A Minimum Tax for the Wealthy(nytimes.com)
nytimes.com
A Minimum Tax for the Wealthy
http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-tax-for-the-wealthy.html?smid=fb-share&_r=0
12 comments
This seems like a willfully ignorant reading of the op-ed. There is context here which any reasonably well-informed person should be aware of, which is that the gains made by top earners far outstrip the gains made by middle and lower income people. As a result, those people are worse off than they were in the past (their income has failed to increase relative to cost of living increases in recent decades.) So the reason people focus on the wealthy is that middle and lower income people are already at their breaking point.
Also, it isn't clear to me if you're referring to the "Buffet Rule", or to a scheme like the one proposed by Buffet here. In any case, he admits that even if we did the first part of what he is proposing (the minimum tax for the wealthy), there would still be work to be done.
Also, it isn't clear to me if you're referring to the "Buffet Rule", or to a scheme like the one proposed by Buffet here. In any case, he admits that even if we did the first part of what he is proposing (the minimum tax for the wealthy), there would still be work to be done.
For more context:
"You hear a lot, in books, in the blogosphere, among pundits that the middle class is being hollowed out, the incomes for all but the top 1% or maybe the top 20% are stagnating; that the gap between rich and poor has grown inexorably; that the American dream is dead"
"[these claims] are basically wrong. And that's what 10 years of research by myself and James Sullivan at Notre Dame has shown. If you measure incomes better, accounting properly for inflation, median incomes have gone up by about 50% since 1980. And if you look at consumption, it's gone up by a similar amount over that whole period--though exactly when it went up is slightly different from the income pattern."
http://www.econtalk.org/archives/2011/10/bruce_meyer_on.html
"You hear a lot, in books, in the blogosphere, among pundits that the middle class is being hollowed out, the incomes for all but the top 1% or maybe the top 20% are stagnating; that the gap between rich and poor has grown inexorably; that the American dream is dead"
"[these claims] are basically wrong. And that's what 10 years of research by myself and James Sullivan at Notre Dame has shown. If you measure incomes better, accounting properly for inflation, median incomes have gone up by about 50% since 1980. And if you look at consumption, it's gone up by a similar amount over that whole period--though exactly when it went up is slightly different from the income pattern."
http://www.econtalk.org/archives/2011/10/bruce_meyer_on.html
It wasn't a willful misreading. I was addressing the part that I quoted - because it's likely to be a debate point in the fiscal cliff negotiations.
> With the threshold at $250k, the tax hikes would still only bring in enough added revenue to cover 8 days of federal spending.
Does that include the restoration of pre-Bush capital gains tax? Because I'm sure that would add up to a lot. In fact, I think that's the biggest thing that the ultra-rich have become addicted to in the past decade.
Does that include the restoration of pre-Bush capital gains tax? Because I'm sure that would add up to a lot. In fact, I think that's the biggest thing that the ultra-rich have become addicted to in the past decade.
Talk about the "ultra-rich" becoming "addicted" to money is loaded nonsense, but never mind.
The idea of taxing investment income leads to a lot of terrible, perverse outcomes. It steers wealth towards being locked up in big companies and funds, since this is how you compound investment fashion without that money being repeatedly taxed. It also makes sure the incentive to invest on one's own accord belongs primarily to capitalists, since the tax naturally compounds when you buy and sell on your own account. Non-capitalists must allocate their money in one of a handful of government-approved fashions, or be eaten by repeated capital gains taxes for things as simple as rebalancing.
Capital gains taxes seem motivated by a broad desire to soak the rich, but you will find very few economists on the left (or the right) supporting this idea over alternatives like a progressive consumption tax. Capital gains taxes are one more example of a clueless "progressive" idea leading to outcomes that are poor to both progressive and non-progressive perspectives.
The idea of taxing investment income leads to a lot of terrible, perverse outcomes. It steers wealth towards being locked up in big companies and funds, since this is how you compound investment fashion without that money being repeatedly taxed. It also makes sure the incentive to invest on one's own accord belongs primarily to capitalists, since the tax naturally compounds when you buy and sell on your own account. Non-capitalists must allocate their money in one of a handful of government-approved fashions, or be eaten by repeated capital gains taxes for things as simple as rebalancing.
Capital gains taxes seem motivated by a broad desire to soak the rich, but you will find very few economists on the left (or the right) supporting this idea over alternatives like a progressive consumption tax. Capital gains taxes are one more example of a clueless "progressive" idea leading to outcomes that are poor to both progressive and non-progressive perspectives.
http://krugman.blogs.nytimes.com/2012/01/18/the-history-of-c...
http://krugman.blogs.nytimes.com/2012/01/19/the-dubious-case...
http://krugman.blogs.nytimes.com/2012/01/19/the-dubious-case...
Lazily posting links without further comment is not really what I think constitutes a good discussion, but I'll bite because I happen to have a link of my own handy.
NPR's Planet Money once brought together a bipartisan panel of economists and asked them what they agree on. Consumption taxes as a replacement for investment+income taxes got universal support: https://nathensmiraculousescape.wordpress.com/2012/08/08/pla...
The effect of a consumption tax would be to never tax investment income until it is spent on something that isn't investment.
Beware Krugman; he is brilliant but sees himself as a pundit in service of a political agenda, and has baldly admitted as much himself. I would be surprised if he disagreed with consumption taxes on grounds other than political expediency. I don't believe that particular question is raised in the posts you link.
NPR's Planet Money once brought together a bipartisan panel of economists and asked them what they agree on. Consumption taxes as a replacement for investment+income taxes got universal support: https://nathensmiraculousescape.wordpress.com/2012/08/08/pla...
The effect of a consumption tax would be to never tax investment income until it is spent on something that isn't investment.
Beware Krugman; he is brilliant but sees himself as a pundit in service of a political agenda, and has baldly admitted as much himself. I would be surprised if he disagreed with consumption taxes on grounds other than political expediency. I don't believe that particular question is raised in the posts you link.
You said economists are in agreement on this issue. I showed a prominent economists who isn't. I'm sure I can easily find others. You said that capital gains taxes have terrible consequences, but one of my links shows the history of capital gains taxes in the US, they used to be higher, and terrible things weren't happening.
Your last comment is largely an ad hominem. Consumption taxes are typically regressive.
Edit: your last link did not say what you said it said. It did not say to replace capital gains taxes with a consumption tax. It didn't mention capital gains at all.
Your last comment is largely an ad hominem. Consumption taxes are typically regressive.
Edit: your last link did not say what you said it said. It did not say to replace capital gains taxes with a consumption tax. It didn't mention capital gains at all.
Of course, the melange of changes they come up with is self-contradictory: eliminate the mortgage deduction (deducted from income on which you pay income tax), oh, and then eliminate income tax. ditto employer health care plan deductibility, and corporate income tax. i.e.: it's linkbait blogspam of the radio variety.
not precisely what you asked, but a useful approximation:
"If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit." [2012] -- http://www.forbes.com/sites/danbigman/2012/04/03/john-stosse...
"If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit." [2012] -- http://www.forbes.com/sites/danbigman/2012/04/03/john-stosse...
That's exactly not what I was saying - I was talking about capital gains which isn't taxed as income. Currently that sits at 15%, but will rise to 25%.
Fair point, presumably "income" would just be earned income and dividends.
The challenge is that when you change the rate, people change their behavior.
Here's some interesting data showing the historical relationship between behavior and capital gains policy over time:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
If you assume currently capital gains collections are $150B, increasing them 33% will add $44B.
From a pragmatical pov, that just doesn't seem like much. And that's assuming there's not a contraction in capital gains harvesting, which wouldn't square with history.
Look, I'll admit, I'm not unbiased here. I generate 80% of my income from churning long-term assets.
I sold a company that I bootstrapped a few years ago, and we got a good price.
I'm able to generate about $120k per year after-tax. My goal is to never touch the principal and live off returns.
Now, I'm bootstrapping my next startup... The $120k allows me to work 1 day a week consulting to "plug" the gap between my family's spending and my income. The other 4 days, I work on bootstrapping my startup.
If taxes go up, that will cost me an addl $6700 per year in taxes.
So my choices are...
1) take more consulting work -> Won't do this because my startup needs my time and I'm already working 60 hr days
2) try to generate higher returns, -> Not going to do this because I'm already maxed out with the risk I feel comfortable with
3) cut back my personal spending, -> Yes, this is what will happen.
For the affluent retired, I suspect many of them will choose to cut back too.
From where I'm sitting, the tax policy is going to hit me fairly hard, will only produce an additional $44B in taxes, and will probably cause a recession. So it doesn't seem very wise.
The challenge is that when you change the rate, people change their behavior.
Here's some interesting data showing the historical relationship between behavior and capital gains policy over time:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
If you assume currently capital gains collections are $150B, increasing them 33% will add $44B.
From a pragmatical pov, that just doesn't seem like much. And that's assuming there's not a contraction in capital gains harvesting, which wouldn't square with history.
Look, I'll admit, I'm not unbiased here. I generate 80% of my income from churning long-term assets.
I sold a company that I bootstrapped a few years ago, and we got a good price.
I'm able to generate about $120k per year after-tax. My goal is to never touch the principal and live off returns.
