The Money Mustache Community
Other => Off Topic => Topic started by: Leisured on June 25, 2017, 11:28:21 PM
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This article in the online magazine Aeon looks at the history of inequality, and suggests that inequality gradually increases unless society is hit by a disaster.
https://aeon.co/essays/are-plagues-and-wars-the-only-ways-to-reduce-inequality
I already knew that wages for agricultural workers in Europe increased after the Black Death of 1350, because of the shortage of labour. I had also read the idea that if all rich people in a country had their wealth confiscated and distributed among the poor, then after say 50 years, there would still be a rich elite and the poor would still be poor. This idea matches the anecdotes we see on the forum Antimustachian Wall of Shame and Comedy.
I recommend the online magazine Aeon.
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Interesting!
I could see various reasons re: rich becoming rich again and poor becoming poor again.
Some people become wealthy through practices such as frugality and investing, and some become poor by wasting. Those traits would likely be retained through a redistribution of resources.
But there are also a bunch of people who become wealthy via power plays, cheating, aggression, taking advantage of others...and they would likely retain those qualities through and after a redistribution. And there are a bunch of people who become poor by sharing almost all of what they receive, and that trait too would likely be retained after a redistribution.
To move from poverty to abundance, I had to work very hard psychologically to retrain myself to stop giving everything (income, assets, work) away and to begin hoarding for myself. I found that extraordinarily challenging. I still find it weird.
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Been on my mind quite a bit after this last bull market in the US that seems to now be spinning out of control with the election of such a divisive, 'America First' (aka Billionaires First) President. Also agrees Elon Musk's philosophy that mankind is in a race against time at this point to evolve and advance technology sufficiently to protect civilization. An interesting offshoot being 'racing extinction' (https://en.wikipedia.org/wiki/Racing_Extinction).
It is always tempting to assume that the lessons of history are no longer relevant because the world has changed so much – as indeed it has. But we must bear in mind that the exact same claim could have been made back in the 1950s, ’60s and ’70s, when inequality declined even as economies boomed and the middle classes thrived. There was no obvious reason why this should ever change: and yet change it did. It is just as likely as not that we are currently riding another upward wave in the concentration of income and wealth, continuing a pattern that stretches back thousands of years. In the not-too-distant future, robotics, genetic engineering and biomechatronic enhancements of the human body could well create inequalities we can barely even imagine. And if they do, will it all end in yet another unforeseen, sudden and dramatic violent turn?
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Interesting!
I could see various reasons re: rich becoming rich again and poor becoming poor again.
Some people become wealthy through practices such as frugality and investing, and some become poor by wasting. Those traits would likely be retained through a redistribution of resources.
But there are also a bunch of people who become wealthy via power plays, cheating, aggression, taking advantage of others...and they would likely retain those qualities through and after a redistribution. And there are a bunch of people who become poor by sharing almost all of what they receive, and that trait too would likely be retained after a redistribution.
To move from poverty to abundance, I had to work very hard psychologically to retrain myself to stop giving everything (income, assets, work) away and to begin hoarding for myself. I found that extraordinarily challenging. I still find it weird.
Gee joon, you went from immoral, "power plays, cheating, aggression, taking advantage of others" for people that aquire assets, to moral, "people who become poor by sharing almost all of what they receive" and thus have nothing.
I hope you found a middle ground where you can live a moral financial life build assets and prepare for your future.
I think I did and I don't feel I'm part of your first group.
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But wait, you missed the whole opening part! :) I said, "Some people become wealthy through practices such as frugality and investing, and some become poor by wasting."
I don't associate wealth with immorality nor poverty with morality, nor vice versa. I see different individuals having any of a variety of traits, and set out four different examples.
Yes, I hope I've found a middle ground for me. I do still feel uncomfortable hoarding while others go without, and continue to try to find the optimal path there.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
The Waltons received the largest inheritance in the history of the world. They paid no tax on it because Sam Walton transferred 80% of his ownership to his kids before they turned 18. They are the wealthiest family in the world and have never worked. If there had been just one Walton kid, he or she would be by far the wealthiest person in the world.
Meanwhile, many Wal-Mart employees qualify for assistance. So taxpayers subsidizing basic services for Wal-Mart workers pays dividends to the Walton kids.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
+1000 for this, agree a generous inheritance amount - say 100 times median family income. After that tax at 80%+
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
To be fair, no one on this thread has proposed raising taxes on self made millionaires. Inheritance tax is about taxing those that have done nothing to earn these obscene sums. Isn't that what America stands for, being self reliant and not a hereditary hierarchy?
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
The Waltons received the largest inheritance in the history of the world. They paid no tax on it because Sam Walton transferred 80% of his ownership to his kids before they turned 18. They are the wealthiest family in the world and have never worked. If there had been just one Walton kid, he or she would be by far the wealthiest person in the world.
Meanwhile, many Wal-Mart employees qualify for assistance. So taxpayers subsidizing basic services for Wal-Mart workers pays dividends to the Walton kids.
The fact that many Walmart employees qualify for assistance doesn't have anything to do with Walmart. They qualify for assistance because of their low income, not because they work at Walmart. We are not subsidizing basic services for Walmart workers, we are subsidizing basic services for low income people. Whether that's good or bad, you can't blame it on Walmart.
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
The Waltons received the largest inheritance in the history of the world. They paid no tax on it because Sam Walton transferred 80% of his ownership to his kids before they turned 18. They are the wealthiest family in the world and have never worked. If there had been just one Walton kid, he or she would be by far the wealthiest person in the world.
Meanwhile, many Wal-Mart employees qualify for assistance. So taxpayers subsidizing basic services for Wal-Mart workers pays dividends to the Walton kids.
The fact that many Walmart employees qualify for assistance doesn't have anything to do with Walmart. They qualify for assistance because of their low income, not because they work at Walmart. We are not subsidizing basic services for Walmart workers, we are subsidizing basic services for low income people. Whether that's good or bad, you can't blame it on Walmart.
I think the point that was trying to be made is that America is moving toward a more Oligarchic (https://en.wikipedia.org/wiki/Oligarchy) system, and this would become an inevitablility if the US inheritance tax is replealed. The Walton familty may or may not be a good example, but there are certainly plenty of others (the Koch Brothers (https://en.wikipedia.org/wiki/Koch_family), many of the billionaires Trumps cabinet, etc.) so let's not get caught up in a WalMart quibble.
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
The Waltons received the largest inheritance in the history of the world. They paid no tax on it because Sam Walton transferred 80% of his ownership to his kids before they turned 18. They are the wealthiest family in the world and have never worked. If there had been just one Walton kid, he or she would be by far the wealthiest person in the world.
Meanwhile, many Wal-Mart employees qualify for assistance. So taxpayers subsidizing basic services for Wal-Mart workers pays dividends to the Walton kids.
The fact that many Walmart employees qualify for assistance doesn't have anything to do with Walmart. They qualify for assistance because of their low income, not because they work at Walmart. We are not subsidizing basic services for Walmart workers, we are subsidizing basic services for low income people. Whether that's good or bad, you can't blame it on Walmart.
Too bad companies can't give raises.
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Too bad companies can't give raises.
Economics 101: why would they when they can find other people will to work at the same rate as the current employees? The whole reason that striking workers try to block access to a facility (i.e., make you cross the picket line) is to apply social pressure on others to prevent them from taking the jobs.
On the subject of estate taxes. I'd have to dig around for a bit, but I seem to recall that at least one of the founders of the United States was in favor of them for precisely the reason of preventing dynastic wealth from forming. Effectively they were in favor of very low to no taxes (if possible) on the living and very high taxes on the dead.
Then why don't all companies pay the minimum? At some point we all have responsibilities for our individual actions, even the Waltons. It might be a great business decision, you're still responsible for it, Economics 101 doesn't alleviate you from cause/effect. If you read the linked article, you'll see examples spanning thousands of years of rich people complaining about paying more in wages; followed by periods of adjustment.
Contrast the example of the Waltons to the american folk hero Henry Ford. He bucked your theory of and was rewarded when he paid higher wages. In modern days we have Costco vs. Walmart in the grocery wars, Costco pays more yet they also stay in business.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
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Bookmarking
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful balancing idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
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Too bad companies can't give raises.
Best quote ever
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
MOD EDIT: Rude. Forum rule #1, please.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
I think that's the point, take money from the rich and spend it on everyone. Long term accumulation of wealth will be minimized as it becomes harder to have generational wealth transfer.Warren BuffetT espoused this, as did Bill Gates, in their giving pledge.
If you think bureaucrats are bad you can bypass them by leaving it all to charity.
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Too bad companies can't give raises.
Best quote ever
+2
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
I think that's the point, take money from the rich and spend it on everyone. Long term accumulation of wealth will be minimized as it becomes harder to have generational wealth transfer.Warren BuffetT espoused this, as did Bill Gates, in their giving pledge.
If you think bureaucrats are bad you can bypass them by leaving it all to charity.
I'm sure you are correct. Most people would give to charity before turning over their money to the government. Charities are not all focused on inequality so the impact that would have is certainly debatable. How would you define rich? Ask most of the world and you would get a different answer.
A much better use of the governments efforts would be to ensure equal opportunities, and not try to force equal outcomes.
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Studies show that it takes 1 generation to build wealth and 2 generations to destroy it. Don't worry The Walton grandkids will more than likely spend it all.
Just look and see what happened to John Rockeffelar the richest man who ever lived. He died in 1937 worth $340 Billion dollars. Today that wealth is distributed through 200 people and worth $10 billion. The next generation will be even lower. People who attain massive unearned wealth have no idea how to value it and waste it just as fast as they received it.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
MOD EDIT: Rude. Forum rule #1, please.
I regurgitated the peaceful equalization line that they used to describe Latin America between 2002 and 2010 but what you would have realized if you read the article is that I applied it to a way the US could find a similar effect. Continuing to post in a thread about an article you've never read is about the definition of conservative ideology. Know nothing, factless slack jawed yokel thought.
[MOD EDIT: Forum rule #1.]
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To be fair, most millionaires are self made and the Waltons are the largest employers in the US
To be fair, no one on this thread has proposed raising taxes on self made millionaires. Inheritance tax is about taxing those that have done nothing to earn these obscene sums. Isn't that what America stands for, being self reliant and not a hereditary hierarchy?
I don't know. Maybe America stands for deferred gratification, saving for a rainy day, and providing security for one's family by forgoing current consumption in favor of saving and investing for a future day. If you start from that premise, then saving and passing along money to your offspring is a red-white-and-blue American value.
Creating high estate taxes causes a lot of work for trust attorneys and estate planners and a lot of business for life insurance salespeople. It's not obvious to me that that's better than the current system.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
'entitled' is not the point. The point of a stiff inheritance tax is to break up inherited wealth. Any government has to raise taxes somehow, and an inheritance tax is one way of doing it.
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much better use of the governments efforts would be to ensure equal opportunities, and not try to force equal outcomes.
Interesting idea, Accountant007. Scholarships, perhaps? A billion dollars invested in a tax free vehicle, would yield about $40 million a year. Assume each scholar gets $40k a year for tuition and living expenses, then a billion dollars in a scholarship fund would support a thousand scholars a year. Do such charities exist?
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
MOD EDIT: Rude. Forum rule #1, please.
I regurgitated the peaceful equalization line that they used to describe Latin America between 2002 and 2010 but what you would have realized if you read the article is that I applied it to a way the US could find a similar effect. Continuing to post in a thread about an article you've never read is about the definition of conservative ideology. Know nothing, factless slack jawed yokel thought.
Actually the thread is on inequality. I thought the thread might benefit from a discussion on ways to address it. However, if you would like to continue your book report on the article, by all means, carry on.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
Thinking like this bothers me.
I suppose you would think it is OK if you inherited $100K from a rich uncle, but somehow it's not OK that Sam Waltons (or similar) kids inherit a few million. They are going to spend their millions and trickle it down into the economy same as you are going to spend your $100K. And why do you think they contribute nothing to society, just because they inherited a big windfall?
This whole wealth inequality debate is silly. Take everything away from everyone and those same wealthy people will rise to wealth, while those at the bottom will stay at the bottom. Wealthy people and families get wealthy because of their behavior and you can't get the poor ahead by "giving" them money.
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It's difficult to make comparisons to prior eras, not even going into the measurement problems. Current states have totally different political and economic arrangements from prior states. We are explicitly engaged in redistributive actions. Older Empires basically are extractive institutions designed to solely support an upper elite.
So I don't see our wealth inequality building up over the course of centuries in the same way the High Middle Ages might, or the Romans, or the Sumerians.
I also don't see this as a major issue. People aren't going to have equal outcomes. They also aren't going to have equal opportunities. Trying to change this a fool's errand.
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
I guess I have no problem if someone chooses to leave their money to their kids or whomever else they decide. Not sure what you mean by hurts society. I think I would rather squander the money than leave it to some greedy bureaucrat to spend as he/she sees fit, or as you eloquently put it "peacefully rebalance our society".
Considering that the IMF, OECD and just about every intelligent study ever conducted shows inequality harms growth I think you do know what I mean by 'hurts society.' Or is that just 'fake news?' I just regurgitated the peaceful rebalancing(equalization) idea from the article but since it appears you didn't read it, I'm not sure I'll take your opinions seriously.
Oh, was there any original thoughts in what you posted or was it all a regurgitation of someone else's thoughts? Unfortunately, the solution that you champion does nothing for inequality. All it does is take money from individuals and put it in the hands of government officials who are likely to spend it in ways that ensures their re-election.
MOD EDIT: Rude. Forum rule #1, please.
I regurgitated the peaceful equalization line that they used to describe Latin America between 2002 and 2010 but what you would have realized if you read the article is that I applied it to a way the US could find a similar effect. Continuing to post in a thread about an article you've never read is about the definition of conservative ideology. Know nothing, factless slack jawed yokel thought.
Actually the thread is on inequality. I thought the thread might benefit from a discussion on ways to address it. However, if you would like to continue your book report on the article, by all means, carry on.
Actually this thread was started about a single essay which is linked in the OP. Just because you want to push your conservative viewpoint in a thread, without even spending 5-10 minutes of time reading the details of the reason behind the thread doesn't mean you can arbitrarily change the scope of the topic to your liking. Read the essay and comment on it like the rest of us or GTFA.
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::excited, happy clapping at bender's::
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
Actually this thread was started about a single essay which is linked in the OP. Just because you want to push your conservative viewpoint in a thread, without even spending 5-10 minutes of time reading the details of the reason behind the thread doesn't mean you can arbitrarily change the scope of the topic to your liking. Read the essay and comment on it like the rest of us or GTFA.
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I did read the article and it was a fairly interesting historical perspective. You proposition that we implement an 80-90% inheritance tax provoked my response. If you cannot tolerate a dissenting argument about that or have an adult conversation without reverting to "conservative, fake news, slack jawed yokel, GTFA" you should stick to a less galvanizing topic - maybe a thread on good recipes or pretty flowers. I don't believe there is anything overly conservative about opposing government taking the entire wealth of a family just because the kids did not "contribute to society". Maybe the mirror is a good place to look for someone pushing ideologies.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
'entitled' is not the point. The point of a stiff inheritance tax is to break up inherited wealth. Any government has to raise taxes somehow, and an inheritance tax is one way of doing it.
It IS the point. Why do you feel that breaking up inherited wealth is the right thing to do? What makes the government, or the beneficiaries of the government more deserving of that wealth than the heirs?
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So if we truly care about inequality, we need to target millionaires too. Even someone with 1 Million is part of the problem, as there are many with $100k who will look and see the rich millionaire as a huge inequality.
I don't care a single bit about inequality down to the single-digit of millions per household. (I also don't care at a higher figure, but I understand some do and that's OK.)
$1MM in assets for a 55-year old retiree couple is very meager existence. They don't need "targeting" and society does not benefit in aggregate from them being "targeted".
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I find 7 figure and up inheritances a big problem. How does it harm society if a few people (Elon Musk, Bezos, etc) change the world with their business/ vision and get insanely rich? It actually helps society. What hurts society are the Walton kids and the trust fund babies who contribute nothing to society and rent seek for a career. 80-90% inheritance tax on amounts over a reasonable sum (that number is up for debate) would go a large way towards peacefully rebalancing our society.
Actually this thread was started about a single essay which is linked in the OP. Just because you want to push your conservative viewpoint in a thread, without even spending 5-10 minutes of time reading the details of the reason behind the thread doesn't mean you can arbitrarily change the scope of the topic to your liking. Read the essay and comment on it like the rest of us or GTFA.
I did read the article and it was a fairly interesting historical perspective. You proposition that we implement an 80-90% inheritance tax provoked my response. If you cannot tolerate a dissenting argument about that or have an adult conversation without reverting to "conservative, fake news, slack jawed yokel, GTFA" you should stick to a less galvanizing topic - maybe a thread on good recipes or pretty flowers. I don't believe there is anything overly conservative about opposing government taking the entire wealth of a family just because the kids did not "contribute to society". Maybe the mirror is a good place to look for someone pushing ideologies.
Only one of us two has been reprimanded for intolerance in this thread and it's not me. Maybe you need to be the one to look in the mirror. Who said anything about taking the entire wealth of a family? I advocated for an untaxed amount (admitting that the amount should be debated) followed by 80-90% taxes. Maybe you need to learn some reading comprehension. I've always known that hypocrisy is the M.O. of the right.
MOD EDIT: Forum rule #1
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Only one of us two has been reprimanded for intolerance in this thread and it's not me. Maybe you need to be the one to look in the mirror. Who said anything about taking the entire wealth of a family? I advocated for an untaxed amount (admitting that the amount should be debated) followed by 80-90% taxes. Maybe you need to learn some reading comprehension. I've always known that hypocrisy is the M.O. of the right.
I think the moderator fell asleep at the switch.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
'entitled' is not the point. The point of a stiff inheritance tax is to break up inherited wealth. Any government has to raise taxes somehow, and an inheritance tax is one way of doing it.
It IS the point. Why do you feel that breaking up inherited wealth is the right thing to do? What makes the government, or the beneficiaries of the government more deserving of that wealth than the heirs?
It is not the government that should be the beneficiaries of the wealth but society. The wealthy can choose to donate their wealth to charity rather than facing a high inheritance tax. Charities need to be reformed as well, but that is another conversation.
The problem in the US right now is the tax system is setup to favor those with high concentrations of wealth (even those on this board with $1M). Why is the capital gains and dividend tax rate 15-20%? Most individuals with 1M+ are getting a significant portion of their income from these sources. Why does Warren Buffett pay a lower effective tax rate than his secretary?
The answer is the extremely wealthy are writing their own laws. It is cheaper for the Koch's of the world to give 1% of their wealth (tax deductible) to political campaigns that make sure they stay in a 20% tax bracket than to see their tax rate go to 25%.
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
Your graph leaves out effective tax rate by income level because it's not quite as convincing?
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So if we truly care about inequality, we need to target millionaires too. Even someone with 1 Million is part of the problem, as there are many with $100k who will look and see the rich millionaire as a huge inequality.
