I thought Obama signed into law in 2010 as part of the "extended unemployment benefits" law changes that made the estate tax exemption 5.X million for the future and lowered the tax rates to 40% max.
Is that not correct?
I thought Obama signed into law in 2010 as part of the "extended unemployment benefits" law changes that made the estate tax exemption 5.X million for the future and lowered the tax rates to 40% max.
Is that not correct?
nocones wrote: Beer Barron I agree with you premises (particularly healthcare). I worry though about 3 things. 1. How our inept government could be expected to successfully administer these things. 2. How our voting public with ever get past the partisanship that has been marketed so well to us creating such a divided electorate that simply votes for alternating sides of the same coin thinking their guys will fix the problems their guys where implicit in creating. 3. Who/how to pay for the necessary increase in government income required to pay for the programs you've suggested and maintain the commitments made by past governments (social security and debt)
The first two questions are tough. For education, it would be simpler. Expand current systems and give them more funding, or put a few in with minimal oversight. For health care, someone who knows better would have a good answer. I figure we have models in place elsewhere in the world that have figured out most of the tough questions, and would be pretty simple for us to adopt. Most people in Germany actually use private insurance, it is just publicly funded for everyone. A system similar to that would probably work pretty well here.
As for how we pay for it: it would be short term debt, for long term money savings and improved economic strength. It would be an investment. The idea is that if you fund education now, you do not have to fund nearly as much welfare, health care, or justice system expenses in the future. The benefits from funding health care would not be as great as funding education, but would still be there, because it costs us a lot less to spend money on general healthcare than on emergency care and loss of work time due to illness. We're already in debt, but not really making systemic changes to save money in government.
nocones wrote: I thought Obama signed into law in 2010 as part of the "extended unemployment benefits" law changes that made the estate tax exemption 5.X million for the future and lowered the tax rates to 40% max. Is that not correct?
Hmmm... It appears you are correct, and my information is out of date.
spitfirebill wrote: So your answer is that when a wealthy person dies, you take all his money and give it to other people who haven't worked for it either?
I'm not advocating for "taking" anything, I'm advocating for incentives that would reward people for spending more of their money on creating jobs and bettering society. The robber barons of the 1800's acquired wealth in very unethical ways, but they also put tremendous wealth back into society by building infrastructure, schools, museums, etc.
It is evident from most of the discussion that the issue isn't an economic one, but a cultural one. The Germans, for example, are one end of the spectrum in the EU, while the Greeks are the other. Which has almost destroyed it.
I agree with those that say the middle class in this country is really killing itself by struggling to have all the luxury items that they think they need. I see young couples all around my neighborhood with expensive homes, expensive cars, and kids in private school. And both of them working hard just to stay even. When you talk about "excess capital" think about how lacking these folks are in it. Think about how wasteful it is to go from a iPhone 3 to a iPhone 4 for a iPhone 5 and all the other expensive gadgets everyone thinks they need and then throws away when the next shiny object comes out. Rather that saving (investing!) that money.
There's a lot of "let's legislate and control the economy to make it fair" here that didn't work in the Soviet Union and won't work anywhere.
I know quite a few folks that are considered wealthy by the Obama definition and I don't know any of them that sit around on their asses collecting income from passive investments. They all worked to get where they are and they are very actively investing, which creates jobs, believe it or not. I sometimes wonder about how hard these folks work considering that they COULD just go fishing every day with what they already have. It isn't the money incentive as much as it is the culture they were raised in.
Think about how well some immigrant groups tend to do in this country and why they often surpass the natives.
Datsun1500 wrote:alfadriver wrote: The only problem with your father is that it's quite likley that he pays only 15% tax on his income, whereas working people pay between 20-36%. It would be nice if that were even. Why does your father get a tax break for being rich? IMHO, that's a problem. Put it in a different way- Say Alan Mullaly makes the same money your father does, just as an example. But since he worked for his, he gets to pay 39% income tax on his salary. Whereas your dad can easily only pay 15%, so if the pay was $20M, Mullaly takes home $12.2M whereas your dad takes home $17M. How is that fair? You work hard running a company, employing many millions of hard working tax paying employees, producing a product that millions buy, really driving the economy and have to pay more taxes?? I don't get that.Why the assumption that he's taxed at 15%? The only thing taxed at 15% is dividends from stocks. Stocks purchased with money that he was already taxed on... Any other income (interest, rental, business, etc.) is taxed at the same rate as others in that bracket. It's not as fun as saying "The rich guy only pays 15% and I pay 25%" though, is it? So his father worked 50 to make himself successful, built a business, paid taxes, etc. and it's still not fair?
Well, looking at IRS data, and seeing that actual tax rates on income drops to just about 20% at the highest income braket, it seems to be a pretty safe assumption that people would be making most of their money via long term captiol gains. Otherwise, the 39% highest tax braket for that level of income would have a much higher effect.
