Author Topic: Fiscal cliff  (Read 47397 times)

grantmeaname

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Re: Fiscal cliff
« Reply #50 on: December 02, 2012, 12:10:42 PM »
Yes, it was my question. Kolorado said that repercussions would hurt the vulnerable and that the cuts would have life-changing effects. I quoted those statements in the same post as my question. Literally the same post -- they're like 30 pixels apart!

smalllife

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Re: Fiscal cliff
« Reply #51 on: December 02, 2012, 12:33:01 PM »
Or you could realize that I was simply stating how a failure to reach any kind of consensus would affect the general population.  There is no need to get all snippy about it.


Your question = Quote from: grantmeaname on Today at 09:12:38 AM
Besides tentative, uneasy asset pricing for investors, how is this affecting the general population?

My answer = How it affects the general population.


grantmeaname

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Re: Fiscal cliff
« Reply #52 on: December 02, 2012, 12:48:06 PM »
It's not a problem with your post, and that's a good and specific example of the affects. What I was asking for in response to kolorado's post was a reason that it was absolutely significant, though, and that's what everyone seems to be unable to provide.

eyePod

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Re: Fiscal cliff
« Reply #53 on: December 02, 2012, 04:41:01 PM »
Anyone that thinks more taxes will solve anything should work for a large government agency for a year.  Money is not the problem.  Waste, mismanagement and fraud are the problems.  We need less government, not more taxes.  I would be fine with paying more taxes if doing so would actually accomplish anything.  It would not.

The way you describe it, taxes aren't the issue.  Government is.  If they spent the money better, then more taxes would be fine.

Another Reader

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Re: Fiscal cliff
« Reply #54 on: December 02, 2012, 04:51:05 PM »
Government does not need more money, at any level.  Government is probably the least "mustachian" enterprise in existence.  The people in government need to be more efficient and frugal.  I would be fine with paying more in taxes if a need could be demonstrated, after every effort to operate efficiently was made. 

Anyone that thinks money, i.e. taxes, is the answer should be forced to work in a couple of agencies to see the waste and mismanagement in action.  It's sickening to see the waste of resources, which if properly used, might actually accomplish something. 

grantmeaname

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Re: Fiscal cliff
« Reply #55 on: December 02, 2012, 05:01:46 PM »
It's just super that those are your political beliefs, but the thing about living in a democracy is that solutions that only consider the wishes of one of the many groups at the table are infeasible. So when we're discussing what actual legislators with limited political capital should be doing about fiscal reform, you saying "government is bad because I saw it once!" and vehemently denying any solution but dramatic spending cuts is really not a workable model for moving the nation forward.

Another Reader

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Re: Fiscal cliff
« Reply #56 on: December 02, 2012, 05:34:24 PM »
The nation is not "moving forward."  It is a sinking ship. 

Tax the producers enough, and they either leave or stop producing.  There are lots of historical examples of this, some of which I'm sure you will run into in your studies.




iamlindoro

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Re: Fiscal cliff
« Reply #57 on: December 02, 2012, 05:44:55 PM »
The nation is not "moving forward."  It is a sinking ship. 

Tax the producers enough, and they either leave or stop producing.  There are lots of historical examples of this, some of which I'm sure you will run into in your studies.

On the contrary, some of the most prosperous periods in the country's history coincide with the periods of highest taxation (the post-WWII era and the 80s and 90s)

http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets

The highest tax rate in the early 50s was over 90%.  In the mid 80s it was over 50%.  In the 90s it was the 39% the democrats propose to allow it to revert to in 2013.  The country was obscenely productive and prosperous at those times, and we're *still* talking about allowing it to go back to a tax rate that is lower than most of the last century.  People who think a 39% top tax rate will wreck the economy need to get some perspective.

grantmeaname

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Re: Fiscal cliff
« Reply #58 on: December 02, 2012, 06:04:55 PM »
The nation is not "moving forward."  It is a sinking ship.
"moving forward" was not a comment on the current state of affairs but on the goal of the fiscal negotiations. So are you nihilistic about any plan being a possible solution, then?

Quote
Tax the producers enough, and they either leave or stop producing.  There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
So many that you could even name one if you tried, I bet.

Another Reader

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Re: Fiscal cliff
« Reply #59 on: December 02, 2012, 06:25:58 PM »
The folks in Washington may come to some agreement that kicks the can down the road a few years.  They lack the ability and interest to come up with any real solutions.

The historical tax rates are meaningless out of context.  What did people actually pay as a percentage of their income?  And not just in income tax. What was the total tax burden?  As someone that actually remembers the 1950's, I can tell you there was a heck of a lot less government back then.

As for educating Grant, well, that's his job, not mine.

grantmeaname

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Re: Fiscal cliff
« Reply #60 on: December 02, 2012, 06:33:32 PM »
The historical tax rates are meaningless out of context.
So provide a more meaningful number that tells a different story. Wikipedia's full of them.

Quote
What did people actually pay as a percentage of their income? And not just in income tax. What was the total tax burden?
Well, even the lowest bracket in the fifties was at least 26% every year, so it's hard to imagine the total tax burden being lower. But I guess you were there, so you already knew that.

Quote
As someone that actually remembers the 1950's, I can tell you there was a heck of a lot less government back then.
Yeah, the 30% of GDP that the government spent in the mid-1950s is dramatically different from the 34% that the government was spending in the 2000s until the 2008 recession hit.