I don't care a single bit about inequality down to the single-digit of millions per household. (I also don't care at a higher figure, but I understand some do and that's OK.)
$1MM in assets for a 55-year old retiree couple is very meager existence. They don't need "targeting" and society does not benefit in aggregate from them being "targeted".
$1 million is a lot of money compared to most households.
http://www.shnugi.com/networth-percentile-calculator/?min_age=18&max_age=90&networth=1000000
This calculator said the median net worth for a household headed up by someone at age 55, is less than $100,000. $1MM was over the 80th percentile.
I mean, if the argument is "we need a lot more money," then that household with $1mm needs to pay more tax. I certainly don't care, they can go back to work for another 10-15 years.
Also, since this is a FIRE forum, our concept of wealth should include people who have retired early, not just people who have a lot of money. That's slack that can be targeted, if the nation really desperately needs money.
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Income Inequity is a problem to me mostly because US politicians are easily influenced by campaign contributers and lobbyists. Policy is being passed to benefit the elite class and widen the margin of inequality. At this point I'm not sure you can even argue against this. The conditions being put in place have made it harder for people to achieve upward mobility imo.
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
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People aren't going to have equal outcomes. They also aren't going to have equal opportunities. Trying to change this a fool's errand.
Society can make spending choices that encourage equal opportunities.
Low/no tuition fees for post-secondary education mean more students can continue their educations.
Universal health care means people are not tied to their jobs because they fear losing work-related health insurance.
Good parental leaves mean women and men have more options for work/family life.
And so on. These are all social choices.
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I also don't get how some can be OK with the concept of FIRE, but have concerns about inequality at some arbitrarily chosen 'extreme' wealth level. For example, if one has $1M, they are pointing the finger at those that have 10M or 50M as being part of the problem. In reality if inequality is such a huge problem, we'll never solve it by simply taking money from the ultra rich. It will have to come all the way down to include many members of this board who are working towards FI.
I don't think extreme wealth is arbitrary.
The concept of FIRE is to make just enough to live the life you want and then retire. Many on these forums advocate giving back anything above that number. We haven't really put a number on "extreme wealth" in this thread but most of the debate is whether or not any number is high enough that it should be taxed at a steeply progressive rate. When I think of extreme wealth I'm thinking of numbers many multiples of what a family could live off of without touching the principle.
I would also argue that as an individual you should start giving away your wealth well before you reach that point, but that's another debate.
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People aren't going to have equal outcomes. They also aren't going to have equal opportunities. Trying to change this a fool's errand.
Society can make spending choices that encourage equal opportunities.
Low/no tuition fees for post-secondary education mean more students can continue their educations.
Universal health care means people are not tied to their jobs because they fear losing work-related health insurance.
Good parental leaves mean women and men have more options for work/family life.
And so on. These are all social choices.
None of those create equal opportunity. Just to go with the third, since it's extremely obvious, some families have 2 parents, and some families do not. You cannot adjust for that, unless you decided to off my Dad somehow. Perhaps through a war or a bubonic plague, which is what the original article suggests is the ONLY way to create equality.
I don't care if the average person goes to college, they still aren't going to have the opportunities of wealthy kids unless you prevent their parents from helping them in other ways (connections, job advice, additional rent money, whatever).
EDIT: If you want to spend money on it, fine, but I'm not interested wasting money on an equality dream. Expanding coverage to the remaining 20 million uninsured is probably going to cost another $200 billion per year. Trying to correct for the fact that everyone has crappy plans with high deductibles is going to cost several hundred billion more. Bernie Sanders free college is $75 billion. If you want to increase all the education spending in the US to $18,000 per pupil, that's another $300+ billion.
Now you're talking another $1.2 trillion in spending, which is a 36% increase in taxes, and we're still not going to be equal, so someone is going to come back in 10 years and want even more. I haven't even touched retirement, or pre-K programs, for instance.
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Does anyone have opinions on very high taxation of luxury items?
Defining luxury would certainly be difficult, but personally I would be ok with anything that is a non-necessity. Which will still be difficult to define. Food is a necessity, but what about steak. Transportation is a necessity, but Escalades are not. Homes...where to begin.
Maybe we could apply the high tax rate to all purchases and then give exemptions rather than looking at it the other way around? Then product lobbyists would fight for that exemption. Lots of room for corruption. Tax luxury product manufacturers directly?
Just some thoughts, feel free to butcher them.
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
It is more about effective tax rate. The top 20% of Americans control 85% of the money. A rational person would assume they pay 85% of the taxes. The tax code favors those who are living off of capital gains and dividends. The CEO who makes 200k/yr with $3M in stock options, a person making 5x the median income off dividends, and real estate developers. W2 wage earners are all getting the short end of the stick, even those who make a ton of money. A surgeon or law firm partner who is making 600k is paying ~50% of it in taxes; the CEO from earlier is paying ~20%.
It is cheaper for the Koch's of the world to give 1% of their wealth (tax deductible) to political campaigns that make sure they stay in a 20% tax bracket than to see their tax rate go to 25%.
This quote doesn't make much sense - please provide some reasoning behind it. Many are passionate about this subject, but I'm finding that some statements are not backed up by facts.
This is just common sense. If I have $10B, which is $400M/yr without touching the principal, it makes more sense for me to donate a tax deductible portion of that to make sure politicians who favor your current situation (i.e. conservative <-- don't want change or only slow change by definition) are elected to office.
The average Senate campaign costs 10M. There are 33 senators being elected in 2018. All winning senators will spend ~300-350M combined in 2018. The combined wealth of the top 0.01% (families with 20M+ in assets) in the US is 9T. 0.008% of their wealth could fund the entire 2018 senate election (winners and losers).
That is for a national senate race. When you look on the local level at city councils, mayors, state senate etc. it gets even crazier. How much do you think a few real estate guys have to donate to a city council race in Atlanta Georgia to sway an election their way?
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Can you be more specific about the conditions that make it harder to achieve upward mobility? I thought education was the major enabler of upward mobility.
What policies are being passed to benefit the elite class and widen inequality?
Google education cuts.
My state , PA, has had hundreds of millions in cuts to education just in the last 5 yrs
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
It is more about effective tax rate. The top 20% of Americans control 85% of the money. A rational person would assume they pay 85% of the taxes. The tax code favors those who are living off of capital gains and dividends.
Looking at the chart, a rational person would conclude that their instincts were roughly correct. That the top 20% of people (assuming returns filed is a close approximation for people; if anything it's biased in a way that "helps" this argument) who, per your figure, control 85% of the wealth, are paying pretty close to 85% of the taxes.
The top 16% of returns above account for 79.4% of the taxes paid. If you break the next section proportionally, take 18.4% of the next bucket, representing 4% of the returns and 2.75% of the taxes paid. That gives you a 20% of returns and a conservative 82.1% of income (edit: tax paid).
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Does anyone have opinions on very high taxation of luxury items?
Defining luxury would certainly be difficult, but personally I would be ok with anything that is a non-necessity. Which will still be difficult to define. Food is a necessity, but what about steak. Transportation is a necessity, but Escalades are not. Homes...where to begin.
Maybe we could apply the high tax rate to all purchases and then give exemptions rather than looking at it the other way around? Then product lobbyists would fight for that exemption. Lots of room for corruption. Tax luxury product manufacturers directly?
Just some thoughts, feel free to butcher them.
The U.S. already tried this. They put something like a 10% tax on luxury boats (can't remember how they defined 'luxury'), so of course the purchase of luxury boats dropped off a cliff, and there were tons of layoffs of bluecollar workers.
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
It is more about effective tax rate. The top 20% of Americans control 85% of the money. A rational person would assume they pay 85% of the taxes. The tax code favors those who are living off of capital gains and dividends.
Looking at the chart, a rational person would conclude that their instincts were roughly correct. That the top 20% of people (assuming returns filed is a close approximation for people; if anything it's biased in a way that "helps" this argument) who, per your figure, control 85% of the wealth, are paying pretty close to 85% of the taxes.
The top 16% of returns above account for 79.4% of the taxes paid. If you break the next section proportionally, take 18.4% of the next bucket, representing 4% of the returns and 2.75% of the taxes paid. That gives you a 20% of returns and a conservative 82.1% of income.
I was just about to post the same thing, then I saw your comment.
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
It is more about effective tax rate. The top 20% of Americans control 85% of the money. A rational person would assume they pay 85% of the taxes. The tax code favors those who are living off of capital gains and dividends.
Looking at the chart, a rational person would conclude that their instincts were roughly correct. That the top 20% of people (assuming returns filed is a close approximation for people; if anything it's biased in a way that "helps" this argument) who, per your figure, control 85% of the wealth, are paying pretty close to 85% of the taxes.
The top 16% of returns above account for 79.4% of the taxes paid. If you break the next section proportionally, take 18.4% of the next bucket, representing 4% of the returns and 2.75% of the taxes paid. That gives you a 20% of returns and a conservative 82.1% of income.
I should have expounded on the graphic. I stated the top 20% hold 85% of the wealth as support that maybe they should pay 85% of the taxes and the graph wasn't as lopsided as it appeared at first. The problem is federal income tax and most state income tax is the only progressive tax we have. Once you consider the regressive taxes: payroll, property, sales tax, and some state taxes you get a different perspective:
(http://ctj.org/images/2014/wp2014c3hq.jpg)
http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.WVKjS8_ytOQ
In a progressive tax system you would expect the top earners to pay a much higher percentage of their total income than those at the bottom. In reality, the US is closer to a 30% flat tax across the board.
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While I don't think inequality is ideal, I haven't seen a way for government to improve it without causing worse consequences. Some inequality is going to be a fact of life. For me, it's more important that the poorest has an acceptable standard of living, which I think the US has.
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Federal income taxes are progressive and other specific features of the federal code like IRA's and HSA's, but other types of federal taxation are much lower than they have been historically. The capital gains tax, for example, is a fraction of what it was 50 years ago. This is a big reason why there is more stock market and real estate speculation than ever before and why once someone becomes wealthy, their wealth spirals upward. An explicit stock and real estate transaction tax would help reduce reckless stock trading and real estate speculation.
Meanwhile, state taxation schemes tend to be regressive. The state sales taxes are obviously regressive, and some much more regressive than others. For example, most states do not levy sales taxes on food, but some do. For example, "low tax" Tennessee taxes groceries at 9.5~%, which is a tax on that state's poor that the poor elsewhere do not bear.
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
I don't think the percentile in which you fall is relevant, we only use the 1% figure to put things in perspective. Maybe we should include dollar amounts in this discussion as many of us seem to have different versions of "extreme wealth" but we're arguing like we're talking about the same thing. Personally I don't think living a comfortable life in the US off of the interest of your investments and not a whole lot more to spare qualifies for extreme wealth, not even close. The ability to buy multiple luxury homes, vehicles and the like-maybe. The ability to spend millions on campaign donations and actually see a return due to your candidates policies, that's probably extreme wealth.
Current estate tax is 40% on anything over $5.5 million/individual. Personally I think it could go a bit lower than 5.5 and also it should be progressive after that. Beyond that I could make up some numbers but I wouldn't be able to defend them. Maybe someone else can make some suggestions?
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
I'm not sure why you argue for comparing an American's wealth to say that of a citizen of a 3rd world country (or the rest of the globe), this is completely irrelevant. Yes, there is a lot of global inequality between rich and poor nations, but that is well beyond the scope of the problems we are discussing (which is inequality within a single developed economy (assumed by me to be the US)). Maybe you can start another thread if you want to debate inequality between countries or in emerging countries or whatever.
I'm not saying that it's not an interesting point, just that it is a strawman when used to defend the inequality within the US.
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I think ctj.org is a partisan organization (they are a progressive lobbying group). I think the information presented may be skewed to help push for the changes they are lobbying for.
CBPP is non-partisan - This is a pretty good article with their take on tax rates for low income:
http://www.cbpp.org/research/policymakers-often-overstate-marginal-tax-rates-for-lower-income-workers-and-gloss-over-0 (http://www.cbpp.org/research/policymakers-often-overstate-marginal-tax-rates-for-lower-income-workers-and-gloss-over-0)
The lowest income group often has negative federal tax rates, which is ignored by the ctj article. The ctj image shows the average income of $14k for the lowest 20%. At this income level, families are eligible for numerous assistance programs that would more than negate anything paid in taxes. Some examples include EITC, SNAP, Savers Credit, ACA (Obmacare)/Medicaid/CHIP and CTC (child tax credit).
Payroll taxes on $14k is about $850, which isn't much compared to the benefits listed above. State and local taxes may also be reduced depending on the location.
Yeah, I agree. It is hard to find a good metric of the total tax burden for various income tax brackets, but I think we can agree that looking at only federal income tax data is the wrong way of looking at it. Sales tax, locality flat tax, and payroll taxes are all regressive and by definition affect those making less money and spending a greater percentage of their income than savers and high income workers. Focusing on the bottom 20% or even the bottom 40% is probably the wrong place to look anyway for this exercise and is really a strawman as what can we really tax from this group making less than 30k?
Let's look at the data that hits a little closer to home for the posters here. The 80th percentile (75k) and 90th percentile (115k), why are those two groups paying approximately the same tax rate as the top 1% making 1.5M?
The 90th percentile is paying a 7% payroll tax on 100% of their income while the top 1% have payroll tax on 9% of their income. Sprinkle in local tax exemption of on dividends, 20% tax rates on capital gains and dividends and that unfair high federal income tax rate on the wealthy moves to parity with those making 15x to 20x less.
Like I said before. It is really W2 wage earners who are getting the short end of the stick with the current tax code. At any rate, the current push to provide tax "relief" for those making over 250K is a bit disingenuous. The people in this country who are really taxed the hardest are those W2 wage earners making 250k - 500k range. They make just enough money that 401k deductions don't help much on an absolute basis, AMT reduces deductions, and they are well in the top tax brackets with no relief of taking income from tax advantaged sources. The top 1% like to nestle in with this group when commiserating over their tax burden but in reality, the tax code is far different for the two groups.
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
I'm not sure why you argue for comparing an American's wealth to say that of a citizen of a 3rd world country (or the rest of the globe), this is completely irrelevant. Yes, there is a lot of global inequality between rich and poor nations, but that is well beyond the scope of the problems we are discussing (which is inequality within a single developed economy (assumed by me to be the US)). Maybe you can start another thread if you want to debate inequality between countries or in emerging countries or whatever.
I'm not saying that it's not an interesting point, just that it is a strawman when used to defend the inequality within the US.
I understand your point. My point is that if my NW is 500K or 1M, why do I care about the guy that has a NW of 100MM? And if I am truly concerned about the poor, am I doing something about it rather than pontificate about how the guy with 100MM should have his wealth redistributed. I often wonder what people's motivations are in the inequality debate - concern for the poor, mad that the neighbor inherited a couple million, or just plain irritated that there are people that make substantially more than them.
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Then why don't all companies pay the minimum? At some point we all have responsibilities for our individual actions, even the Waltons. It might be a great business decision, you're still responsible for it, Economics 101 doesn't alleviate you from cause/effect. If you read the linked article, you'll see examples spanning thousands of years of rich people complaining about paying more in wages; followed by periods of adjustment.
In general companies try and pay the least for the required skills that they can get away with. The labor market is subject to supply and demand along with the rest of the free market. Basic neoclassical economic theory expects that employers are going to seek to minimize their costs, of which labor is one part.
Contrast the example of the Waltons to the american folk hero Henry Ford. He bucked your theory of and was rewarded when he paid higher wages. In modern days we have Costco vs. Walmart in the grocery wars, Costco pays more yet they also stay in business.
Look up Taylorisim or Scientific Management when you get a chance since it's the management practice that Ford subscribed to. Part of it was reducing labor costs due to turnover. Realistically you didn't need to have many skills to work for Ford on the assembly line. Anyone that could follow simple directions could do it. However, by paying higher than the $2.25/day wage of the time he was able to avoid employee turnover which in turn reduced downtime and improved line efficiency. This makes sense because even now employers want to reduce employee turnover since it can be very expensive to replace employees - cheaper to pay them just enough that they will not leave. Also, Ford didn't exactly pay his wage employees $5/day. He paid them $2.50/day with the remaining $2.50/day being a bonus that was contingent upon such things as learning English, taking classes to be "Americanized" (if an immigrant), and would only be given to women if they were unmarried.
I understand the economic theorems, I also understand some business owners are nice and some are not. The labour market is not entirely subject to supply/demand; the entire point of labour laws is to prevent companies from taking advantage of the supply demand curve. In each society it is up to the populace to determine the restrictions placed on the supply; pretty much everyone has realized that companies can't be trusted, they're self serving as you point out, whereas society needs to look out for everyone.
When you apply those theorems in the past without restrictions, what's happened to the society? Allowing free rein to economic theorems is a recipe for disaster, every economist knows it. By restricting the actions of corporations you can have a functional society, that's the whole reason we have economists in power today; to determine the right level of restrictions to maintain a healthy society.
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
I'm not sure why you argue for comparing an American's wealth to say that of a citizen of a 3rd world country (or the rest of the globe), this is completely irrelevant. Yes, there is a lot of global inequality between rich and poor nations, but that is well beyond the scope of the problems we are discussing (which is inequality within a single developed economy (assumed by me to be the US)). Maybe you can start another thread if you want to debate inequality between countries or in emerging countries or whatever.
I'm not saying that it's not an interesting point, just that it is a strawman when used to defend the inequality within the US.
I understand your point. My point is that if my NW is 500K or 1M, why do I care about the guy that has a NW of 100MM? And if I am truly concerned about the poor, am I doing something about it rather than pontificate about how the guy with 100MM should have his wealth redistributed. I often wonder what people's motivations are in the inequality debate - concern for the poor, mad that the neighbor inherited a couple million, or just plain irritated that there are people that make substantially more than them.
The motivation is typically that the US has been at it's 'peak' of growth and comparative strength when inequality was low. Also please compare the 10 most equal countries in the world to the10 least and let me know where you'd rather live. I suspect you already knew this but, as typical of the right,you muddy the water when faced with an answer that doesn't suit your world view.
[MOD NOTE: please avoid the sweeping generalizations.]
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The motivation is typically that the US has been at it's 'peak' of growth and comparative strength when inequality was low. Also please compare the 10 most equal countries in the world to the10 least and let me know where you'd rather live. I suspect you already knew this but, as typical of the right, you muddy the water when faced with an answer that doesn't suit your world view.
The most unequal countries by Gini index (https://www.theguardian.com/inequality/datablog/2017/apr/26/inequality-index-where-are-the-worlds-most-unequal-countries) (Central African Republic, Botswana, Haiti, Namibia, South Africa) are not a problem so much because of the inequality, but because the absolute low level of GDP per capita (where they rank 186, 72, 169, 100, and 88 out of 186 countries listed (https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita)). You are literally looking at the poorest country in the world and suggesting it sucks to live there because of the inequality. I'm sorry, but I don't buy it.