Now, I'm bootstrapping my next startup... The $120k allows me to work 1 day a week consulting to "plug" the gap between my family's spending and my income. The other 4 days, I work on bootstrapping my startup.
If taxes go up, that will cost me an addl $6700 per year in taxes.
So my choices are...
1) take more consulting work -> Won't do this because my startup needs my time and I'm already working 60 hr days
2) try to generate higher returns, -> Not going to do this because I'm already maxed out with the risk I feel comfortable with
3) cut back my personal spending, -> Yes, this is what will happen.
For the affluent retired, I suspect many of them will choose to cut back too.
From where I'm sitting, the tax policy is going to hit me fairly hard, will only produce an additional $44B in taxes, and will probably cause a recession. So it doesn't seem very wise.
That Forbes article seems highly politicized and doesn't cite a source for that number.
Or you could pursue a balanced approach. Raise taxes on the wealthy, a little bit & cut intelligently across all programs.
The defense budget is bloated, SS could be means tested, Medicare must be both means-tested & some of the benefits curtailed.
wealth == accumulated assets, but wealth != income
High-income people are frequently wealthy (outside of incomes derived through lottery winnings), but the two are not equal in their political views - those sitting on their wealth will be in favor of income taxes (since they barely have any), those who work for income will lean in favor of asset and consumption taxation (property, estate and sales taxes).
High-income people are frequently wealthy (outside of incomes derived through lottery winnings), but the two are not equal in their political views - those sitting on their wealth will be in favor of income taxes (since they barely have any), those who work for income will lean in favor of asset and consumption taxation (property, estate and sales taxes).
This seems like a riskily reductionist point, as we know that people aren't always single-issue voters focused on achieving their financial best interests.
Oh, definitely. Even folks who are single-issue voters realize that outside of supermajority years executive branch of government has to compromise.
However, the anecdotal evidence of "stored wealth vs current income" tax is there, notice how "let's-back-tax-everybodys-income" Prop-30-happy California is also home to "dont-you-dare-to-raise-taxes-on-my-mansions" Prop 13. My original remark was to point out that wealthy people and high income people are frequently advocating opposite causes.
However, the anecdotal evidence of "stored wealth vs current income" tax is there, notice how "let's-back-tax-everybodys-income" Prop-30-happy California is also home to "dont-you-dare-to-raise-taxes-on-my-mansions" Prop 13. My original remark was to point out that wealthy people and high income people are frequently advocating opposite causes.
>Prop-30-happy California is also home to "dont-you-dare-to-raise-taxes-on-my-mansions" Prop 13.
Mansions? Hardly. More like "Don't raise taxes on my tiny tract home through the roof based on ridiculously inflated real estate values."
Mansions? Hardly. More like "Don't raise taxes on my tiny tract home through the roof based on ridiculously inflated real estate values."
If you look at the places with highest volatility, it tends to be jobs-heavy SF Bay Area and LA. A farmer in Oxnard might see his farmhouse appreciate 10% here and there, East Palo Alto and Antioch (which I think you're describing) did not experience any significant swings even during the height of real estate bubble.
I was living in Southern California when prop 13 passed by an overwhelming margin. The people who benefited the most weren't wealthy at all. Instead, they were retired people on fixed incomes who were being forced by tax increases to move from houses in which they'd lived for three or four decades.
Maybe in a state that didn't have both high sales taxes and high income taxes a cap on property taxes wouldn't make sense. But in California it does.
Maybe in a state that didn't have both high sales taxes and high income taxes a cap on property taxes wouldn't make sense. But in California it does.
But categorically I would expect it to be a reasonable heuristic.
>Personally, I don't care if the wealthy pay higher taxes. In the recent election, 8/10 of the wealthiest counties in the US voted for President Obama, and his stance on tax rates was clear. If those voters are willing to pay higher taxes, I'm fine with that.
That's because they don't expect to pay higher taxes. When you have enough money you can route your income through offshore shell corporations and paper banks in the Mediterranean. Taxes are for the little people.
That's because they don't expect to pay higher taxes. When you have enough money you can route your income through offshore shell corporations and paper banks in the Mediterranean. Taxes are for the little people.
Government is the least efficient allocator of resources. For every dollar put to use, many more dollars are wasted due to incompetence or fraud. California's Proposition 30 was a wake-up call for me; despite all the political advertisements to the contrary, the many billions raised for "education" went entirely to shore up the teacher's bloated pensions and benefits fund.
Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome. This concept is so rare as to practically not exist in the public sector.
I'm not opposed to higher taxes. I am opposed to throwing money, mine or anyone else's, into a black hole. Convince me that the extra tax dollars will be spent wisely and that society will see a net positive return at some point in the future, and you have my support.
Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome. This concept is so rare as to practically not exist in the public sector.
I'm not opposed to higher taxes. I am opposed to throwing money, mine or anyone else's, into a black hole. Convince me that the extra tax dollars will be spent wisely and that society will see a net positive return at some point in the future, and you have my support.
>Government is the least efficient allocator of resources.
This is baseless dogma. Government may not always be the most efficient allocator, but it's not always the least efficient either. In cases of positive and negative externalities, the market does not allocate ideally.
We need to move past this dogma of "All government is bad government" so that we can separate the good from the bad. Good rules are helpful. Bad rules are harmful. When we have low expectations of our government, we will unsurprisingly have low outcomes.
This is baseless dogma. Government may not always be the most efficient allocator, but it's not always the least efficient either. In cases of positive and negative externalities, the market does not allocate ideally.
We need to move past this dogma of "All government is bad government" so that we can separate the good from the bad. Good rules are helpful. Bad rules are harmful. When we have low expectations of our government, we will unsurprisingly have low outcomes.
I think what nugget is getting at, is there are many government programs that are mismanaged (welfare, social security, education to some extent, and others). Who legitimately feels good that they pay taxes only to see other Americans living off of Welfare, generations unemployed, living off of welfare (which btw, I consider to be fraud). People that live on welfare (no, not people who use the program as it was intended, as temporary help), don't pay taxes and the benefit from those of us that do pay taxes.
When confronted with situations like the one described above, any rational person would wonder why we want higher taxes, when we should really be focusing on reforming our broken social programs. Only then, when we take legitimate steps to reform our broken social programs, should we be considering higher taxes.
When confronted with situations like the one described above, any rational person would wonder why we want higher taxes, when we should really be focusing on reforming our broken social programs. Only then, when we take legitimate steps to reform our broken social programs, should we be considering higher taxes.
Broken by what measure? Relative to what? Is the government mismanaged compared to say Google? The federal agency I worked for was a much tighter-run ship than the startup I worked for, or the medium-sized tech company I worked for. I'd wager the federal government, or at least most of it, is better-run than most small and medium sized businesses in the US. The caliber of people in most of the agencies is just extremely high compared to what you usually see at all but the top private sector companies.
I gave you +1 for middlebrow dismissal, you ignored the point I made and simply compared government to the private sector. I don't care how great the private sector manages their business, that is not the topic of discussion. Maybe you should stop wearing your ass as a hat and make a relevant comparison like between our governments and other governments, or between our govt today and our govt 20 years. Comparing apples and oranges isn't an argument. Still, plus 1 for Middlebrow dismissal.
Many areas of the federal government are actually pretty good by commercial standards (at least for caliber of employee), but most state governments are by comparison pretty horrible (particularly California). However, they're much more concerned with fairness and being abused by third parties, since they aren't as constrained to succeed or die. It is better for an employee of a government entity to follow process 100% correctly and ultimately fail than to take a calculated risk outside of normal process and fail, even if the expected return on the riskier path is far higher, or odds of failure lower. Startups are exactly the opposite, since they die by default. Big businesses are somewhere in between -- a new product failing usually won't kill the business if it fails cleanly, but could if enough corners are cut.
The ultimate difference between private firms and government is that a private firm which is seriously screwed up will go out of business. A government agency can continue being dysfunctional for a long time (e.g. the Office of Thrift Supervision). The other big difference is that when a government entity is incompetent, it tends to hurt others a lot more than when a single commercial firm is incompetent.
The ultimate difference between private firms and government is that a private firm which is seriously screwed up will go out of business. A government agency can continue being dysfunctional for a long time (e.g. the Office of Thrift Supervision). The other big difference is that when a government entity is incompetent, it tends to hurt others a lot more than when a single commercial firm is incompetent.
This response has become the standard (non sequitur) response to proposals for progressive taxation, but it doesn't engage at all with the argument being made.
The degree to which taxes are progressive doesn't determine the total tax collected, or the amount the government expends, it determines how that burden is applied to people. What we should really be comparing is: does an individual allocate their first $100,000 of income with any different efficiency than their second, third, or fifteenth $100k of income? If you give $1000 to a person who makes $50,000 a year, and $1000 to someone who makes $1,000,000 a year, who will allocate that money better? I think most of us would feel intuitively that the person making $50,000 would use it "better", but there's fair arguments to the contrary as well (including figuring out what "better" means). But only when you ask that question are you asking about progressive taxation, not just tax burden as a whole.