Quote
As for educating Grant, well, that's his job, not mine.
It's good to see that your position has any substance behind it, and even better to see that you've managed to turn this into an ad hominem rather than try and participate productively in the discussion.

chucklesmcgee

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Re: Fiscal cliff
« Reply #61 on: December 02, 2012, 06:36:06 PM »
Quote
Tax the producers enough, and they either leave or stop producing.  There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
So many that you could even name one if you tried, I bet.
[/quote]

Actually yes. This one quite recently. 60% of those making more than a million pounds a year disappeared from Britain it introduced a 50% tax rate on million pound incomes from 2010 to 2011, to the point that less tax revenue was actually collected than before the high rate was introduced.  http://online.wsj.com/article/SB10001424127887323751104578148820012847656.html?mod=googlenews_wsj

We can argue whether this was due to them leaving the country, working less, taking steps to avoid or evade taxes or a poor economy in general reducing returns. But the UK GDP has been recovering since 2009 and the richest usually tend to recover faster than the rest of the population, so it seems unlikely that an economy like that could really account for 60% of those making a million pounds disappearing. I'd say it's pretty strong evidence that a big tax hike could be self-defeating. There's probably some optimal rate of taxation but it's very difficult to determine it.

Paul der Krake

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Re: Fiscal cliff
« Reply #62 on: December 02, 2012, 06:52:06 PM »
It must be one of those psychological things that push a lot of people over the edge to finally pull the plug and move out of the country. As an ex-Londoner, I find it baffling that it took anyone that long to skip town with a 1m annual income.

Do I love London as a city? Absolutely.
Would I live there with this sort of money in the bank? Hello no!

Or it could just be that people started paying attention and shuffled money around. Knowing that a lot of wealth in London has connections to foreign countries, people have ways to get creative.

Note that roughly a quarter of Switzerland's population is foreign. There's also Belgium next door, already widely used amongst the rich French to establish residency for a preferred tax rate.

Another Reader

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Re: Fiscal cliff
« Reply #63 on: December 02, 2012, 06:57:45 PM »
Don't you see the slope of that curve as somewhat ominous?  The federal government is spending a higher percentage of GDP today than at any time since WWII. The parasites in Washington are eventually going to drain every drop of blood out of our economy.

Also, a lot of the current expenditures are not coming from revenues received.  Rather, the federal government is relying on cheap and easy credit to borrow and spend.  That might be necessary in wartime.  It should not be in peacetime.  Spend less money and leave the wealth with those that earned it.  Looking at who actually pays the bill, a lot of that wealth would stay with you and me, the middle class.


grantmeaname

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Re: Fiscal cliff
« Reply #64 on: December 02, 2012, 07:07:04 PM »
Don't you see the slope of that curve as somewhat ominous?
The government is certainly not headed the direction I want it to, but it's not like prosperity and high government spending are incompatible: look at Europe, Australia, Canada... Ominous may be too strong a word choice.

Quote
Also, a lot of the current expenditures are not coming from revenues received.  Rather, the federal government is relying on cheap and easy credit to borrow and spend.  That might be necessary in wartime.  It should not be in peacetime.
Part of the problem is that government operation and investment are conflated in the way government spending is reported. I think that the government's operating spending shouldn't be much higher now than in better economic times, but when it comes to investment, the government absolutely should be borrowing as much as possible: it can do so for less than inflation! It's better than free -- the time value of money is negative! That's a no brainer.

kolorado

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Re: Fiscal cliff
« Reply #65 on: December 02, 2012, 07:08:24 PM »
In response to Grant, I was specifically thinking of lower and middle income people being asked to shoulder more taxes when they haven't figured out how to handle or rise from the downturn from 4 years ago. I was thinking of the increase in participants in the food stamp program over the last 4 years. Even college educated, middle income people are signing up for food stamps. Everyone who is living paycheck to paycheck right now and is not on food stamps or government programs will either have to make some serious life changes or ask for assistance if the tax cuts aren't extended. The ease of qualifying for assistance makes the life changes option less appealing. Many people are on a fixed income or dealing with a catastrophic event and cannot reasonably make changes.
http://online.wsj.com/article/SB10001424127887324851704578131413033855182.html

swiper

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Re: Fiscal cliff
« Reply #66 on: December 02, 2012, 07:16:12 PM »
Don't you see the slope of that curve as somewhat ominous?  The federal government is spending a higher percentage of GDP today than at any time since WWII. The parasites in Washington are eventually going to drain every drop of blood out of our economy.

Well you have had two recent wars and a recession, something has got to give...

And aren't we taking about, in the "worst case" a highest marginal income tax rate increase from  ~35% to ~40%? This is hardly earth shattering, and puts you on par with many other developed nations. As with all things it'll work out to a compromise of some tax increases and some spending cuts.

Also, a lot of the current expenditures are not coming from revenues received.  Rather, the federal government is relying on cheap and easy credit to borrow and spend.  That might be necessary in wartime.  It should not be in peacetime.  Spend less money and leave the wealth with those that earned it.  Looking at who actually pays the bill, a lot of that wealth would stay with you and me, the middle class.

