67% of Americans Think "Wealth Gap" Unfair
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BoatShoes
So you think that no alterations to the alternative minimum tax and the PPAC taxes will have no effect? I suppose you don't also believe that adding a VAT to our current code would not raise additional revenue either? Plenty of OECD countries raise that much revenue as a percentage of GDP. I have provided links. The models and methods they use are there to be critiqued. Do you believe in empiricism or do you rely solely on mere assertions of self-evidence?Cleveland Buck;956829 wrote:That's never happened in the history of our country, but it will happen now because the CBO says so. Got it. -
BoatShoes
Congress "doing nothing" simply means that provisions that are already scheduled to go into effect, like lower payments for doctors in medicare (which Congress always "fixes") will go into effect. It'd be nice if you stay away from mocking me as I have provided evidence from a reputable source with an explanation as to why an ever growing AMT (not saying that's justified...just that if it were allowed to continue as it is scheduled to it will raise more revenue) and new healthcare taxes will lurch us above 20% in revenue.tk421;956830 wrote:And I think you and the CBO are full of crap. If Congress does NOTHING, the budget is going to balance itself. Yeah, right. You are living in a liberal fantasy land. By Obama's own budget numbers, the deficit remains over 700+ billion past 2021. Stop being such a liberal apologist and take your head out of your ass, you can't possibly believe what you just typed.
As for SS, yes let's remove the cap on earnings but keep the cap on benefits, that way the rich can keep on paying more and more for the poor and not get their benefits back. Why don't you just call that what it is, stealing? You want the rich to pay more for SS, but not receive 100% of their money back in benefits.
It should be noted that this report came out before the continued realization of our dismal economic woes. The ultimate point is however is that there are things we can do on the revenue side that will help close the deficit and Republicans are entrenched.
As for raising the cap on SS. SS is insurance is it not? People are usually plenty happy if they don't have to rely on their insurance. If people are doing well enough to not receive 100% of the value of their insurance payments they are usually better off. Furthermore, if that were agreed to by our elected representatives it would not be "stealing" unless you believe the whole concept of Republican government to be organized theft.
***Additionally, it is a logic fallacy to believe that we can't raise more than 18.6% revenue in the future just because we haven't in the past. Most OECD countries average more than 25% in revenue just from ordinary personal income taxes. Right now we're only bringing in about 14% of GDP. Thus, if people are serious about deficit reduction, you'd think they'd at least advocate raising that back to at least 18%. -
BoatShoes
Ronald Reagan and Del Latta enacted the Alternative Tax when Ronald Reagan said this "We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share." (Please forgive the Thinkprogress.org link for the video)BGFalcons82;956912 wrote:I'm confused. If nothing is done, the budget magically balances in 4 years? So, as long as the Bush tax cuts of 2002-03 expire, then all will balance out and their will be great rejoicing. No cuts necessary. No other tax raises necessary. All because the CBO says so. Wow. What are all the arguments about anyways, eh?
The AMT is the salve for all that ails us, eh? The tax, originally set up to catch a few hundred evil rotten fat cats in the early 70's which would now ensnare tens of millions of taxpayers because the Congress decided not to index it to inflation. According to the CBO and yourself, Americans earning more than $100,000 will gladly pony up the AMT cash, they won't change their spending/living habits one smidgen, and there will be a glut of money flowing into tax-cheat Geithner's hands. Typical liberal tax and spend theology.
I suppose the fact that this heinous money-grab has been patched year after year due to its hideous nature and outright revolt from the taxpaying Americans means nothing now. No more patches, eh? Shut up and take it...right? Obama's millionaires are now people with adjusted gross incomes over $100,000. Welcome to Amerika, folks.
[video=youtube;cgbJ-Fs1ikA][/video]
Now, I never said it was justified for the AMT to be swallowing up taxpayers. I've mentioned before how the original "buffet rule" has been a disaster. All I've presented with my post was that it would indeed encapsulate more revenue were it not to be fixed which could help eliminate our budget deficit by 2015 if all other scheduled provisions also occur.
And you decry how the AMT would absorb more money from lower incomes. Who do you think the Perry Tax Plan or the 9-9-9 plan will get more revenue from? Hermain Cain and Rick Perry will raise taxes on people who make $100k more than the expiration of the Bush tax cuts. -
Manhattan Buckeye"As for raising the cap on SS. SS is insurance is it not? People are usually plenty happy if they don't have to rely on their insurance. If people are doing well enough to not receive 100% of the value of their insurance payments they are usually better off."
Every now and then I'm flabbergasted at some of the points made here.
In most insurance situations, we have a choice. If I'm unhappy with my insurance provider I can always move my business to another provider. We don't have a choice in SS. If we don't pay, we go to jail.