The 5 most equal countries by Gini index (Ukraine, Slovenia, Norway, Slovak Republic, Czech Republic) rank 113, 37, 6, 39, and 36 out of 186 in GDP per capita. Hey, those places where I might prefer to live are a lot richer than the poor countries, but I'm sure the primary reason I'd like to live there because of the income equality not the relative richness. Once again, not buying it.
The correlation between "where I want to live" and "rich country" is much, much stronger than "equal country".
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Also, most people have no clue what the wealth distribution really looks like in the the US.
Here's a good 6 minute YouTube primer (https://www.youtube.com/watch?v=slTF_XXoKAQ) graphically showing what 'ideal', perceived, and actual wealth distribution in the US looks like. Pretty shocking.
Politicians thrive on keeping the 99% uninformed, bickering, and emotional. And now there's this new invention of slapping the label 'fake news' on inconvenient truths. But the fact people perceive (or decieve themselves) like the US has some healthy middle class '1950s' wealth distribution goes to show that people are not informed or just can't conceive of what the concentration of the top 1% wealth looks like.
If you look at the top 1% of global wealth, you are looking at someone with a net worth of around 775K (includes home equity). That would include a sizeable number of us in this forum. Top 1% of wage earners globally earn in the neighborhood of 32K. I would guess that would be a good many of us here. So if the people at the top 1% are a problem, then we all better take a good look in the mirror, instead of pointing to people even higher up the wealth ladder (extreme wealth, as we like to call it). Just carving out our wealthy nation to determine who is the top 1% doesn't show the full picture.
I'm not sure why you argue for comparing an American's wealth to say that of a citizen of a 3rd world country (or the rest of the globe), this is completely irrelevant. Yes, there is a lot of global inequality between rich and poor nations, but that is well beyond the scope of the problems we are discussing (which is inequality within a single developed economy (assumed by me to be the US)). Maybe you can start another thread if you want to debate inequality between countries or in emerging countries or whatever.
I'm not saying that it's not an interesting point, just that it is a strawman when used to defend the inequality within the US.
I understand your point. My point is that if my NW is 500K or 1M, why do I care about the guy that has a NW of 100MM? And if I am truly concerned about the poor, am I doing something about it rather than pontificate about how the guy with 100MM should have his wealth redistributed. I often wonder what people's motivations are in the inequality debate - concern for the poor, mad that the neighbor inherited a couple million, or just plain irritated that there are people that make substantially more than them.
The motivation is typically that the US has been at it's 'peak' of growth and comparative strength when inequality was low. Also please compare the 10 most equal countries in the world to the10 least and let me know where you'd rather live. I suspect you already knew this but, as typical of the right, you muddy the water when faced with an answer that doesn't suit your world view.
Could you be a little more condescending?
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Could you be a little more condescending?
He seems to be trying his best.
(edited for slightly less snark)
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When you apply those theorems in the past without restrictions, what's happened to the society? Allowing free rein to economic theorems is a recipe for disaster, every economist knows it. By restricting the actions of corporations you can have a functional society, that's the whole reason we have economists in power today; to determine the right level of restrictions to maintain a healthy society.
I don't think this will come as a surprise to you, but those of us that study economics don't agree on the right level of restrictions. ;)
Yeah, I'm so confused. There was Laissez Faire (capitalism leading to monopoly) and Locke arguing for as little constraint as possible at some point, and then communism and socialism on the other side. But economic theorems have become much more nuanced. For instance, what about Hayek and Austrian Economics? Many economic theorems have become evolved models, so it is hard to say that following an economic model is a recipe for disaster. But I still think that the Fed holds the reins on this horse and corporations do their best given their circumstances and playing field.
It is also quite possible, in America today, if people complained enough and voted with their dollars - that the majority could still affect the minority. If we don't like how WalMart pays workers, we'll take our business elsewhere or refuse to 'enjoy' cheap stuff until they pay their workers better. But that is such a fantasy. For every one or two people that can afford to reduce their consumption at WalMart out of 'principle', 10+ more people are finding themselves shopping there out of necessity.
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Then why don't all companies pay the minimum? At some point we all have responsibilities for our individual actions, even the Waltons. It might be a great business decision, you're still responsible for it, Economics 101 doesn't alleviate you from cause/effect. If you read the linked article, you'll see examples spanning thousands of years of rich people complaining about paying more in wages; followed by periods of adjustment.
Contrast the example of the Waltons to the american folk hero Henry Ford. He bucked your theory of and was rewarded when he paid higher wages. In modern days we have Costco vs. Walmart in the grocery wars, Costco pays more yet they also stay in business.
Plenty of companies pay better than Walmart. If that is so good for business, why is Walmart so much more successful than they are? Because that money has to come from somewhere, and all grocery stores have very thin margins. That somewhere is the customers. Many customers shop for the cheapest prices they can get, those prices are at Walmart. A big part of that is that they pay their employees as little as possible.
Whole Foods is a great example of a company that pays well, has very knowledgeable staff, encourages people to eat healthy, and is very pleasant to shop in. Hell it was always on the list of best companies to work for. It should work perfectly! Except you have to pay for all of those things somehow, which means you have to charge more for comparable items.
Walmart's crazy success is proof that their strategy works. If you think you can do better than they can by paying employees more, I'd encourage you to try.
I should have expounded on the graphic. I stated the top 20% hold 85% of the wealth as support that maybe they should pay 85% of the taxes and the graph wasn't as lopsided as it appeared at first. The problem is federal income tax and most state income tax is the only progressive tax we have. Once you consider the regressive taxes: payroll, property, sales tax, and some state taxes you get a different perspective:
(http://ctj.org/images/2014/wp2014c3hq.jpg)
http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.WVKjS8_ytOQ
In a progressive tax system you would expect the top earners to pay a much higher percentage of their total income than those at the bottom. In reality, the US is closer to a 30% flat tax across the board.
Does this graphic take into account the personal exemption and standard deduction? Once you take those into account, the person making $45500 pays more like 10%. The person making $14000 pays 3%. Granted that's Federal taxes, but that's a significant difference for someone in that tax bracket, and when multiplied out by a few million people adds up significantly.
Then if you look at what is actually paid, the bottom 45% of people pay 0 federal income tax. Again, not an insignificant number. Granted, there are sales taxes and car registration and things like that which they do pay, and which are significant for them, but the 0 income tax is a pretty big thing that your graphic doesn't show.
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The motivation is typically that the US has been at it's 'peak' of growth and comparative strength when inequality was low. Also please compare the 10 most equal countries in the world to the10 least and let me know where you'd rather live. I suspect you already knew this but, as typical of the right, you muddy the water when faced with an answer that doesn't suit your world view.
The most unequal countries by Gini index (https://www.theguardian.com/inequality/datablog/2017/apr/26/inequality-index-where-are-the-worlds-most-unequal-countries) (Central African Republic, Botswana, Haiti, Namibia, South Africa) are not a problem so much because of the inequality, but because the absolute low level of GDP per capita (where they rank 186, 72, 169, 100, and 88 out of 186 countries listed (https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita)). You are literally looking at the poorest country in the world and suggesting it sucks to live there because of the inequality. I'm sorry, but I don't buy it.
The 5 most equal countries by Gini index (Ukraine, Slovenia, Norway, Slovak Republic, Czech Republic) rank 113, 37, 6, 39, and 36 out of 186 in GDP per capita. Hey, those places where I might prefer to live are a lot richer than the poor countries, but I'm sure the primary reason I'd like to live there because of the income equality not the relative richness. Once again, not buying it.
The correlation between "where I want to live" and "rich country" is much, much stronger than "equal country".
Can't get your link to open. Please let me see your info but please make sure that it's after taxes and transfers as that's the only relevant equality measure for a discussion about economic equality in the 'real world' pretty sure that Ukraine isn't there. Also your assertion that the countries on the more equal side are just better because they're richer does not demonstrate anything other than a subjective guess.
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I should have expounded on the graphic. I stated the top 20% hold 85% of the wealth as support that maybe they should pay 85% of the taxes and the graph wasn't as lopsided as it appeared at first. The problem is federal income tax and most state income tax is the only progressive tax we have. Once you consider the regressive taxes: payroll, property, sales tax, and some state taxes you get a different perspective:
(http://ctj.org/images/2014/wp2014c3hq.jpg)
http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.WVKjS8_ytOQ
In a progressive tax system you would expect the top earners to pay a much higher percentage of their total income than those at the bottom. In reality, the US is closer to a 30% flat tax across the board.
Does this graphic take into account the personal exemption and standard deduction? Once you take those into account, the person making $45500 pays more like 10%. The person making $14000 pays 3%. Granted that's Federal taxes, but that's a significant difference for someone in that tax bracket, and when multiplied out by a few million people adds up significantly.
Then if you look at what is actually paid, the bottom 45% of people pay 0 federal income tax. Again, not an insignificant number. Granted, there are sales taxes and car registration and things like that which they do pay, and which are significant for them, but the 0 income tax is a pretty big thing that your graphic doesn't show.
Yeah, I looked into it a bit and it does take exemptions into account. What you have to remember is that person making 45k pays 7.65% FICA taxes on 100% of their income; 4-8% in state taxes; and 0-2% local taxes; That brings them up to 22 - 27% right there; add a 6% sales tax to that if they are spending 50% of the money make and you are at 30%.
Play around with this calculator for your local area:
https://smartasset.com/taxes/income-taxes#VW0hm6Av0V
What you really need to pay attention too though and what actually affects the people who consider themselves middle class (most of them are not) on this forum is this:
Focusing on the bottom 20% or even the bottom 40% is probably the wrong place to look anyway for this exercise and is really a strawman as what can we really tax from this group making less than 30k?
Let's look at the data that hits a little closer to home for the posters here. The 80th percentile (75k) and 90th percentile (115k), why are those two groups paying approximately the same tax rate as the top 1% making 1.5M?
The 90th percentile is paying a 7% payroll tax on 100% of their income while the top 1% have payroll tax on 9% of their income. Sprinkle in local tax exemption of on dividends, 20% tax rates on capital gains and dividends and that unfair high federal income tax rate on the wealthy moves to parity with those making 15x to 20x less.
Like I said before. It is really W2 wage earners who are getting the short end of the stick with the current tax code. At any rate, the current push to provide tax "relief" for those making over 250K is a bit disingenuous. The people in this country who are really taxed the hardest are those W2 wage earners making 250k - 500k range. They make just enough money that 401k deductions don't help much on an absolute basis, AMT reduces deductions, and they are well in the top tax brackets with no relief of taking income from tax advantaged sources. The top 1% like to nestle in with this group when commiserating over their tax burden but in reality, the tax code is far different for the two groups.
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When you apply those theorems in the past without restrictions, what's happened to the society? Allowing free rein to economic theorems is a recipe for disaster, every economist knows it. By restricting the actions of corporations you can have a functional society, that's the whole reason we have economists in power today; to determine the right level of restrictions to maintain a healthy society.
I don't think this will come as a surprise to you, but those of us that study economics don't agree on the right level of restrictions. ;)
Obviously, or we wouldn't need to study economics ;)
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Then why don't all companies pay the minimum? At some point we all have responsibilities for our individual actions, even the Waltons. It might be a great business decision, you're still responsible for it, Economics 101 doesn't alleviate you from cause/effect. If you read the linked article, you'll see examples spanning thousands of years of rich people complaining about paying more in wages; followed by periods of adjustment.
Contrast the example of the Waltons to the american folk hero Henry Ford. He bucked your theory of and was rewarded when he paid higher wages. In modern days we have Costco vs. Walmart in the grocery wars, Costco pays more yet they also stay in business.
Plenty of companies pay better than Walmart. If that is so good for business, why is Walmart so much more successful than they are? Because that money has to come from somewhere, and all grocery stores have very thin margins. That somewhere is the customers. Many customers shop for the cheapest prices they can get, those prices are at Walmart. A big part of that is that they pay their employees as little as possible.
Whole Foods is a great example of a company that pays well, has very knowledgeable staff, encourages people to eat healthy, and is very pleasant to shop in. Hell it was always on the list of best companies to work for. It should work perfectly! Except you have to pay for all of those things somehow, which means you have to charge more for comparable items.
Walmart's crazy success is proof that their strategy works. If you think you can do better than they can by paying employees more, I'd encourage you to try.
I should have expounded on the graphic. I stated the top 20% hold 85% of the wealth as support that maybe they should pay 85% of the taxes and the graph wasn't as lopsided as it appeared at first. The problem is federal income tax and most state income tax is the only progressive tax we have. Once you consider the regressive taxes: payroll, property, sales tax, and some state taxes you get a different perspective:
Where I live, Walmart workers are paid higher wages and don't rely on food stamps. Even Walmart, your shining example, has alternate business practices that are successful. So Walmart has tried exactly what you suggested I try and succeeded; in other countries.
Even within the USA there are different wages depending on the state. How is it that Walmart can be successful, paying higher wages in some places than others? California pays $10.50, Washington pays $11.00 and on the other end Alabama is at $7.25, 30% less. How is it Walmart, with a 30% difference on minimum wage depending on the state, is also found everywhere? If minimum wage was the sole difference, wouldn't the 30% difference in minimum wages offset their razor thin margins of 5-10%?
Please note, I recognize their business success, they make a lot of money, no arguments.
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Can't get your link to open.
I don't know. They're just web links and should work on any browser.
Please let me see your info but please make sure that it's after taxes and transfers as that's the only relevant equality measure for a discussion about economic equality in the 'real world' pretty sure that Ukraine isn't there. Also your assertion that the countries on the more equal side are just better because they're richer does not demonstrate anything other than a subjective guess.
Take a look at any given list of countries. Mark in red those countries where you subjectively believe you wouldn't want to live. Mark in green those countries where you subjectively think you would want to live.
Then, sort those countries by Gini index (before or after transfers) or any other measure of inequality and take a look at the pattern of red and green. Then sort that same list of countries by per capita GDP and look at the pattern of red and green.
My belief is that most people would have a stronger correlation between "green" and "rich" than "green" and "equal". When I did that exercise, the lowest per capita GDP country that I was willing to live in was Belize, then a gap to Costa Rica, then a long gap to the Czech Republic. Looking at a measure of income inequality (https://en.wikipedia.org/wiki/List_of_countries_by_income_equality), Belize and Costa Rica are quite unequal and Czech Republic is quite equal. (It's also worth noting that my experiences in Belize and Costa Rica are no doubt colored by living on the unequal side of those countries, further reinforcing my unsurprising opinion of "it's better to live rich". A condo in downtown Jaco is not representative of average or median Tico living...)
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Yeah, I looked into it a bit and it does take exemptions into account. What you have to remember is that person making 45k pays 7.65% FICA taxes on 100% of their income; 4-8% in state taxes; and 0-2% local taxes; That brings them up to 22 - 27% right there; add a 6% sales tax to that if they are spending 50% of the money make and you are at 30%.
Play around with this calculator for your local area:
https://smartasset.com/taxes/income-taxes#VW0hm6Av0V
Good point, I always forget about FICA.
What you really need to pay attention too though and what actually affects the people who consider themselves middle class (most of them are not) on this forum is this:
Focusing on the bottom 20% or even the bottom 40% is probably the wrong place to look anyway for this exercise and is really a strawman as what can we really tax from this group making less than 30k?
Let's look at the data that hits a little closer to home for the posters here. The 80th percentile (75k) and 90th percentile (115k), why are those two groups paying approximately the same tax rate as the top 1% making 1.5M?
The 90th percentile is paying a 7% payroll tax on 100% of their income while the top 1% have payroll tax on 9% of their income. Sprinkle in local tax exemption of on dividends, 20% tax rates on capital gains and dividends and that unfair high federal income tax rate on the wealthy moves to parity with those making 15x to 20x less.
Like I said before. It is really W2 wage earners who are getting the short end of the stick with the current tax code. At any rate, the current push to provide tax "relief" for those making over 250K is a bit disingenuous. The people in this country who are really taxed the hardest are those W2 wage earners making 250k - 500k range. They make just enough money that 401k deductions don't help much on an absolute basis, AMT reduces deductions, and they are well in the top tax brackets with no relief of taking income from tax advantaged sources. The top 1% like to nestle in with this group when commiserating over their tax burden but in reality, the tax code is far different for the two groups.
I get it, if reducing inequality through taxation is the goal, that makes a lot of sense. That's not everyone's idea of what taxes should be used for.
As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing. The fact that capital gains can be structured so flexibly makes it even more difficult to tax without just harming poor investors. Rich people can move their money to other countries, set it aside for 20 years without realizing any capital gains, and all sorts of strategies poorer investors can't do.
Where I live, Walmart workers are paid higher wages and don't rely on food stamps. Even Walmart, your shining example, has alternate business practices that are successful. So Walmart has tried exactly what you suggested I try and succeeded; in other countries.
Even within the USA there are different wages depending on the state. How is it that Walmart can be successful, paying higher wages in some places than others? California pays $10.50, Washington pays $11.00 and on the other end Alabama is at $7.25, 30% less. How is it Walmart, with a 30% difference on minimum wage depending on the state, is also found everywhere? If minimum wage was the sole difference, wouldn't the 30% difference in minimum wages offset their razor thin margins of 5-10%?
Please note, I recognize their business success, they make a lot of money, no arguments.
Yeah and in those places are all of the prices the same? I very much doubt it. Even if the prices are the same, those places may have demographics that buy more of the higher margin items, making up the difference. I'm not sure, maybe those locations are just less profitable, or maybe they hire 30% less workers to do the same jobs. I do know that my girlfriend lived in LA for two months this year, and she was shocked at the grocery prices. I'm not sure if she shopped at Walmart, but in general everything was more expensive than it is here in Texas.
Sure they could pay $10.50 in Alabama, but then another grocery store nearby will open up who pays $7.25 and undercuts all of their prices, eventually running them out of business because people want to shop at the place that charges less. There are all sorts of other factors like their negotiating power and quantity discounts, but all things being equal a store that pays more for employees has to charge more.
For what it's worth, Walmart does provide a pretty solid career path for people who take it seriously and want to be promoted up the ranks. You can get all sorts of jobs above minimum wage with a little initiative working there. Even the low on the totem pole jobs get raises over time. Half of their workers are full time.
I think it's very odd that we've come to expect a cashier job that can be learned in a week to pay for someone's entire budget and their healthcare. It's a starter job for someone with no skills.
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Very well put, ooeei!
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As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing.
I know, right! Double taxation is so unfair. Why should I pay a sales/property tax when I've already paid income taxes on that money!?
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As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing.
I know, right! Double taxation is so unfair. Why should I pay a sales/property tax when I've already paid income taxes on that money!?
Federally you don't pay income taxes then sales/property. But Federally, businesses pay taxes, then you pay taxes on dividends and capital gains based on money already taxed. Sure some things get taxed double federally, but it's not as common.
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I get it, if reducing inequality through taxation is the goal, that makes a lot of sense. That's not everyone's idea of what taxes should be used for.