I take it you don't buy Keynesian economics?

grantmeaname

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Re: Fiscal cliff
« Reply #67 on: December 02, 2012, 07:22:53 PM »
The only low-income individual in that article would go from a -13.3% tax rate to a -8.3% tax rate, and she's only "low-income" because she's working part time while in grad school. Sorry, but that plus one unsupported and vague statistic from a think tank are not enough to convince me that the fiscal cliff will crush anybody. There's a pensioner making $200,000 a year who's worried that he may have to reduce spending by 2-2.5% and I'm supposed to feel sorry for the guy?

NWstubble

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Re: Fiscal cliff
« Reply #68 on: December 02, 2012, 07:31:30 PM »
Here's a hint; they don't care how awesome you are at your job.

Poor baby, here is a thought - then quit. Why haven't you - because government workers are not paid less than private sector equivelants and get ridiculously good benefits - so another 18 years of pay freezes may equalize that.

Yeah and generally they aren't required to be as productive as the private sector - so hiring freezes and attrition for a few more years may help to....I know it seems like your working your ass off but 1 private sector worker could probably accomplish the same amount as a it takes 3-5 government workers to accomplish in a day.

Not all government agencies pay better than their private sector counterparts, but some certainly do. The problem with the gov compensation system is that somewhere in the last 10-15 years the promotion system was bastardized from its original design. The original system was based on common sense, a job had a pay scale that you could move up by performing well and by gaining experience, much like the private sector in general. So someone could be hired into a job as a "7" that was classified as a "7/9/11", which equated to a given pay range with each number representing a higher grade within the range, and through gaining knowledge and skills (experience) and quality performance be awarded raises to each higher grade topping out at an 11.

Hopefully I haven't lost you in that crappy attempt at describing the system in general. Now here is what has actually been happening for the last 15-20 years. Using the same scale, someone is hired as a 7, as soon as they have hit "time in grade" they automatically bump to a 9 and then to an 11. Automatic, rubber stamped, performance and abilities not taken into consideration. This is what is expected and "how things are done" now. And don't even get me started on how hard it is to fire a government employee for performance issues! Not to mention budget priorities, etc.

Sol, I'm sure you know "the government game". I know there are hard working government employees who are fairly compensated and are being drug down by the others. I have several immediate family members who work for land management agencies, but the system needs fixed because as a whole it is broken.

Another Reader

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Re: Fiscal cliff
« Reply #69 on: December 02, 2012, 07:48:42 PM »
In the 1950's we had two recent wars and some smaller recessions from which to recover.  And yes, we were paying off what was borrowed to wage those wars.  However, we were not paying for nearly as much on-going government as we are today. 

The nominal tax rates may have been higher in the 1950's, but incomes were much lower.  A lot of folks did not make more than the $4,000 that defined the lowest bracket.  And there is no information about what folks actually paid, after considering deductions and exemptions, nor does this take into account taxes other than income tax.

If I am on a par with other developed nations in the taxes I pay, then I want the same benefits.  You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc. 

With regard to borrowing, there has to be a lender from whom to borrow.  When inflation appears, the debt will not be renewed on such easy terms.  I don't see a lot of investment being made with those borrowed dollars.  I see a lot of money going to fight wars that can't be won (been there done that with Vietnam) and writing a lot of checks for true entitlement programs, such as welfare.  No interstate highways or other infrastructure, little scientific research, and not much of anything that would constitute an investment.

chucklesmcgee

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Re: Fiscal cliff
« Reply #70 on: December 02, 2012, 08:23:18 PM »
it's not like prosperity and high government spending are incompatible: look at Europe...

Currency on the edge of collapse, a slowing economy, massive debt with skyrocketing interest costs, record unemployment of 11.7% exceeding 25% in some countries, with youth unemployment nearing 50%. Tell me again how Europe's a good example of high government spending and prosperity being compatible?

chucklesmcgee

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Re: Fiscal cliff
« Reply #71 on: December 02, 2012, 08:36:21 PM »
If I am on a par with other developed nations in the taxes I pay, then I want the same benefits.  You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc. 

This is really fair. You look at place like Sweden, and they've got a massive amount of free welfare, government services, healthcare, free university education, efficient public transportation, etc, hardly any debt, a decent economy and low unemployment. But you'll pay around 60% of your income to the government if you're making anything over poverty level wages, gas is about $8/gallon because of the taxes and even a Big Mac goes for around $10.  It's a matter of tradeoffs that most Swedes I spoke to seemed pretty content with. But it involves a fundamentally different conception of the size and role of government that most Americans are comfortable with. Government spending is actually referred to as "the public economy".

I feel like Americans keep getting pushed these have-you-cake-and-eat-it-too promises- more jobs, benefits, protections all while keeping inflation and taxes low. In the end that money keeps getting borrowed and the can getting kicked down the road because it would be politically unpopular to tell voters that they can't have everything.
« Last Edit: December 02, 2012, 09:04:50 PM by chucklesmcgee »

sol

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Re: Fiscal cliff
« Reply #72 on: December 02, 2012, 09:01:29 PM »
Government does not need more money, at any level.  Government is probably the least "mustachian" enterprise in existence.  The people in government need to be more efficient and frugal.  I would be fine with paying more in taxes if a need could be demonstrated, after every effort to operate efficiently was made. 

Anyone that thinks money, i.e. taxes, is the answer should be forced to work in a couple of agencies to see the waste and mismanagement in action.  It's sickening to see the waste of resources, which if properly used, might actually accomplish something.