If you want to call it what it is, a redistributive tax, then we can start discussing all of the problems with it - mostly its presence. -
BoatShoes
Spending Cuts "free the economy." Have you even turned on the news in the last 4 years? This belief is being refuted right before your eyes in Europe. Expansionary Austerity is a myth. Plain and simple. At the end of WWI the Fed started raising interest rates. In June 1920, the Federal Reserve raised rates all the way to 7%; higher than any period ever except the late 70's and early 80's. Between July and November the New York Fed dropped rates between 7 and 4.5% and the Recession ended on November 3, 1921.Cleveland Buck;956840 wrote:In 1920-21 the economy crashed after the inflation of WWI. The government cut spending in half. What a bunch of buffoons, am I right? The economy never recovered. Oh wait, it recovered after a year correction. Sorry.
After World War II we had 10 million troops coming home. The market could never hope to absorb all of that labor. We were destined to have a severe recession without huge government stimulus. Oh wait, spending was cut by 60% and the economy boomed.
Your professors are wrong. Spending cuts free the economy. They do not restrict it. The government needs to be dismantled.
The Preponderance of the evidence is not on your side. -
Cleveland Buck
Token cuts while propping up massive debt is not austerity. It might seem like it to Europeans, but it isn't. When one of them cuts spending in half and allows the debt to be liquidated, then tell me how they are doing.BoatShoes;957403 wrote:Spending Cuts "free the economy." Have you even turned on the news in the last 4 years? This belief is being refuted right before your eyes in Europe. Expansionary Austerity is a myth. Plain and simple. At the end of WWI the Fed started raising interest rates. In June 1920, the Federal Reserve raised rates all the way to 7%; higher than any period ever except the late 70's and early 80's. Between July and November the New York Fed dropped rates between 7 and 4.5% and the Recession ended on November 3, 1921.
The Preponderance of the evidence is not on your side.
And the Fed had to raise interest rates after the war because they printed so much money. That's how it works. Only cutting rates 2.5 points over a year and a half is awfully timid, don't you think? Hell, the rates probably would have fallen a bit naturally after the government slashed spending. And yet the economy soared. It must be a miracle that we got out of it without stimulating demand and putting people to work in meaningless temporary jobs.
The preponderance of evidence is not on your side.
http://mises.org/daily/3788/The-Forgotten-Depression-of-1920 -
Cleveland Buck
..First, we need to consider why the market economy is afflicted by the boom–bust cycle in the first place. The British economist Lionel Robbins asked in his 1934 book The Great Depression why there should be a sudden "cluster of error" among entrepreneurs.
Given that the market, via the profit-and-loss system, weeds out the least competent entrepreneurs, why should the relatively more skilled ones that the market has rewarded with profits and control over additional resources suddenly commit grave errors — and all in the same direction? Could something outside the market economy, rather than anything that inheres in it, account for this phenomenon?
Ludwig von Mises and F.A. Hayek both pointed to artificial credit expansion, normally at the hands of a government-established central bank, as the nonmarket culprit. (Hayek won the Nobel Prize in 1974 for his work on what is known as Austrian business-cycle theory.) When the central bank expands the money supply — for instance, when it buys government securities — it creates the money to do so out of thin air.
This money either goes directly to commercial banks or, if the securities were purchased from an investment bank, very quickly makes its way to the commercial banks when the investment banks deposit the Fed's checks. In the same way that the price of any good tends to decline with an increase in supply, the influx of new money leads to lower interest rates, since the banks have experienced an increase in loanable funds.
The lower interest rates stimulate investment in long-term projects, which are more interest-rate sensitive than shorter-term ones. (Compare the monthly interest paid on a thirty-year mortgage with the interest paid on a two-year mortgage — a tiny drop in interest rates will have a substantial impact on the former but a negligible impact on the latter.) Additional investment in, say, research and development (R&D), which can take many years to bear fruit, will suddenly seem profitable, whereas it would not have been profitable without the lower financing costs brought about by the lower interest rates.
We describe R&D as belonging to a "higher-order" stage of production than a retail establishment selling hats, for example, since the hats are immediately available to consumers while the commercial results of R&D will not be available for a relatively long time. The closer a stage of production is to the finished consumer good to which it contributes, the lower a stage we describe it as occupying.
On the free market, interest rates coordinate production across time. They ensure that the production structure is configured in a way that conforms to consumer preferences. If consumers want more of existing goods right now, the lower-order stages of production expand. If, on the other hand, they are willing to postpone consumption in the present, interest rates encourage entrepreneurs to use this opportunity to devote factors of production to projects not geared toward satisfying immediate consumer wants, but which, once they come to fruition, will yield a greater supply of consumer goods in the future.
Had the lower interest rates in our example been the result of voluntary saving by the public instead of central-bank intervention, the relative decrease in consumption spending that is a correlate of such saving would have released resources for use in the higher-order stages of production. In other words, in the case of genuine saving, demand for consumer goods undergoes a relative decline; people are saving more and spending less than they used to.