So the assumption is based on data. That, and he said that he does not work anymore. So sources of income are pretty limited, in tax reporting domain.
That, and we are talking about gain here- the increase in value of an item, not the purchase price. When you sell that, your income is the increase of the value of that- not the original value. that INCREASE of value is then taxed at 15% if held for more than one year. This isn't the dividend being taxed.
Again, the IRS does report this kind of income increases as income increases. If you go here- http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income there's a excel file of sources of income. On that sheet, there's data of total income vs ordinary long term capitol gains.
Some quick math has long term capitol gains as <1% for earners up to $100k, less than 5% for earners between that an $500k, less than 10% up to $1M income, then it raises to 11.8% between 1-1.5M, 14.4% between 1.5-2M, 19.2% for 2M-5M, 26.7% for 5M-10M, and then a rather staggering 42.8% of total income for people who report over $10M of income. So if you are a typical earner of $10M, 4.2M of that only gets taxed at 15%.
This isn't money that is taxed twice. This is the the money gotten from the increase of value of something. Not dividens, not normal intrest, not wages, etc. Just gains.
How much more progressive should our tax code be? If you want to get the Rich to spend more on "creating jobs" your going to have to give them some kind of effective tax cut and to do that you will have to generate the revenue from the lower 95%..
Take a look at this chart. I apologize the source isn't better but I could not come the information presented like this elsewhere. I did confirm the accuracy of the info from various sources.
How would you adjust the right side of this chart so the super rich pull their weight?
I thought the discussion was about businesses increasing profits by cutting wages - which in the long term decreases the public's ability to purchase the stuff the businesses sell.
In reply to nocones:
That chart is a little misleading. I just made one based off of the 2011 tax data from the IRS, but am not sure how to post it... The crux of it is that the one income bracket that pays a lot more than it's weight is between $200k-$1M. Above $1M it's more, but not that drastically more. The link to the IRS has the data, too, but a the breakdown of brakets is a little different.
But more important is the tax percentage paid vs. tax braket. Which I'd like to plot, too. It peaks at 29.2% of taxable income for the $1.5-2M earners, but then drops to 23% above $10M. And this tax braket should be at 39.6%. But the difference between income tax of taxable income vs. rate is interesting.... Seems as if the highest of wage earners seem to have a subsidy going to them of one type or another.
nocones wrote: How much more progressive should our tax code be? If you want to get the Rich to spend more on "creating jobs" your going to have to give them some kind of effective tax cut and to do that you will have to generate the revenue from the lower 95%..
So, the rich never created jobs before the Reagan Administration?
So for those of you on the right side of this debate, what is the solution to growing income inequality? Or do you deny that income equality is increasing?
alfadriver wrote: But more important is the tax percentage paid vs. tax braket. Which I'd like to plot, too. It peaks at 29.2% of taxable income for the $1.5-2M earners, but then drops to 23% above $10M.
Wow I didn't know the US' income tax brackets actually turn regressive above a certain point. I did know how light US taxation is but it's still funny to think that US deca-millionaires' uppermost bracket is pretty close to mine...
The bracket does not turn regressive, those people are just getting more deductions or are paying taxes at a different rate for some reason (e.g. capital gains). He is referencing overall percentage of income that ends up being payed as tax, not tax rate.
Of note, for both sides here, is that investments in companies, in general, are going to be tax deductible.
So, for the super rich not paying as high a percentage, this MAY be the result of businesses expenses (which can also be a bit of a scam of course)
Also, having super high taxes for the super wealthy (as in pre-Regan era), in a way, Encourages business spending, since it is deductible.
Right?
PHeller wrote: So for those of you on the right side of this debate, what is the solution to growing income inequality? Or do you deny that income equality is increasing?
I think the question you want to ask is:
Do you agree that inequality is growing? If so, do you think that is an issue / problem. (Yes or No) Why?
Datsun1500 wrote:PHeller wrote: So for those of you on the right side of this debate, what is the solution to growing income inequality? Or do you deny that income equality is increasing?I don't think there is a growing inequality.
Bad news, the stats say this is factually wrong. This has nothing to do with perceptions, it's cold hard math.
Love these threads! Keep em coming! Lots of good discussion here.
alfadriver wrote: The only problem with your father is that it's quite likley that he pays only 15% tax on his income, whereas working people pay between 20-36%. It would be nice if that were even. Why does your father get a tax break for being rich? IMHO, that's a problem.
It's not as simple as that. It depends on the bracket but the cap gains rate varies from 0, 15 or 20%. Also, for high wage earners there is an additional 3.8% medicare contribution tax. This is for long term cap gains. Short term gains are taxed at ordinary rates.
Even if you were paying 15% on qualified dividends (normal dividends are taxed at ordinary rates), don't forget corporations already paid 35% on that income.