As government employee, I take offense at this.  Your broad brush is simplistic and insulting.

Fortunately, the opinions of ignorant strangers from the internet don't mean that much to me, and I would only be demeaning myself by sinking to your level to denigrate your professional competence.  So I think I'm done here.

tooqk4u22

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Re: Fiscal cliff
« Reply #73 on: December 03, 2012, 08:49:01 AM »
MWstubble/Sol - my statement was not to imply that there is anything wrong with the quality of people in government but more what NWstubble says about the system of government employees.  I am no different, it is human nature, if I am will have the same job security and income as the lowest performer then what is my incentive for doing things better and more efficiently.  And yes there are agencies that are underfunded and not compensated as well but overall as you say it is the government game - it is winning propostion for the government employee- that is until one day it is not because the bang for the buck is not there.



tooqk4u22

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Re: Fiscal cliff
« Reply #74 on: December 03, 2012, 08:54:23 AM »
The highest tax rate in the early 50s was over 90%.  In the mid 80s it was over 50%.  In the 90s it was the 39% the democrats propose to allow it to revert to in 2013.  The country was obscenely productive and prosperous at those times, and we're *still* talking about allowing it to go back to a tax rate that is lower than most of the last century.  People who think a 39% top tax rate will wreck the economy need to get some perspective.

Marginal rates were higher but it makes no sense to compare that number to today.  First of all it applied to incomes above $200k, which inflated by 3% today gets to $1.2M today and back then that was only 0.1% of the population.  Also capital gains taxes were 25% so that didn't apply to the 90%.  The rules were also different as for deductions and corporate income.  It is not a fair comparison - you really would have to take the rules and apply them side by side.  Effective rates matter much more than marginal rates and what is included or excluded matters a lot as well.


tooqk4u22

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Re: Fiscal cliff
« Reply #75 on: December 03, 2012, 08:59:40 AM »
Yeah, the 30% of GDP that the government spent in the mid-1950s is dramatically different from the 34% that the government was spending in the 2000s until the 2008 recession hit.


34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.   

Also in the 1950's we got more quality out of the spending - it was for infrastructure and other societal improvements and not as much about social programs.

But I also agree with Grant that the going over the fiscal cliff will mean impending doom...do I want it to happen - no, would I prefer it over the status quo - yes. It would result in a recession and adjusting to a new normal (which is fairly common nowadays) and it might take a few more years of stagnant growth - but that would be a better outcome then perpetually increasing the debt.
« Last Edit: December 03, 2012, 09:03:37 AM by tooqk4u22 »

tooqk4u22

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Re: Fiscal cliff
« Reply #76 on: December 03, 2012, 09:05:33 AM »
it's not like prosperity and high government spending are incompatible: look at Europe...

Currency on the edge of collapse, a slowing economy, massive debt with skyrocketing interest costs, record unemployment of 11.7% exceeding 25% in some countries, with youth unemployment nearing 50%. Tell me again how Europe's a good example of high government spending and prosperity being compatible?

The only places its compatible are where this is a high amount of natural resources per capita or relative to the size of the economy - Canada and Australia fall into this category, Europe is a disaster and the direction our politicians want to take us. 

Sylly

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Re: Fiscal cliff
« Reply #77 on: December 03, 2012, 09:33:06 AM »
And don't even get me started on how hard it is to fire a government employee for performance issues! Not to mention budget priorities, etc.

This reminds me of what a (federal) government college recruiter said regarding job security at a recruiting session I attended:
"Short of not showing up, it'd be very hard for you to get fired."
I thought to myself, "And you're proudly advertising this?!?"
« Last Edit: December 03, 2012, 10:00:30 AM by Sylly »

Sylly

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Re: Fiscal cliff
« Reply #78 on: December 03, 2012, 09:59:55 AM »
Actually, that wasn't my point at all-- My point is that those at an income level that could be affected by the proposed tax increases, those making $250K or higher PER YEAR (decidedly not middle class), the statistical truth is that those people tend to spend less, not more.  The reality is that those driving the "economic engine" with large spending are the real middle class-- under $250K/year in income, and very little savings.  An increase in taxes on those who tend to spend less, and need less, is a blip to them.  Remember, it's a tax on INCOME, not on wealth.  Government agents are not going to break into your house and cart off anything you've already accumulated.

...

US Millionaires tend to drive old, used cars, drink Budweiser when they drink at all, wear a $30 Timex, and spend very, very little.  In other words, they're mustachians.

Let me get this straight. Most of us on these forums agree that people in general can live quite well with much less than they actually spend.

You're saying that statistically, the people earning more pends less because they actually need less. And you're saying that people earning less are usually ones spending more

Those who spend the most actually tend to not be wealthy (and their spending is the reason why) and thus would generally not be the ones with the higher proposed tax rate.  Those people can feel free to keep spending unchecked and filling the coffers of the accumulating wealthy.

If one is part of the very small minority of the wealthy who spend their money unchecked, such that a 4-5% tax increase affects their ability to purchase luxuries, this will be a golden opportunity for them to learn how the really rich stay rich-- by modifying their behavior and habits until a bump in the road like 4% on new earnings isn't even a blip on the radar.

And your acceptance of the 'soak the rich' tax plan is because they can afford it? And the wealthy ones who would be affected should take this opportunity to learn to modify their behavior?