Consumer-goods industries, in turn, undergo a relative contraction in response to the decrease in demand for consumer goods. Factors of production that these industries once used — trucking services, for instance — are now released for use in more remote stages of the structure of production. Likewise for labor, steel, and other nonspecific inputs.
When the market's freely established structure of interest rates is tampered with, this coordinating function is disrupted. Increased investment in higher-order stages of production is undertaken at a time when demand for consumer goods has not slackened. The time structure of production is distorted such that it no longer corresponds to the time pattern of consumer demand. Consumers are demanding goods in the present at a time when investment in future production is being disproportionately undertaken.
Thus, when lower interest rates are the result of central bank policy rather than genuine saving, no letup in consumer demand has taken place. (If anything, the lower rates make people even more likely to spend than before.) In this case, resources have not been released for use in the higher-order stages. The economy instead finds itself in a tug-of-war over resources between the higher- and lower-order stages of production.
With resources unexpectedly scarce, the resulting rise in costs threatens the profitability of the higher-order projects. The central bank can artificially expand credit still further in order to bolster the higher-order stages' position in the tug of war, but it merely postpones the inevitable.
If the public's freely expressed pattern of saving and consumption will not support the diversion of resources to the higher-order stages, but, in fact, pulls those resources back to those firms dealing directly in finished consumer goods, then the central bank is in a war against reality. It will eventually have to decide whether, in order to validate all the higher-order expansion, it is prepared to expand credit at a galloping rate and risk destroying the currency altogether, or whether instead it must slow or abandon its expansion and let the economy adjust itself to real conditions.
It is important to notice that the problem is not a deficiency of consumption spending, as the popular view would have it. If anything, the trouble comes from too much consumption spending, and as a result too little channeling of funds to other kinds of spending — namely, the expansion of higher-order stages of production that cannot be profitably completed because the necessary resources are being pulled away precisely by the relatively (and unexpectedly) stronger demand for consumer goods. Stimulating consumption spending can only make things worse, by intensifying the strain on the already collapsing profitability of investment in higher-order stages.
"Mises compared an economy under the influence of artificial credit expansion to a master builder commissioned to construct a house that (unbeknownst to him) he lacks sufficient bricks to complete."
Note also that the precipitating factor of the business cycle is not some phenomenon inherent in the free market. It is intervention into the market that brings about the cycle of unsustainable boom and inevitable bust.[10] As business-cycle theorist Roger Garrison succinctly puts it, "Savings gets us genuine growth; credit expansion gets us boom and bust."[11]
This phenomenon has preceded all of the major booms and busts in American history, including the 2007 bust and the contraction in 1920–1921. The years preceding 1920 were characterized by a massive increase in the supply of money via the banking system, with reserve requirements having been halved by the Federal Reserve Act of 1913 and then with considerable credit expansion by the banks themselves.
Total bank deposits more than doubled between January 1914, when the Fed opened its doors, and January 1920. Such artificial credit creation sets the boom–bust cycle in motion. The Fed also kept its discount rate (the rate at which it lends directly to banks) low throughout the First World War (1914–1918) and for a brief period thereafter. The Fed began to tighten its stance in late 1919.
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Footwedge
Yes, SS is an insurance plan that the wealthy need not buy. And I agree that raising the limit for the wealthy on how much tax is collected in this division is nonsensical.Manhattan Buckeye;957369 wrote:If you want to call it what it is, a redistributive tax, then we can start discussing all of the problems with it - mostly its presence.
However, how the extremely wealthy are being taxed...or not being taxed is a whole different story.
What I have a problem with people of your thought processing, is the constant use of the perjorative term "redistribution of wealth."
So what is exactly is a "redistribution of wealth"? First of all, redestributing wealth has been going on yearly since the foundation was put in place here in 1787. To accurately depict any "redistribution of wealth", one has to compare it to a baseline, and one can pick any year for that baseline...in order to properly analize delta, or change.
For argument sake, let's pick 1980 as a baseline. Is that OK with you? The true "redistribution of wealth" crowd has gotten their way....and gotten it's way in quite an obscene fashion, quite frankly. These wealth redistributors have now changed the distribution to an unpalpatable level for 68-78% of Americans...depending on which poll you subscribe to.
Not an opinion, but a hard core fact...in 1980, the hardest of the hardest working, the smartest of the smartest, the shrewdest of the shrewdest were making annual bank of 10 to 20 times more annual income than the rank and file floor grunts...both white and blue collar. And rightfully so!! I might add. They were for the most part, the smartest of the smart, the hardest workers of the workers, and the most astute of the astute. Today, that "spread" has increased 30 fold....
to a whopping 400 to 1 ratio. And you people, the teeny, tiny minority, somehow subscribe to this as being "good for America"...and the American people. Uttely amazing I might add.