The degree to which taxes are progressive doesn't determine the total tax collected, or the amount the government expends, it determines how that burden is applied to people. What we should really be comparing is: does an individual allocate their first $100,000 of income with any different efficiency than their second, third, or fifteenth $100k of income? If you give $1000 to a person who makes $50,000 a year, and $1000 to someone who makes $1,000,000 a year, who will allocate that money better? I think most of us would feel intuitively that the person making $50,000 would use it "better", but there's fair arguments to the contrary as well (including figuring out what "better" means). But only when you ask that question are you asking about progressive taxation, not just tax burden as a whole.
Why are you framing the argument as if incomes are something that are owned by the government instead of the person who earned the money?
The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary.
The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary.
The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary.
Why is it scary? Your tax dollars go to the government because other citizens wish their tax dollars to go to the government, because they believe the government is the most efficient way to provide certain goods. Basically, they believe the government can spend their money better than they can, at least a certain amount of their money spent for certain purposes. Taxes aren't completely consensual, of course. They're government policy, and like any government policy, they can't depend on unanimous approval. However, the will of the people, as expressed through every democratic system on Earth, does support some degree of taxation and government spending. The natural question for a voter to ask when their vote affects taxation is whether it is more efficient to accomplish certain things through the government rather than through private spending -- essentially, whether the government can "better use" money for certain purposes than taxpayers can themselves. What's wrong with that?
Why is it scary? Your tax dollars go to the government because other citizens wish their tax dollars to go to the government, because they believe the government is the most efficient way to provide certain goods. Basically, they believe the government can spend their money better than they can, at least a certain amount of their money spent for certain purposes. Taxes aren't completely consensual, of course. They're government policy, and like any government policy, they can't depend on unanimous approval. However, the will of the people, as expressed through every democratic system on Earth, does support some degree of taxation and government spending. The natural question for a voter to ask when their vote affects taxation is whether it is more efficient to accomplish certain things through the government rather than through private spending -- essentially, whether the government can "better use" money for certain purposes than taxpayers can themselves. What's wrong with that?
Taxes are entirely not consensual. And that is the crux of the matter. Because they are not consensual there needs to be some sort of mechanism to limit the ability for the majority to simply appropriate money and property from the minority.
Suggesting that the only limiting factor is whether the government (even a democratically elected one) thinks it can use the money better than you can, really isn't a limit.
When the people find that they can vote themselves money, that will herald the end of the republic. -- Benjamin Franklin
Suggesting that the only limiting factor is whether the government (even a democratically elected one) thinks it can use the money better than you can, really isn't a limit.
When the people find that they can vote themselves money, that will herald the end of the republic. -- Benjamin Franklin
You're arguing the old maker versus taker canard, which doesn't reflect reality at all. Taxation would not exist without the consent of a large number of economically productive taxpayers. If you think politics in the United States is run by poor people, or by mysterious forces that somehow nullify and overcome the economic power of a preponderance of American taxpayers, you are kidding yourself. You'd be better off engaging with American taxpayers who want the government to play a certain role and want to pay for it than pretending we don't exist. If you persist in believing that government is a conspiracy by parasites against the productive, then you are going to be perpetually confused and disappointed by American politics. Warren Buffet is trying to help you out, to clue you in to the fact that the politics surrounding government spending and revenue are not determined by the economic divisions you think they are. Accept that a large number of prosperous Americans (such as Warren Buffet) are willing taxpayers who approve of many forms of government spending, and I promise you, things will become a lot clearer. You might even be able to frame your arguments in a form that a presidential candidate wouldn't have to apologize for repeating.
I don't think the majority of people who politically support the current tax code are currently making as most of their income and a sizable portion of net worth 50-500k/yr in wage income from non-government (direct or one level removed) sources, however.
(it's primarily retirees who are now a combination of state beneficiary and investment income earners, people who work for government or direct vendors to government, and is funded by people who make most of their money as capital gains or carried interest.)
This is true for both major parties, and has been true for at least 40 years, though.
Socially and intellectually, the people I mostly identify with are professionals and other middle to upper class wage earners (doctors, lawyers, engineers); the exception being startup equity. And the people who earn wages (vs. capital gains) in this bracket pay the highest marginal taxes of anyone.
If tech people weren't able to shift income into capital gains, 50%+ taxation would be a much bigger deal.
(it's primarily retirees who are now a combination of state beneficiary and investment income earners, people who work for government or direct vendors to government, and is funded by people who make most of their money as capital gains or carried interest.)
This is true for both major parties, and has been true for at least 40 years, though.
Socially and intellectually, the people I mostly identify with are professionals and other middle to upper class wage earners (doctors, lawyers, engineers); the exception being startup equity. And the people who earn wages (vs. capital gains) in this bracket pay the highest marginal taxes of anyone.
If tech people weren't able to shift income into capital gains, 50%+ taxation would be a much bigger deal.
Its not really scary at all because that is what governments have always done, unless you are an advocate for no government at all in which case you are damn scary.
That is a false dichotomy.
You want me to choose between anarchy or <insert your form of government here> where you've asserted that it doesn't matter what form of government I choose because they are all the same.
You want me to choose between anarchy or <insert your form of government here> where you've asserted that it doesn't matter what form of government I choose because they are all the same.
The whole point of my post is that progressive taxation is a question of which individuals pay what, not whether money stays with individuals or goes to the government. You appear to be caught up in the framing of political rhetoric.
As if 'framing' isn't an important part of communicating ideas? In this case you chose to frame the discussion in the form of the government 'giving' its money to the people. I'm rejecting that formulation. That doesn't mean I'm rejecting the idea of taxes or more specifically progressive taxes.
I offered a thought experiment, and using the example of "giving $1,000" is easier to think about than "not taking $1,000". As a thought experiment they are equivalent, with respect to the question: who utilizes resources most efficiently?
By introducing variability of how much the government takes total it adds another question that is being used to persistently distract from the question of progressivity. When people say "the wealthy should bear a larger portion of the burden" a typical response is "we should be spending less on government!" – which is no response at all, just a distraction.
You said: "The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary." – which is EXACTLY what I was pointedly NOT asking. The degree of progressivity in a system does not determine whether a person or the government has the person's money, but WHICH people have how much money.
By introducing variability of how much the government takes total it adds another question that is being used to persistently distract from the question of progressivity. When people say "the wealthy should bear a larger portion of the burden" a typical response is "we should be spending less on government!" – which is no response at all, just a distraction.
You said: "The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary." – which is EXACTLY what I was pointedly NOT asking. The degree of progressivity in a system does not determine whether a person or the government has the person's money, but WHICH people have how much money.
OK, I'll accept that you weren't intending to suggest that the government has primary claim on your income but you seem unaware of how your framing has been used by others to actually make that claim.
I can accept theoretically that you can separate the progressive structure of the federal income tax from spending decisions but in reality it is pretty hard to solve our budget problems by simply taxing the 'rich'--at least if you use the $250,000 figure that is most commonly used.
Here is a nice calculator you can use to see the difficulty: http://splitwise.com/taxes/
I can accept theoretically that you can separate the progressive structure of the federal income tax from spending decisions but in reality it is pretty hard to solve our budget problems by simply taxing the 'rich'--at least if you use the $250,000 figure that is most commonly used.
Here is a nice calculator you can use to see the difficulty: http://splitwise.com/taxes/
Now we're demanding that progressivity must balance the budget too? This is car salesman accounting, muddling unrelated choices together to distract from individual choices that can be rationally considered.
You keep giving these pundit talking points – the talking points of pundits have been rehashed enough, we shouldn't be using them here, it's not a productive form of discussion. Are we men or are we pundits? I, sir, am a man! ;)
You keep giving these pundit talking points – the talking points of pundits have been rehashed enough, we shouldn't be using them here, it's not a productive form of discussion. Are we men or are we pundits? I, sir, am a man! ;)
Huh? I'm not at all suggesting that the budget deficit can/should be solved by tweaking the progressivity of the federal tax system. In fact I'm saying the opposite--it is very hard to solve the budget deficit in that way because what we have a spending problem, not a revenue problem.
"Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome. This concept is so rare as to practically not exist in the public sector."
What a shitty, smug attitude to have towards the many very bright and motivated people who work in the public sector. They're not all perfect, but neither are all entrepreneurs. Not by a long shot.
What a shitty, smug attitude to have towards the many very bright and motivated people who work in the public sector. They're not all perfect, but neither are all entrepreneurs. Not by a long shot.
I didn't say that folks in the public sector are lazy or stupid, I said that there is rarely a direct connection between their performance on the job and their financial upside. Public sector workers are much more concerned about downside protection (i.e. avoid controversial decisions, cover your ass). In many cases, and I've seen this first hand, inaction is safer than action, whereas the opposite is usually true in business and especially in startups.
You're right -- I've never seen anyone in the private sector avoid controversial decisions or cover their ass. We should hand over all our nation's money to Bill Nguyen.
'Entrepreneurs' are terrible at allocating capital. Just compare the ROI from venture capital funds vs the S&P 500 over the last 20 years to get some idea. And no the vast majority of CEO's of a fortune 500 company are not Entrepreneurs for any reasonable definition of the term.
PS: It's important to include failures and opportunity costs when you talk about Entrepreneurs or your basically saying lottery winners are great at allocating capital.