I ask this then:
Why can't the tax increases be extended over even into the middle class (since we know people tend to over-consume), so that even they too can take this opportunity to learn some mustachian habits, since the philosophies espoused on this site is clearly not exclusive to the wealthy.

I'm not saying the wealthy shouldn't pay taxes (or in this case, additional taxes). What I have issues with here, is the implication that the wealthy should bear all the additional tax burden and the middle class should be spared additional taxes because they can't afford them because they have bad spending habits, while the wealthy should have no issues with paying more because they tend to have better spending habits and therefore spend less anyway. Isn't it a bit perverse to, in a way, reward bad behavior?

iamlindoro

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Re: Fiscal cliff
« Reply #79 on: December 03, 2012, 10:32:22 AM »
Really??  "Soak the rich?"  Again, let's get some perspective here.  We're talking about reverting from the *most* preferential tax system to the rich in the history of our country to the *second most* preferential tax system to the rich in the history of our country.  I'm not about punishing success-- But the Bush era tax cuts were designed to favor the wealthy, and they're not sustainable.  If you look at Grant's chart above, there's actually a nice downward trend beginning in the 90s, the Clinton era, when the exact tax rate the democrats propose to restore was in effect.  It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.

Yes, we need to cut government spending (IMO predominantly in the area of defense).  But we can't do it while also choking off our income.  People act as though the expiration of the Bush tax cuts will suddenly launch us into uncharted territory-- they won't.  Taxes are not a perpetually diminishing entity.  They rise and lower in relation to our fiscal needs.  Our current needs call for greater revenue, and restoring the exact same system we had before the current one is a pretty trivial step in that direction.

Sylly

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Re: Fiscal cliff
« Reply #80 on: December 03, 2012, 10:57:45 AM »
Really??  "Soak the rich?"  Again, let's get some perspective here.  We're talking about reverting from the *most* preferential tax system to the rich in the history of our country to the *second most* preferential tax system to the rich in the history of our country.  I'm not about punishing success-- But the Bush era tax cuts were designed to favor the wealthy, and they're not sustainable.  If you look at Grant's chart above, there's actually a nice downward trend beginning in the 90s, the Clinton era, when the exact tax rate the democrats propose to restore was in effect.  It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.

Yes, we need to cut government spending (IMO predominantly in the area of defense).  But we can't do it while also choking off our income.  People act as though the expiration of the Bush tax cuts will suddenly launch us into uncharted territory-- they won't.  Taxes are not a perpetually diminishing entity.  They rise and lower in relation to our fiscal needs.  Our current needs call for greater revenue, and restoring the exact same system we had before the current one is a pretty trivial step in that direction.

You're missing the point of my question. And also note that I also put quotation marks on the 'soak the rich' label. I'm exaggerating (the grain of truth in it) and saying that tongue-in-cheek, sorry if it's not clear.

I don't disagree that for this current debt problem, taxes should go up. But I also believe cuts and reforms need to be made. We may disagree on what should go up, what should be cut, etc, but that's not what I'm here to discuss.

Your arguments, as quoted above, at least, as I understood it (hence the "Let me get this straight" preface), was that the wealthy could afford the additional taxes because they have room for it in the budget anyway. And of the wealthy who don't, well, they could learn to cut their spending and be a little more mustachian. You also said the less wealthy who spend more could continue "to spend unchecked."

The main point of my question is, "So why not apply the tax rate increase to this second group of people as well?" Then they too can have their "golden opportunity" to learn to save more of their money and become rich!

tooqk4u22

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Re: Fiscal cliff
« Reply #81 on: December 03, 2012, 10:59:33 AM »
It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.

I am tired of people blaming the wars - the cost of which in total over the 10 or so years is less than the deficit we have each year right now.

Setting aside whether anybody is for or against the bush tax cuts expiring - it only adds up to $1 trillion over 10 years and that is if ALL of the bush tax cuts expire. So again this doesn't even solve the deficit of single year, let alone over 10 years.  Setting aside economic challenges it may cause I am more in favor of letting all the bush cuts expire - you know shared sacrifice.

This all such BS - the general population, and maybe even the MMM population, doesn't get it.   We have a spending problem, can the rich be taxed more - yes, but we need to address spending in a large way.

Only in washington is it considered a spending cut if you spend $1trillion now and had planned to spend $3trillion 10 years from now but then reduce it to $2.5trillion and call it a cut - NO IT IS NOT - it is increasing spending and lower rate.  Of course Obama and his camp believe that adding spending above what was planned now somehow counts as a cut as well.




Sylly

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Re: Fiscal cliff
« Reply #82 on: December 03, 2012, 11:20:01 AM »
Only in washington is it considered a spending cut if you spend $1trillion now and had planned to spend $3trillion 10 years from now but then reduce it to $2.5trillion and call it a cut - NO IT IS NOT - it is increasing spending and lower rate.

And only in Washington do they compare 'savings' over 10 years to a deficit of 1 year.
« Last Edit: December 03, 2012, 11:21:32 AM by Sylly »

iamlindoro

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Re: Fiscal cliff
« Reply #83 on: December 03, 2012, 11:23:26 AM »
Your arguments, as quoted above, at least, as I understood it (hence the "Let me get this straight" preface), was that the wealthy could afford the additional taxes because they have room for it in the budget anyway. And of the wealthy who don't, well, they could learn to cut their spending and be a little more mustachian. You also said the less wealthy who spend more could continue "to spend unchecked."