Now who exactly are the wealth redistributors again? And at what cost to our people? Better be careful the next time you use this perjorative phrase....because when you do so...you should be looking at your own image in the mirror.
And to those loony toons that think that "all boats have risen" over the past 30 years need a basic course in google searching.
My opinion is that probably 90% of Americans...or better felt that this distribution was fair...or at least, very fair in 1980. But over the past 31 years, the real "wealth redistributors" have made a mockery of what is deemed "fair" by the American people collectively.
The wrong group is using the term "wealth redistribution" in a perjorative fashion....until now. Just yesterday, my AOL internet browser page took an online poll...with a full 78% of people stating that wealth distribution in this country is no longer fair. The sample size was huge, encompassing more than 15,000 voters, which far exceeds the typical number on a Pew Poll or a Rasmussen poll. Most people that are not mathematically challenged, understand the basic probabilty and statistic premise...that the higher the sample size number (called the n number), the more accurate the results will be in regards to true reality. There were no mitigating demographics listed...the only prerequisite was that the voter obviously had a computer, had a connection with AOL, and evidently, were paying their monthly user fees.
The vast, vast majority of people around the globe...all 6 billion of us, do not believe that either the dichotomies of laissez-faire (let it alone philosophy) nor Marx's communism (use of one's abilities to be used to equally satisfy everyone's needs) are fair, or in the human spirit's best interest.
That is why....in every political system across the globe today, a percentage of laissez faire and social communism is mixed in attempt to make our earth a more pleasant and fair place to reside.
Today, in our own country, the "redistribution of wealth" has in fact, thrown out of kilter the fairness factor....according to the vast majority of Americans.
And that, cannot even be debated. -
gutProblem is the govt is a very poor mechanism by which to redistribute wealth. You have to focus on incentives to create the desired outcome and eliminate the middle man (govt).
Also a big part of that gap is the business owner does not get the same pressure from the global economy as the rank-and-file does. I imagine 20-30 years down the road we will see businesses more affected by the same sort of pressure as companies in India/China become truly globally competitive (right now it's mostly low-skilled mfring jobs).
It's in part transitional/structural change. America has done well for two centuries as we generally replaced these jobs with more value-added (and better paying) jobs. And to some extent that is true, except for the uneducated/unskllied who are disillusioned over losing their job paying $20 an hour to put a screw in a door. I just don't accept that taxation and regulation (i.e. protectionism) is going to make things better- we've gone through those ups-and-downs and debates many times over our history and capitalism pretty much always wins by TKO.
The idea that bureacrats - lawyers - have the answers to making the economy and business work better is just laughable. -
BoatShoes
I'm not going to sit here and criticize Ludwig Von Mises because he's a greater man than I'll ever be. But the fact is that he was called the "archetypical unscientific economist." Austrian economical theories are not supported by an overwhelming majority of academic economists, conservative and liberal. Its proponents itself reject the scientific method.Cleveland Buck;957430 wrote:Token cuts while propping up massive debt is not austerity. It might seem like it to Europeans, but it isn't. When one of them cuts spending in half and allows the debt to be liquidated, then tell me how they are doing.
And the Fed had to raise interest rates after the war because they printed so much money. That's how it works. Only cutting rates 2.5 points over a year and a half is awfully timid, don't you think? Hell, the rates probably would have fallen a bit naturally after the government slashed spending. And yet the economy soared. It must be a miracle that we got out of it without stimulating demand and putting people to work in meaningless temporary jobs.
The preponderance of evidence is not on your side.
http://mises.org/daily/3788/The-Forgotten-Depression-of-1920
They reject statistical methods and experimentation asserting as self-evident that human actions are too complex to be subjected to scientific rigor. Mises argued instead using logical deduction from "undeniable, self-evident axioms or irrefutable facts about human existence." It's not economics. It's a ruse of a justification for beliefs about the immorality of government intervention.
Chicago school style libertarians like Milton Friedman and Gordon Tullock reject the Austrian Theory of the business cycle and for good reason because it does not stand up to empirical scrutiny (as if Austrians would know because they don't use empiricism). The Austrian theory implies that net investment should be below zero during recessions and yet it has been positive in every recession except the great depression.
The result, like orthodox marxism, is an interesting story a century ago that is now just ossified dogma used to justify a particular doctrine of political philosophy.
Milton Friedman summed it up in 1993 and again in 2001. "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false."
So, you have the whole spectrum of the economics profession against you...from liberal keynesians like Joe Stiglitz to libertarians like Milton Friedman. I'd say that makes the preponderance of the evidence against you. It's Mises, Hayek and Rothbard versus the whole empirical tradition since David Hume.