PS: It's important to include failures and opportunity costs when you talk about Entrepreneurs or your basically saying lottery winners are great at allocating capital.
Where did you get the idea that "the many billions raised for 'education' went entirely to shore up the teacher's bloated pensions and benefits fund?" (emphasis added)
As far as I'm aware, the majority of the money went to prevent spending cuts in education budgets, and the rest went into the general budget (http://voterguide.sos.ca.gov/propositions/30/analysis.htm).
Hyperbole is not necessary to make your point.
As far as I'm aware, the majority of the money went to prevent spending cuts in education budgets, and the rest went into the general budget (http://voterguide.sos.ca.gov/propositions/30/analysis.htm).
Hyperbole is not necessary to make your point.
It is a mistake to try to analyze spending in this way.
Dollars are fungible. Dollars directed to one particular budget item (education budgets in your example) simply frees up other dollars to be used elsewhere (pensions and benefits in the parent comment).
Dollars are fungible. Dollars directed to one particular budget item (education budgets in your example) simply frees up other dollars to be used elsewhere (pensions and benefits in the parent comment).
Government is the least efficient allocator of resources? Says who? How many wealthy individuals are sitting on piles of money right now because they are unsure of the economic climate and therefore are not going to invest? Who better than the government to take it away from them and then invest it into public infrastructure and consequently stimulate the economy?
It's very difficult to be "sitting on piles of money" in the way you imply unless you've literally perched yourself atop a chair constructed from stacks of US dollar bills.
When a millionaire earns an extra million dollars, he or she puts it somewhere - into stocks, or bonds, or other investments, and sometimes, rarely, keeps it in a bank account for years on end where it sits and earns no interest. With the exception of the bank account, all of these are capital re-investments that stimulate the economy in some way.
When a millionaire earns an extra million dollars, he or she puts it somewhere - into stocks, or bonds, or other investments, and sometimes, rarely, keeps it in a bank account for years on end where it sits and earns no interest. With the exception of the bank account, all of these are capital re-investments that stimulate the economy in some way.
Money stored into bank accounts are re-invested into property and construction, which is a type of capital-reinvestment.
Wealthy people don't "sit on piles of money". That money is either held in a bank or invested. If it's in a bank, it is able to be loaned out to others looking for access to capital now. If its invested, it's being used as capital in a business (assuming it's and equity investment).
Banks don't really loan out money these days, either -- they generally have been keeping it on deposit with the fed, or in government securities, rather than making commercial loans.
And, banks are a lot less efficient at deploying capital than enterprises internally, or private investors, even in good times.
And, banks are a lot less efficient at deploying capital than enterprises internally, or private investors, even in good times.
None of these things happen if the government takes it instead.
>How many wealthy individuals are sitting on piles of money right now because they are unsure of the economic climate and therefore are not going to invest?
So what? It's their money.
So what? It's their money.
Why do you think they are sitting on these piles of money rather than investing it? It's because of the incessant sabre-rattling from the left over the past six years about raising taxes and ramping up even more regulation. It has a chilling effect.
oh Please. What a silly excuse. How about they've cut back on investing because they've been bitten twice in the span of one decade by two bubbles (one in housing, one in tech) & they figured out it's better to be more discriminating about capital allocation. simply stated when given a choice between wealth destruction & capital preservation, the latter is more desirable. Has it occurred to you that maybe, just maybe there aren't enough good enterprises to invest into. You're APPLE sitting on 125 Billion $ in cash, would buy Autonomy ?
That kind.
Just to be clear, I'm mostly talking about companies drastically scaling back their plans for growth in recent years, which obviously impacts private investors in the equity markets as well. Countless CEOs have gone on the record saying they've postponed hiring and capital investments because of the current tax and regulatory environment, in addition to the general dysfunction of Washington.
As you point out, Apple is sitting on over 100 billion, and countless other companies are sitting on amounts of capital that were previously unheard of. You can't honestly argue that it's a coincidence that all of these companies are simultaneously gun-shy to invest in growth.
As you point out, Apple is sitting on over 100 billion, and countless other companies are sitting on amounts of capital that were previously unheard of. You can't honestly argue that it's a coincidence that all of these companies are simultaneously gun-shy to invest in growth.
you know what's chilly? the blade of the guillotine.
you can either share some of your money or lose all of it.
you can either share some of your money or lose all of it.
It's funny how quickly people forget. There is one inevitable end result of such severe disproportionate concentrations of wealth. I'm sure we're nowhere near that point yet, but those who argue against redistribution are guaranteeing we will get there at some point.
I take you to mean that people forget that this is the inevitable outcome, but is there proof of that? China and ancient egypt for extremely stable examples of societies with hugely disproproriate distribution of wealth. Is it possible that revolutionary France and Russia are the outliers of history?
I really wish that I had joined HN more than a month ago, just so that I could downvote you. This belongs on Reddit or Huffpo, not HN.
Ironically, it's this sort of OWS mullarkey that's helping to prolong the environment of economic uncertainty that's hurting us so badly today.
Ironically, it's this sort of OWS mullarkey that's helping to prolong the environment of economic uncertainty that's hurting us so badly today.
I joined HN four years ago. How would YOU know what belongs on HN?
Your comment is extremely shallow and false to boot. It belongs on Rush Limbaugh, not on HN.
Your comment is extremely shallow and false to boot. It belongs on Rush Limbaugh, not on HN.
def further_proof(age, wisdom):
if (age != wisdom):
print "forensic"You want downvoting privileges, but think insults are appropriate here, and even equate those insults with proofs!
comic.
comic.
Look, before PG rightfully jumps in here like the SkiFree Yeti and tells us both to knock it off, let's see if we can squash this:
http://xkcd.com/667/
I'll concede that my last comment was inappropriate (it's super-basic Python, not a proof).
Can you at least concede that loose talk of beheading capitalists is, at the very least, counter-productive to what we should all want, which is a robust recovery?
Are you really advocating that people like PG and Elon Musk should be murdered without due process for being successful?
If not, why say so? Even solely as a rhetorical device, it's extremely distasteful, polarizing, and makes a rational person discount anything else you might have to say on the matter.
Or maybe you and people like you have no intention of really following through with these threats - they're just attempts to bully political opponents into adopting your tax policies. So, we're just talking soft-extortion here, not outright plans of murder and violence.
How about "evil" financiers like Warren Buffett (or is he "one of the good ones"?), or the other bankers and financiers - many of whom heavily donated to Obama, some of whom even served in his administration. Should the chopping block be reserved just for them? Do they get a pass if they donated to the right political parties and organizations?
This extreme demonization of capitalism is really troubling to me, and I think it helps explain the sluggishness of the economic recovery. The holders of capital are a bit spooked, and rightfully so.
I'll concede that my last comment was inappropriate (it's super-basic Python, not a proof).
Can you at least concede that loose talk of beheading capitalists is, at the very least, counter-productive to what we should all want, which is a robust recovery?
Are you really advocating that people like PG and Elon Musk should be murdered without due process for being successful?
If not, why say so? Even solely as a rhetorical device, it's extremely distasteful, polarizing, and makes a rational person discount anything else you might have to say on the matter.
Or maybe you and people like you have no intention of really following through with these threats - they're just attempts to bully political opponents into adopting your tax policies. So, we're just talking soft-extortion here, not outright plans of murder and violence.
How about "evil" financiers like Warren Buffett (or is he "one of the good ones"?), or the other bankers and financiers - many of whom heavily donated to Obama, some of whom even served in his administration. Should the chopping block be reserved just for them? Do they get a pass if they donated to the right political parties and organizations?
This extreme demonization of capitalism is really troubling to me, and I think it helps explain the sluggishness of the economic recovery. The holders of capital are a bit spooked, and rightfully so.
>(it's super-basic Python, not a proof).
Uh huh. The name of your method was "proof". I've been on HN for four years and you think I don't know how to read and write python? I'm a lisp hacker who came to this place back when it was about lisp hacking for hackers. Now, right wing business douches like you come along spouting talking points straight out of the corporate PR department.
First of all, I did not threaten anyone with the guillotine. The simple fact of the matter is that if the wealthy keep spouting bullshit designed to fuck the poor (which is all that your kind of speech is) then they are going to get guillotined. Don't think the reincarnation of Robespierre is not chomping at the bit to chop your neck.
Naturally, I have no interest in killing pg or myself or any other rich people. However, I have an interest in the survival and success of the human species.
These CEOs that you cite should be afraid. Their poor hearts are chilled at the possibility of a tax raise on their 14% tax burdens. Boo hoo! I am making the point that a tax raise on a billionaire is warm and balmy next to the ice cold steel that you get on the chopping block.
If these CEOs, the richest in all of history, keep acting like idiots they are going to get us all killed. And we'll deserve it. Fuck us if we are so myopic and pathetic that we can't create a rational vision of a human future to build and instead surrender all our autonomy to some metaphysical libertarian nonsense that is widely ridiculed by Nobel Prize winning economists.
In conclusion, welcome to HN. There are a lot more people here than just corporate blowhards and their nerd-slaves. Hacker culture still has some blood in its veins.