The main point of my question is, "So why not apply the tax rate increase to this second group of people as well?" Then they too can have their "golden opportunity" to learn to save more of their money and become rich!

Not exactly what I meant.  I was addressing the "don't tax the poor job creators, it's their money that runs the economy and creates jobs" argument.  Treating the very wealthy (and let's face it, > $250K a year is as shitton of money) as though they were a protected class is silly.  So yes, the wealthy *can* afford it, they *have* afforded it, and in general it hasn't prevented them staying wealthy in the past.  Having lower taxes on the wealthy hasn't been proven to have any tangible effect on the economy, or in making wealth more accessible to the middle class.  It hasn't grown the middle class.  It hasn't had any net positive effect on society at large.  So, at a time when we need revenue to help address our defecit (and I fully acknowledge spending cuts should be a huge part of a fair plan too-- let's start with our ability to destroy the world hundreds of times over, shall we?), getting it using a system we have used to great effect in the past, from a group that stands to lose the least as a result, makes perfect sense to me.

Now, you may argue that a progressive system of taxation is inherently unfair, but that's a different argument and it's no more or less compelling now than at any time before.  The fact is that we have a progressive system of taxation and it is supposed to scale in relation to wealth.  The Bush tax cuts made the system less progressive.

My principle argument here is that there are some who see the expiration of the tax cuts as a revelation, as uncharted territory-- it's not.  The expiration of the Bush tax cuts simply puts us back at a tax code that was in effect for years beforehand, and which in turn is more favorable to the wealthy than any tax code before it.

Sylly

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Re: Fiscal cliff
« Reply #84 on: December 03, 2012, 11:53:39 AM »
My principle argument here is that there are some who see the expiration of the tax cuts as a revelation, as uncharted territory-- it's not.  The expiration of the Bush tax cuts simply puts us back at a tax code that was in effect for years beforehand, and which in turn is more favorable to the wealthy than any tax code before it.

I agree that reverting the Bush tax cuts isn't going to bring us to uncharted territory. I guess my main argument is that it's true for all the tax brackets, not just the top one. I'm with tooqk, I'd rather see the tax cuts expire for all the tax brackets. And I say that despite it being more beneficial (at least in the short term) for me  if it expires only for the top bracket.

What I'd much rather see is if they actually simplify the whole tax system so it doesn't look like swiss cheese to people who can most afford to game the system, and upping revenue from across the whole income spectrum that way. But hey, one can dream, right?

grantmeaname

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Re: Fiscal cliff
« Reply #85 on: December 03, 2012, 11:55:23 AM »
34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.
Bring the numbers and we'll talk. The picture is quantitatively very similar, so if you think it's qualitatively different you better be prepared to bring the numbers.

swiper

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Re: Fiscal cliff
« Reply #86 on: December 03, 2012, 11:59:40 AM »
Here you have 50 years of US Gov spending courtesy of NPR:
 


(http://www.npr.org/blogs/money/2012/05/14/152671813/50-years-of-government-spending-in-1-graph)

Gaining efficiencies is important, but nothing new. I think you'd be hard pressed to find any real life "Ron Swanson's" who will give you all the gains you are looking for. I've worked for both public and more recently private employers and I haven't noticed a large difference in work ethic. In my experience,  the small team dynamic impacted work ethic much more so than any monetary motivation or threat of job loss. This is not to say you shouldn't try chasing efficiencies or improving the system, but in many cases you start running into diminishing returns.

I think the better question is one of prioritization. What do people value and hence want to continue spending on? What specific programs do they want to cut?

   

 
« Last Edit: December 03, 2012, 12:01:39 PM by swiper »

grantmeaname

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Re: Fiscal cliff
« Reply #87 on: December 03, 2012, 12:00:06 PM »
In the 1950's we had two recent wars and some smaller recessions from which to recover.  And yes, we were paying off what was borrowed to wage those wars.  However, we were not paying for nearly as much on-going government as we are today.
Support your argument.

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The nominal tax rates may have been higher in the 1950's, but incomes were much lower. A lot of folks did not make more than the $4,000 that defined the lowest bracket.  And there is no information about what folks actually paid, after considering deductions and exemptions, nor does this take into account taxes other than income tax.
"There is no information" means "the information doesn't exist", not "I can't find numbers that contradict the US government's economic data which you produced, so I'm going to will yours out of existence".

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If I am on a par with other developed nations in the taxes I pay, then I want the same benefits.  You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc. 
You're not on par with other developed nations in the taxes you pay.

tooqk4u22

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Re: Fiscal cliff
« Reply #88 on: December 03, 2012, 12:20:52 PM »
34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.
Bring the numbers and we'll talk. The picture is quantitatively very similar, so if you think it's qualitatively different you better be prepared to bring the numbers.

The chart says it all....private was to the moon until 2008-2009 -private includes personal and corporate and public is government.


grantmeaname

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Re: Fiscal cliff
« Reply #89 on: December 03, 2012, 01:55:48 PM »
Shit, that's way more dramatic than I would have thought.

What do you think the implications are for the economy in the long term, and for investors like you and I?

tooqk4u22

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Re: Fiscal cliff
« Reply #90 on: December 03, 2012, 02:27:13 PM »
Shit, that's way more dramatic than I would have thought.