As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing. The fact that capital gains can be structured so flexibly makes it even more difficult to tax without just harming poor investors. Rich people can move their money to other countries, set it aside for 20 years without realizing any capital gains, and all sorts of strategies poorer investors can't do.
I would agree anyone who is conservative leaning doesn't think taxes should be used to reduce inequality. The basic premise of the article that started the thread is, throughout history, the only way inequality has been reduced is through violence or plague. I would like to think the US is forward looking enough to engineer social change in a way that doesn't require a significant reduction in population.
Inequality has been growing since 1980.
(http://www.cbpp.org/sites/default/files/styles/downsample150to92/public/atoms/files/9-30-16pov-f1.png?itok=cQ2zxJsO)
http://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
This is what tax rates have been doing:
(http://bornglocal.com/blog/wp-content/uploads/2014/02/evolution-us-tax-rates-since-1960.png)
Back in the conservative glory days of the 1950s - 1980s, the country accomplished that with high taxes on the top 0.1% and union membership was strong. If you are opposed to raising taxes, what mechanism does society have?
Maybe it is a progressive liberal snowflake idea to think there must be a way to accomplish this and go back to a time when all income brackets enjoyed the gains of the economy at a similar rate. I am not saying people in the 1% didn't work harder, are smarter, got luckier, or were born well and don't deserve their place.
Surely, even far right conservatives, see a problem when the bottom 20% has seen no a change in real income for almost 40 years, is making 20% more money, and the top 5% are making 75% more. To put it yearly; the annual raise for the bottom 20% is 0, the median is 0.5%, and the top 5% are getting a 2% annual raise.
Raising taxes on the top 1% doesn't necessarily mean the government is the one taking the windfall either. If you are a business owner being taxed obscenely, maybe you start giving to a tax deductible charity or pay your employees more to reduce your tax burden.
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As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing.
I know, right! Double taxation is so unfair. Why should I pay a sales/property tax when I've already paid income taxes on that money!?
Federally you don't pay income taxes then sales/property. But Federally, businesses pay taxes, then you pay taxes on dividends and capital gains based on money already taxed. Sure some things get taxed double federally, but it's not as common.
I'm not sure why that distinction matters. I don't think I should have to pay taxes twice on the same money. I don't care who's taking the money, just that they're double dipping.
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Surely, even far right conservatives, see a problem when the bottom 20% has seen no a change in real income for almost 40 years, is making 20% more money, and the top 5% are making 75% more. To put it yearly; the annual raise for the bottom 20% is 0, the median is 0.5%, and the top 5% are getting a 2% annual raise.
Why should we expect that everyone should see a sustained increase in real income? It's a fair question to ask why the top 5% saw their real income rise by a CAGR of 1.4% (not 2%), but for me, the default assumption is that real wages should remain constant over a long period of time, under the theory that wages represent a claim check on someone else's labor. (You work job X, get money, which you use to pay person Y doing job Z to provide you some good/service, who takes the money and pays person O to do job P to provide them some good/service, etc, etc.)
You earn claim checks on a certain number of hours of labor by your labor (representing your real wages). The idea that everyone should earn more claim checks on other's labor is unsustainable in my opinion.
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Surely, even far right conservatives, see a problem when the bottom 20% has seen no a change in real income for almost 40 years, is making 20% more money, and the top 5% are making 75% more. To put it yearly; the annual raise for the bottom 20% is 0, the median is 0.5%, and the top 5% are getting a 2% annual raise.
Why should we expect that everyone should see a sustained increase in real income? It's a fair question to ask why the top 5% saw their real income rise by a CAGR of 1.4% (not 2%), but for me, the default assumption is that real wages should remain constant over a long period of time, under the theory that wages represent a claim check on someone else's labor. (You work job X, get money, which you use to pay person Y doing job Z to provide you some good/service, who takes the money and pays person O to do job P to provide them some good/service, etc, etc.)
You earn claim checks on a certain number of hours of labor by your labor (representing your real wages). The idea that everyone should earn more claim checks on other's labor is unsustainable in my opinion.
The increase in real income would come from the expansion of the economy. If the GDP of the country increases by 50%, you would expect the pay of the bottom quartile to increase by 50% and the income of the top 1% to increase by 50% as well. If the top 1% get paid 50x what the bottom quartile is paid then one hour of work by the 1% individual buys 50 hours of work from that unskilled bottom quartile fellow. This is what we saw happen from 1950 to the mid 80s.
From the mid 80's till today, we saw the top 1% expand their pay to make 150x what the guy in the bottom quartile made.
for me, the default assumption is that real wages should remain constant over a long period of time, under the theory that wages represent a claim check on someone else's labor. (You work job X, get money, which you use to pay person Y doing job Z to provide you some good/service, who takes the money and pays person O to do job P to provide them some good/service, etc, etc.)
You earn claim checks on a certain number of hours of labor by your labor (representing your real wages). The idea that everyone should earn more claim checks on other's labor is unsustainable in my opinion.
You are making my point for me. Why is the 1% wage earner making 150 claim checks on the bottom quartile worker today when he was making 50 claim checks every year from 1950 to 1980?
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The increase in real income would come from the expansion of the economy. If the GDP of the country increases by 50%, you would expect the pay of the bottom quartile to increase by 50% and the income of the top 1% to increase by 50% as well.
That is an increase in nominal income, which is not (necessarily) an increase in real income. I read your post as clearly referencing real income in the conversation and my comments were confined to real (inflation-adjusted) income.
You are making my point for me. Why is the 1% wage earner making 150 claim checks on the bottom quartile worker today when he was making 50 claim checks every year from 1950 to 1980?
Yes. I agree and acknowledged that point when I said:
It's a fair question to ask why the top 5% saw their real income rise by a CAGR of 1.4% (not 2%)
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Can't get your link to open.
I don't know. They're just web links and should work on any browser.
Please let me see your info but please make sure that it's after taxes and transfers as that's the only relevant equality measure for a discussion about economic equality in the 'real world' pretty sure that Ukraine isn't there. Also your assertion that the countries on the more equal side are just better because they're richer does not demonstrate anything other than a subjective guess.
Take a look at any given list of countries. Mark in red those countries where you subjectively believe you wouldn't want to live. Mark in green those countries where you subjectively think you would want to live.
Then, sort those countries by Gini index (before or after transfers) or any other measure of inequality and take a look at the pattern of red and green. Then sort that same list of countries by per capita GDP and look at the pattern of red and green.
My belief is that most people would have a stronger correlation between "green" and "rich" than "green" and "equal". When I did that exercise, the lowest per capita GDP country that I was willing to live in was Belize, then a gap to Costa Rica, then a long gap to the Czech Republic. Looking at a measure of income inequality (https://en.wikipedia.org/wiki/List_of_countries_by_income_equality), Belize and Costa Rica are quite unequal and Czech Republic is quite equal. (It's also worth noting that my experiences in Belize and Costa Rica are no doubt colored by living on the unequal side of those countries, further reinforcing my unsurprising opinion of "it's better to live rich". A condo in downtown Jaco is not representative of average or median Tico living...)
QATAR, BRUNEI and KUWAIT are in the top 6 in the world in GDP per capita. Your theory holds no water when subjected to 10 seconds of research.
http://www.businessinsider.com/the-richest-countries-in-the-world-2017-3
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
Me Me Me! Call on me! I know the answer. Since money is finite and part of society is getting rapidly richer and the other isn't, we use taxation to make things more equal in an attempt to improve the overall quality of life and encourage growth (as demonstrated in studies by the IMF and OECD.)
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The increase in real income would come from the expansion of the economy. If the GDP of the country increases by 50%, you would expect the pay of the bottom quartile to increase by 50% and the income of the top 1% to increase by 50% as well.
That is an increase in nominal income, which is not (necessarily) an increase in real income. I read your post as clearly referencing real income in the conversation and my comments were confined to real (inflation-adjusted) income.
You are making my point for me. Why is the 1% wage earner making 150 claim checks on the bottom quartile worker today when he was making 50 claim checks every year from 1950 to 1980?
Yes. I agree and acknowledged that point when I said:
It's a fair question to ask why the top 5% saw their real income rise by a CAGR of 1.4% (not 2%)
So we agree it seems. Now I'm asking, by what means can society prevent income inequality from expanding further? I don't dispute a CEO should make 50x what the median worker makes like in 1980. This number has expanded to 400x and is still growing. The CEO now makes in an hour what the median worker (not lowest paid) makes in two months.
The article at the beginning of the thread said it would take a population reduction or event of major wealth destruction; is it impossible to reduce this discrepancy by any other means, or do we continue until music stops?
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QATAR, BRUNEI and KUWAIT are in the top 6 in the world in GDP per capita. Your theory holds no water when subjected to 10 seconds of research.
http://www.businessinsider.com/the-richest-countries-in-the-world-2017-3
I'm glad you were able to refute my argument within your attention span.
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The increase in real income would come from the expansion of the economy. If the GDP of the country increases by 50%, you would expect the pay of the bottom quartile to increase by 50% and the income of the top 1% to increase by 50% as well.
That is an increase in nominal income, which is not (necessarily) an increase in real income. I read your post as clearly referencing real income in the conversation and my comments were confined to real (inflation-adjusted) income.
You are making my point for me. Why is the 1% wage earner making 150 claim checks on the bottom quartile worker today when he was making 50 claim checks every year from 1950 to 1980?
Yes. I agree and acknowledged that point when I said:
It's a fair question to ask why the top 5% saw their real income rise by a CAGR of 1.4% (not 2%)
So we agree it seems. Now I'm asking, by what means can society prevent income inequality from expanding further? I don't dispute a CEO should make 50x what the median worker makes like in 1980. This number has expanded to 400x and is still growing. The CEO now makes in an hour what the median worker (not lowest paid) makes in two months.
The article at the beginning of the thread said it would take a population reduction or event of major wealth destruction; is it impossible to reduce this discrepancy by any other means, or do we continue until music stops?
The conservatives will drive us to a French Revolution style event here and will be kneeling at the guillotine still blaming it all on the Welfare queens.
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Conservatives keep the French Revolution out of American schools because it makes ours look small-time and simplistic.
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What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
$32,000.00+ 26%
$48,000.00+ 30%
$64,000.00+ 34%
$80,000.00+ 38%
$88,000.00+ 43%
$112,000.00+ 47%
$128,000.00+ 50%
$144,000.00+ 53%
$160,000.00+ 56%
$176,000.00+ 59%
$208,000.00+ 62%
$256,000.00+ 65%
$304,000.00+ 69%
$352,000.00+ 72%
$400,000.00+ 75%
$480,000.00+ 78%
$560,000.00+ 81%
$640,000.00+ 84%
$720,000.00+ 87%
$800,000.00+ 89%
$1,200,000.00+ 90%
$1,600,000.00+ 91%
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
No deductions other than Charity.
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I am not sure many folks would strive to earn high incomes if that much was going to be taken away. Why go through the stress?
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I am not sure many folks would strive to earn high incomes if that much was going to be taken away. Why go through the stress?
Maybe drop those rates by 20% across the board and cap the max at about 50%. Tax capital gains as ordinary income after a certain amount. Punitively tax estates over a threshold. I think lower corporate taxes would be good for bringing jobs and foreign earned money back to the US. Make those changes and we'd have a lot of healthy economic growth.
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That sounds a little more feasible, but the other side of the coin is to put a major overhaul into how things work in the government sector to majorly reduce waste. Though I am no way an expert, and rather more towards the novice side, I always though some kind of tax credit for companies based on hiring employees sounded like a good idea.
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I disagree that the tax system in setup to favor the rich in this country.
(http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/03/FT_15.03.23_taxesInd.png)
Source http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/)
What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
Me Me Me! Call on me! I know the answer. Since money is finite and part of society is getting rapidly richer and the other isn't, we use taxation to make things more equal in an attempt to improve the overall quality of life and encourage growth (as demonstrated in studies by the IMF and OECD.)
I agree - the solution the post article and others have come up with. The safety net programs I've mentioned before, like EITC, Medicaid, SNAP, etc, are there to help those who are not valuable enough to society to be paid a decent wage. I think these programs or something similar are necessary, and expect these programs to continue/expand in the future. The new studies are showing some proof to the theory that you can't simply raise minimum wage too far past the value of the work being done.
The fundamental issue is that unskilled labor is not as valuable as it once was, and skilled labor has become much more valuable at the same time. This is what creates the inequality. McDonalds currently requires 375,000 employees to staff to keep their restaurants staffed. In response to increased pressure to pay their unskilled labor more, McDonalds has invested in new technology to automate the ordering process.
https://www.forbes.com/sites/realspin/2016/11/29/thanks-to-fight-for-15-minimum-wage-mcdonalds-unveils-job-replacing-self-service-kiosks-nationwide/#5d935ee94fbc (https://www.forbes.com/sites/realspin/2016/11/29/thanks-to-fight-for-15-minimum-wage-mcdonalds-unveils-job-replacing-self-service-kiosks-nationwide/#5d935ee94fbc)
A small number of highly skilled people made a lot of money developing this technology, which may effectively eliminate a hundred thousand jobs or more. Talk about widening the inequality chasm there. The 'fight for 15' is making things worse instead of better.
To me it's clear that paying more for unskilled labor than it's worth will accelerate adoption of automation. This will worsen longer term prospects for unskilled workers. The better solution is actually the current one, with taxpayer funded programs to help those who can't earn a living being paid market rates. We may need to expand such programs.
No one is arguing causation of inequality. All evidence suggests it's bad for growth and quality of life. One side is suggesting possible solutions and the other side just wants to let the rich keep taking more and more. One path may get us back to how America was a booming engine for the world. The other may get us to a peasant uprising like it has throughout history. To argue that economic inequality is not bad for a society is to not have learned from history.
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To me it's clear that paying more for unskilled labor than it's worth will accelerate adoption of automation. This will worsen longer term prospects for unskilled workers. The better solution is actually the current one, with taxpayer funded programs to help those who can't earn a living being paid market rates. We may need to expand such programs.
No one is arguing causation of inequality. All evidence suggests it's bad for growth and quality of life. One side is suggesting possible solutions and the other side just wants to let the rich keep taking more and more. One path may get us back to how America was a booming engine for the world. The other may get us to a peasant uprising like it has throughout history. To argue that economic inequality is not bad for a society is to not have learned from history.
I'm not sure what 'side' I'm on, but I suggested a solution where we expand existing programs. Your comment seems filled with anger and lacks substance. It's not clear what solution you're advocating for.
Not attacking you. If you believe in expanding safety net programs and you agree that money is finite then you agree that taxes on those not receiving benefits would have to go up. Most conservatives support cutting safety net programs. You appear to not be conservative. My comments were meant to be directed at those who prefer the status quo or would prefer giving less to low income people.
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Probably the best bang for the buck is making the military more efficient.
The military is by far the federal government's largest expense paid out of general revenue (medicare, social security, etc., have their own funding sources). At the local level, police and fire are the largest budget items for every city in the country. If national and local security can be improved with technology then staff levels could be slashed.
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At the local level, police and fire are the largest budget items for every city in the country.
For my city (Cambridge, MA), education is significantly larger than public safety.
FY18 figures:
Public Safety: $134MM
Education:$183MM
I would imagine that many (possibly most) cities spend more on education than public safety.
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Spot checking some other local towns, I didn't find any where police+fire exceeded education.
Lexington, MA (legendarily good school district) spends $102MM on education and $13MM on police + fire.
New York City spends $23BB on education and $7BB on fire + police.
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I don't know how it works in Massachusetts but in Ohio the school boards are completely separate entities from municipalities (or counties) and their borders often do not align with their namesake cities. There is no physical or administrative tie between the City of Cincinnati and Cincinnati Public Schools, for example. Schools are usually funded 100% by property taxes in Ohio, meaning as much as half of a homeowner's property tax payment goes to the local school district, with the remainder split between the city, county, and special funds like zoos, museums, parks, etc.
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It is cheaper for the Koch's of the world to give 1% of their wealth (tax deductible) to political campaigns that make sure they stay in a 20% tax bracket than to see their tax rate go to 25%.
This quote doesn't make much sense - please provide some reasoning behind it. Many are passionate about this subject, but I'm finding that some statements are not backed up by facts.
This is just common sense. If I have $10B, which is $400M/yr without touching the principal, it makes more sense for me to donate a tax deductible portion of that to make sure politicians who favor your current situation (i.e. conservative <-- don't want change or only slow change by definition) are elected to office.
The average Senate campaign costs 10M. There are 33 senators being elected in 2018. All winning senators will spend ~300-350M combined in 2018. The combined wealth of the top 0.01% (families with 20M+ in assets) in the US is 9T. 0.008% of their wealth could fund the entire 2018 senate election (winners and losers).
That is for a national senate race. When you look on the local level at city councils, mayors, state senate etc. it gets even crazier. How much do you think a few real estate guys have to donate to a city council race in Atlanta Georgia to sway an election their way?
Yeah, except you can't write off political contributions on your taxes. They're not tax deductible.
Freakonomics Radio did a two part interview with one of the Koch brothers recently. Worth a listen.
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The fundamental issue is that unskilled labor is not as valuable as it once was, and skilled labor has become much more valuable at the same time. This is what creates the inequality. McDonalds currently requires 375,000 employees to staff to keep their restaurants staffed. In response to increased pressure to pay their unskilled labor more, McDonalds has invested in new technology to automate the ordering process.
I seriously doubt that McDonald's wouldn't have developed those kiosks without the "fight for 15." Automation is inevitable, especially with something like "ordering fast food." That's just the way things are headed. Technological revolution and whatnot. I don't think the fight for higher minimum wage had anything to do with it. (Except maybe, MAYBE, accelerating the rollout slightly.)
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The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
$32,000.00+ 26%
$48,000.00+ 30%
$64,000.00+ 34%
$80,000.00+ 38%
$88,000.00+ 43%
$112,000.00+ 47%
$128,000.00+ 50%
$144,000.00+ 53%
$160,000.00+ 56%
$176,000.00+ 59%
$208,000.00+ 62%
$256,000.00+ 65%
$304,000.00+ 69%
$352,000.00+ 72%
$400,000.00+ 75%
$480,000.00+ 78%
$560,000.00+ 81%
$640,000.00+ 84%
$720,000.00+ 87%
$800,000.00+ 89%
$1,200,000.00+ 90%
$1,600,000.00+ 91%
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
No deductions other than Charity.
That could work. Unfortunately, the legislature would be unable to resist monkeying around with the system. That's what happened last time the tax code got overhauled (under Reagan), and over time new exemptions and deductions got added, until you end up with the mess of a tax code we have now. That's not to say it shouldn't be overhauled - it should. Just don't fool yourself into thinking that the "new, streamlined, fairer" system will stay that way for very long.
