Tax The Rich, Kill Your Paycheck

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Jccarlton
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Tax The Rich, Kill Your Paycheck

Post by Jccarlton »

Yet another great piece from American Thinker:
http://www.americanthinker.com/2010/03/ ... iddle.html

Does anybody else remember the 70's, when tax shelters were the investment opportunities that everybody wanted?

Carl White
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Post by Carl White »

Lowering taxes on the rich certainly hasn't worked for us.

The rich have gotten richer and everyone else has either stagnated (while working longer hours) or lost ground. The concentration of wealth in the country is reaching levels not seen since the twenties.

The rich were also quick enough to demand government support (i.e. taxpayer money) when their greed put the whole system out of balance and in danger of collapse. Just what are they promoting now, corporate socialism when they're losing money and capitalism when they're making it? If it's the taxpayer that gets to underwrite the risks they take, maybe they should be more of the taxpayer.

For that matter, with the deterioration of the middle class, who is left to pay for the country's staggering military bill that enables the corporations to work their will around the world? And who will be there to foot the bill the next time they set things wobbling? The lobbyists have been hard at work, defeating any attempt to restore the financial regulations that kept the markets sane.

Time to invest in gold and property, people, while the insatiable rich undermine everything until it collapses.

Skipjack
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Post by Skipjack »

The american middle class has almost disappeared, especially in the last 8 years. The rich got even richer, everybody else got poorer.
The 50ies were a great time of economic boom because of the rising middle class. The 2000s are a time economic decline because of the decline of the middle class.

MSimon
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Post by MSimon »

When economic growth is high - think the end of the dot com boom - the middle class and the poor advance due to the competition for labor.

You want to help the poor and the middle class relative to the rich?

Get the economy booming. Hobbling the people who invest is not the way to equalize the income disparity. It doesn't work. The rich can afford to game the system.

My prescription: get the government out of the way and let 'er rip.
Engineering is the art of making what you want from what you can get at a profit.

Carl White
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Post by Carl White »

The problem with the dot com boom and later the housing boom was that they were bubbles. They were the creation of the illusion of wealth, not actual wealth.

The U.S. (and Canada) needs to create new industries. Like the manufacture of fusion generators, perhaps? Hopefully.

Jccarlton
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Location: Southern Ct

Post by Jccarlton »

Skipjack wrote:The american middle class has almost disappeared, especially in the last 8 years. The rich got even richer, everybody else got poorer.
The 50ies were a great time of economic boom because of the rising middle class. The 2000s are a time economic decline because of the decline of the middle class.
You really need to check your facts:
http://www.heritage.org/Research/Welfar ... chart2.jpg
I'm tired of this oft repeated canard that just is not true.
http://www.cbo.gov/ftpdocs/81xx/doc8113 ... Income.pdf
http://www.heritage.org/Research/Taxes/ ... 8146_1.pdf

MSimon
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Post by MSimon »

The problem with the dot com boom and later the housing boom was that they were bubbles. They were the creation of the illusion of wealth, not actual wealth.


Not true. The dot com boom gave us cheap bandwidth (it took a while). And the boom came because traffic was DOUBLING every 6 months. It was amazing that the suppliers could keep up. Then traffic leveled off (only 40% increase a year) and it took us two years to work off the overhang.

So we got real wealth out of the dot com bubble.

What do we get out of the housing bubble? Unoccupied houses.
Engineering is the art of making what you want from what you can get at a profit.

Skipjack
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Post by Skipjack »

Jccarlton
Well you are not quite right:
http://en.wikipedia.org/wiki/American_middle_class
Generally the middle class can afford less due to increased prices, e.g. for housing. To me that is a big indicator of relative wealth.
Anyway, one can argue about this on an on. IMHO it would be good to focus on the middle class though. IMHO they are what defines your country, not the upper class, nor the lower class.

Oh and I am absolutely not for redistribution of wealth. But the middle class has to see some (tax-) releave some where. They are the ones who are currently struggling the most (to avoid their own social decline).

TDPerk
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Post by TDPerk »

Two lies in two sentences and one sentence without relevance.

"Lowering taxes on the rich certainly hasn't worked for us."

We've scarcely done it yet, and to the extent we've done it, it worked out just fine. We are plainly on the confiscatory side of the Laffer curve.

"The rich have gotten richer and everyone else has either stagnated (while working longer hours) or lost ground."

Not if you count healthcare, which is part of most worker's compensation. I've gotten about a 4% raise every year in that on average. If it were wages, taxed, and at my disposal, I could be as flexible with it as I'd rather be--but that doesn't mean my compensation isn't going up, and untaxed in the main at that.

"The concentration of wealth in the country is reaching levels not seen since the twenties."

You say that like it's both true and a bad thing. Count healthcare and it's scarcely as true, and it's rent seeking, not capitalism, which is at fault for what is faulty in the rest. Dis-empower government drastically, and the money will go to who can best make it, not those who lobby best.
molon labe
montani semper liberi
para fides paternae patria

TDPerk
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Post by TDPerk »

"The 50ies were a great time of economic boom because of the rising middle class."