The fact is, like marxists who have a predisposed worldview against the capitalistic system, you have a predisposed worldview toward market fundamentalism and like Mises and Hayek before you, you just dig in deeper as the world rejects your idea. Even before the Fed existed there were severe market crashes comparable to the 1929 crash in 1869, 1884, 1896, 1901 and 1907.
You can go ahead and say "No Boatshoes I'm right and everyone else is wrong." But most people who are experts don't think the evidence coincides with the austrian story.
The fact is the world with Central Banks and strong social safety nets in regulated market economies has not been a road to serfdom. Among the OECD those countries with high rates of taxation and social spending perform better on both measures of economic freedom and economic performance than those with low taxation and social outlays. Their workers tend to be less productive creating slower economic growth but they are happier and lead better lives. I'm not saying that its the greatest and that there isn't a debate between to be had between conservatives and liberals about incentives, dead weight loss and taxes and ricardian equivalence, etc. but the austrians have definitely gotten it wrong.
I don't know I'm tired of having this debate with you. When economists of the Austrian inclination start providing empirical evidence for their case I'm open to be swayed but thus far people way smarter than I am have shut that door. You just want a smaller government and the Austrian theory is used to justify that intuition. You'd be better off just saying you want a smaller government just because. -
gutI agree with pretty much everything Boatshoes wrote above.
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QuakerOatsAnother $203 BILLION added to the national debt in October, alone.
Can we destroy the American economy from within ....... "Yes We Can" -
gut
There were also some accounting shenanigans shifting a significant Oct expenditure into the prior month. The logic was surmised to be an effort to make the 2012 deficit look better than it really will be (since that money ends up hitting the 2011 fiscal budget). And so that extra $203B looks even worse.QuakerOats;957821 wrote:Another $203 BILLION added to the national debt in October, alone.
Can we destroy the American economy from within ....... "Yes We Can" -
Cleveland Buck
Some people just think economics is an exact science and that their formulas completely account for human behavior. These formulas give them their "empirical evidence", and then the indoctrinated masses can dismiss anyone who doesn't have similar "empirical evidence".BoatShoes;957773 wrote:I'm not going to sit here and criticize Ludwig Von Mises because he's a greater man than I'll ever be. But the fact is that he was called the "archetypical unscientific economist." Austrian economical theories are not supported by an overwhelming majority of academic economists, conservative and liberal. Its proponents itself reject the scientific method.
They reject statistical methods and experimentation asserting as self-evident that human actions are too complex to be subjected to scientific rigor. Mises argued instead using logical deduction from "undeniable, self-evident axioms or irrefutable facts about human existence." It's not economics. It's a ruse of a justification for beliefs about the immorality of government intervention.
Chicago school style libertarians like Milton Friedman and Gordon Tullock reject the Austrian Theory of the business cycle and for good reason because it does not stand up to empirical scrutiny (as if Austrians would know because they don't use empiricism). The Austrian theory implies that net investment should be below zero during recessions and yet it has been positive in every recession except the great depression.
The result, like orthodox marxism, is an interesting story a century ago that is now just ossified dogma used to justify a particular doctrine of political philosophy.
Milton Friedman summed it up in 1993 and again in 2001. "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false."
So, you have the whole spectrum of the economics profession against you...from liberal keynesians like Joe Stiglitz to libertarians like Milton Friedman. I'd say that makes the preponderance of the evidence against you. It's Mises, Hayek and Rothbard versus the whole empirical tradition since David Hume.
The fact is, like marxists who have a predisposed worldview against the capitalistic system, you have a predisposed worldview toward market fundamentalism and like Mises and Hayek before you, you just dig in deeper as the world rejects your idea. Even before the Fed existed there were severe market crashes comparable to the 1929 crash in 1869, 1884, 1896, 1901 and 1907.
You can go ahead and say "No Boatshoes I'm right and everyone else is wrong." But most people who are experts don't think the evidence coincides with the austrian story.
The fact is the world with Central Banks and strong social safety nets in regulated market economies has not been a road to serfdom. Among the OECD those countries with high rates of taxation and social spending perform better on both measures of economic freedom and economic performance than those with low taxation and social outlays. Their workers tend to be less productive creating slower economic growth but they are happier and lead better lives. I'm not saying that its the greatest and that there isn't a debate between to be had between conservatives and liberals about incentives, dead weight loss and taxes and ricardian equivalence, etc. but the austrians have definitely gotten it wrong.
I don't know I'm tired of having this debate with you. When economists of the Austrian inclination start providing empirical evidence for their case I'm open to be swayed but thus far people way smarter than I am have shut that door. You just want a smaller government and the Austrian theory is used to justify that intuition. You'd be better off just saying you want a smaller government just because.
No statistics are going to tell you everything you think you know about an economy. We can use common sense though to see patterns. The 2nd Bank of the United States is founded in 1816 and in 1819 inflation is rampant and the economy crashes. Shocking. During the Civil War the federal government introduces greenbacks and prints like there is no tomorrow. Who would have seen a crash coming in 1869?