This post written in Vim on Ubuntu (not that I'm a fan of Ubuntu or anything. But apt sure is nice!).
Uh huh. The name of your method was "proof". I've been on HN for four years and you think I don't know how to read and write python? I'm a lisp hacker who came to this place back when it was about lisp hacking for hackers. Now, right wing business douches like you come along spouting talking points straight out of the corporate PR department.
First of all, I did not threaten anyone with the guillotine. The simple fact of the matter is that if the wealthy keep spouting bullshit designed to fuck the poor (which is all that your kind of speech is) then they are going to get guillotined. Don't think the reincarnation of Robespierre is not chomping at the bit to chop your neck.
Naturally, I have no interest in killing pg or myself or any other rich people. However, I have an interest in the survival and success of the human species.
These CEOs that you cite should be afraid. Their poor hearts are chilled at the possibility of a tax raise on their 14% tax burdens. Boo hoo! I am making the point that a tax raise on a billionaire is warm and balmy next to the ice cold steel that you get on the chopping block.
If these CEOs, the richest in all of history, keep acting like idiots they are going to get us all killed. And we'll deserve it. Fuck us if we are so myopic and pathetic that we can't create a rational vision of a human future to build and instead surrender all our autonomy to some metaphysical libertarian nonsense that is widely ridiculed by Nobel Prize winning economists.
In conclusion, welcome to HN. There are a lot more people here than just corporate blowhards and their nerd-slaves. Hacker culture still has some blood in its veins.
This post written in Vim on Ubuntu (not that I'm a fan of Ubuntu or anything. But apt sure is nice!).
Okay, thank you for confirming that there is no reasoning with you forensic. I'll save PG the trouble of yelling at us and end my part in this here.
Also, just to clarify, I've been an independent freelance programmer/serial entrepreneur for over 10 years - I've never worked for or held an interest in a big corporation, and my bank account balance looks a lot more like an OWS member than a VC. I'm just not gullible enough to fall for this class warfare nonsense, or blame others for my success or lack thereof.
Tell you what: when OWS rounds you up, I'll have a talk with my fellow plebs and see if I can get you a pass.
Also, just to clarify, I've been an independent freelance programmer/serial entrepreneur for over 10 years - I've never worked for or held an interest in a big corporation, and my bank account balance looks a lot more like an OWS member than a VC. I'm just not gullible enough to fall for this class warfare nonsense, or blame others for my success or lack thereof.
Tell you what: when OWS rounds you up, I'll have a talk with my fellow plebs and see if I can get you a pass.
If you don't recognize the high privilege of working as an entrepreneur in the first world for 10 years, you are just clueless. There are people starving to death because of the first world economic policy that you advocate, or at least that you perpetuate.
I'm not an Occupier. I advocate meritocracy. And meritocracy doesn't happen when you deny opportunity to the majority through economic policy that keeps the plutocracy entrenched.
Occupy is a great example of how sad the underclass is. Look at how pathetic they are. They are completely irrational and lost and have no idea what to even do. Of course, they're just sheep. But if the Goldman Sachs of the world keep growing the numbers of that herd (and all signs point to yes) then eventually there will be enough sheep for a Fuhrer to come along and point them at the enemy.
BTW, pg doesn't bother yelling at anyone here.
I'm not an Occupier. I advocate meritocracy. And meritocracy doesn't happen when you deny opportunity to the majority through economic policy that keeps the plutocracy entrenched.
Occupy is a great example of how sad the underclass is. Look at how pathetic they are. They are completely irrational and lost and have no idea what to even do. Of course, they're just sheep. But if the Goldman Sachs of the world keep growing the numbers of that herd (and all signs point to yes) then eventually there will be enough sheep for a Fuhrer to come along and point them at the enemy.
BTW, pg doesn't bother yelling at anyone here.
What gives the government the right to 'take it away from them?'
They have the guns normally. Force tends to be its own right.
That said, Californians complaining about government isn't surprising, they have the worst possible state government of the union. Their bias is understandable, but entirely their own doing.
That said, Californians complaining about government isn't surprising, they have the worst possible state government of the union. Their bias is understandable, but entirely their own doing.
"Potentially, a government is the most dangerous threat to man's rights: it holds a legal monopoly on the use of physical force against legally disarmed victims."
Like everything Ayn Rand, that's completely upside down, since government is also the only entity that has ever succeeded in guaranteeing people's rights.
So government is the best friend of man's rights, while libertarianism is the biggest enemy. Libertarianism = corporate feudalism.
So government is the best friend of man's rights, while libertarianism is the biggest enemy. Libertarianism = corporate feudalism.
they have the worst possible state government of the union
Must be all the rich people that live here; they ruin everything!
Must be all the rich people that live here; they ruin everything!
What is "property" other than a state-enforced claim to ownership? If the state (read: society) decides to take some back it is well within its "right" to do so, as your only claim to property is based on decree of society.
I'm guessing your not a big John Locke fan.
I am a fan actually, and I don't think my views are incompatible with his. I do have reservations of the typical use of "natural law" arguments though. One can construct a natural law argument for just about any premise one wants.
> I am a fan actually, and I don't think my views are incompatible with his.
I'm unable to reconcile your comment with what I understand to be John Lock's theory regarding property rights. They seem incompatible to me.
I'm unable to reconcile your comment with what I understand to be John Lock's theory regarding property rights. They seem incompatible to me.
My recollection of his work is nothing but vague memories at this point, so there's a good chance I'm completely off in my assessment.
That would be the sixteenth amendment to The Constitution of the United States of America.
Oh right, investing in infrastructure == stimulus for the economy.
http://www.slate.com/articles/business/project_syndicate/201...
http://www.slate.com/articles/business/project_syndicate/201...
>Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome.
Not if they're burning through someone else's money. Then it's as big a shitshow as government.
Not if they're burning through someone else's money. Then it's as big a shitshow as government.
That has nothing to do with the article. No matter how inefficient the government is, they still need money. And the article is about who pays how big part of that money.
>For every dollar put to use, many more dollars are wasted due to incompetence or fraud. California's Proposition 30 was a wake-up call for me...
You needed a wake-up call after the shenanigans we've seen in Sacramento over the last decade? They won't even spend the extra money. They'll use it as leverage to issue bonds. Tax increases in California have become mere guarantees taxes will be raised yet further at some future date.
You needed a wake-up call after the shenanigans we've seen in Sacramento over the last decade? They won't even spend the extra money. They'll use it as leverage to issue bonds. Tax increases in California have become mere guarantees taxes will be raised yet further at some future date.
I'm with you. Until the federal gov can prove it is willing to even attempt a balanced budget, is willing to stop giving handouts (to both the wealthy and the lazy), and proves it will actually invest in something other than bad cars and banks, then there's no reason they should get anything more than they already do.
If you keep feeding a monster, all you get is a bigger monster.
If you keep feeding a monster, all you get is a bigger monster.
Your argument assumes that people making spending decisions care about the debt. 30 years of government run by both sides of the aisle demonstrate that revenue and expenditures are entirely decoupled.
Whether you feed or don't feed the monster doesn't impact the monster's size. If you stop funding government, all you get is a larger debt.
Whether you feed or don't feed the monster doesn't impact the monster's size. If you stop funding government, all you get is a larger debt.
Entrepreneurs only work for human beings with money. Who works for those without?
It doesn't matter how inefficient government is. Government is the only entity that works for the disadvantaged.
Government is also the only entity capable of addressing collective problems.
It doesn't matter how inefficient government is. Government is the only entity that works for the disadvantaged.
Government is also the only entity capable of addressing collective problems.
> Government is the only entity that works for the interest of the disadvantaged.
oh rly? http://www.nps.gov/partnerships/fundraising_individuals_stat...
oh rly? http://www.nps.gov/partnerships/fundraising_individuals_stat...
If you think private charity works for the disadvantaged, you are confusing the customer with the product.
Mmm, can you elaborate?
Like Red Cross or local church's soup kitchen, how does their activity not benefit the disadvantaged?
Like Red Cross or local church's soup kitchen, how does their activity not benefit the disadvantaged?
Maybe some private charities do benefit the disadvantaged. But that doesn't mean those private charities work for the disadvantaged.
Who is the customer of a private charity? Who is the product of a private charity?
Who is the customer of a private charity? Who is the product of a private charity?
You can't possibly actually believe this.
When I'm doing volunteer work, I'm working for the interest of the disadvantaged. My synagogue collectively works for the interest of the disadvantaged through their social action programs. My town's interfaith food bank is run very well and addresses a collective problem without taking a dime of government support.
Government plays a role in helping the disadvantaged but it doesn't play the only role, it's not necessarily the most effective role, and since it involves taking money from people involuntarily, we should make damn sure the help's truly necessary and there's not a better, voluntary way to do it first.
When I'm doing volunteer work, I'm working for the interest of the disadvantaged. My synagogue collectively works for the interest of the disadvantaged through their social action programs. My town's interfaith food bank is run very well and addresses a collective problem without taking a dime of government support.
Government plays a role in helping the disadvantaged but it doesn't play the only role, it's not necessarily the most effective role, and since it involves taking money from people involuntarily, we should make damn sure the help's truly necessary and there's not a better, voluntary way to do it first.