Datsun1500 wrote: Don't worry about what "the rich guys" are doing, worry about yourself. Assume the income inequality is increasing, so? What's better to do, complain about it or actually do something about it yourself?
Now this part's my opinion: This is unworkable because the world is far more complex and unfair than this suggests. To suggest that everyone has equal opportunities, a chance at a fungible set of valuable skills and that their lives don't interact in any way with that of others is to vastly oversimplify life in general. Life is not a game of chess, it doesn't start out the same for everyone, it's not a game of pure skill and there's way more than just one opponent to worry about.
Now what could somebody do to "do something about it yourself?" Start a business? You need some spare money for that (usually, a lot). How do you make that? Get a job and work hard. If you're lucky that will work out great and you'll wonder what everyone else is complaining about. On the other hand, that may only get you enough to survive. If you're unlucky, not even that. Where do you go from there? There aren't too many jobs available and nobody's hiring. You can try to retrain for an industry that looks more promising but then you need that spare money again and you may lose all the hard work that went into your last career (and it could happen again if 2nd time isn't the charm). Now in this hypothetical scenario we can acknowledge that the game looks rigged but not complain about it or take any action apart from what you do yourself. So do you just resign yourself to failure and wait for death?
Beer Baron wrote: Here are things I would do to make corrections to some of the issues I see in our society that can be achieved without blaming or really penalizing either the haves or the have-nots. Yes, these would cost public tax money, but would ultimately pay a significant return on investment by lowering major costs down the road (say 10-20 years): 1: Primary Education More money into good primary education. If there is one thing that helps people better themselves later in life, it's education. Make pre-K schooling mandatory. Studies have shown huge improvements in the outlook of future life for kids who go to preschool. Along with this, would be real, universal sex education from junior high on. Get the moral religious activists out of dictating sex-ed policy. "Abstinence only education" is b.s. that does not work. Teach people how to properly use birth control, then provide it for them. 2: Publicly funded higher/vocation training Don't make people have a difficult choice between a subsistence paycheck and getting training that will lead to good paying employment. Yes, I know, it *can* be done. That doesn't mean it *will* be done if it is painful. Remove that pain. Pay people a stipend to attend approved 2-year vocational training. 3: European/Canadian style healthcare We've already decided everyone in this country deserves access to health care. Now let's act like we have. Give people access to primary care rather than waiting until they have an emergency. Shift the burden of paying for health care off of employers. This will be really good for small businesses and entrepreneurs. Paying for health care is disproportionately harder for smaller companies. If they are relieved of that burden, it becomes much easier to operate a business and attract skilled workers. You also remove the issue of companies like Walmart keeping low-wage employees at part time to avoid paying for their health coverage. Those low wage workers could have health care, and their company would be more likely to employ them full time. This would make their lives easier because they could work the same number of hours at fewer jobs.
I'm actually with this guy. My issue is it sounds great on paper but I don't know that our government can pull that off.
nocones wrote: 1. How our inept government could be expected to successfully administer these things.
As "inept" as you think the government is, they actually aren't that bad. It's one of the biggest businesses in the world, and suffers as such. Or should I say "non-profit organizations"?
nocones wrote: 2. How our voting public with ever get past the partisanship that has been marketed so well to us creating such a divided electorate that simply votes for alternating sides of the same coin thinking their guys will fix the problems their guys where implicit in creating.
Youse guys' politics are weird. I still can't get over the whole "teaching abstinence" thing or creationism. Basically, this comes down to a failure of the system in regards to federal vs state rights IMO.
nocones wrote: 3. Who/how to pay for the necessary increase in government income required to pay for the programs you've suggested and maintain the commitments made by past governments (social security and debt)
You don't need to increase government income for these things. You need to change the insane industries you (general, USA you) have built up around them (mainly insurance, big pharma, and the medical community). I will continue to argue this, our system in Canada is NOT milking us dry. Our federal pension plan is well and PROPERLY funded. The safety nets are decent, and aren't destroying people.
nocones wrote: How much more progressive should our tax code be? If you want to get the Rich to spend more on "creating jobs"
If the rich want to earn MORE money, they will naturally create jobs IMO. At the end of the day, "typically", you need a larger workforce to earn more money. There are only so many efficiencies you can chase before the final answer is "expand your business". Doesn't matter what they are taxed at, they still earn more money either way.
GameboyRMH wrote:Datsun1500 wrote:Bad news, the stats say this is factually wrong. This has nothing to do with perceptions, it's cold hard math.PHeller wrote: So for those of you on the right side of this debate, what is the solution to growing income inequality? Or do you deny that income equality is increasing?I don't think there is a growing inequality.
I just wanted to quote this part of the thread for the LULZ. Even trying to paint a pretty picture, the statistics clearly show more money being in the pockets of the richer, and a divide rising creating "haves" and "have nots". It's not serious yet... but give it 50+ years and we could be back to revolutions IMO. Not to be alarmist, but that's how this stuff has happened for thousands of years.