Wow. Is that ever a case of the cart before the horse. The middle class rose because of the economic boom, which only happened because so much of the rest of the world's production capacity had been razed/disrupted by WWII.

The 50's were when the Brits got a rep for bad teeth, because they couldn'lt afford decent dental care, and they were on sometimes stricter rations after the war than before it.

'Course they had socialists in charge, so they didn't recover as fast as they might have.
molon labe
montani semper liberi
para fides paternae patria

Jccarlton
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Post by Jccarlton »

Skipjack wrote:Jccarlton
Well you are not quite right:
http://en.wikipedia.org/wiki/American_middle_class
Generally the middle class can afford less due to increased prices, e.g. for housing. To me that is a big indicator of relative wealth.
Anyway, one can argue about this on an on. IMHO it would be good to focus on the middle class though. IMHO they are what defines your country, not the upper class, nor the lower class.

Oh and I am absolutely not for redistribution of wealth. But the middle class has to see some (tax-) releave some where. They are the ones who are currently struggling the most (to avoid their own social decline).
While I think that looking at movement through the income quintiles is what is important, You are right about the tax burden on the middle class. The fact is that, through inflation, the tax burden on the most productive part of the middle class, the small business owners, has increased significantly, making making it much harder to stay in business and employ people. The rich can manage their income to ease the tax burden, but a person who doesn't have that kind of income flexibility gets screwed. I've seen both sides of this first hand.

Carl White
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Post by Carl White »

TDPerk wrote:Two lies in two sentences and one sentence without relevance.

"Lowering taxes on the rich certainly hasn't worked for us."

We've scarcely done it yet, and to the extent we've done it, it worked out just fine. We are plainly on the confiscatory side of the Laffer curve.
It was done in the Reagan era, and by Dubya, so it certainly hasn't been "scarcely done" yet. Remember "trickle-down economics"?
Not if you count healthcare, which is part of most worker's compensation. I've gotten about a 4% raise every year in that on average. If it were wages, taxed, and at my disposal, I could be as flexible with it as I'd rather be--but that doesn't mean my compensation isn't going up, and untaxed in the main at that.
All this reflects is that healthcare costs have gotten out of control. 131% increase in 10 years. It doesn't represent any improvement in the standard of living. In fact, with the way HMOs operate, it can be harder to get the care you need.
"The concentration of wealth in the country is reaching levels not seen since the twenties."

You say that like it's both true and a bad thing. Count healthcare and it's scarcely as true, and it's rent seeking, not capitalism, which is at fault for what is faulty in the rest. Dis-empower government drastically, and the money will go to who can best make it, not those who lobby best.
It is true and the facts all point toward it. Even Jccarlton's references were more about trying to justify it than denying it. It's partly because the upper class works more hours, for example? That only reflects the changing nature of work in the U.S., with the disappearance of steady manufacturing jobs that pay well and replacement of them by part time work (no healthcare there, by the way) and temp jobs and minimum-wage service economy jobs. Loss of opportunity for many people who would like to work but end up with two part-time jobs at best.

Concentration of wealth is not a bad thing, but only up to a certain point. Did you know that half of U.S. children will have to depend on food stamps at some point in their lives? Fully half! That's how tight things are getting for a lot of people in the U.S. At the other end of the scale, we have the crazy increases in CEO and senior executive compensation. That should be alarming to everyone who thinks things are still balanced.
Last edited by Carl White on Fri Mar 12, 2010 3:28 pm, edited 2 times in total.

Skipjack
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Post by Skipjack »

The fact is that, through inflation, the tax burden on the most productive part of the middle class, the small business owners, has increased significantly, making making it much harder to stay in business and employ people.
On that, I do agree, actually. Businesness are taxed way to much in the US, much more than they are here. This is IMHO a problem and one of the reasons why I decided not to move my business to the US after all.
Here in Austria, small business owners make a nice chunk of the middle class. There are many others though. Teachers, middle and lower management, engineers, architects, university professors and medical doctors. Some of them are upper middle class, but still middle class.
They all feel the tax burden the most. Once you are rich enough, you do have a much easier time handling your taxes. Reinvest, donate, invest in bad movies and get double tax writeoffs (was possible in Germany, not sure about the US), put the money into foundations and so on.
The middle class cant afford doing that, because they need all the money the make to live of it and have only very little left to do these things with (to little for some of these options).

MSimon
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Post by MSimon »

Generally the middle class can afford less due to increased prices, e.g. for housing.
Depends on how you count. When I was growing up a 1,000 sq ft house was the norm. Now a days 2,000 sq ft is the norm.

So what does that mean? Prices rise until an object of desire is just barely affordable. You want more disposable income? Live in a smaller house.

But you know how it works - as soon as you have enough money you want a better place to live.
Engineering is the art of making what you want from what you can get at a profit.

Carl White
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Post by Carl White »

MSimon wrote:So what does that mean? Prices rise until an object of desire is just barely affordable. You want more disposable income? Live in a smaller house.
That can be hard to do actually, at least in some places. The developers are all set on building closely-packed McMansions instead of cottages. And the older small houses sell for high prices too due to large yards and location.

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