What do you think the implications are for the economy in the long term, and for investors like you and I?

What it means is that we are in slow growth mode for a while, the ramp up in private sector debt which fueled purchases, asset prices, stocks, etc is in deleveraging mode (some of it forced through foreclosures/bankruptcties), which is why the endless spending/stimulus programs had little effect on the economy (look at the chart you can see the government spending picked up some of the slack but not all of it).  The government can't fix the problem, and in some regards it has hindered it over the last two years. And if the government goes too far with trying to fix it with spending then the imbalance shifts again causing inflation due to the eroding dollar and increased borrowing costs.  Clearly I have been critical of washingtion (both sides) but that doesn't mean it is an easy task that they have.

It results in demand being way down, companies will not invest in capital equipment or people in any meaningful way until demand picks up.  Individuals won't buy stuff until they are more confident.  Its very circular but I believe that two things will get us to the crossover point naturally - (1) the replacement cycle - companies and indviduals can only delay/defer things so long before things NEED to be replaced (we are seeing some of that already) and (2) the relationship between inflation vs. deleveraging vs. asset prices - if incomes grow at 2% and inflation is 1% then the debt is theoretically reducing by the difference each year at no cost on top of actual reduction of debt (paying it down,foreclosure,bk). The wider the gap the better it is, but the problem is that the gap is not that wide right now and we are in very sensitive position right now where incomes are barely moving, inflation is low but could increase, and there is a lot of uncertainty - there is always uncertainty leading up to an election but I can't recall so much political uncertainty after an election.

Things can't really get better until balance sheets get better, which they have but there is more to go. Of course this can go to far as well, look at Japan.

dionysiandame

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Re: Fiscal cliff
« Reply #91 on: December 05, 2012, 09:11:35 AM »

I don't think you really needed a disclaimer to state your side.  Clearly I don't need a disclaimer to say that I am not on your side....that said I don't think taxes should go up but I do think they can.  I also think spending needs to go down - remember the fight going on right now is that liberals want taxes to go up on the wealthy (i.e. middle class and above) and are offering up zero spending cuts.  Republicans are now conceding some of this but want to see cuts. 

And lets be clear about what both sides considered to be cuts - cutting things out of the growth of future spending.  Example if budget today = $1 trillion.....projected budget 10 years from now = $3 trillion then cut so that budget 10 years from now is $2 trillion.....wow they just CUT the budget by a third by their rules. 

I SAY NO....a cut would be taking the budget today and making it $900 billion.....point is democrats can't even concede to making cuts that aren't even cuts.

My position is to simplify the tax code, raise revenue with a combination of higher rates and the simplification, and actual cuts.

Please cite sources for this assertions as it seems to be patently false based on non-biased sources such as the actual Federal Budget Outlays and the CBO. While there is a difference in where the Democrats would like to make cuts, to say they aren't offering any is hyperbole at best and flat out lying at worse. For your perusal I will provide the historical Federal Budget outlays (which are available for free by the way); Pg. 144 includes data on debt increases which, contrary to the opinion of some, have been fairly common within the past decade or so. Beginning at page 148-149 you can actually see the outlays and what money goes where; as expected Defense, Medicare, and Social Security make up a good bit of our "debt."

Since Medicare, Medicaid, and Social Security are "sacred cows", the aim of some is to cut spending in areas that are already underfunded; infrastructure, education, public health, and the sciences , instead of cutting spending in defense, no-bid government contract work, and corporate subsidies. While some are in favor of raising revenues (tax increases), cutting loopholes, cutting defense spending and corporate subsidies, while investing in the programs mentioned above. You also have to bear in mind there are "on the books" expenses and "off the books" expenditures; so both sides could say they're "making cuts" when they're only chopping off chunks of discretionary spending (as was the case during the massive expenses of two wars and a bail out program. FUN FUN FUN!).

Basically, you cannot run a nation like a household and that's something many economists are having to learn the hard way and many pundits are banking on Americans NOT being aware of because most of us are keeping our head to the ground just trying to make it. Hell, when you look at the data, often times there has been a lot of compromise between what the majority has offered, what the minority has countered, and what actually became.






dionysiandame

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Re: Fiscal cliff
« Reply #92 on: December 05, 2012, 09:20:54 AM »


I forgot to put in the links. LOL!

http://www.washingtonpost.com/wp-srv/special/politics/documents/2012budget-full-summary.html Federal 2012 Budget Outlays

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/budget.pdf Potential Federal Budget 2013 Budget Outlays (I wish I could find the primary source data for the plans to *gasp* shrink the government by combining redundant agencies)


http://www.cbo.gov/publication/43735
This is just to the analysis of the unemployment insurance program which makes up a pittance of our total budget, but people hate it because the poor and unlucky deserve to starve in rat infested nests filled with death and disease amirite?

tooqk4u22

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Re: Fiscal cliff
« Reply #93 on: December 05, 2012, 02:49:51 PM »
dionysiandame - I am not sure if you are for or against my comments but you clearly take offense to my comment about democrats, so got it - anything against the democratic machine is sacrilegious.

Call me what you will - but focus on the second paragraph of my comments, I really don't care about individual line items if the whole thing is still going up - there are not cuts if it is increasing.  Republicans have and still are playing the same game - does that make you happy, as I have made clear both political parties are out of control with spending (albeit on different things, but both seem to be getting it done) and are completely disfunctional and incompetent and not interested in anything other than protecting themselves and the compromise you elude to often results in more of the same and nothing getting addressed.

