The Ideal, the Perceived, and the Actual Distribution of Wealth-USA
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Cleveland Buck
If you want to look at the facts, tax rates and income distribution are unrelated, but you know what is related? The inflation of the 1920s created a wealth disparity similar to today, and also created a massive bust that the government dragged out for 15 years. The inflation of the 1990-present has created an even greater disparity. Guess where this ends. -
believer
Ummm....Japan bombs Pearl Harbor?Cleveland Buck;1401511 wrote:Guess where this ends. -
gut
What inflation? While there has clearly been inflation in food and energy prices, this has been offset with lower prices in other goods (and rent/housing). I'm aware of the problems with CPI, but it's still useful for relative comparisons. And there's no comparison to the inflation we saw throughout the late 70's and early 80's.Cleveland Buck;1401511 wrote:The inflation of the 1990-present has created an even greater disparity. Guess where this ends. -
Cleveland Buck
Sorry, I'm not using the mainstream definition of inflation.gut;1401557 wrote:What inflation? While there has clearly been inflation in food and energy prices, this has been offset with lower prices in other goods (and rent/housing). I'm aware of the problems with CPI, but it's still useful for relative comparisons. And there's no comparison to the inflation we saw throughout the late 70's and early 80's.
Inflation = Increase in the money supply
The CPI has nothing to do with it. -
gut
OK. Hadn't really thought of it that way, but intuitively it makes sense: increase the money supply (i.e. credit & leverage) and the wealthy tend to be more capable and savvy (if for no other reason than they can afford competent professional advice) to take advantage.Cleveland Buck;1401572 wrote:Sorry, I'm not using the mainstream definition of inflation.
Inflation = Increase in the money supply
The CPI has nothing to do with it.
The old axiom "it takes money to make money" has always been true. Heck, if I could have my FICA contributions (and employer match) back I'd love to pick-up some rental properties right now. -
believer
I'd settle for a paid off mortgage.gut;1401578 wrote:Heck, if I could have my FICA contributions (and employer match) back I'd love to pick-up some rental properties right now. -
gut
Haha, that's poor man's thinking. Responsible use of leverage is a path to increased wealth. It's the "responsible" part that many people struggle with.believer;1401580 wrote:I'd settle for a paid off mortgage.
2.5% interest (after-tax) on a mortgage? I wouldn't have a dime of equity in my house if I could - the equity in my house is only making me 2.5%. I would have twice as much money after 30 years with only a modest 5% return. -
Footwedge
There is nowhere on the planet that can guarantee you a "modest" 5% return. Secondly, interest rates for homes are low, very low, but not as low as you posted.gut;1401587 wrote:Haha, that's poor man's thinking. Responsible use of leverage is a path to increased wealth. It's the "responsible" part that many people struggle with.
2.5% interest (after-tax) on a mortgage? I wouldn't have a dime of equity in my house if I could - the equity in my house is only making me 2.5%. I would have twice as much money after 30 years with only a modest 5% return. -
Footwedge
You can arguev cause and effect all you want. I simply stated that over those 30 years, when the net wealth disparity has exploded in our country, we collectively paid at a histically very low tax rate. Are there other considerations to factor in? Yes.gut;1401489 wrote:If you were really doing your homework you'd realize revenues have been pretty consistent as a % of GDP regardless of the rates in place. We don't have a revenue problem, never have.
What I was directing my response to were those that blame the "social expirament" of wealth distribution as a failure. I called that type of thinking a dichotomy of sorts...an oxymoron.
Yes, there has been a redistribution of wealth...from the middle class to the rich. Not the other way around. And by pure mathematics, it will happen that our beloved system will some day become an aristocracy.
Kind of like the game of monoply. Play the game long enough...one guy owns it all...the others go completely broke. -
gut
Do you TRY to be wrong every time you respond to my posts? Bankrate.com national average 30-yr fixed mortgages are 3.73% (they've recently risen, spending most of the past 5-6 months @3.5%) After-tax puts that in the neighborhood of 2.5% for higher brackets.Footwedge;1401594 wrote:There is nowhere on the planet that can guarantee you a "modest" 5% return. Secondly, interest rates for homes are low, very low, but not as low as you posted.
And, no, nothing guarantees a 5% return but over a 30-yr time horizon you'd be hard-pressed not to hit that. It's actually a pretty conservative number (30yr treasury, not that it's riskless, is yielding 3.15%) that trails historical averages pretty significantly but reflects lower growth expectations going forward. -
gut
Again, the widening wealth gap is a global phenomenon, so you'll have to come up with a bit more than blaming low US tax rates.Footwedge;1401603 wrote:You can arguev cause and effect all you want. I simply stated that over those 30 years, when the net wealth disparity has exploded in our country, we collectively paid at a histically very low tax rate. Are there other considerations to factor in? Yes.