It's disingenuous to say you're working FOR the disadvantaged. They aren't directing your activity and they have no power in the matter.
Government actually responds to the desires of the disadvantaged so the difference is infinite.
Volunteer organizations only serve a very, very narrow sliver of the disadvantaged, and they usually don't work to eradicate the disadvantaged but rather to exploit them to perpetuate their institutions.
The customer of the volunteer organization is the donor or charitable person. They dictate the behaviour of the organization. The product is the disadvantaged person, who is used in sales pitches and so on to convince the customer to hand over their credit card information.
Just because the disadvantaged are used by private charities to extract donations from the wealthy doesn't mean that the volunteer organizations are working FOR the disadvantaged.
Simple fact of the matter is that working for the disadvantaged would include a lot more responsiveness, a lot more prevention, a lot more intelligence, a lot LESS volunteer work and a lot more professional work. (volunteer work is poverty tourism 99% of the time--the poor don't need people handing out soup at soup kitchens. They just need money to buy their own soup and a social system that gives them some opportunity to become self-sufficient.)
Government actually responds to the desires of the disadvantaged so the difference is infinite.
Volunteer organizations only serve a very, very narrow sliver of the disadvantaged, and they usually don't work to eradicate the disadvantaged but rather to exploit them to perpetuate their institutions.
The customer of the volunteer organization is the donor or charitable person. They dictate the behaviour of the organization. The product is the disadvantaged person, who is used in sales pitches and so on to convince the customer to hand over their credit card information.
Just because the disadvantaged are used by private charities to extract donations from the wealthy doesn't mean that the volunteer organizations are working FOR the disadvantaged.
Simple fact of the matter is that working for the disadvantaged would include a lot more responsiveness, a lot more prevention, a lot more intelligence, a lot LESS volunteer work and a lot more professional work. (volunteer work is poverty tourism 99% of the time--the poor don't need people handing out soup at soup kitchens. They just need money to buy their own soup and a social system that gives them some opportunity to become self-sufficient.)
Your comment is bizarre.
First, if government has been responding to the desires of the disadvantaged all along, it would seem that a good portion of the poor and disadvantaged want to stay poor and disadvantaged. I don't believe that's the case - so either the government hasn't been responding to the desires of the disadvantaged or the government has been rather ineffective at it.
Second, your description of a volunteer organization is so ridiculously counter to reality, I'm certain you've never spent time working for one. Here's how something like a county food bank actually works: civic organizations (mostly churches, but also groups like the Rotary and Lions Club) organize food drives and solicit donations. Grocery stores and restaurants donate food as well. Volunteers sort and bag groceries and man the food bank during pickup hours - anyone who wants the food gets the food. (Other volunteers drive food to elderly or disabled people who can't make it in.)
No one is paid, no one even has the ability to handle credit cards, and no disadvantaged people are paraded around in fundraising pitches. Donations of food mainly come from everyday people, and are widespread throughout the community. We serve a lot of people in our county, not a 'very, very narrow sliver'. You calling the work done by volunteers 'poverty tourism' is just you being an ass.
As for whether the food bank encompasses 'prevention' - no, it does not. There are plenty of other community organizations that do, though. The biggest and most effective are probably the marriage counseling and parenting classes provided by local churches to their members.
First, if government has been responding to the desires of the disadvantaged all along, it would seem that a good portion of the poor and disadvantaged want to stay poor and disadvantaged. I don't believe that's the case - so either the government hasn't been responding to the desires of the disadvantaged or the government has been rather ineffective at it.
Second, your description of a volunteer organization is so ridiculously counter to reality, I'm certain you've never spent time working for one. Here's how something like a county food bank actually works: civic organizations (mostly churches, but also groups like the Rotary and Lions Club) organize food drives and solicit donations. Grocery stores and restaurants donate food as well. Volunteers sort and bag groceries and man the food bank during pickup hours - anyone who wants the food gets the food. (Other volunteers drive food to elderly or disabled people who can't make it in.)
No one is paid, no one even has the ability to handle credit cards, and no disadvantaged people are paraded around in fundraising pitches. Donations of food mainly come from everyday people, and are widespread throughout the community. We serve a lot of people in our county, not a 'very, very narrow sliver'. You calling the work done by volunteers 'poverty tourism' is just you being an ass.
As for whether the food bank encompasses 'prevention' - no, it does not. There are plenty of other community organizations that do, though. The biggest and most effective are probably the marriage counseling and parenting classes provided by local churches to their members.
Perhaps, when I say something quite abstract, I'm MAKING A POINT instead of, you know, ignorant of very mundane facts like what you are blabbing.
God the literalism in the software industry is just pathetic. It's like all you ever read is technical documentation.
I'm imagining you reading Camus and then trying to educate him on the dictionary definition of "absurd"
"Excuse me sir, but let me educate you about this extremely fucking obvious fact that everyone already knows while I completely miss your point because I'm dense as lead"
God the literalism in the software industry is just pathetic. It's like all you ever read is technical documentation.
I'm imagining you reading Camus and then trying to educate him on the dictionary definition of "absurd"
"Excuse me sir, but let me educate you about this extremely fucking obvious fact that everyone already knows while I completely miss your point because I'm dense as lead"
Government is the only entity that works for the disadvantaged.
The Red Cross, the Salvation Army, the Catholic school and hospital network (CRS), Doctors without Borders, Lutheran World Federation, the ACLU, etc etc etc.
The Red Cross, the Salvation Army, the Catholic school and hospital network (CRS), Doctors without Borders, Lutheran World Federation, the ACLU, etc etc etc.
You have confused the customer with the product.
That statement rings false.
The product of doctor's without borders is better health for the disadvantaged. The product of the red cross disaster relief is comfort and care in times of distress. The EAPN main goal is to elevate the disadvantaged above their current situation and prevent the cycle of poverty.
The product of doctor's without borders is better health for the disadvantaged. The product of the red cross disaster relief is comfort and care in times of distress. The EAPN main goal is to elevate the disadvantaged above their current situation and prevent the cycle of poverty.
This doesn't conform with standard HN understandings of what it means to be a customer and what it means to be a product.
[deleted]
>But what I really hate is the class warfare and populist messages driving fiscal policy.
This.
The thing that really gets me are the people who should know better, like Warren Buffet. You read the article and he's making straw man arguments about billionaires stuffing their cash in mattresses because their taxes are too high -- nobody is arguing that. The real problem is that taxation is economically distortionary and the higher you raise the rates, the greater the distortion. Because taxes are only due when assets are sold (and in the meantime the owner is collecting asset appreciation on the portion of the value that would have been due in taxes), capital gains tax encourages investors to hold their existing assets rather than seeking out more economically efficient ones. It encourages them to invest in more stable assets that can be held for a long period of time to defer taxes, rather than taking a risk on a startup that could cause tax to be due sooner when there is an IPO etc.
Or the tired numbers about how the rich are a lot richer now than they used to be and their taxes are lower, without providing evidence of causation rather than correlation. I mean sure, the richest might have 4.5X as much as they did twenty years ago instead of 5X, but is that really the big problem? Or is the real problem the regulatory capture and Wall St. shenanigans that allow the rich to double their money every five or ten years while Main St. loses their retirement fund to the same stock market?
At the same time, everybody just assumes that if you want to collect more tax money from the rich, raising the capital gains tax is the way to do it. Or the same with corporations and corporate income tax. But both of them are way, way too easy to avoid and for the same reason -- they depend on measuring profit, and it's gotten to be trivial to make an entity look unprofitable on paper. Raising the rates won't help that, it'll just push more people into tax shelters.
If you want to tax the rich and corporate entities then you have to tax the stuff they don't have a choice about doing. Sales tax, but the tax is paid by the seller not the customer. Income tax, but the tax is paid by the employer, not the employee. If you want to do business you need employees and customers, so they can't avoid paying taxes with shelters and loopholes. That's how you tax the rich. Capital gains tax is just a shell game that encourages accounting tricks and offshore banking.
This.
The thing that really gets me are the people who should know better, like Warren Buffet. You read the article and he's making straw man arguments about billionaires stuffing their cash in mattresses because their taxes are too high -- nobody is arguing that. The real problem is that taxation is economically distortionary and the higher you raise the rates, the greater the distortion. Because taxes are only due when assets are sold (and in the meantime the owner is collecting asset appreciation on the portion of the value that would have been due in taxes), capital gains tax encourages investors to hold their existing assets rather than seeking out more economically efficient ones. It encourages them to invest in more stable assets that can be held for a long period of time to defer taxes, rather than taking a risk on a startup that could cause tax to be due sooner when there is an IPO etc.
Or the tired numbers about how the rich are a lot richer now than they used to be and their taxes are lower, without providing evidence of causation rather than correlation. I mean sure, the richest might have 4.5X as much as they did twenty years ago instead of 5X, but is that really the big problem? Or is the real problem the regulatory capture and Wall St. shenanigans that allow the rich to double their money every five or ten years while Main St. loses their retirement fund to the same stock market?
At the same time, everybody just assumes that if you want to collect more tax money from the rich, raising the capital gains tax is the way to do it. Or the same with corporations and corporate income tax. But both of them are way, way too easy to avoid and for the same reason -- they depend on measuring profit, and it's gotten to be trivial to make an entity look unprofitable on paper. Raising the rates won't help that, it'll just push more people into tax shelters.