You don't need a central bank to have booms and busts. Wherever you have fractional reserve banking you will have them. When banks are printing too much money people go to the bank to get their money out. When banks can't come up with this money they are bankrupt. Throughout the 1800s the government bailed these banks out by letting them continue to operate without redeeming their notes for money. This is why you see booms and busts in the 19th century, just like this century. The existence of the central bank just makes it easier to inflate and allows them to directly bail out the failed banks, making this process much smoother and also much bigger.
Despite these booms and busts in the 19th century you still never had anything like 1929-1945, but that is because the government allowed credit to contract and stayed out of it, so recoveries were much quicker and stronger.
Lots of people can memorize what they are fed in economics class and work their formulas and become experts in the field. That doesn't make them right. There were a lot of flat earth experts too back in the day.
By creating a welfare state and using statistics to support your argument you can show people are happy with the current system, but that doesn't make it sustainable. The government can never tax enough to pay the welfare state, so they have to print the money as well. They believe if they can keep prices from inflating too fast that people will be happy enough with stagnant real wages as long as their paychecks are bigger.
The fact is that it isn't sustainable. Slowly increasing the money supply only slowly redistributes wealth from the working class to the bankers and politically connected. New money doesn't bring new value, it just takes that value from the existing supply. The banks get this new value, and also the first use of the money before the price of assets, commodities, etc. have risen, so they get the windfall from that too. We already have riots in the streets all around the world, including this country, but your statistics say all is well, so let's print more money. At some point someone will realize the formulas really can't account for human thought and behavior and that we already are serfs. -
BGFalcons82
Wrong. Reagan created the Alternative Minimum Tax, eh?BoatShoes;957363 wrote:Ronald Reagan and Del Latta enacted the Alternative Tax when Ronald Reagan said this "We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share." (Please forgive the Thinkprogress.org link for the video)
http://www.taxfoundation.org/publications/show/498.html
Did you see the key number? The same tax applied in 2005 that was created in 1969 would only affect those making $1,170,000 or more. The AMT is a disaster waiting to explode. The real question is, why won't they just abolish it altogether instead of yearly patches? Someday, when we're sleeping, or elect leaders based on marxist philosophies, we'll be sucked into the AMT sewer. Or, as the Left opines, the government would be able to re-distribute the confiscated wealth to where it's needed most. The central planners are so much smarter than people that actually earn their pay. :rolleyes:Why Was the AMT Enacted?
Congress enacted the AMT in 1969 following testimony by the Secretary of the Treasury that 155 people with adjusted gross income above $200,000 had paid zero federal income tax on their 1967 tax returns. (See Appendix for the AMT’s legislative history.) In inflation-adjusted terms, those 1967 incomes would be roughly $1.17 million in today’s dollars.
This tax avoidance by a few high-income taxpayers was widely perceived as unfair. Rather than directly addressing the problem by eliminating the deductions and credits in the tax code that were leading to the tax avoidance, Congress laid an additional layer of complexity over the regular income tax in the form of the AMT. -
BoatShoesBGFalcons82;958816 wrote:Wrong. Reagan created the Alternative Minimum Tax, eh?
http://www.taxfoundation.org/publications/show/498.html
Did you see the key number? The same tax applied in 2005 that was created in 1969 would only affect those making $1,170,000 or more. The AMT is a disaster waiting to explode. The real question is, why won't they just abolish it altogether instead of yearly patches? Someday, when we're sleeping, or elect leaders based on marxist philosophies, we'll be sucked into the AMT sewer. Or, as the Left opines, the government would be able to re-distribute the confiscated wealth to where it's needed most. The central planners are so much smarter than people that actually earn their pay. :rolleyes:
That was incorrect of me to say Reagan created the AMT. I should have said that he altered the system from merely an add-on to a parallel tax system with the tax equity and fiscal responsibility act of 1982. My mistake. However, that does not discount the fact that taxes were raised by 1% of GDP that year, the largest peacetime tax increase in American history and President Reagan lobbied for the act using similar language our current president also uses to justify tax increases. During the debates about the bill Reagan said he would agree to $3 in spending cuts for $1 in tax increases. Meanwhile every republican presidential candidate (including romney) has said they wouldn't agree to $10 in spending cuts for $1 in tax raises.
As I've said before Ronald Reagan would be far too liberal for today's republican party.