Even then, regardless of the tax rate, revenues have historically averaged 18% of GDP. So, again, the tax rate does not explain the widening wealth gap. At all. -
believer
Not all of us aspire to be slum lords.gut;1401587 wrote:Haha, that's poor man's thinking.
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Footwedge
Under Obama's tenure, the revenues are around 15% of GDP. I will concede that equating low tax rates to the widening gap is a reach. Doesn't really matter what the tax rates are. The thread is about the widening gap. This has much more to do with unbridled capitaism....which started in the 80's.gut;1401607 wrote:Again, the widening wealth gap is a global phenomenon, so you'll have to come up with a bit more than blaming low US tax rates.
Even then, regardless of the tax rate, revenues have historically averaged 18% of GDP. So, again, the tax rate does not explain the widening wealth gap. At all.
After all that went doen in 08 and 09, the people on Wall Street are STILL complaining about regulations. this just in....you orchestrated the grandest theft in the history of the planet. Nobody went to jail. You stole it all...and not one....count em...not one has been indicted, let alone convicted.
There's a small club that controls it all. This is not "bat shit crazy' ramblings...but the actual truth.
Lobbyists + politicians+the power elite==2 class society. My period of life was a good one. Used my limited talents to carve out a comfy living and a nice nest egg. In 25 years or so, you won't be able to recognize how bad it will be in America. Whether or not the country goes bankrupt or not, it will be ugly when the grandkids are my age. -
Footwedge
What the fuck are you talking about? After taxes 2.5 percent? huh? If you are somehow trying to state that schedule A's with line item deductions will make the actual rate 2.5% is a joke.gut;1401606 wrote:Do you TRY to be wrong every time you respond to my posts? Bankrate.com national average 30-yr fixed mortgages are 3.73% (they've recently risen, spending most of the past 5-6 months @3.5%) After-tax puts that in the neighborhood of 2.5% for higher brackets.
And, no, nothing guarantees a 5% return but over a 30-yr time horizon you'd be hard-pressed not to hit that. It's actually a pretty conservative number (30yr treasury, not that it's riskless, is yielding 3.15%) that trails historical averages pretty significantly but reflects lower growth expectations going forward.
as for your other comment about making 5% over the long haul...you're a fool. For example, the S and P made a whopping .9 of 1% over the past 12 years. Look it up. Moreover, there is no way one can project your numbers. Now one can make around 2-3% in fixed indexed annuities...that's about it. But even with those, uncle sammy will grab the deferred tax at the right time. And it's taxed as ordinary income which can be painful depending on the size of the annuity.
As a banking industry person, you really don't know your shit....at all. -
gut
I'm starting to understand why you rail against the "widening wealth gap"...you are clueless about finance and investing and how to accumulate wealth. LMAO, only suckers buy annuities - typically expensive insurance products with high commissions and management fees that eat into your return. There's so much wrong with your post I don't even know where to begin, from your cherry picked 12 year time frame (when I was talking a 30-yr horizon) to your focus on the S&P, which IS NOT a diversified portfolio, to your ignorance of re-balancing and dollar cost averaging, among others.Footwedge;1402264 wrote:What the **** are you talking about? After taxes 2.5 percent? huh? If you are somehow trying to state that schedule A's with line item deductions will make the actual rate 2.5% is a joke.
as for your other comment about making 5% over the long haul...you're a fool. For example, the S and P made a whopping .9 of 1% over the past 12 years. Look it up. Moreover, there is no way one can project your numbers. Now one can make around 2-3% in fixed indexed annuities...that's about it. But even with those, uncle sammy will grab the deferred tax at the right time. And it's taxed as ordinary income which can be painful depending on the size of the annuity.
As a banking industry person, you really don't know your ****....at all.
And WTF are you talking about "Schedule A"? Do you not understand that I deduct my mortgage interest at my marginal rate otherwise the income offset is taxed at ordinary rates? So pretty simply your after-tax rate becomes (1-T)*i. That's one of the first things we learn in Acctg 101 - maybe add that one to your reading list.
You will be better served to put down "Wealth of Nations" and pick-up "Investing for Dummies 101". You would really look a lot less the fool if you'd stop challenging me on things you clearly have no idea about. Honestly, you are so clueless you don't even realize how wrong everything you just wrote is. -
gut
Oh really? Unbridled capitalism started in the 80's? Is that what globalization is, and is that when it started? Fascinating - which book told you that?Footwedge;1402263 wrote: This has much more to do with unbridled capitaism....which started in the 80's.