And those sacred cows.....well IMO they should be shot and eaten. 

As for the CBO, I am not sure you understand how that works but it is not based on any real analysis.  If a budget and its changes are submitted to them for review their job is not to say whether or not it is reasonable and its assumptions are reasonable its job is merely to attest to whether the math works or not.  Lets say a budget is presented that says GDP will grow by 200% a year for five years and it will result in a $500trillion dollar surplus based on the tax revenue and therefore we can spend another $500trillion today and have a balanced budget....guess what they would stamp it as acceptable but clearly it is not reasonable.


Sylly

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Re: Fiscal cliff
« Reply #94 on: December 05, 2012, 04:18:56 PM »
And those sacred cows.....well IMO they should be shot and eaten. 

Best line in this thread so far.

grantmeaname

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Re: Fiscal cliff
« Reply #95 on: December 05, 2012, 06:44:33 PM »
And those sacred cows.....well IMO they should be shot and eaten.
Ain't that the goddamn truth? Here on a forum about self-sufficiency, we're against welfare to those who clearly have plenty. Preach, tooqk, preach.

dionysiandame

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Re: Fiscal cliff
« Reply #96 on: December 05, 2012, 07:04:14 PM »
dionysiandame - I am not sure if you are for or against my comments but you clearly take offense to my comment about democrats, so got it - anything against the democratic machine is sacrilegious.

More hyperbole. Okay, I'm game.

Quote
Call me what you will - but focus on the second paragraph of my comments, I really don't care about individual line items if the whole thing is still going up - there are not cuts if it is increasing.  Republicans have and still are playing the same game - does that make you happy, as I have made clear both political parties are out of control with spending (albeit on different things, but both seem to be getting it done) and are completely disfunctional and incompetent and not interested in anything other than protecting themselves and the compromise you elude to often results in more of the same and nothing getting addressed.

Okay, so I'll call you a liar and raise you a willfully ignorant liar and call it a day. "I don't really care about individual line items..." translates into "I don't feel like looking at the actual math but damn it I'm pissed because someone told me I should be." Cute. 

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And those sacred cows.....well IMO they should be shot and eaten. 

Was...was this a zinger? Well played Sir.

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As for the CBO, I am not sure you understand how that works but it is not based on any real analysis.  If a budget and its changes are submitted to them for review their job is not to say whether or not it is reasonable and its assumptions are reasonable its job is merely to attest to whether the math works or not.  Lets say a budget is presented that says GDP will grow by 200% a year for five years and it will result in a $500trillion dollar surplus based on the tax revenue and therefore we can spend another $500trillion today and have a balanced budget....guess what they would stamp it as acceptable but clearly it is not reasonable.

Hmm, as someone who works in Data Analysis, I will have to say that I generally have to "analyze" the data before I can come to any conclusions. I don't know, maybe all of that math is just an illusion...a soul crushing illusion, but I can't "attest" to anything that hasn't been crunched, pulled, and mashed into something comprehensible and useful. When my VP looks at my data, it's not my job to say "Oh this is great! Look we've hit all of our metrics! Now, let's go snort some coke in the restroom!" I present the data and then my internal customers (VP and management) make their moves from there.

So when I see that unemployment could range between $3-30 billion, and I compare that against our other expenditures, and then I look at the risk of NOT extending said benefit; including how it could effect household demand, etc; I would, personally, rather extend said benefit. I was giving you that data so you could see where our elected officials budget plans are partially coming from when they're not based on political positioning, emotional triggers, or privilege.

Is anyone else increasingly turned on by sovereign currency and public debt?

Marinate with that image.

You're welcome.

dionysiandame

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Re: Fiscal cliff
« Reply #97 on: December 05, 2012, 07:12:04 PM »
And those sacred cows.....well IMO they should be shot and eaten.
Ain't that the goddamn truth? Here on a forum about self-sufficiency, we're against welfare to those who clearly have plenty. Preach, tooqk, preach.

Welfare for those who have plenty? Do you mean corporate welfare or like, welfare welfare, an exceedingly difficult and humiliating program to go through which was majorly reformed, but that states have the ability to modify requirements if they absolutely need to?

http://www.factcheck.org/2012/08/santorums-distorted-dependency-claims/

http://www.factcheck.org/2012/08/does-obamas-plan-gut-welfare-reform/




smedleyb

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Re: Fiscal cliff
« Reply #98 on: December 05, 2012, 07:28:56 PM »
I am tired of people blaming the wars - the cost of which in total over the 10 or so years is less than the deficit we have each year right now.

4 trillion and counting:

http://costsofwar.org/

And I'm tired of faux fiscal conservatives who fail to acknowledge that this nation's military (i.e., waste) spending is out of control.  When you spend more than the next 20 largest military forces combined, you have a "war" problem. 

grantmeaname

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Re: Fiscal cliff
« Reply #99 on: December 05, 2012, 10:17:27 PM »
Do you mean corporate welfare or like, welfare welfare, an exceedingly difficult and humiliating program to go through which was majorly reformed, but that states have the ability to modify requirements if they absolutely need to?
No, neither. I mean social security and medicare, which currently are not means tested and both target the single richest demographic in the country.