If you want to tax the rich and corporate entities then you have to tax the stuff they don't have a choice about doing. Sales tax, but the tax is paid by the seller not the customer. Income tax, but the tax is paid by the employer, not the employee. If you want to do business you need employees and customers, so they can't avoid paying taxes with shelters and loopholes. That's how you tax the rich. Capital gains tax is just a shell game that encourages accounting tricks and offshore banking.
I'd kind of dismissed the idea of a consumption/sales tax as terribly regressive, but it doesn't have to be, and lately I've been wondering what the distribution might look like. To make a sales tax more progressive, you might in effect say that the first $20,000 you spend is tax-free. If you have a 10% tax, then you just give every individual $2,000 cash (and ignore that some people spend less than $20,000 – that's the sort of loophole that can never grow very large).
Given a system like that I'd be curious what the numbers might really look like. How high a tax would we need? What would the actual tax burden look like for different amounts of cash-back? Could we replicate something similar to the progressivity we have now?
But there's still distortions. Consider high Shipping & Handling fees – these are often done because S&H is considered a service, and so sales tax is not levied on that portion of the cost. But a $0.01 book with $7 S&H is clearly bullshit. But who is there to call the seller on that bullshit? Why are goods taxed but not services? I've never been clear on that.
Given a system like that I'd be curious what the numbers might really look like. How high a tax would we need? What would the actual tax burden look like for different amounts of cash-back? Could we replicate something similar to the progressivity we have now?
But there's still distortions. Consider high Shipping & Handling fees – these are often done because S&H is considered a service, and so sales tax is not levied on that portion of the cost. But a $0.01 book with $7 S&H is clearly bullshit. But who is there to call the seller on that bullshit? Why are goods taxed but not services? I've never been clear on that.
One interesting form of taxation might be to tax purely status purchases. e.g. in countries like Singapore, where you don't really need a car, they tax cars heavily -- yet rich people still go out of their way to get super expensive cars to show off. Progressive real estate taxes, luxury taxes on vehicles, expensive types of clothing or jewelry, etc. wouldn't deter purchases much, but would raise money.
The most awesome tax I have ever seen is auctioning short license plates (done in the middle east and Hong Kong) -- pure profit for the state, and artificial scarcity created by the state. In fact, it's "better" for me to own the "1" license plate if everyone knows I spent $10mm on it than if they thought I got it by being lucky.
(In general, I'd like to see more VAT + poll + etc. taxes vs. income or investment taxes. And taxes on things we want to discourage, like pollution.)
The most awesome tax I have ever seen is auctioning short license plates (done in the middle east and Hong Kong) -- pure profit for the state, and artificial scarcity created by the state. In fact, it's "better" for me to own the "1" license plate if everyone knows I spent $10mm on it than if they thought I got it by being lucky.
(In general, I'd like to see more VAT + poll + etc. taxes vs. income or investment taxes. And taxes on things we want to discourage, like pollution.)
>Given a system like that I'd be curious what the numbers might really look like. How high a tax would we need? What would the actual tax burden look like for different amounts of cash-back?
It seems like the math is fairly straightforward, but dependent on how much money you need to raise. The big question is to what extent you would want something like that to displace other taxes. If you wanted to displace all other federal, state and local taxes then a sensible rate would likely have to be in the nature of 20-30% (depending on the size of the exemption and how much money the government is to spend).
>Could we replicate something similar to the progressivity we have now?
It seems to me you could achieve an arbitrarily large degree of progressivity by playing with the size of the exemption. In the extreme case you pay everyone something like $50,000/year and then have an extraordinarily high tax rate, but then you get a different kind of distortion where people quit their jobs because they can live off the tax rebate.
On the other hand, having a substantial unconditional rebate (not that large, but say $5000-$10,000/year) would eliminate the call for many need-based programs, because those in need would then have that money with which to buy food and shared accommodations, etc. That would significantly reduce government expenditures for those programs and allow such a large rebate to be had without the need for a prohibitively high tax rate. (It would also eliminate several redundant government bureaucracies dedicated to administering now-redundant need-based programs.)
> Why are goods taxed but not services? I've never been clear on that.
I think it's jurisdiction dependent. But as to why, it's almost certainly only because that's what has been successfully lobbied for by someone. There isn't any sound economic rationale unless you want to encourage the purchase of services over goods for some reason, at the cost of exactly the sort of distortions you're talking about.
It seems like the math is fairly straightforward, but dependent on how much money you need to raise. The big question is to what extent you would want something like that to displace other taxes. If you wanted to displace all other federal, state and local taxes then a sensible rate would likely have to be in the nature of 20-30% (depending on the size of the exemption and how much money the government is to spend).
>Could we replicate something similar to the progressivity we have now?
It seems to me you could achieve an arbitrarily large degree of progressivity by playing with the size of the exemption. In the extreme case you pay everyone something like $50,000/year and then have an extraordinarily high tax rate, but then you get a different kind of distortion where people quit their jobs because they can live off the tax rebate.
On the other hand, having a substantial unconditional rebate (not that large, but say $5000-$10,000/year) would eliminate the call for many need-based programs, because those in need would then have that money with which to buy food and shared accommodations, etc. That would significantly reduce government expenditures for those programs and allow such a large rebate to be had without the need for a prohibitively high tax rate. (It would also eliminate several redundant government bureaucracies dedicated to administering now-redundant need-based programs.)
> Why are goods taxed but not services? I've never been clear on that.
I think it's jurisdiction dependent. But as to why, it's almost certainly only because that's what has been successfully lobbied for by someone. There isn't any sound economic rationale unless you want to encourage the purchase of services over goods for some reason, at the cost of exactly the sort of distortions you're talking about.
>I'd kind of dismissed the idea of a consumption/sales tax as terribly regressive, but it doesn't have to be, and lately I've been wondering what the distribution might look like.
In California the sales tax doesn't apply to clothing under a certain price or food staples. Since poor people spend a high percentage of their money on these things it's not a big burden for them.
If they want to buy booze or a big screen TV they can pay sales tax like the rest of us.
In California the sales tax doesn't apply to clothing under a certain price or food staples. Since poor people spend a high percentage of their money on these things it's not a big burden for them.
If they want to buy booze or a big screen TV they can pay sales tax like the rest of us.
Hmm, if only such a thing already existed...
http://en.wikipedia.org/wiki/Alternative_Minimum_Tax
Although when anyone in my lowly tax bracket has to worry about it, it's pretty sad.
http://en.wikipedia.org/wiki/Alternative_Minimum_Tax
Although when anyone in my lowly tax bracket has to worry about it, it's pretty sad.
AMT + Deduction Cap would be the same thing effectively, assuming the deduction cap applied to everything. Right now the reason people make millions and pay no taxes is because they give generously to charities, and their investments are tax-free muni bonds. AMT still allows too many deductions to force all the top earners into paying taxes.
The big deal is that AMT doesn't apply to capital gains (at least not directly; it can cause you to blow the exemption cap though)
I suppose my point is that we have a feature in the tax code which is ostensibly designed to achieve his very goals, but it's become useless over time because a) it's not indexed to inflation, and b) it allows some deductions and generally adds complexity, rather than being a true flat minimum.
Hey Warren, instead of an income tax, don't you think a wealth tax would be better?
Oh, I thought not.
Oh, I thought not.
At taxable income nearing $40 MM in recent years, I'd say he's a decent candidate for speaking on income tax.
http://www.huffingtonpost.com/2011/10/12/warren-buffetts-inc...
http://www.huffingtonpost.com/2011/10/12/warren-buffetts-inc...
Yes, well, with 1000x that in assets I'd say he's an even better candidate for a wealth tax.
It would be against the US constitution anyway. http://en.wikipedia.org/wiki/Wealth_tax
Did you read that link? It would only be unconstitutional at the federal level, and even a federal wealth tax would be constitutional if the revenue were "apportioned among the states".
“Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
The problem is not that the wealthy won't invest if they are taxed at higher rates. Its that they will have LESS to reinvest with after gains are taxed. Its strictly a matter of who you believe distributes resources more efficiently: the government or the people.
The problem is not that the wealthy won't invest if they are taxed at higher rates. Its that they will have LESS to reinvest with after gains are taxed. Its strictly a matter of who you believe distributes resources more efficiently: the government or the people.
Of course "efficiently" depends completely on what property you're trying to optimize for. Individuals work for themselves, government (theoretically) works for the people. It is not a given that "the people" will be more efficient for all such properties.
You misunderstand the context of efficiency. We're talking about efficiently allocating limited capital resources. This is done by 'prices.' The government by definition cannot efficiently allocate capital because there exists no market signal from capital consumers as to how the scarce resources should be best utilized. The government can only guess and spend.
I don't think I misunderstand the context. The definition that people generally use when discussing this is making some fundamental assumptions that simply do not hold up. Efficiency for efficiency's sake is meaningless--its always in the pursuit of some greater goal. For the private citizen, that goal is different than for a government. It is a flawed argument to assume that the government does, or should, have the same goal as a private citizen.