GameboyRMH wrote: Now this part's my opinion: This is unworkable because the world is far more complex and unfair than this suggests. To suggest that everyone has equal opportunities, a chance at a fungible set of valuable skills and that their lives don't interact in any way with that of others is to vastly oversimplify life in general. Life is not a game of chess, it doesn't start out the same for everyone, it's not a game of pure skill and there's way more than just one opponent to worry about.
This basically sums it up. I personally believe everyone in a 1st world country has the opportunity to SUPPORT themselves and acquire the basic necessities. After that, it all goes out the window. So many variables.
novaderrik wrote: the reason the "rich" are getting "richer" is because the "middle class" is giving large chunks of their disposable income to the "rich" in the form of cell phone and cable bills as well as payments on the shiny new cars, boats, rv's, and houses that are sold by the "rich" to the "middle class". there are some "middle class" people that come between themselves and the "rich" in the form of making, transporting, selling, and servicing those things.
Economists have hard data proving that income growth for anyone not in the upper tier of income in the U.S. has not grown in at least 10 years. Some data says over 20 years. It really has very little to do with increased consumer spending or conspicuous consumption like what you describe.
The numbers say the main reason is because the rich are soaking up almost all, if not all, income growth in the U.S. This is increasing income inequality which will cause all of us, rich and poor, all sorts of problems down the road. Income inequality is destabilizing to society.
Xceler8x wrote: Economists have hard data proving that income growth for anyone not in the upper tier of income in the U.S. has not grown in at least 10 years. Some data says over 20 years. It really has very little to do with increased consumer spending or conspicuous consumption like what you describe. The numbers say the main reason is because the rich are soaking up almost all, if not all, income growth in the U.S. This is increasing income inequality which will cause all of us, rich and poor, all sorts of problems down the road. Income inequality is destabilizing to society.
Another odd thing is the exorbitant CEO pay... one person does not make a company. And no one person is worth paying tens of millions a year for. That makes it seem like they are god and control every facet of a corporation, which is insanity.
You hand-wave away everything as "excuses" and counter with some rags-to-riches corner cases and a big heaping helping of Just World Fallacy. I put a lot of effort into my arguments, I expect better in return.
Datsun1500 wrote: ....Everyone does have an equal opportunity to become successful. Those that believe that, can do well. Those that don't, make excuses...
I think you are being a wee bit too general here. Can you honestly say the guy that grows up in rural Appalachia and one of Donald Trumps sons have the SAME chance of becoming successful? (neither of which is their doing) Certainly the both CAN, and both will take a lot of work and dedication, but the SAME chance?
Having money has privileges (makes some things easier). Having a lots of money makes making more money much easier (e.g. higher interest rates, more lucrative / easier investment opportunities etc). That is a pretty basic fact, I don't think you can dispute that.
I think you are correct though is saying the current situation is not that much difference from the past (some of which required laws, robber barons and such). I don't know what the rate of change is at this point, but that would be the critical statistic.
BTW I think 50 years is too long a timeline. Think more like 10 years, maybe 20 tops. We have a whole generation who is largely unemployed or underpaid, and more and more jobs being replaced by automation. There's no money to pay anyone to do new, more "trivial" jobs this time. The need for human labor simply appears to be decreasing.
GameboyRMH wrote: BTW I think 50 years is too long a timeline. Think more like 10 years, maybe 20 tops. We have a whole generation who is largely unemployed or underpaid, and more and more jobs being replaced by automation. There's no money to pay anyone to do new, more "trivial" jobs this time. The need for human labor simply appears to be decreasing.
Yeap. Somehow, in all of the commotion for new technology and greater efficiencies, it was forgotten what would happen when life became "too" easy. It's a reap what you sow kind of thing, and I think it has been made even worse by the digital era (where something made of essentially nothing has value).
Datsun1500, what is your deal? Honestly, the simple version of it is this; for there to be rich, there MUST be poor. That is how a finite system works. End of discussion. Not everyone can be rich, no matter what they do (just like not everyone will be poor). Not everyone WILL be rich, for various reasons. But there are also a lot of people who essentially "fail" at being rich for a huge number of reasons, some outside their control. For you to argue otherwise... well it's just silly. The blanket statement of "anyone can be rich" is as ridiculous as me saying "anyone can go to the moon".
And also, the French Revolution was about 200 years ago... it wasn't until the mid 1800's where common democracy finally was becoming a thing. And it could be argued that the World Wars were a style of revolution. So yea, I personally believe unless some serious enlightening goes on, we either hit WW3 (if resources start to dwindle causing imbalances between nations) or we have the resources but it's sort of like elyisum (we're rich, so f*&k all you poor peoples, peace out!)
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