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What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
$32,000.00+ 26%
$48,000.00+ 30%
$64,000.00+ 34%
$80,000.00+ 38%
$88,000.00+ 43%
$112,000.00+ 47%
$128,000.00+ 50%
$144,000.00+ 53%
$160,000.00+ 56%
$176,000.00+ 59%
$208,000.00+ 62%
$256,000.00+ 65%
$304,000.00+ 69%
$352,000.00+ 72%
$400,000.00+ 75%
$480,000.00+ 78%
$560,000.00+ 81%
$640,000.00+ 84%
$720,000.00+ 87%
$800,000.00+ 89%
$1,200,000.00+ 90%
$1,600,000.00+ 91%
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
No deductions other than Charity.
I'm having a hard time seeing how this helps the bottom 60% at all. Right now according to the graph they are paying 5.6% + 7.65% for a total of 13.25%. And the LOWEST bracket you show is 20%, on up to 30% for that same bottom 60% of taxpayers. With no deductions. Does that include getting rid of EITC and exemptions and childcare credits and all the other things that allow many of the lower wage earners to actually get more back than they put in? And on top of that you want a 5% federal sales tax on everything they spend?
Or the middle class, like me, who paid an effective rate last year of 11%, plus the 7.65% FICA. My new rate would by approximately 33%, plus another several thousand "wealth" tax, plus a new 5% federal sales tax. Holy shit.
And at the top end of the scale, 91% tax? Really? No killing of incentive there. Confiscatory tax rates like that are in my opinion, morally wrong.
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What I get out of your graph is that 62.3% of the families pay only 5.6% of the taxes paid.
Clearly those families are not over taxed. So we have 37.7% of the families paying 94.4%
of the taxes paid.
We need to find a way to get 62.3% of the population earning a higher wage.
It is sickening to me that, "Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report."
It should not be that difficult to support yourself in America. I don't know the answer, especially after the study out of Seattle, estimates the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.f732d5f56094
The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
$32,000.00+ 26%
$48,000.00+ 30%
$64,000.00+ 34%
$80,000.00+ 38%
$88,000.00+ 43%
$112,000.00+ 47%
$128,000.00+ 50%
$144,000.00+ 53%
$160,000.00+ 56%
$176,000.00+ 59%
$208,000.00+ 62%
$256,000.00+ 65%
$304,000.00+ 69%
$352,000.00+ 72%
$400,000.00+ 75%
$480,000.00+ 78%
$560,000.00+ 81%
$640,000.00+ 84%
$720,000.00+ 87%
$800,000.00+ 89%
$1,200,000.00+ 90%
$1,600,000.00+ 91%
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
No deductions other than Charity.
I'm having a hard time seeing how this helps the bottom 60% at all. Right now according to the graph they are paying 5.6% + 7.65% for a total of 13.25%. And the LOWEST bracket you show is 20%, on up to 30% for that same bottom 60% of taxpayers. With no deductions. Does that include getting rid of EITC and exemptions and childcare credits and all the other things that allow many of the lower wage earners to actually get more back than they put in? And on top of that you want a 5% federal sales tax on everything they spend?
Or the middle class, like me, who paid an effective rate last year of 11%, plus the 7.65% FICA. My new rate would by approximately 33%, plus another several thousand "wealth" tax, plus a new 5% federal sales tax. Holy shit.
And at the top end of the scale, 91% tax? Really? No killing of incentive there. Confiscatory tax rates like that are in my opinion, morally wrong.
Lower each of those income tax rates by 20%, cap the highest at 50% and redo your analysis please.
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The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
If I adjust for inflation people from $0.00 to $133,643 would pay 20%. That puts 90% of the population in the 20% bracket. It also means we are collecting taxes from the bottom 50% of people that at this time do not pay *federal taxes* at the rate of 20%. (that could do a lot for the deficit)
Your welcome to cry me a river about how they pay 7.42% in payroll taxes, but I don't see why the shouldn't pay into their retirement program.
Oh! I see you want to drop that.
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
I'm with on 0% corporate
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
I don't want federal income and a sales tax.
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
It looks like you don't want anyone to acquire wealth.
My wife came from a communist country, they changed the money on a regular basis, you could only exchange a certain amount, any extra money was worthless.
Shall we limit the exchange to $25,000, $50,000. /s/
What's your number?
No deductions other than Charity.
Edit to fix quotes
-
The bottom 60% make only 21.3% of the income in the country. In addition, they are paying 7.65% FICA taxes on all their income and have to spend nearly everything they make, paying sales tax on the majority of that income.
Here is how you reduce income inequality:
Federal - 1960 Single Tax Brackets (Adjust for inflation and change yearly)
Tax Bracket Tax Rate
$0.00+ 20%
$16,000.00+ 22%
$32,000.00+ 26%
$48,000.00+ 30%
$64,000.00+ 34%
$80,000.00+ 38%
$88,000.00+ 43%
$112,000.00+ 47%
$128,000.00+ 50%
$144,000.00+ 53%
$160,000.00+ 56%
$176,000.00+ 59%
$208,000.00+ 62%
$256,000.00+ 65%
$304,000.00+ 69%
$352,000.00+ 72%
$400,000.00+ 75%
$480,000.00+ 78%
$560,000.00+ 81%
$640,000.00+ 84%
$720,000.00+ 87%
$800,000.00+ 89%
$1,200,000.00+ 90%
$1,600,000.00+ 91%
Use those tax brackets as total allowed tax- Cut them by however much percent (maybe 10% on the federal level) and let the states decide how they want to add to the above maximum brackets.
Corporate taxes: 0%
Sales Tax: 5% Federal <-- It must all go to maintain infrastructure
FICA taxes: 0%
Dividends + Capital Gains: Up to the Median Income Level (55k) 0%; after that it is taxed as gross income.
Wealth: 0.5%/yr of cash and investments (just like other property)
No deductions other than Charity.
I'm having a hard time seeing how this helps the bottom 60% at all. Right now according to the graph they are paying 5.6% + 7.65% for a total of 13.25%. And the LOWEST bracket you show is 20%, on up to 30% for that same bottom 60% of taxpayers. With no deductions. Does that include getting rid of EITC and exemptions and childcare credits and all the other things that allow many of the lower wage earners to actually get more back than they put in? And on top of that you want a 5% federal sales tax on everything they spend?
Or the middle class, like me, who paid an effective rate last year of 11%, plus the 7.65% FICA. My new rate would by approximately 33%, plus another several thousand "wealth" tax, plus a new 5% federal sales tax. Holy shit.
And at the top end of the scale, 91% tax? Really? No killing of incentive there. Confiscatory tax rates like that are in my opinion, morally wrong.
Those were the approximate actual tax rates (in today's dollars) between 1949 and 1963. In 1963 to 1966 they dropped the tax rates from 91% to 70% for the top end and 20% to 14% for the bottom end; they stayed here until 1981.
https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets/
Note the two charts showing wage growth for both the top 5%, median, and bottom 20%; and actual tax rates:
(http://www.cbpp.org/sites/default/files/styles/downsample150to92/public/atoms/files/9-30-16pov-f1.png?itok=cQ2zxJsO)
http://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
(http://bornglocal.com/blog/wp-content/uploads/2014/02/evolution-us-tax-rates-since-1960.png)
1950-1980 saw the creation of the national highway system, we put a man on the moon, and improved our waterways. This is what our national debt did:
(https://www.economicshelp.org/blog/wp-content/uploads/2010/09/US-National-Debt-GDP-05-10.gif)
So those punitive tax codes lead to an infrastructure renaissance, national debt reduction, strong economic growth, and an economy where the rich and poor shared in the economic gain of the country at a roughly equal rate.
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^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
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I would agree anyone who is conservative leaning doesn't think taxes should be used to reduce inequality. The basic premise of the article that started the thread is, throughout history, the only way inequality has been reduced is through violence or plague. I would like to think the US is forward looking enough to engineer social change in a way that doesn't require a significant reduction in population.
Inequality has been growing since 1980.
(http://www.cbpp.org/sites/default/files/styles/downsample150to92/public/atoms/files/9-30-16pov-f1.png?itok=cQ2zxJsO)
http://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
This is what tax rates have been doing:
(http://bornglocal.com/blog/wp-content/uploads/2014/02/evolution-us-tax-rates-since-1960.png)
Back in the conservative glory days of the 1950s - 1980s, the country accomplished that with high taxes on the top 0.1% and union membership was strong. If you are opposed to raising taxes, what mechanism does society have?
Maybe it is a progressive liberal snowflake idea to think there must be a way to accomplish this and go back to a time when all income brackets enjoyed the gains of the economy at a similar rate. I am not saying people in the 1% didn't work harder, are smarter, got luckier, or were born well and don't deserve their place.
Surely, even far right conservatives, see a problem when the bottom 20% has seen no a change in real income for almost 40 years, is making 20% more money, and the top 5% are making 75% more. To put it yearly; the annual raise for the bottom 20% is 0, the median is 0.5%, and the top 5% are getting a 2% annual raise.
Raising taxes on the top 1% doesn't necessarily mean the government is the one taking the windfall either. If you are a business owner being taxed obscenely, maybe you start giving to a tax deductible charity or pay your employees more to reduce your tax burden.
Yeah that all worked great in the 50's, in a completely different world. Globalization, tech, and automation have very significantly changed how businesses work since then. You now have companies like Facebook with a market cap of $446Bn that only has 17,000 employees. That's over $26,000,000 per employee. If you divide again by the P/E ratio of 38 that's $690,402 in earnings per employee. It makes sense these employees would be paid more than employees in the 50's, as there was nothing like this back then. Facebook doesn't even hire people in the bottom 20%, and probably not the bottom 40%, because they have no need for them.
Skills now are even more valuable than they were in the 50's compared to manual labor and putting in time. You can build a machine to do assembly line work cheaper than employing a person. So far you can't build a machine to design the assembly line. A single mechanic or two now can maintain the machinery to replace 10+ manual labor employees. It absolutely makes sense that the mechanic's salary would go up compared to 50 years ago, and the manual labor employees would stay the same. Someone who figures out a new way to optimize the algorithm for Facebook could benefit the company on the scale of millions of dollars. There was no comparable job to that in the 50's, and to expect that someone who works the checkout counter at Walgreens to see a pay increase similar to skilled labor is absurd.
Your plan to move away from corporate taxes, but toward personal taxes is tricky as well. What's to stop all of the high earners from simply moving to another country? The ultra high earners you're trying to target are going to avoid the vast majority of these taxes, and you'll end up taxing the lower earners more. Sure, you'll be able to tax the crap out of the doctor or lawyer making $400k/year living in Chicago, but the CEO who has $50 million in stock options is going to be living in Ireland and have a "summer home" in New York. Either that or he'll structure it so his salary isn't income, and structure his investments to avoid the wealth tax. Granted, even with the wealth tax he's looking at paying $250,000 of his $50 million (granted, every year) vs the $45 million he'd pay if it were income. He'll also have no problem buying all of the high end properties with his extra $45 million he saves and renting them out to people whose jobs require them to live here.
The other issue I have with your plan is the implication that tax rates somehow had a causal effect on our economic growth in the 50's and onward. Just because it didn't hurt in a post-war industrial boom doesn't mean it will work in a global tech based market. There are a lot of countries out there that are great to live in that don't tax nearly as aggressively as you line out here, and moving to them is easier than ever. It's entirely possible to be in a high level position in a company and communicate almost exclusively digitally, and occasionally with air travel.
As far as bringing back unions, that sounds like a great way to push even more manufacturing jobs out of the US. Unionizing the auto plants and increasing wages through collective bargaining? Time to move to the plant to Mexico. The US worker in 2017 isn't only competing with other US workers. They're competing with workers worldwide. Companies are willing to pay a premium for many jobs, but once the cost gets too high they can and will move elsewhere.
-
^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
So if president Trump announces he has a plan that increases taxes to build more infrastructure and pay off debt would support it? Or would you assume it's going to his friends in construction and the rich would just find a loophole.
-
Yeah that all worked great in the 50's, in a completely different world. Globalization, tech, and automation have very significantly changed how businesses work since then. You now have companies like Facebook with a market cap of $446Bn that only has 17,000 employees. That's over $26,000,000 per employee. If you divide again by the P/E ratio of 38 that's $690,402 in earnings per employee. It makes sense these employees would be paid more than employees in the 50's, as there was nothing like this back then. Facebook doesn't even hire people in the bottom 20%, and probably not the bottom 40%, because they have no need for them.
Skills now are even more valuable than they were in the 50's compared to manual labor and putting in time. You can build a machine to do assembly line work cheaper than employing a person. So far you can't build a machine to design the assembly line. A single mechanic or two now can maintain the machinery to replace 10+ manual labor employees. It absolutely makes sense that the mechanic's salary would go up compared to 50 years ago, and the manual labor employees would stay the same. Someone who figures out a new way to optimize the algorithm for Facebook could benefit the company on the scale of millions of dollars. There was no comparable job to that in the 50's, and to expect that someone who works the checkout counter at Walgreens to see a pay increase similar to skilled labor is absurd.
Your plan to move away from corporate taxes, but toward personal taxes is tricky as well. What's to stop all of the high earners from simply moving to another country? The ultra high earners you're trying to target are going to avoid the vast majority of these taxes, and you'll end up taxing the lower earners more. Sure, you'll be able to tax the crap out of the doctor or lawyer making $400k/year living in Chicago, but the CEO who has $50 million in stock options is going to be living in Ireland and have a "summer home" in New York. Either that or he'll structure it so his salary isn't income, and structure his investments to avoid the wealth tax. Granted, even with the wealth tax he's looking at paying $250,000 of his $50 million (granted, every year) vs the $45 million he'd pay if it were income. He'll also have no problem buying all of the high end properties with his extra $45 million he saves and renting them out to people whose jobs require them to live here.
The other issue I have with your plan is the implication that tax rates somehow had a causal effect on our economic growth in the 50's and onward. Just because it didn't hurt in a post-war industrial boom doesn't mean it will work in a global tech based market. There are a lot of countries out there that are great to live in that don't tax nearly as aggressively as you line out here, and moving to them is easier than ever. It's entirely possible to be in a high level position in a company and communicate almost exclusively digitally, and occasionally with air travel.
As far as bringing back unions, that sounds like a great way to push even more manufacturing jobs out of the US. Unionizing the auto plants and increasing wages through collective bargaining? Time to move to the plant to Mexico. The US worker in 2017 isn't only competing with other US workers. They're competing with workers worldwide. Companies are willing to pay a premium for many jobs, but once the cost gets too high they can and will move elsewhere.
I agree with a lot of what you are saying about automation and I completely agree that unskilled labor is not going to be as highly compensated as skilled labor. We can't just say here is the 1960 tax bracket and leave it; any tax reform would have to close loopholes of course. Maybe tax everything at the corporate level; weight the revenue of the company versus the employees pay and tax at the revenue level for goods and services sold in the country. That would solve the whole moving headquarters, and foreign workers (or execs living in a tax haven) would be taxed for goods sold in the US.
I am not a tax expert by any means, but was presenting the 1960 tax bracket as an example of how high taxes did not stifle growth between 1950 and 1980. We have a huge debt burden, and growing inequality in the country. Saying there is no way to fix it is dooming us to relive a very dark history. The last 37 years of trickle down economics is not working for the bottom 90%. They are making about the same to less pay in real terms as they were in 1980. That is 9 out of 10 people have not participated in the economic boom associated with the computer age. Meanwhile the top 10% are only doing 36% better, the top 1% are doing 2.3x better, the 0.1% are doing ~4x better, and the top 0.01 are doing 5.3x better. If trickle down was working, you would expect at least some trickle down to the bottom 80-90% of Americans.
The break into the top 20% is 111k and top 10% is 153k for household income. There are a bunch of people on this board who are between these two numbers and aren't participating in the country's economic growth! That is what is so astounding about the argument that everything is ok; they really have no clue it is affecting them as well. It is easy to see the fast food worker or janitor and say yeah automation is hitting those guys hard, that's where the gap comes from. The gap in economic growth is hitting lawyers, engineers, tradesmen, and nurses too.
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People aren't going to have equal outcomes. They also aren't going to have equal opportunities. Trying to change this a fool's errand.
Society can make spending choices that encourage equal opportunities.
Low/no tuition fees for post-secondary education mean more students can continue their educations.
Universal health care means people are not tied to their jobs because they fear losing work-related health insurance.
Good parental leaves mean women and men have more options for work/family life.
And so on. These are all social choices.
None of those create equal opportunity. Just to go with the third, since it's extremely obvious, some families have 2 parents, and some families do not. You cannot adjust for that, unless you decided to off my Dad somehow. Perhaps through a war or a bubonic plague, which is what the original article suggests is the ONLY way to create equality.
I don't care if the average person goes to college, they still aren't going to have the opportunities of wealthy kids unless you prevent their parents from helping them in other ways (connections, job advice, additional rent money, whatever).
EDIT: If you want to spend money on it, fine, but I'm not interested wasting money on an equality dream. Expanding coverage to the remaining 20 million uninsured is probably going to cost another $200 billion per year. Trying to correct for the fact that everyone has crappy plans with high deductibles is going to cost several hundred billion more. Bernie Sanders free college is $75 billion. If you want to increase all the education spending in the US to $18,000 per pupil, that's another $300+ billion.
Now you're talking another $1.2 trillion in spending, which is a 36% increase in taxes, and we're still not going to be equal, so someone is going to come back in 10 years and want even more. I haven't even touched retirement, or pre-K programs, for instance.
Ah, but you see you are thinking like an American, and I was thinking like a Canadian. Canada and most western European countries do all those things, and tend to have higher minimum wages as well. The end result is a smaller differential between high and low income earners.
https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#OECD_countries (https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#OECD_countries)
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^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
What were the actual rates paid at that time? If all income became exempt during that time, it doesn't matter what the rate is if it isn't actually used.
Table 1.2 in :
https://obamawhitehouse.archives.gov/omb/budget/Historicals
shows that relative to the GDP, the federal receipts (taxes) haven't changed much since the 40's. Yes it fluctuates a bunch, but even at those higher taxes, people didn't pay (much?) more taxes. It seems with those higher taxes, people in those brackets were just sheltering their money one way or another. Which means higher taxes now probably won't help with inequality.
Your last paragraph seems very emotional.
Are there any solutions out there that don't increase taxes?
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^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
So if president Trump announces he has a plan that increases taxes to build more infrastructure and pay off debt would support it? Or would you assume it's going to his friends in construction and the rich would just find a loophole.
Depends on the infrastructure. If we are talking fixing roads and bridges, fixing the water problem in Flint, rebuilding communities, helping to install solar, spending money to install high-speed internet (much like the phone system of long ago), OH and KEEP the ACA (or goodness, maybe even go to single payer), I'd totally support it.
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1. Trickle down economics has worked just fine. The bottom 90% drive better cars then 37 years ago, have cellphones, have computers, live longer, have better TVs, have access to more entertainment, live in bigger house, and have had many other improvements I have not listed.
The labor era was trickle down economics. What Reagan espoused was a trick. The power vacuum created by the decline of labor was filled with fascists like the Koch Brothers.