Also as I've said before the AMT has been a disaster and most tax experts agree with this. Do you even read my posts? That said, that does not mean however that bracket creep, etc. would not raise the revenue the CBO projects. That's the only claim I made. -
BoatShoesHere's an article that sums up the transformation of the Republican party from the party of ideas to the party of the Rich. I encourage my conservative friends to at least read it. http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109
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Cleveland Buck
Eh. Both parties are owned by the rich. We need to eliminate all loopholes and corporate welfare so that the playing field is level for everyone. No more subsidies. No more government contracts. No more government playing venture capitalist for their rich buddies. But to blame the tax rate for the wealth disparity is just plain misinformed.BoatShoes;965266 wrote:Here's an article that sums up the transformation of the Republican party from the party of ideas to the party of the Rich. I encourage my conservative friends to at least read it. http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109 -
gut
Are you honestly implying that Europe's crisis right now is the result of recent austerity measures and not years of anemic growth driven by massive taxes, government deficits and entitlements?BoatShoes;957403 wrote:This belief is being refuted right before your eyes in Europe. Expansionary Austerity is a myth. -
BoatShoes
I don't deny Eurosclerosis. When I deride "Expansionary Austerity" I'm talking about the specific acts of austerity in response to a recession. Had Europe (and us) been more responsible during the good times the correct policy response in a depressed economy would be more palatable. Cutting spending or raising taxes in response to a recession just increases future debt burdens, slows down growth and turns recessions into depressions. Obviously countries like Greece can't do what they ought to do because they were irresponsible during the good years and are also trapped by the Euro and the miserable failures of the European Central Bank.gut;965479 wrote:Are you honestly implying that Europe's crisis right now is the result of recent austerity measures and not years of anemic growth driven by massive taxes, government deficits and entitlements? -
gut
I agree with that. Inefficient and wasteful as govt spending is, you can't deny the impact of taking 50-100bps or whatever out of GDP. Empirical data does support that recessions have been shallower and shorter, but then never working off the excess may have led to the Great Recession. But looking at history, perhaps we were due and maybe the damage wasn't as bad as it could have been.BoatShoes;965702 wrote:I don't deny Eurosclerosis. When I deride "Expansionary Austerity" I'm talking about the specific acts of austerity in response to a recession. Had Europe (and us) been more responsible during the good times the correct policy response in a depressed economy would be more palatable. Cutting spending or raising taxes in response to a recession just increases future debt burdens, slows down growth and turns recessions into depressions. Obviously countries like Greece can't do what they ought to do because they were irresponsible during the good years and are also trapped by the Euro and the miserable failures of the European Central Bank.
It's disheartening to see the class warfare when people are too ignorant to understand what run-away socialism has done to Europe. They are pining for a model that almost certainly will make them worse off. But I'm convinced - and behavioral economics would support this - that many people would be happier being worse off if the rich are hurt comparatively more. -
BoatShoes
I agree with you in general that financing welfare spending with debt during good years like Greece is very bad. It's like they've got it backwards. They're cutting and saving now when they should be spending and spent when they should have saved and cut. You've pointed out before how this has generally beguiled Keynesian thought as the surpluses don't seem to happen.gut;965828 wrote:I agree with that. Inefficient and wasteful as govt spending is, you can't deny the impact of taking 50-100bps or whatever out of GDP. Empirical data does support that recessions have been shallower and shorter, but then never working off the excess may have led to the Great Recession. But looking at history, perhaps we were due and maybe the damage wasn't as bad as it could have been.
It's disheartening to see the class warfare when people are too ignorant to understand what run-away socialism has done to Europe. They are pining for a model that almost certainly will make them worse off. But I'm convinced - and behavioral economics would support this - that many people would be happier being worse off if the rich are hurt comparatively more.
But, we also financed a lot of spending (war spending in particular) during the good years when we should have been saving and cutting; and yet our welfare state is much smaller than much of Europe.
Where I disagree is that it is all about "run away welfarism in Europe." Runaway Spending (whatever it's on) by governments financed by Debt is problematic. Large Public Welfare Spending in countries like France, Sweden and Germany; financed with taxes has not left them with problems.
Sweden, Denmark and Germany all have larger Public Welfare States than the PIGSand they are doing just fine...but what's the difference? They paid for them with taxes and not debt. Germany is saving the PIGS and they have a larger welfare state.
The issue is then, do higher taxes reduce productivity in these countries that leads to meager GDP? There is truth to this. Greg Mankiw warns that we don't want to become like the French sipping Lattes on a vacation rather than producing output. (Doesn't sound too bad to me). No one can deny that U.S. workers are the most productive in the world. But look who's right behind them? France; which has the world's second largest welfare state. (They even have a "solidarity tax" on wealth).
Taxes in Romania and Singapore are both dramatically lower than taxes in France and yet their workers are much more productive per hour. So then what is the difference between the productivity in countries like Germany and France which both have large welfare states and taxation? I'm not sure.
The bottom line is, "runaway welfare states" are not the cause of the problems in the PIGS...it's runaway welfare spending financed by debt during good economic times. The countries that paid for their spending with taxes during good times are doing fine. They've had lower GDP per worker over the last decade but their people are happier and healthier than Americans.
