, but it's not as comprehensive as a formal estate tax (it wouldn't catch "cash", for instance).

Right; if they have cash, and it came from an asset, they payed taxes when they sold the asset at a gain/loss for cash. Obviously this sort of taxation leads to a lower total level of "estate taxes," but that's just because the taxes were paid before death.

Is that a commonly given rationale? It's interesting -- I've never heard it before. So the premise is that estate tax limits the development of a hereditary rich faction, and that's a good thing? I'm not sure it accomplishes that objective, but I never viewed it in that light.

*Boggle*. This is pretty much the entire reason its supported in the US, and why FDR put it in last time. Oh, and Europe only acquired estate taxation relatively recently (on a historical basis), and it's coincided with the destruction of their heriditary aristocracies.

No, they're not taxable because nothing meaningful has changed (the government could care less whether or not such transfers occur, and it's difficult to see how they benefit the public interest). The business/asset is unchanged, it's just changed owners. All of those situations I mentioned involve a change in ownership of the asset, just like an estate inheritance.

Relating to taxation of asset transfers: I don't think anyone would really care if estate taxes were just trimmed down in the US to cover untaxed appreciation in Canadian/Australian style, instead of right now where they tax the entire net value. That's not what we did, however; Bush eliminated it *all.* Right now, if someone buys a stock, holds it for 40 years, and passes it on when they die, none of the appreciation is ever taxed a whit in that person's lifetime, and not taxed when its handed over to the other person. And if Bush's dividend tax cut passes, none of the dividends will ever be taxed; so theoretically, one rich guy could support his heirs for, well, all eternity.

Somehow, this all strikes me as incredibly bad.

[Jason McCullough]

Yeah, we pay a lot of taxes.

You actually pay very little in taxes, compared to the rest of the western world. If Bush's current tax cut proposal goes through, for instance, an average American family, with a few investments and income worth 60K/year, will pay one-fifth as much in taxes as the same family in Canada, for instance. The same family in Canada would pay 46% tax on all income above 60K US. Many European countries have even higher rates.

I can't believe you guys complain at all!

Canada spends 42% of GDP on the government, and the United States spends 33% of GDP on the government. When you consider that in Canada all health care spending is included in "the government," while in the US it's just medicare/medicaid, the difference between the two countries is awfully small.

The rate on income beyond 60,000 (46%, 38%, whatever) is not even remotely a good indicator of what people actually pay. GDP fractions are.

The difference between Canada and Sweden government size, by contrast, actually is 12% of GDP.

[Anonymous]

You really are thick, ain'tchya? It's not the reference to more than one person, it's the conclusion that you can ascribe additional attributes/behaviour/motivations/characteristics (beyond the single characteristic you've arbitrarily choosen to define the group) to those persons (none of whom are known to you).

You don't like individuals who "ain't you", and your delusions require you to assume that they're all out to get you, so you propogate hateful stereotypes to deal with your own insecurities. You're a prejudiced, hateful moron -- you will, at least, admit that.


I like individuals who "ain't me," my Special Friend. I'm personally doing fine, except my lack of health insurance. Yet I like a lot of individuals around me who are being screwed by an elite group of greedy assholes on top, guys like Ken Lay and Dick Cheney who milk off the government through corporate welfare. I never said I hated all rich people, you reading-challenged fruitfop. I said that the political system has been manipulated to benefit the rich. It's up to the majority, the middle class and the poor to change that. We have to vote out the people who cater to the needs of the rich, who have the reins of power due to their wealth. That you cannot recognize the political power of wealth is unbelievable. Get help, Drama Queen.

[Anonymous]

Here's a little scenario for D-whatever.

You're a black slave in the south. You've escaped from your captors. You see white people in the road.

Do you approach them, in the knowledge that all white people are individuals, and some white people disliked slavery while others supported it? Or do you avoid them, and stick with established Underground Railroad safe houses because a lot of those white people are "out to get you" as you so efficiently put it?

You avoid them. You only trust those whites that have demonstrated their ability to be trusted.

Today there is a class war being waged that is visible whenever people wish to take money away from public schools and pump public funds into private schools. It's visible when the interests of corporate media owners who stand to make bucketloads of cash from mergers are given priority over the public interest of maintaining a diversity of media sources. Its visible when politicians take us to war, sending poor kids to fight while rich kids like George W. Bush get assigned to national guard units back home.

It's visible in a hundred other ways if you're paying attention. If you're not paying attention, because you're a self-satisfied twit, you'll just assume anyone who notices the power of the rich to influence politcs as "prejudiced" people with "inferiority complexes." How does that sand taste, Ostrich Boy?

[Met_K]

Tastes like you're cooking with the low-fat oil again.

[Mark Asher]

Mark nicely taken out of context and stretched. I don't work for some huge corporation. I pay over 3000 dollars a year out of my pay into my benefits package. I don't get free prescritpions and 100% coverage. I get what I consider to be an average deal. I put a lot of money in, I get prescription co-pay, per visit co-pay and if something awful happened to me I get coverage beyond a deductible for 80% of the costs...There is no such thing as a free ride. What I don't agree with is providing a free service for those unwilling to work to get healthcare that I have to work my ass off to subsidize. That offends me....sorry but it does and I have a right to that opinion. As an aside I looked at buying my own coverage at one point and the cost per year was about the same. The only difference was the deductible for major expenses was set at 1000 instead of 500.