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1. Trickle down economics has worked just fine. The bottom 90% drive better cars then 37 years ago, have cellphones, have computers, live longer, have better TVs, have access to more entertainment, live in bigger house, and have had many other improvements I have not listed.
The labor era was trickle down economics. What Reagan espoused was a trick. The power vacuum created by the decline of labor was filled with fascists like the Koch Brothers.
I understand that you disagree with them, but I believe calling them fascists hurts your argument more than it helps.
https://www.merriam-webster.com/dictionary/fascism
fascism:
a political philosophy, movement, or regime (such as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition
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Yeah that all worked great in the 50's, in a completely different world. Globalization, tech, and automation have very significantly changed how businesses work since then. You now have companies like Facebook with a market cap of $446Bn that only has 17,000 employees. That's over $26,000,000 per employee. If you divide again by the P/E ratio of 38 that's $690,402 in earnings per employee. It makes sense these employees would be paid more than employees in the 50's, as there was nothing like this back then. Facebook doesn't even hire people in the bottom 20%, and probably not the bottom 40%, because they have no need for them.
Skills now are even more valuable than they were in the 50's compared to manual labor and putting in time. You can build a machine to do assembly line work cheaper than employing a person. So far you can't build a machine to design the assembly line. A single mechanic or two now can maintain the machinery to replace 10+ manual labor employees. It absolutely makes sense that the mechanic's salary would go up compared to 50 years ago, and the manual labor employees would stay the same. Someone who figures out a new way to optimize the algorithm for Facebook could benefit the company on the scale of millions of dollars. There was no comparable job to that in the 50's, and to expect that someone who works the checkout counter at Walgreens to see a pay increase similar to skilled labor is absurd.
Your plan to move away from corporate taxes, but toward personal taxes is tricky as well. What's to stop all of the high earners from simply moving to another country? The ultra high earners you're trying to target are going to avoid the vast majority of these taxes, and you'll end up taxing the lower earners more. Sure, you'll be able to tax the crap out of the doctor or lawyer making $400k/year living in Chicago, but the CEO who has $50 million in stock options is going to be living in Ireland and have a "summer home" in New York. Either that or he'll structure it so his salary isn't income, and structure his investments to avoid the wealth tax. Granted, even with the wealth tax he's looking at paying $250,000 of his $50 million (granted, every year) vs the $45 million he'd pay if it were income. He'll also have no problem buying all of the high end properties with his extra $45 million he saves and renting them out to people whose jobs require them to live here.
The other issue I have with your plan is the implication that tax rates somehow had a causal effect on our economic growth in the 50's and onward. Just because it didn't hurt in a post-war industrial boom doesn't mean it will work in a global tech based market. There are a lot of countries out there that are great to live in that don't tax nearly as aggressively as you line out here, and moving to them is easier than ever. It's entirely possible to be in a high level position in a company and communicate almost exclusively digitally, and occasionally with air travel.
As far as bringing back unions, that sounds like a great way to push even more manufacturing jobs out of the US. Unionizing the auto plants and increasing wages through collective bargaining? Time to move to the plant to Mexico. The US worker in 2017 isn't only competing with other US workers. They're competing with workers worldwide. Companies are willing to pay a premium for many jobs, but once the cost gets too high they can and will move elsewhere.
I am not a tax expert by any means, but was presenting the 1960 tax bracket as an example of how high taxes did not stifle growth between 1950 and 1980. We have a huge debt burden, and growing inequality in the country. Saying there is no way to fix it is dooming us to relive a very dark history. The last 37 years of trickle down economics is not working for the bottom 90%. They are making about the same to less pay in real terms as they were in 1980. That is 9 out of 10 people have not participated in the economic boom associated with the computer age. Meanwhile the top 10% are only doing 36% better, the top 1% are doing 2.3x better, the 0.1% are doing ~4x better, and the top 0.01 are doing 5.3x better. If trickle down was working, you would expect at least some trickle down to the bottom 80-90% of Americans.
I few things:
1. Trickle down economics has worked just fine. The bottom 90% drive better cars then 37 years ago, have cellphones, have computers, live longer, have better TVs, have access to more entertainment, live in bigger house, and have had many other improvements I have not listed.
2. You are looking at income percentiles incorrectly. It is incorrect to say 9 out of 10 people have not participated in the income boom caused by the computer age. This statement assumes that when you are born you have a number imprinted on your forehead (Bottom 20%) and will always be in that income cohort. This is COMPLETELY FALSE. Seven out of ten Americans will be in the 90th percentile of income earners at some point in their career. There is a high degree of mobility between income cohorts.
3. Have you thought that maybe a cashier at Walmart should not participate in the growth in income caused by the computer age? Remember, income comes from helping people so the more (this encompass quality and quantity) people you help the more money you make.
A cashier today and 37 years ago noth helped about the same number of people every day. A lawyer on the other hand has seen a modest increase in their income because they are able to use technology to increase the number of people they help. Some individuals that have taken advantage of the scalability of digital products have helped so many people that their incomes are hard to comprehend. Bill Gates or Mark Zuckerburg made a ton of money because they helped a lot of people, more than Mother Teresa!
With this mindset maybe growing income in-equality is a good thing because it is being caused because technology has increased the number of people a single person can help.
You need to get your head away from the cashier, the janitor, the barista; the bottom 90% is capped at 153k. That means engineers, accountants, actuaries, and lawyers.
Here is an example for you. Lets just look at the starting salary's of professionals in the 1980 vs 2017.
http://www.naceweb.org/job-market/compensation/salary-trends-through-salary-survey-a-historical-perspective-on-starting-salaries-for-new-college-graduates/
What you will discover is starting salaries have not changed on an inflation adjusted basis. Well that is just starting salaries you say? Ok, lets take a chemical engineer as an example. They start on average at about 65k (this has improved about 7% from 1980); what will that starting chemical engineer make late in their career? 2-3x the starting salary?
http://www.payscale.com/research/US/Job=Chemical_Engineer/Salary
Shows they make about 130k on average in their late career. So a chemical engineer is doing about 5-10% better today on an inflation adjusted basis than they were 37 years ago. The economy has expanded by 240% on an inflation adjusted basis. Zuckerburg, Gates (the 0.01%) have grown their income 540% on an inflation adjusted basis.
This is for a white collar, relatively highly trained chemical engineer. How much more work do you think computers have allowed this person to do in 2017 than in 1980? 2x, 5x, 10x? His pay for the amount of work product he is producing has increased 7%! By the way, I didn't just cherry pick a chemical engineer; the engineering profession as a whole is down 1% in pay vs. 1980. STEM degrees as a whole? Down 1.5%, Bachelors degrees as a whole? Down 1%.
3. Have you thought that maybe a cashier at Walmart should not participate in the growth in income caused by the computer age? Remember, income comes from helping people so the more (this encompass quality and quantity) people you help the more money you make.
Yeah, your point makes sense, but the people making the computers are not participating either!
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I saw comments about FICA being a regressive payroll tax.
I disagree.
FICA is composed of social security and medicare components. The largest portion, by far, is social security (unless someone makes a whole lot more than the social security cap on taxable income).
At first glance both Medicare and Social Security appear to be regressive, in that both rich and poor pay the same rate into the system.
However, the benefits that low income workers receive are HEAVILY subsidized by high income earners. So, although the percentage paid into Social Security is the same, the value received back is GREATLY skewed to provide advantages to low income workers.
Some of you might say, "But there is an income cap on Social Security taxation! High income earners don't have to pay taxes on the money they earn above that cap!"
You would be right. Your point would also be irrelevant because BENEFITS are also capped based on that income cap. If one of the CEOs who make obscene amounts of money per year became disabled in their 30s, would you want to pay social security benefits for another 60 years based on their full income? Thankfully we don't have to do that.
Medicare is a regressive tax, I agree.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
It's not the heirs who are entitled to something. It's the parent who is entitled to give his money to his children rather than spending it all.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
It's not the heirs who are entitled to something. It's the parent who is entitled to give his money to his children rather than spending it all.
Good point. The parent might also decide to leave it to someone other than the child.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
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It's not the heirs who are entitled to something. It's the parent who is entitled to give his money to his children rather than spending it all.
+100
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I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
It's not the heirs who are entitled to something. It's the parent who is entitled to give his money to his children rather than spending it all.
[/quote]
If it is a parent's intention to create a multi-generational dynasty of layabouts we workers are helpless to stop them.
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^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
What were the actual rates paid at that time? If all income became exempt during that time, it doesn't matter what the rate is if it isn't actually used.
Table 1.2 in :
https://obamawhitehouse.archives.gov/omb/budget/Historicals
shows that relative to the GDP, the federal receipts (taxes) haven't changed much since the 40's. Yes it fluctuates a bunch, but even at those higher taxes, people didn't pay (much?) more taxes. It seems with those higher taxes, people in those brackets were just sheltering their money one way or another. Which means higher taxes now probably won't help with inequality.
Your last paragraph seems very emotional.
Are there any solutions out there that don't increase taxes?
Re: bold
I'm a relatively conservative guy. I live in IL and am a Millennial, so maybe I'm underestimating my conservative-ness, but I come from a libertarian-ish background.
Just throwing out the tribal affiliation before getting to the point.
There's no way to navigate the next few decades without substantial tax increases. The aging population alone is going to add an additional 3% of GDP to government spending. There's probably going to be an additional 1.5-2% because of healthcare cost growth in the major programs.
Non-defense discretionary spending (IE, stuff that gets spent on roads and dams and all that) has been pushed as a % of GDP pretty dramatically over the last few decades. There's not much room to cut it.
If you're household income is in the six figures, there's probably a minimum 30% tax increase baked in over the next 15-20 years. Given the resurgent....ahhh... "democratic socialism" in the air, I'd bank on more like 50%, all-in.
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Thinking like this bothers me.
I suppose you would think it is OK if you inherited $100K from a rich uncle, but somehow it's not OK that Sam Waltons (or similar) kids inherit a few million. They are going to spend their millions and trickle it down into the economy same as you are going to spend your $100K. And why do you think they contribute nothing to society, just because they inherited a big windfall?
This whole wealth inequality debate is silly. Take everything away from everyone and those same wealthy people will rise to wealth, while those at the bottom will stay at the bottom. Wealthy people and families get wealthy because of their behavior and you can't get the poor ahead by "giving" them money.
Wow, a defense of the long discredited trickle down economics theory and an utterly baseless claim that the rich are rich because they deserve to be rich and vice versa for the poor. Sam Walton or Bill Gates or Sergei Brin or any of the other wildly successful people in history are total outliers, who benefited largely from luck and circumstances, and to suggest that their offspring would rise to wealth from nothing as they did is beyond ridiculous. Sure, reset everyone to zero and eventually they would stratify and some would of course rise to the top, but there is no basis to conclude that it would be the same people who did previously, and for sure absolutely ZERO basis to conclude that their offspring would.
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You all need to back of the high inheritance tax ideas. I'm building wealth solely for the benefit of my family for my lifetime and afterwards. I want to leave a legacy to them so that my family can get ahead in future generations. Many people think like this even if they don't say it.
Get rid of inheritances (to be given the benevolent state who will surely administer the monies well) and most people won't want to leave an inheritance at all. Also, just curious if someone builds a company that's worth $35million, is that company administered by the government once the founder dies? Or will there be a work around for that?
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You all need to back of the high inheritance tax ideas. I'm building wealth solely for the benefit of my family for my lifetime and afterwards. I want to leave a legacy to them so that my family can get ahead in future generations. Many people think like this even if they don't say it.
Get rid of inheritances (to be given the benevolent state who will surely administer the monies well) and most people won't want to leave an inheritance at all. Also, just curious if someone builds a company that's worth $35million, is that company administered by the government once the founder dies? Or will there be a work around for that?
That's a fine idea if you favor oligarchies. If you happen to think that progressive democracy has led to the greatest innovation and wealth creation in history, then you may want to re-think that position. Teddy Roosevelt was a stinging critic of dynastic wealth, and I happen to think he was spot-on.
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Most inheritance is left via a will, meaning the person who earned the money through whatever means AND paid taxes on the earnings gets to decide what to do with it. The government has no business with their money.
For those of you who are in favor of it, just go ahead and will your money to the government when you die. and leave everyone else alone.
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You all need to back of the high inheritance tax ideas. I'm building wealth solely for the benefit of my family for my lifetime and afterwards. I want to leave a legacy to them so that my family can get ahead in future generations. Many people think like this even if they don't say it.
Get rid of inheritances (to be given the benevolent state who will surely administer the monies well) and most people won't want to leave an inheritance at all. Also, just curious if someone builds a company that's worth $35million, is that company administered by the government once the founder dies? Or will there be a work around for that?
That's a fine idea if you favor oligarchies. If you happen to think that progressive democracy has led to the greatest innovation and wealth creation in history, then you may want to re-think that position. Teddy Roosevelt was a stinging critic of dynastic wealth, and I happen to think he was spot-on.
Basically:
If you have a bunch of wealth you tend to believe that your family should inherit it.
If you have little wealth then you are more likely to believe they should give it away to those who have little wealth.
Go figure. It is always so easy to give away someone else's money.
BTW, you can't tax inheritance because those with enough money will always set up trusts to protect it. All the tax does is make lawyers, trust managers, and accountants richer due to fees.
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^^^^^
Conservatives will never allow evidence to get in the way of their agenda. It's one based on how they feel things should be rather than what has been proven to have worked. Lower tax at all cost conservatives are lower IQ or sociopathic, imho. There's no other way to rationally see how someone would think that way.
What were the actual rates paid at that time? If all income became exempt during that time, it doesn't matter what the rate is if it isn't actually used.
Table 1.2 in :
https://obamawhitehouse.archives.gov/omb/budget/Historicals
shows that relative to the GDP, the federal receipts (taxes) haven't changed much since the 40's. Yes it fluctuates a bunch, but even at those higher taxes, people didn't pay (much?) more taxes. It seems with those higher taxes, people in those brackets were just sheltering their money one way or another. Which means higher taxes now probably won't help with inequality.
Your last paragraph seems very emotional.
Are there any solutions out there that don't increase taxes?
Re: bold
I'm a relatively conservative guy. I live in IL and am a Millennial, so maybe I'm underestimating my conservative-ness, but I come from a libertarian-ish background.
Just throwing out the tribal affiliation before getting to the point.
There's no way to navigate the next few decades without substantial tax increases. The aging population alone is going to add an additional 3% of GDP to government spending. There's probably going to be an additional 1.5-2% because of healthcare cost growth in the major programs.
Non-defense discretionary spending (IE, stuff that gets spent on roads and dams and all that) has been pushed as a % of GDP pretty dramatically over the last few decades. There's not much room to cut it.
If you're household income is in the six figures, there's probably a minimum 30% tax increase baked in over the next 15-20 years. Given the resurgent....ahhh... "democratic socialism" in the air, I'd bank on more like 50%, all-in.
Those increases would be to solve deficits we've already committed to, which is another topic. I mean specifically for Inequality: Is there any solution to inequality that isn't designed around increasing taxes? I can understand increasing taxes to fund the solution, but the two solutions put forth so far have been increasing income taxes and increasing estate taxes, where the tax is the solution, not the means to a solution.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
I guess it would have to be liquidated to pay the taxes, then a large corporation will buy it up?
That's the question I'm trying to get answered here by the proponents of the inheritance tax. The proponents think it will end dynasties of wealthy people. What it will really do is screw over the family who owns the $10million farm while the Waltons hire an army of lawyers to keep doing what they've always done.
Also, the proponents of inheritance taxes are operating under the assumption that the government will manage wealth well.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
Alright Komrade Alim Nassor.
Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
[MOD NOTE: Forum Rule #1]
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
Alright Komrade Alim Nassor.
Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Reread that proverb. A COUNTRY grows great. Isn't that what a punitive inheritance tax would do? That is the worst possible quote you could use to support no inheritance tax.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
I guess it would have to be liquidated to pay the taxes, then a large corporation will buy it up?
That's the question I'm trying to get answered here by the proponents of the inheritance tax. The proponents think it will end dynasties of wealthy people. What it will really do is screw over the family who owns the $10million farm while the Waltons hire an army of lawyers to keep doing what they've always done.
Also, the proponents of inheritance taxes are operating under the assumption that the government will manage wealth well.
This is something I've been considering as well. Does anyone have a full understanding of how businesses or other large assets are taxed under the current estate tax? Is there a difference between farms and other businesses because I hear the family farm example a lot.
Also, the proponents of inheritance taxes are operating under the assumption that the government will manage wealth well.
No, they are not. Why has this argument been repeated so many times in relation to inheritance taxes? This is just as applicable to any form of taxation.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
What's hilarious is that even among the landed gentry of England, there have been great strokes of luck or poor luck. The families whose land just happened to sit on top of large coal reserves got much wealthier (and were able to pay the steep taxes brought about by Labour and keep their family homes) than those whose didn't. Those with land close to London or the other major cities still hold title to hundreds of acres under well-established suburbs. Some of England's Dukes inherited billions -- others are dirt poor, just because of where the land they inherited 500-1000 years ago is located.
In England they acknowledge the role of luck in privilege. In the United states we like to pretend that everyone gets what they deserve, when it's often not the case.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
Alright Komrade Alim Nassor.
Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Reread that proverb. A COUNTRY grows great. Isn't that what a punitive inheritance tax would do? That is the worst possible quote you could use to support no inheritance tax.
I disagree with your assessment.
Old men are more likely to plant trees to help their kids or neighbors than help their country. If you remove the reward (help their kids) then they are much less likely to do it. If the government takes the tree when the man dies, the old man is less likely to plant it.
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You all need to back of the high inheritance tax ideas. I'm building wealth solely for the benefit of my family for my lifetime and afterwards. I want to leave a legacy to them so that my family can get ahead in future generations. Many people think like this even if they don't say it.
Get rid of inheritances (to be given the benevolent state who will surely administer the monies well) and most people won't want to leave an inheritance at all. Also, just curious if someone builds a company that's worth $35million, is that company administered by the government once the founder dies? Or will there be a work around for that?
That's a fine idea if you favor oligarchies. If you happen to think that progressive democracy has led to the greatest innovation and wealth creation in history, then you may want to re-think that position. Teddy Roosevelt was a stinging critic of dynastic wealth, and I happen to think he was spot-on.
Basically:
If you have a bunch of wealth you tend to believe that your family should inherit it.
If you have little wealth then you are more likely to believe they should give it away to those who have little wealth.
Go figure. It is always so easy to give away someone else's money.
BTW, you can't tax inheritance because those with enough money will always set up trusts to protect it. All the tax does is make lawyers, trust managers, and accountants richer due to fees.
Yes you can. If you change a law about taxes on inheritances you can dictate what gets taxed and when it gets taxed. You're just assuming what would happen if we changed the rate only. You know what assuming does?
It's instinctual nature to care about your own progeny above society. That's why a democratic society decides as a whole and the rich aren't allowed to make the rules as they see fit.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
Alright Komrade Alim Nassor.
Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Reread that proverb. A COUNTRY grows great. Isn't that what a punitive inheritance tax would do? That is the worst possible quote you could use to support no inheritance tax.
I disagree with your assessment.
Old men are more likely to plant trees to help their kids or neighbors than help their country. If you remove the reward (help their kids) then they are much less likely to do it. If the government takes the tree when the man dies, the old man is less likely to plant it.
He would be more likely to donate it to charity if taxed high after his death which would be exactly what the proverb means. Your proverb is THE WORST possible proverb to support no inheritance tax.
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The purpose of changing the tax system back to the 1960's or 70's brackets is to level the playing field. Income inequality means it is more difficult to move from the median to the 1%. Take the 1980 breakdown of the rich, median, and poor in today's dollars for example:
On the left is the annual income it took to be in this percentile in 1980 in 2017 dollars; The right is 2017 in 2017 dollars:
1980 / 2017
0.01% - 1.8M / 9.5M
0.1% - 400k / 1.6M
1% - 197k / 465k
10% - 100k / 135k
20% - 80k / 80k
50% - 52k / 52k
75% - 25k / 25k
Granted, it is possible to move between brackets. A lot of people say "See social mobility" when they see someone going from median income to the top 10%. The problem is going from the median to 1% is much more difficult today than 1980, and it gets even harder to move to the 0.1 or 0.01. Productivity of the workers has increased, but the benefits of the increase have stayed at the top. And again, I'm not talking about fast food workers, I'm talking about professionals - Accountants, Lawyers, Engineers etc.
(http://www.cynicaltimes.org/images/articles/EPI%20Chart.png)
Society needs to find a way to deal with the inequality. Historically a few things have worked:
1. Increased Progressive Taxes
2. War <-- Historically the 1% are banished/killed
3. Plague <-- Natural severe population reduction
If you see nothing wrong with the increasing change in the distribution of wealth since 1980 just state that and move on. Know one of the 3 preceding options will happen at some point to correct the imbalance.
In my opinion (and yes I'm in an income bracket that would get a tax hike), paying more than your fair share sucks, but it probably hurts a lot less than 2 or 3.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
What's hilarious is that even among the landed gentry of England, there have been great strokes of luck or poor luck. The families whose land just happened to sit on top of large coal reserves got much wealthier (and were able to pay the steep taxes brought about by Labour and keep their family homes) than those whose didn't. Those with land close to London or the other major cities still hold title to hundreds of acres under well-established suburbs. Some of England's Dukes inherited billions -- others are dirt poor, just because of where the land they inherited 500-1000 years ago is located.
In England they acknowledge the role of luck in privilege. In the United states we like to pretend that everyone gets what they deserve, when it's often not the case.
Life is not fair. It never was and it never will be. We don't all get what we deserve, but the odds are if you work hard in the US you will be much better off compared to those who are lazy.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
Or maybe they did it for survival? For the benefit of everyone? To gain power over others? For love? For life?
There's about a gazillion reasons for the establishment of civilization and If you asked someone why it happened I doubt their first response would be "to establish a dynasty for one's heirs".
I think you're confusing the concept of passing on your genetic material with passing down wealth. If you meant to say that we live to procreate I would agree, at least in terms of our animal instincts.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
What we are saying is to a degree that we are borrowing our wealth from society. Mostly it means that what we have belongs just as much to society as it does one's heirs. Government is the means to balance the playing field, to a degree. A society that gives a truly fair chance to all is expensive. Everyone can agree on that. The question is does one support policies that benefit society as a whole or policies that benefit the individual?
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
What we are saying is to a degree that we are borrowing our wealth from society. Mostly it means that what we have belongs just as much to society as it does one's heirs. Government is the means to balance the playing field, to a degree. A society that gives a truly fair chance to all is expensive. Everyone can agree on that. The question is does one support policies that benefit society as a whole or policies that benefit the individual?
Again, that's an odd thing to read in an MMM context. Don't we all know that wealth doesn't just happen? Look, I can see a reasonable inheritance tax. But when you get into numbers like 80%... jesus.
Can anyone tell me what happens after the death of my boss who has built a $35million company? Does the USG send a bureaucrat out to take over the company?
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Yes you can. If you change a law about taxes on inheritances you can dictate what gets taxed and when it gets taxed. You're just assuming what would happen if we changed the rate only. You know what assuming does?
It's instinctual nature to care about your own progeny above society. That's why a democratic society decides as a whole and the rich aren't allowed to make the rules as they see fit.
yea, yea, yea, makes an ass out of u and ming. Just another example of how people think it's ok to make racist statements about Asians.
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Yes you can. If you change a law about taxes on inheritances you can dictate what gets taxed and when it gets taxed. You're just assuming what would happen if we changed the rate only. You know what assuming does?
It's instinctual nature to care about your own progeny above society. That's why a democratic society decides as a whole and the rich aren't allowed to make the rules as they see fit.
yea, yea, yea, makes an ass out of u and ming. Just another example of how people think it's ok to make racist statements about Asians.
Can't figure out if you're serious. It's "make an ass out of you and me". It's a reminder - to you and me - not to rush to judgement. Asians have nothing to do with it.
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Let's do a hypothetical.
Let's say you feel it is unfair to tax inheritance at all. However, not taxing inheritance will lead to increasing levels of inequality to the point where the world is owned by a few wealthy families and they control everyone else. This leads to an uprising of the masses in which they kill the ruling families and the entire financial system falls to nothing. We start over until it happens again.
Or the wealthy families give back a large portion with every generation. They keep enough to continue a life of luxury for themselves and continue to invest that given money so that they can do it again with the next generation.
Now I'm not saying that it's that clear cut, but isn't it even worth you're consideration? Maybe it isn't "fair" but is that really what matters?
Like my momma always said "Life isn't fair."
Edit: I missed the second half of Index's post. Sorry for being redundant. But seriously, think about it.
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The purpose of changing the tax system back to the 1960's or 70's brackets is to level the playing field. Income inequality means it is more difficult to move from the median to the 1%. Take the 1980 breakdown of the rich, median, and poor in today's dollars for example:
On the left is the annual income it took to be in this percentile in 1980 in 2017 dollars; The right is 2017 in 2017 dollars:
1980 / 2017
0.01% - 1.8M / 9.5M
0.1% - 400k / 1.6M
1% - 197k / 465k
10% - 100k / 135k
20% - 80k / 80k
50% - 52k / 52k
75% - 25k / 25k
Granted, it is possible to move between brackets. A lot of people say "See social mobility" when they see someone going from median income to the top 10%. The problem is going from the median to 1% is much more difficult today than 1980, and it gets even harder to move to the 0.1 or 0.01. Productivity of the workers has increased, but the benefits of the increase have stayed at the top. And again, I'm not talking about fast food workers, I'm talking about professionals - Accountants, Lawyers, Engineers etc.
(http://www.cynicaltimes.org/images/articles/EPI%20Chart.png)
Society needs to find a way to deal with the inequality. Historically a few things have worked:
1. Increased Progressive Taxes
2. War <-- Historically the 1% are banished/killed
3. Plague <-- Natural severe population reduction
If you see nothing wrong with the increasing change in the distribution of wealth since 1980 just state that and move on. Know one of the 3 preceding options will happen at some point to correct the imbalance.
In my opinion (and yes I'm in an income bracket that would get a tax hike), paying more than your fair share sucks, but it probably hurts a lot less than 2 or 3.
I really don't get this attitude. Mobility in the U.S. is just as great or greater on an absolute basis than that in western european countries that everybody wants to emulate, but people want to change our policies just because the U.S. has more rich people. If a person born to parents making $20k has a 20% chance of making $80k, it seems like that's all that's relevant.
But regardless, having estate taxes seems like a stupid policy. If you want to tax estates, it would seem much better for almost any policy preference to tax inheritances. Let people inherit up to say $5M tax free and anything beyond that get treated as regular income. If people are just worried about too much wealth concentration, that will accomplish it while the extremely rich to pass their entire estate untaxed, as long as they are willing to devise it to enough people.
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The purpose of changing the tax system back to the 1960's or 70's brackets is to level the playing field. Income inequality means it is more difficult to move from the median to the 1%. Take the 1980 breakdown of the rich, median, and poor in today's dollars for example:
On the left is the annual income it took to be in this percentile in 1980 in 2017 dollars; The right is 2017 in 2017 dollars:
1980 / 2017
0.01% - 1.8M / 9.5M
0.1% - 400k / 1.6M
1% - 197k / 465k
10% - 100k / 135k
20% - 80k / 80k
50% - 52k / 52k
75% - 25k / 25k
Granted, it is possible to move between brackets. A lot of people say "See social mobility" when they see someone going from median income to the top 10%. The problem is going from the median to 1% is much more difficult today than 1980, and it gets even harder to move to the 0.1 or 0.01. Productivity of the workers has increased, but the benefits of the increase have stayed at the top. And again, I'm not talking about fast food workers, I'm talking about professionals - Accountants, Lawyers, Engineers etc.
Society needs to find a way to deal with the inequality. Historically a few things have worked:
1. Increased Progressive Taxes
2. War <-- Historically the 1% are banished/killed
3. Plague <-- Natural severe population reduction
If you see nothing wrong with the increasing change in the distribution of wealth since 1980 just state that and move on. Know one of the 3 preceding options will happen at some point to correct the imbalance.
In my opinion (and yes I'm in an income bracket that would get a tax hike), paying more than your fair share sucks, but it probably hurts a lot less than 2 or 3.
I really don't get this attitude. Mobility in the U.S. is just as great or greater on an absolute basis than that in western european countries that everybody wants to emulate, but people want to change our policies just because the U.S. has more rich people. If a person born to parents making $20k has a 20% chance of making $80k, it seems like that's all that's relevant.
But regardless, having estate taxes seems like a stupid policy. If you want to tax estates, it would seem much better for almost any policy preference to tax inheritances. Let people inherit up to say $5M tax free and anything beyond that get treated as regular income. If people are just worried about too much wealth concentration, that will accomplish it while the extremely rich to pass their entire estate untaxed, as long as they are willing to devise it to enough people.
What? Mobility from the bottom 20% to the the top 20% is much lower in the US than countries with more progressive tax policies!
(https://www.brookings.edu/wp-content/uploads/2011/11/figure2.jpg)
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(https://www.brookings.edu/wp-content/uploads/2011/11/figure2.jpg)
So much for male priviliedge.
You guys realize most of the wealth you want government crony's to seize isn't bricks of cash in the basement right? It's functioning businesses employing millions of people. How does the government take that, without forcing people shut down and sell off the business? That is a real, clear detriment to working class, and I beleive, a net negative to society.
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I really don't get this attitude. Mobility in the U.S. is just as great or greater on an absolute basis than that in western european countries that everybody wants to emulate, but people want to change our policies just because the U.S. has more rich people. If a person born to parents making $20k has a 20% chance of making $80k, it seems like that's all that's relevant.
Oh really? I guess the dumbass myth that America has more mobility than most other countries just won't die despite all the evidence suggesting otherwise. Facts just don't matter to you people!
http://inequality.stanford.edu/sites/default/files/Pathways-SOTU-2016-Economic-Mobility-3.pdf
http://www.politifact.com/punditfact/statements/2013/dec/19/steven-rattner/it-easier-obtain-american-dream-europe/
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
[MOD NOTE: Attack the argument, not the arguer. No sweeping generalizations about your opponents. This is getting tiresome to police all of this stuff. Thank you.]
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There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
Reading farther back on the thread, we have people offended with people who accumulate a singular of million USD and others who are advocating for 80% inheritance taxes. Those are the type of taxes that liquidate functioning businesses upon owner death, destroying economic value and jobs in the process.
The current policy is relatively sane. Some suggestions on this thread do not strike me the same way.
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(https://www.brookings.edu/wp-content/uploads/2011/11/figure2.jpg)
The Nordic states don't really compare to the top world economies. Where's China, Japan, France, Germany and India?
The title is worded weirdly too, I'm not sure what it means. "Ended up" as in last paycheck? Also, something like 75-80% of American adults have at one time been in the bottom 20% (I believe I read this in a Thomas Sowell article years ago). So is that referring to 75% of Americans? I know it easier to show data like this, but it's simplifying a complex issue.
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Just a thought and a theorized possibility in the US. Lets just take an example of a toilet paper maker. Everyone in the US uses toilet paper. Therefor toilet paper makes have a captive audience. If the amount of people grow in the United States, there are more asses that need wiping and therefor increased purchase of toilet paper. That would mean the owner of the toilet paper company would have an increase in income solely based on population growth.
Could a similar phenomena be happening with some of the richest people? Could they be just profiting from population growth since the .1% owns so much business?
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
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There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
Reading farther back on the thread, we have people offended with people who accumulate a singular of million USD and others who are advocating for 80% inheritance taxes. Those are the type of taxes that liquidate functioning businesses upon owner death, destroying economic value and jobs in the process.
The current policy is relatively sane. Some suggestions on this thread do not strike me the same way.
Precisely. The leftists are doing a shell game where they PROPOSE confiscatory estate taxes, and when you point out the problems, they point out how the CURRENT taxes make sense, convieniently ignoring that the current ones aren't necessarily the ones at issue. It's how leftists at times can be very factually correct while being absolutely wrong.
[MOD NOTE: I realize politics is incredibly divisive where you are, but this condescending generalization thing has got to stop.]
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
They can get a business loan to cover the costs if they want to buy it, or they can sell shares in the company to cover the tax. If it's a profitable company, it should be easy to secure a loan and pay it off and/or buy those shares back. Now, that completely ignores how the government would value the company. Obviously there would be more consideration given to the whole ordeal.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
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Yes you can. If you change a law about taxes on inheritances you can dictate what gets taxed and when it gets taxed. You're just assuming what would happen if we changed the rate only. You know what assuming does?
It's instinctual nature to care about your own progeny ab ove society. That's why a democratic society decides as a whole and the rich aren't allowed to make the rules as they see fit.
yea, yea, yea, makes an ass out of u and ming. Just another example of how people think it's ok to make racist statements about Asians.
Sorry, they're just such easy targets.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
They can get a business loan to cover the costs if they want to buy it, or they can sell shares in the company to cover the tax. If it's a profitable company, it should be easy to secure a loan and pay it off and/or buy those shares back. Now, that completely ignores how the government would value the company. Obviously there would be more consideration given to the whole ordeal.
How many shares can they sell if the company is now largely owned by the US government?
Dear god, I'm suddenly sympathizing with Ayn Rand from talking to you people. You really don't care about what people build or create.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
You asked how does a $35 million dollar company survive in a higher tax environment. Well how does it survive today when it is valued at 7 times the current tax free estate value? If you don't understand this question then take a critical thinking course! Hint: the answer to your question is related to the answer to my question. Other hint if that company valued at $35 million today is hit by inheritance tax what do they do about it?
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
You asked how does a $35 million dollar company survive in a higher tax environment. Well how does it survive today when it is valued at 7 times the current tax free estate value? If you don't understand this question then take a critical thinking course!
Ah, Jerry Brown logic. Because companies are able to make it under the current tax and regulatory regime means that more can be piled on with no consequences.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
You asked how does a $35 million dollar company survive in a higher tax environment. Well how does it survive today when it is valued at 7 times the current tax free estate value? If you don't understand this question then take a critical thinking course!
Ah, Jerry Brown logic. Because companies are able to make it under the current tax and regulatory regime means that more can be piled on with no consequences.
What do they do now? In theory they should be hit with a large tax bill on $25-$30 million. Are they? If so how do they survive? You would have been much better served saying the company was valued at $5 million or less but you didn't. This has left you in a position where you could continue the debate or do what you're doing and dodge it. You know that. I know that. So does everyone else here. Continue dodging it if you want. It only makes you look foolish.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
You asked how does a $35 million dollar company survive in a higher tax environment. Well how does it survive today when it is valued at 7 times the current tax free estate value? If you don't understand this question then take a critical thinking course!
Ah, Jerry Brown logic. Because companies are able to make it under the current tax and regulatory regime means that more can be piled on with no consequences.
What do they do now? In theory they should be hit with a large tax bill on $25-$30 million. Are they? If so how do they survive? You would have been much better served saying the company was valued at $5 million or less but you didn't. This has left you in a position where you could continue the debate or do what you're doing and dodge it. You know that. I know that. So does everyone else here. Continue dodging it if you want. It only makes you look foolish.
What the fuck are you even talking about? You keep moving the goal posts back and forth. One minute you and the other pro-inheritance tax people say that we need massively greater taxes, the next minute you say you're happy with the laws as they stand.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
How does it work now when there is a $5 million limit on untaxed estates? Straw man #2 of the day. Keep it up conservatives. You're working hard to muddy the water.
There you are again citing current laws. Look through the posts, there's people suggesting 80% inheritance taxes.
You asked how does a $35 million dollar company survive in a higher tax environment. Well how does it survive today when it is valued at 7 times the current tax free estate value? If you don't understand this question then take a critical thinking course!
Ah, Jerry Brown logic. Because companies are able to make it under the current tax and regulatory regime means that more can be piled on with no consequences.
What do they do now? In theory they should be hit with a large tax bill on $25-$30 million. Are they? If so how do they survive? You would have been much better served saying the company was valued at $5 million or less but you didn't. This has left you in a position where you could continue the debate or do what you're doing and dodge it. You know that. I know that. So does everyone else here. Continue dodging it if you want. It only makes you look foolish.
What the fuck are you even talking about? You keep moving the goal posts back and forth. One minute you and the other pro-inheritance tax people say that we need massively greater taxes, the next minute you say you're happy with the laws as they stand.
Lol. Dodging! Where did I say I'm happy with the laws as they stand? I'm saying that this company, hypothetical or real, would have a similar issue in today's environment. You are demonstrating classic avoidance behavior. You're so defensive now you're swearing at me.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I don't know the current state of the law, but a lot of times family businesses plan for this and transfer minority interests in the business to other family members. They can then take certain discounts, but the IRS is trying to close this loophole. It's more complicated than I want to research and explain right now, but here is a link for those who are interested: http://www.claconnect.com/resources/articles/gift-and-estate-tax-discounts-likely-to-shrink-for-closely-held-businesses
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
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What will happen to the family farm? For example a farm valued at $10M that has been passed down from generation to generation.
Oh the "what will happen to all those family farms" bullshit arguement. Gotta give you economic conservatives credit for marketing and fooling the public though.
There's currently (and has been for last 6-7 years) an exemption of $5M+ and 35-40% tax on amounts greater than $5M, hardly somethng that would kill a family farm. Not to mention this affects very few farms.
http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
I still haven't gotten an answer on what happens to my boss' $35million company when he dies. In the ideal world of higher inheritance taxes, does a bureaucrat get appointed to run it? Or does the family get keep it while paying massive loans to the federal government?
They can get a business loan to cover the costs if they want to buy it, or they can sell shares in the company to cover the tax. If it's a profitable company, it should be easy to secure a loan and pay it off and/or buy those shares back. Now, that completely ignores how the government would value the company. Obviously there would be more consideration given to the whole ordeal.