But the question is, and I think this is where you and I differ, is what do we have? We've had runaway spending financed by debt over the last decade and our people have been working harder and yet we have less to show for it? Now we have seriously consider cutting the meager safety net we already have (which was the entire purpose behind the "starve the beast" strategy) or we're doomed all while the majority of Americans received none of the income (and increased freedom and prosperity that comes with it) in the last decade.
The Average American, including high earning professionals, work harder and have less to show for it. We spent just like Europeans did over the last decade but we didn't get anything for it. American government wastes tax dollars while the Germans, French and Swedes re-invest it in their people and the nation as a whole. We invest in deserts. When you get nothing back in return for taxes but two wastelands in the middle east of course raising taxes sounds like a bad idea. I mean people talk about how there's always inefficiency in terms of ROI when the government taxes us to build a bridge or a train, etc. What about the countless Air Superiority Fighters which will NEVER see combat. At least if people could see and feel say, a new school or a public healthcare option they could buy they could feel like their taxes were going somewhere.
Ideally I'm with you in that I don't want to be like Europe and have slow, slow growth. Expanding the pie is what creates the wealth of nations. But, at the same time, if all of that new wealth is going to the top 1% of Americans why are we all working so hard? The average family, including high earning professionals has experienced slow European style growth in their income for 30 years. It is only the very, very rich who've obtained that 4% per year "America Fuck Yeah" growth. Pointing out this reality is not inciting class warfare...it's pointing out that a class war is going on behind the scenes; that a bad bargain was entered into and that most of America signed received a worthless promissory note.
The average family's income rose 2.5% in the high taxation and high productivity era post WWII whereas the top 1% annual increase was just over 1%. Then, the view came to pass in 1979 that lower taxes would expand the pie and everyone would get a share. Not only did the pie not expand as much as it did in the post-war boom, the average family got less of the pie than they did before.
That is the class warfare. It's black ops, behind the scenes, covert class warfare. Selling the nation on "Growth is better" but not letting them get any part of the growth is the war. The fact that people are pointing it out and saying "no, the pie didn't grow at as fast a rate as it used to and I'm getting less of it than a I used to and the people who told me to agree to this are getting it all" is not class warfare...it's pointing out a bad bargain. -
BoatShoesThe argument that higher taxes will lead to slower growth is a non-starter for me because literally 99% of income earners have seen slower annual income growth in the past 30 years, than in the years following WWII with high taxation. Despite producing more output, most Americans have not been compensated for their increased productivity for 30 years.
Americans have worked harder and earned less. Even if we accept that we'll have better GDP than the Europeans, the gains from that GDP have only gone to the top 1% of income earners. Even if we accept that our smaller welfare state encourages more productivity, what is the point of producing more output if you're going to be less healthy, less happy and earn less of a share of GDP as each year passes than when you did previously?
I was raised a conservative but the offer on the table from conservatives; that less government would lead to a bigger pie faster and that middle america's piece would grow was false. The pie didn't grow as fast as it did in the post war years and most American's piece of the pie shrank.
The average Americans annual income grew at less than 1% per year since 1979...That is slower growth per year than the average Frenchman or German. Thus, although, GDP as a whole grew faster in America per year, that income all went to the top 1% of income earners while the average American's wealth grew less than that of the average European. Americans have worked harder than their average European counterparts but have been compensated less than they are for less output.
The Wealth of most Americans has decreased over the last 30 years. What is the point of increased GDP if you're not making the nation as a whole wealthier but really only one small segment of society. It's not class warfare to point out bad terms in the social contract. The point of striving for more growth is for the income of all the nation's people to grow as whole. That has not happened. -
Cleveland Buck
mises.org/journals/qjae/pdf/qjae11_1_1.pdfRegressions with summary measures of income inequality revealed that monetary inflation seems to affect measures that emphasize the extremities of the income distribution (Theil, Atkinson) more than those that tend to weight median income (Gini). To further support this notion, the effects of the model on various income ratios was reviewed. Not only was M1 a significant variable in every regression, but the marginal effect M1 had on income inequality was positively correlated to the degree of separation of income ratios.
These results have far-reaching macroeconomic implications. From an economic standpoint, these results indicate that monetary policy must be revisited to account for its direct effect on wealth redistribution. However, the political implications are just as significant. If the government is to pursue a policy of social welfare and income equality, it must reconcile this conflict between monetary and social policy. Monetary inflation clearly leads to a coercive redistribution of wealth. That this redistribution tends to penalize lower-income individuals is even more outrageous from a social welfare point of view. The limitations of effecting an egalitarian social order through manipulation of the money supply should be apparent. This position, long held by Austrian economists, is once again vindicated, and the author can only hope that the statistical support this paper lends can offer teeth to an already sound theory.