Define what you mean by "affordable" healthcare. In a world of budget deficits if this means you expect that the government is going to subsidize this to make it affordable I want you to explain where the money is going to come from without raising my taxes.

I think your healthcare is affordable. We pay nearly $700 a month and have a $25 co-pay for subscriptions. Sorry if I took you out of context, but if you think you have an expensive healthcare plan because you work for a small company, think again. I would love to have access to your rates.

That's all I want -- affordable health insurance, not a free ride.

The issue isn't the government subsidizing it, but forcing the insurance companies to offer everyone group rates. I can't get group rates. In fact, I can't even get private insurance as an individual for my eldest son, who is diabetic. Every private insurer in the state of Missouri simply will not even offer him insurance.

All hail the American way, where if you're self-employed you can expect to have problems finding healthcare coverage you can afford, if you can even get any. What's really cool is that if you have private insurance as an individual, you can expect your rates to skyrocket if anyone in your family develops an ongoing medical condition. What might have been barely affordable insurance now becomes something that is unaffordable. You'd be better to fold up your business and go on Welfare and get free coverage.

[Mark Asher]

Yeah, we pay a lot of taxes.

You actually pay very little in taxes, compared to the rest of the western world. If Bush's current tax cut proposal goes through, for instance, an average American family, with a few investments and income worth 60K/year, will pay one-fifth as much in taxes as the same family in Canada, for instance. The same family in Canada would pay 46% tax on all income above 60K US. Many European countries have even higher rates.

I can't believe you guys complain at all!

Heh -- whenever I bring up the low taxation rates in the US compared to other western countries, I always get the "We still pay too much!" response. I agree, though. Americans have little to complain about.

[Chris Nahr]

For the record... Germany, at least, does have an estate tax. There is no "aristocracy" of any importance left in Europe, maybe in part due to estate taxes, but mostly because owning lots of meadows and woods and damp old castles in the middle of nowhere doesn't make you rich or influential in a modern industrial society. These things are not terribly profitable anymore, and the huge old buildings are actually very expensive liabilities, not assets. Most of the rich are industrial dynasts or managers; aristocrats with a huge inherited fortune are a tiny group, relevant only to tabloids.

By the way, for all I know an "aristocracy" of wealthy industrials already exists in the USA, and anyway you'd need an estate tax of 95% or more to destroy it. Exactly how much would you need to tax away from Bill Gates' fortune so that his children wouldn't be considered extremely rich?

[graller]

Mark - WOW - 700 a month is eye-popping and you say this is not including your eldest? I agree that is pretty steep. How large a percentage of the US is in the "self employed" category do you think? Anyone know? Seriously though I always felt there were 4 categories of Healthcare in the US

State/Fed workers with the Cadillac plans - full coverage little or no copays.
Mega corporate plans - similar to above but with a larger employee contribution
Normal employee plan - we pay half the cost and get the best possible basic coverage.
Self-Employed - expensive and not a lot of bells and whistles

[Bub, Andrew]

I think your healthcare is affordable. We pay nearly $700 a month and have a $25 co-pay for subscriptions.

And you don't get any of the game magazines?

[Desslock]

Are you referring to the fact that for fixed assets (only), there's a deemed disposition on death that adjusts the cost base of the asset (with taxes payable on the difference by the estate?) That might be the case in those countries, but it's not as comprehensive as a formal estate tax (it wouldn't catch "cash", for instance).

Right; if they have cash, and it came from an asset, they payed taxes when they sold the asset at a gain/loss for cash. Obviously this sort of taxation leads to a lower total level of "estate taxes," but that's just because the taxes were paid before death.

But it's not estate taxes at all -- there's no additional taxes imposed, whatsoever. Death is just requires the estate to pay the taxes that have been deferred by the fact that there hasn't been a disposition. By deeming a disposition at death, any accumulated capital gain has to be paid -- the inheritor is no worse off than he/she would be if there were no taxes paid at all -- they just don't acquire the original owner's ability to defer accumulated taxes any longer, and actually benefit from a more realistic cost base for the asset, which affects subsequent taxes payable.

That's a far cry from a tithe on accumulated wealth, as in the US.

I don't think anyone would really care if estate taxes were just trimmed down in the US to cover untaxed appreciation in Canadian/Australian style, instead of right now where they tax the entire net value.

Then we're in complete agreement, since I think that system is fair and appropriate. It reflects what actually happened.

Right now, if someone buys a stock, holds it for 40 years, and passes it on when they die, none of the appreciation is ever taxed a whit in that person's lifetime, and not taxed when its handed over to the other person. Somehow, this all strikes me as incredibly bad.

I agree -- that sort of taxation is appropriate. I was just against the blanket tithe from on previously taxed cash. But there has to be a deemed disposition for the purposes of capital assets (on the dividend point, I already indicated my strong disagreement with that proposal).