How many shares can they sell if the company is now largely owned by the US government?
Dear god, I'm suddenly sympathizing with Ayn Rand from talking to you people. You really don't care about what people build or create.
If, in your example, it's largely owned by the US government, they don't have to sell any shares, they already covered their tax liability. If, in this extreme scenario, they want to cover their tax liability while maintaining ownership and control of the company, they can liquidate some of the value of the company (that somehow has been assessed at $35 million) by selling shares of the company, or taking out a business loan, thus covering their tax liability in cash, in which case the government owns absolutely zero percent of the company.
Now once again, this is an extreme contrived example in a scenario where tax rates would be exceptionally high, but I imagine this is how it would work and thus tried to answer your question.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category. I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination. Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category. I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination. Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.
Say it was 80% tax. A person with $1 billion could leave $200 million to their heirs. No legitimate argument can be made by anyone for real world Marxism/communism. Straw man arguments by the right are easier than legitimate debate.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category. I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination. Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.
Say it was 80% tax. A person with $1 billion could leave $200 million to their heirs. No legitimate argument can be made by anyone for real world Marxism/communism. Straw man arguments by the right are easier than legitimate debate.
Going back through Bucksandreds' comments, he/she/xir is not even a serious person. This one fantasy of his/her/xe's made me lol
"The conservatives will drive us to a French Revolution style event here and will be kneeling at the guillotine still blaming it all on the Welfare queens."
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category. I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination. Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.
Say it was 80% tax. A person with $1 billion could leave $200 million to their heirs. No legitimate argument can be made by anyone for real world Marxism/communism. Straw man arguments by the right are easier than legitimate debate.
Going back through Bucksandreds' comments, he/she/xir is not even a serious person. This one fantasy of his/her/xe's made me lol
"The conservatives will drive us to a French Revolution style event here and will be kneeling at the guillotine still blaming it all on the Welfare queens."
I like your tenacity! I see a lot of myself in you. That was a serious anecdote. Let them eat food stamps!
Edited to thank you for teaching me about xir/xe. I just googled it. I honestly have never heard that until now.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I see. So, government trumps family? That doesn't sound like something anyone who desires a free society would say.
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I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are. SMH.
I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.
I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands. Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.
Alright Komrade Alim Nassor.
Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Don't call me Komrade. Re-read the thread and attribute the quotes to the proper people,.
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Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.
Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.
No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.
No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No. My wealth is mine. MINE.
It is not, however, my kids'. When/if they get an influx of money, it may be taxed.
Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.
I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category. I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination. Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.
Why 8 figure mark? Is it because you will never have 8 figures so it seams like a high enough number for you?
Why not at $14k? Treat everyone fairly?
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Wow thread derailed!!! I'll comment to add to the crazy...
Here's some information for those who consider themselves more conservative and want more of a classic Adam Smith capitalism. (See article below) Personally, I am in favor of some form of inheritance tax, the debate is for how much. I don't see anything wrong with the current limits, just index them to inflation and move on. The point of some taxes is to disincentive some behavior. And dynastic wealth is something our country's founders vehemently hated (think royal aristocracy that was so prevalent). So disincentive it through taxes. Give most away or it ends up in "evil" government coffers. Don't be a Tory.
For the record, in the argument for the "morality" of taxes, I have argued before that taxes on conditional transactions is reasonable. Condition: death. Transaction: transfer of wealth. Tax it. I will argue against wealth taxes, in particular real property taxes, the only real wealth tax in the US today.
https://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers
If there was one thing the Revolutionary generation agreed on — and those guys who dress up like them at Tea Party conventions most definitely do not — it was the incompatibility of democracy and inherited wealth.
With Thomas Jefferson taking the lead in the Virginia legislature in 1777, every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property. Jefferson cited Adam Smith, the hero of free market capitalists everywhere, as the source of his conviction that (as Smith wrote, and Jefferson closely echoed in his own words), "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural." Smith said: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."
The states left no doubt that in taking this step they were giving expression to a basic and widely shared philosophical belief that equality of citizenship was impossible in a nation where inequality of wealth remained the rule. North Carolina's 1784 statute explained that by keeping large estates together for succeeding generations, the old system had served "only to raise the wealth and importance of particular families and individuals, giving them an unequal and undue influence in a republic" and promoting "contention and injustice." Abolishing aristocratic forms of inheritance would by contrast "tend to promote that equality of property which is of the spirit and principle of a genuine republic."
Others wanted to go much further; Thomas Paine, like Smith and Jefferson, made much of the idea that landed property itself was an affront to the natural right of each generation to the usufruct of the earth, and proposed a "ground rent" — in fact an inheritance tax — on property at the time it is conveyed at death, with the money so collected to be distributed to all citizens at age 21, "as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."
Even stalwart members of the latter-day Republican Party, the representatives of business and inherited wealth, often emphatically embraced these tenets of economic equality in a democracy. I've mentioned Herbert Hoover's disdain for the "idle rich" and his strong support for breaking up large fortunes. Theodore Roosevelt, who was the first president to propose a steeply graduated tax on inheritances, was another: he declared that the transmission of large wealth to young men "does not do them any real service and is of great and genuine detriment to the community at large.''
Sent from my iPhone using Tapatalk
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^^^^
You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.
[MOD NOTE: Forum Rule #1]
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^^^^
You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.
If disagreeing with you makes me a nut bag, then I'm proud to be a giant economy size one. Most adults have acquired the ability to have open discourse without acting like a 6 year old. You should try it.
[MOD NOTE: Enough already. Let's use our manners.]
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You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.
If one were to read this thread on balance, I'm thinking those repeatedly lobbing ad hominem attacks would be more liable to be so labelled.
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The general consensus of the studies I have seen show the US is trending toward less income equality and less social mobility. The historical record shows this inequality is eventually corrected through tax policy, war and confiscation, or an order of magnitude population reduction.
The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980.
If these facts are wrong please show some data that disputes this. Don't make up a fact like someone born to parents making 20k has a 20% chance if making 80k, the real number is 6-7% and is easy to verify.
I think the left and right can agree there is a wealth Gap. That it has grown since 1980. It is continuing to grow. We can see historically how a growing wealth Gap has ended. We know the founding fathers view of stratified wealth. The question is can anything be done?
Some on here have suggested increasing income taxes and more tax brackets separating the 94% from the 99, and 99.99%. Others have suggested a steep wealth tax. Several posters are opposed to increasing taxes in any way. So what do you propose? The speed of stratification over the past 37 years, the growth in public debt, and movements like occupy wall street and the performance of a candidate like Bernie Sanders makes me think we are not going to stay the course for another 37 years.
We can have a civil discussion about what would work between those if you in the right and left in this board and in the country as a whole and have a compromise where everyone gives in to something. The alternative is to watch the trainwreck happen which may lead to war/confiscation which could hurt those of us on this board planning on saving 6 figure staches. This could actually happen in it lifetimes and it scares the shit out if me. I am genuinely interested in what it society could do to avert this scenario.
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If one were to read this thread on balance, I'm thinking those repeatedly lobbing ad hominem attacks would be more liable to be so labelled.
+1
Please let's knock off the juvenile insults and discuss like adults. There's some good thoughts in this thread from differing viewpoints. I've learned a bit and my own view is more educated and shaped from the discussion.
Attacks only weaken whatever position one is trying to support. The conservatives this or the liberals that... Straw man... it's all disgusting. It feels like divisive political ads all over again.
By responding to your ridiculously fringe/ uninformed views with complete civility I would be giving some merit to your positions. Those positions are comple f$()ing nutjob positions that crumble in the face of any logical/scientific scrutiny. The right in this country has gone off the deep end. It has learned nothing from history, it cares not for fact or scientific proof. It cares only about promoting an ideology of every man for themselves. The truth is civilizations were built because, to some degree, we have to be all in this together.
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The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980.
If these facts are wrong please show some data that disputes this.
I do not dispute the GDP growth numbers, but from here (http://www.multpl.com/us-gdp-inflation-adjusted/table) and here (http://www.multpl.com/united-states-population/table), I think it's more relevant to talk about the per-capita figure, which is 1.6x.
Looking for engineering salaries over time, I found this (http://www.naceweb.org/job-market/compensation/salary-trends-through-salary-survey-a-historical-perspective-on-starting-salaries-for-new-college-graduates/), whereby it seems like fresh college grads in chemical and mechanical engineering are earning 1.1x what they did in 1980 (in inflation adjusted terms) and electrical engineers are earning 1.2x what they did in 1980. These are fresh college grads, where there's no particular reason to think that they're particularly more skilled or "useful" to industry than they were 37 years ago.
Looking across the total population, I do not see evidence of zero real income growth there either. From analysis (https://www.advisorperspectives.com/dshort/updates/2016/09/15/u-s-household-incomes-a-49-year-perspective) of 2015 Census Bureau report, it shows real income growth across all quintiles. (Note that this is from 1967 to 2015, because that's the data they used, and I didn't go track back to see if it specifically held in 1980 to 2015 timeframe, though from the graph, it is visually clear that it has done so.)
(https://www.advisorperspectives.com/images/content_image/data/97/97a7d9bc97e7dba31aba55276b96408a.png)
(https://www.advisorperspectives.com/dshort/charts/census/household-incomes-growth-real-annotated.png)
I do agree that things are becoming more uneven, but I do not see evidence to support "none of those dollars have gone to the bottom 90%". In fact, I see strong evidence above that the bottom 90% have also benefited during this time, beyond simply having much more affordable luxuries, they have increased income in real (inflation adjusted) dollars.
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By responding to your ridiculously fringe/ uninformed views with complete civility I would be giving some merit to your positions.
You should be fairly confident that you aren't running any risk of responding with complete civility.
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The general consensus of the studies I have seen show the US is trending toward less income equality and less social mobility. The historical record shows this inequality is eventually corrected through tax policy, war and confiscation, or an order of magnitude population reduction.
The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980.
If these facts are wrong please show some data that disputes this. Don't make up a fact like someone born to parents making 20k has a 20% chance if making 80k, the real number is 6-7% and is easy to verify.
I think the left and right can agree there is a wealth Gap. That it has grown since 1980. It is continuing to grow. We can see historically how a growing wealth Gap has ended. We know the founding fathers view of stratified wealth. The question is can anything be done?
Some on here have suggested increasing income taxes and more tax brackets separating the 94% from the 99, and 99.99%. Others have suggested a steep wealth tax. Several posters are opposed to increasing taxes in any way. So what do you propose? The speed of stratification over the past 37 years, the growth in public debt, and movements like occupy wall street and the performance of a candidate like Bernie Sanders makes me think we are not going to stay the course for another 37 years.
We can have a civil discussion about what would work between those if you in the right and left in this board and in the country as a whole and have a compromise where everyone gives in to something. The alternative is to watch the trainwreck happen which may lead to war/confiscation which could hurt those of us on this board planning on saving 6 figure staches. This could actually happen in it lifetimes and it scares the shit out if me. I am genuinely interested in what it society could do to avert this scenario.
I don't support any taxation rooted in envy. I can't possibly see how that's good policy to begin with, and I don't think it is even remotely ethical. I don't think you can reasonably tax an estate anymore than you can reasonably tax a Christmas present.
Most arguments that things haven't gotten better in the last 30-40 years fall into the "lying with stats" argument. If you look at sokoloff's graph, you'll see that household incomes are rising for all quintiles. You should also factor in the value of fringe benefits into those numbers and any cash or in-kind, especially elderly folks.. Also, while all groups are adjusted for "inflation," inflation rates aren't really consistent across households. Lower income households have benefited massively from things like improved automobiles and Wal-Mart shoveling massive amounts of cheap crap. Higher-income households out-bidding each other for positional goods aren't relevant to lower-income households.
You can see the top quintile is benefiting at a pretty good clip. It is not hard to get into the top income quintile. It's a household income of $100,000. I work a basic entry-level corporate level job. If I married one of my coworkers, we would already be in the top quintile. A plumber working overtime alongside a pharmacy technician would be very close to that level.
Those households don't "deserve" to be slapped with massive tax increases. We're also looking at massive tax increases baked into the cake anyways. I just got my property tax bill, and Illinois has released templates for the expected tax increase. In total, my household tax to the state will be increasing 40% this year, and services will be cut, and we are STILL no where close to solving these colossal pension short-falls.
That's not going into the massive federal tax increases that are already baked into the cake.
Personally I think most center-left people are as much in la-la land as the center-right people. I know many young couples that are making six figures (and therefore are in the top 20% of US households) that voted for Bernie Sanders because they think Bernie is actually going to make things better for them, rather than massively raising their taxes (even more than they already will be). These households are much better off than their equiveleants 20-30 years. That's when my parents and in-laws got married. All drove cars that were falling apart, got married without rings, and skipped Honeymoons, because they just didn't have money....all things my Bernie Sanders-Yuppie couples consider utterly ordinary, take for granted, and all enjoy.
This is roughly the same as the Medicaid recipient voting for Trump to "Make America Great Again" and then having his/her Medicaid taken away.
I've shared the anecdote before, but my Wife used to be a big liberal and was there at Obama's inauguration, right up until she had to actually start working with low-income populations in the health care sector every day, and learning her Democratic compatriots consider her "the rich."
But, hey, no point in taking things personally! This is just shooting the breeze. :)
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I don't support any taxation rooted in envy. I can't possibly see how that's good policy to begin with, and I don't think it is even remotely ethical. I don't think you can reasonably tax an estate anymore than you can reasonably tax a Christmas present.
I agree with almost everything you said in your well-written post. This part is the only part I'll choose to comment on.
If you take an alternative view that society owns everything and you are simply borrowing from society those things that you do have, then the only reason not to tax the Christmas gift is one of practicality ('how can we be assured that we can tax ALL Christmas gifts?'). In that regard, taxing some things might be impractical (and therefore skipped), but taxing estates is not something that happens so frequently that it would be overwhelming to do.
“I rob banks because that’s where the money is.”
I don't have a serious problem with the current estate taxation policies (even though under many cFIREsim scenarios, we will end up subject to an estate tax as I understand the current law). I don't want someone winning at the game of life in 2017 to be controlling a significantly outsized portion of the Earth in 2117. I do, however, want to reward the frugal savers who wish to pass along some wealth to their family (or other recipients of their choosing), just as I'd want the frugal to be able to give a Christmas gift. There are valid public and private interests to allow some wealth to be passed along (no one wants to live in a world where your money literally "expires") and valid interests to restrict the scope of that transfer on the high end.
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There are an unfortunate group of liberal left who love freedom of speech as long as it is their speech. They will curse, insult, and even assault those they disagree with and not allow them to practice freedom of speech. Their biggest weapon are insults in the caliber of "racist," "uneducated," "misogamist," and "immoral."
The reality is that just because some people's views differ does not mean they are any of those above terms. Whenever we use slander to have a discussion, that discussion instantly falls apart and no one benefits.
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Freedom of speech means that your government won't arrest you for what you say. It doesn't mean other people must listen politely.
Of course it also doesn't mean that they can beat you with sticks if they don't like what you're saying.
The confrontations I've read about have been on university campuses. Universities are supposed to be centers of learning. I think this is a good opportunity for students to learn about critical thinking. Those who do not respect the law while doing so need to face the consequences whether they are speaker or listener.
There's no shortage of rhetoric and ad hominem attacks on either side.
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But I meant to write about inequality.
Extreme inequality is bad because it's bad for society. The very wealthy have great control over other people. They can influence elections to their benefit. They can undertake large scale monopolistic strategies. And so on.
Is there some other way to reduce extreme inequality other than extreme taxation? and is taxation sufficient on it's own?
And what about huge corporations like Google and Twitter? Suppose Twitter were to ban President Trump for violating their terms of use (which has has done). would this be an acceptable impact on society in the US?
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But I meant to write about inequality.
Extreme inequality is bad because it's bad for society. The very wealthy have great control over other people. They can influence elections to their benefit. They can undertake large scale monopolistic strategies. And so on.
Is there some other way to reduce extreme inequality other than extreme taxation? and is taxation sufficient on it's own?
And what about huge corporations like Google and Twitter? Suppose Twitter were to ban President Trump for violating their terms of use (which has has done). would this be an acceptable impact on society in the US?
I can be wrong, but I think what failed is previous societies was not that the rich where rich, but that the poor were hungry. The Romans knew what they were doing. The people were poor, kinda hungry so they distracted them with entertainment, but eventually the people were hungry and the empire fell. Same for the French revolution. It occurred because the people were starving. The thing about America is that no one is starving, people have shelter, people have medical care. People even have some luxuries in their life as well as distraction from creating upheaval via the media, Twitter, Facebook and such. I just don't see the pitchforks coming in this scenario.
The rich controlling our politics is completely true. The other side of the coin can occur though. If the government has enough dependents on it, eventually those dependent overshadow the non dependent population and are able to vote in laws that keep helping themselves. It is no different that the politician who votes themselves a wage increase. So there must be some balance between the two. A line which is attributed to Benjamin Franklin but may belong to someone else, "When people find that they can vote themselves money, that will herald the end of the republic." This goes to both sides, the filthy rich and the dependent.
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But I meant to write about inequality.
Extreme inequality is bad because it's bad for society. The very wealthy have great control over other people. They can influence elections to their benefit. They can undertake large scale monopolistic strategies. And so on.
Is there some other way to reduce extreme inequality other than extreme taxation? and is taxation sufficient on it's own?
And what about huge corporations like Google and Twitter? Suppose Twitter were to ban President Trump for violating their terms of use (which has has done). would this be an acceptable impact on society in the US?
I can be wrong, but I think what failed is previous societies was not that the rich where rich, but that the poor were hungry. The Romans knew what they were doing. The people were poor, kinda hungry so they distracted them with entertainment, but eventually the people were hungry and the empire fell. Same for the French revolution. It occurred because the people were starving. The thing about America is that no one is starving, people have shelter, people have medical care. People even have some luxuries in their life as well as distraction from creating upheaval via the media, Twitter, Facebook and such. I just don't see the pitchforks coming in this scenario.
The rich controlling our politics is completely true. The other side of the coin can occur though. If the government has enough dependents on it, eventually those dependent overshadow the non dependent population and are able to vote in laws that keep helping themselves. It is no different that the politician who votes themselves a wage increase. So there must be some balance between the two. A line which is attributed to Benjamin Franklin but may belong to someone else, "When people find that they can vote themselves money, that will herald the end of the republic." This goes to both sides, the filthy rich and the dependent.
I was going to challenge you to find an example of this, when I remembered that in Ontario we have a bit of a problem with the affordability of our public sector unions. Our premier (equivalent to a governor) recently agreed to a substantial wage increase over 4 years. "Now that the budget is balanced" she said, "we can afford to spend some money." First, we can afford to spend money when the debt has reached nominal zero levels, not the deficit. Second, there's an election coming up next year and the public service unions are big supporters.
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This has gone on long enough and is generating way too much non-constructive commentary and way too many moderation requests.
Locking