There's a fixed amount of labor capital in the US. Who decides how it should be allocated? Let's pretend you believe we need to hire more teachers. Are you right? If you were the government, you'd wave your hands and make it so. But are you wasting labor on teachers we don't fully utilize? Perhaps we could have really benefited from additional plumbers. How can we know?
The only known way to answer those questions is by asking the capital markets. We all share the goal of best utilizing every citizen to raise our collective standard of living. More broadly, it is in everyone's best interest to efficiently use every type of scare capital resource we are afforded. Waste helps no one.
Now, the fact that the capital markets are distorted and borderline useless today is another discussion. Higher taxes won't solve that problem either.
The only known way to answer those questions is by asking the capital markets. We all share the goal of best utilizing every citizen to raise our collective standard of living. More broadly, it is in everyone's best interest to efficiently use every type of scare capital resource we are afforded. Waste helps no one.
Now, the fact that the capital markets are distorted and borderline useless today is another discussion. Higher taxes won't solve that problem either.
The capital markets also tell us that we shouldn't invest in clean energy, or basic scientific research. I would hate to see what education would look like in some parts of the country if we let capital markets determine resource allocation. The point is there are certain things that the market simply cannot value correctly, but clearly do hold value to society. These are the types of things that government is well suited for.
> Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P
Makes sense, but only after you've paid off all or the vast majority of your debt, which means for a decade or two you'll need to have the income be significantly higher than spending, and pay off the debt with the difference.
Makes sense, but only after you've paid off all or the vast majority of your debt, which means for a decade or two you'll need to have the income be significantly higher than spending, and pay off the debt with the difference.
Yeah, back before Bush's looting of the US treasury for his rich pals, we had budget surpluses. In fact, it might have been possible that we would now have paid off the debt if Bush never took office.
If small government advocates really wanted a broad base of support, they'd insist that tax rates always cover government expenditures. Then people would be upset about big government.
However, the current attack against raising taxes (from their current historically low rates) only raises the debt and weakens our fiscal foundation.
However, the current attack against raising taxes (from their current historically low rates) only raises the debt and weakens our fiscal foundation.
If Mr. Buffet is so concerned about the amount of taxes paid by the wealthy he should use this simple form (https://www.pay.gov/paygov/forms/formInstance.html?agencyFor...) to set an example.
This is an absurd (yet common) response.
And if you are for a war, why don't you buy a gun and go fight?
And if you are for a war, why don't you buy a gun and go fight?
A more apt analogy would be, if you're for a war, why don't you enlist? But lots of people in favor of wars do just that. What Buffett is saying is essentially, "Let's institute a draft." Lots of wars have had that, too, of course—which is not necessarily a good thing.
Of course, if there were a US draft (again), there might be fewer American troops overseas, and more protest against the wars we do have. [Disclosure: about 48 years ago, I tore up my draft card and mailed it back to the draft board]
Sure, I'll accept that. But it's a dismissive argument that (purposefully) misses the point.
a: "I want the administration to increase funding for NASA"
b: "Shut up! Send them money yourself!"
a: "I want the administration to increase funding for NASA"
b: "Shut up! Send them money yourself!"
Not quite sure why it's an absurd response?
Agreed. Mr. Buffet is free to donate as much of his 'tail wind' wealth as he chooses. But please, hands off of my wallet.
He donated all of it. Whatever you got isn't that interesting.
You know, I've never had a problem with the income taxes that I pay. They're taken out of my check and I work with what's left. I never think "oh man, they're taking my money" any more than I think "oh man, I totally deserve to win the lottery".
I do think there's something about earning money through investments that makes paying taxes "feel" more like your money is being taken away from you. It's not automatically deducted. It's not there every week. Sometimes you lose money. You have to pay it all at once. Taxes are not part of the mental calculation of how much you made on that sweet stock investment. I think that's WHY the rates are lower. People just feel like the rates SHOULD be lower. But it's a psychological effect. When I look at the economic effects of the current tax scheme on a large scale, it seems to me that this kind of benefit is just a giant tax dodge.
Let's say that the tax rate is structured in a way that the cost of doing productive "work" with your capital is 30%, but the tax rate for just shuffling the money around through a bunch of investment vehicles is %15. Well, you've suddenly got a free %15 to play around with. And if you only need to return %10 to be considered a pretty good investment, then it seems like you really can't fail as long as you've already got enough money to play a different game than the rest of us. But those guys are already orbital, and the rest of us can never achieve escape velocity. I'd prefer to not live in a cyberpunk future where the rich get their own orbital gardens and the rest of us have to live in the ruins they left behind.
You know, I've never had a problem with the income taxes that I pay. They're taken out of my check and I work with what's left. I never think "oh man, they're taking my money" any more than I think "oh man, I totally deserve to win the lottery".
I do think there's something about earning money through investments that makes paying taxes "feel" more like your money is being taken away from you. It's not automatically deducted. It's not there every week. Sometimes you lose money. You have to pay it all at once. Taxes are not part of the mental calculation of how much you made on that sweet stock investment. I think that's WHY the rates are lower. People just feel like the rates SHOULD be lower. But it's a psychological effect. When I look at the economic effects of the current tax scheme on a large scale, it seems to me that this kind of benefit is just a giant tax dodge.
Let's say that the tax rate is structured in a way that the cost of doing productive "work" with your capital is 30%, but the tax rate for just shuffling the money around through a bunch of investment vehicles is %15. Well, you've suddenly got a free %15 to play around with. And if you only need to return %10 to be considered a pretty good investment, then it seems like you really can't fail as long as you've already got enough money to play a different game than the rest of us. But those guys are already orbital, and the rest of us can never achieve escape velocity. I'd prefer to not live in a cyberpunk future where the rich get their own orbital gardens and the rest of us have to live in the ruins they left behind.
The main reasons capital gains are taxed at a lower rate are:
1) inflation (if you buy a stock for $100 and sell it 10y later for $120, you actually lost money, at least for every 10y period I know about)
2) invested dollars have a higher multiplier for economic activity than wages earned and then spent, so raising capital gains rates hurt the economy more ("have higher deadweight losses") than wage taxes. Poll taxes and consumption (VAT, particularly) taxes are even better, though.
3) people who have enough money to make meaningful investments tend to vote more reliably than people who earn mainly wage income, and also are in a better position to donate to political campaigns.
1) inflation (if you buy a stock for $100 and sell it 10y later for $120, you actually lost money, at least for every 10y period I know about)
2) invested dollars have a higher multiplier for economic activity than wages earned and then spent, so raising capital gains rates hurt the economy more ("have higher deadweight losses") than wage taxes. Poll taxes and consumption (VAT, particularly) taxes are even better, though.
3) people who have enough money to make meaningful investments tend to vote more reliably than people who earn mainly wage income, and also are in a better position to donate to political campaigns.
With the second part of item 3 being the determinant factor.
For the same reason that if someone votes for or advocates for a war, we don't say... "well, if you want to fight the (Iranians, or whatever), then go buy a gun and fight them."
I'll leave it as an exercise to the reader why that is an absurd argument.
I'll leave it as an exercise to the reader why that is an absurd argument.
I don't think forking over extra cash is exactly on the same line as putting your life on the line in a war. I'm not sure that's a fair comparison.
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Is it possible for non-investors (i.e. small business owners) to avoid taxes using strategies like a "Cayman Islands mail drop"?
If so, I propose this HACK to solve the tax issue:
Create a site that disseminates information on how small businesses can avoid (not evade) taxes using these approaches that are typically only known to advanced acolytes. Evolve processes that significantly reduces the cost for avoiding taxes effectively. (I imagine that that these complicated loopholes aren't actually that complicated, just that the knowledge is rarified.)
If many people, including a large portion of the upper-middle class, reduced their tax liability, this would significantly increase the amount of attention paid to this issue.
If so, I propose this HACK to solve the tax issue:
Create a site that disseminates information on how small businesses can avoid (not evade) taxes using these approaches that are typically only known to advanced acolytes. Evolve processes that significantly reduces the cost for avoiding taxes effectively. (I imagine that that these complicated loopholes aren't actually that complicated, just that the knowledge is rarified.)
If many people, including a large portion of the upper-middle class, reduced their tax liability, this would significantly increase the amount of attention paid to this issue.
Small business owners are least affected by capital gains increase, since the capital gains tax event is triggered only during sale. The proposed terms of sale (taxation included) don't make sense for you as the business owner? Then either ask for a higher price or don't sell.
A major problem is income != wealth.
-- And it took a constitutional amendment to tax income.
-- And it took a constitutional amendment to tax income.
Personally, I don't care if the wealthy pay higher taxes. In the recent election, 8/10 of the wealthiest counties in the US voted for President Obama, and his stance on tax rates was clear. If those voters are willing to pay higher taxes, I'm fine with that.
But what I really hate is the class warfare and populist messages driving fiscal policy. With the threshold at $250k, the tax hikes would still only bring in enough added revenue to cover 8 days of federal spending. And "fair share"? The top 5% pay 40% of the federal income taxes collected. In order to generate the kind of revenues that would make a significant impact on the deficit, taxes would have to go up across the board, which in turn would lead to an economic slow down.