Our positions on this point seem pretty similar, after all.

Stefan

[Desslock]

Canada spends 42% of GDP on the government, and the United States spends 33% of GDP on the government. When you consider that in Canada all health care spending is included in "the government," while in the US it's just medicare/medicaid, the difference between the two countries is awfully small.

Well, you also have to consider that Canada spends almost nothing on its military (shamefully) -- combining military/health expenditures I suspect the difference would be more interesting.

Maybe a more direct comparision would be U.S. taxes, plus any health insurance premiums vs. Canadian taxes.

[Desslock]

Here's a little scenario for D-whatever. You're a black slave in the south. You've escaped from your captors. You see white people in the road. Do you approach them, in the knowledge that all white people are individuals, and some white people disliked slavery while others supported it? You avoid them. You only trust those whites that have demonstrated their ability to be trusted. ?

Man, you're off the deep end. You're trying to justify your vitriol towards people you don't know by, ironically, hatefully comparing those people you don't know to rascist slavers. When do the nazis come in?

Each person who "isn't you", but has been fortunate to acquire more cash by doing something more productive than you, secretly has an SS badge they keep polished under their bed, and a 9mm under their pillow in case they need to influence some more politicians to get you.

What other arbitrarily created groups of individuals do you hate, since you don't belong to them? The fit and healthy? The classical dancers? Adept lawn bowlers? Dem Smart folk?

[Ben Sones]

Or to put it in a way Desslock might better appreciate:

"With great power comes great(er) responsibility."

;-)

"Responsibility" implies free will. In this instance, the quote would read "With great responsibility comes great(er) obligations."

;)

Adept lawn bowlers?

I hate adept lawn bowlers, for what it's worth. They are so damn smug.

[Jason McCullough]

Our positions on this point seem pretty similar, after all.

Stefan

A truly unexpected result.

Well, you also have to consider that Canada spends almost nothing on its military (shamefully) -- combining military/health expenditures I suspect the difference would be more interesting.

Maybe a more direct comparision would be U.S. taxes, plus any health insurance premiums vs. Canadian taxes.

Canadian military spending is 1.9% of GDP. US military spending is 4.7% of GDP. Canadian health care spending is 9.3% of GDP. US health care spending is 13.2% of GDP. 44% of that is spending by the government, 5.8% of GDP. (links omitted because I'm lazy, google yourself).

Add US private health spending to the raw government GDP number, and you get Canada 42%, US 40.4%. Remove military spending, and you get Canada 40.1%, US 35.7%.

So about back where it started. Surprisingly, you spend about the same on interest payments for federal level debt that we do.

[Mark Asher]

I think your healthcare is affordable. We pay nearly $700 a month and have a $25 co-pay for subscriptions.

And you don't get any of the game magazines?

No. I read them at the supermarket. Someone always rips open at least one of each issue to steal the CD.

I read a game magazine in about 15 minutes. I don't read previews at all, so that's about half the mag. I read the first and last paragraphs of reviews and look at the score. I don't read tips articles. I read most of the columns. That's it -- 15 minutes.

[Mark Asher]

Mark - WOW - 700 a month is eye-popping and you say this is not including your eldest? I agree that is pretty steep. How large a percentage of the US is in the "self employed" category do you think? Anyone know? Seriously though I always felt there were 4 categories of Healthcare in the US

State/Fed workers with the Cadillac plans - full coverage little or no copays.
Mega corporate plans - similar to above but with a larger employee contribution
Normal employee plan - we pay half the cost and get the best possible basic coverage.
Self-Employed - expensive and not a lot of bells and whistles

The plan we have now is from my wife's work, a very small law firm. We won't have it too much longer though, and then it will likely go up. We'll have to get a separate policy from the State of Missouri for my son, and a private policy for the rest of us. It's not good. The insurance company makes a lot of money off us. I imagine last year our medical bills were no more than $1000 or so, and we paid about $8000 in premiums. The irony is that my son is healthier than most people, despite the diabetes. He worked out every day to prepare for football this past fall. The diabetes is under control and he takes far less insulin than most Type 1 diabetics.

[Kalle]

Canada spends 42% of GDP on the government <snip>

The difference between Canada and Sweden government size, by contrast, actually is 12% of GDP.

Not that I question your numbers, but I would like a source for this. I knew the Swedish spending was in the 50% range, but 58% is higher than most numbers I've seen kicked around.

Not that I complain very much. You get what you pay for, and the safety nets in place are extensive. Considering that life is a game that involves a fair bit of chance I prefer it this way as opposed to the American way.

[Jason McCullough]

I was using OECD data from here (http://www.hhs.se/personal/suzuki/o-English/go01.html).

[Kalle]

Thanks for the link. Not quite 58%, but close enough. I'll see if I can dig a bit deeper on the OECD website (http://www.oecd.org)

[Jason McCullough]

Turns out that the total incidence of taxation in the United States is actually already flat (http://slate.msn.com/id/2077294/), when you add them up from all jurisdictions.