US becoming more like old Europe

[RWebb]

http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-the-buffett-rule-is-just-a-start.html?hp&gwh=ACF6B938CA4BB453B519416AD505870F

[Zeke]

And this isn't going to PARF?

Oh, I guess it will.
ibtl

I think it's a stupid thing to even think about. Flat tax everyone and leave a little cushion at the very bottom for the starving poor. They're off the grid anyway.

I pay tax on SS, people should pay tax on welfare.
Doesn't make sense, huh?

[Jim Richards]

IBTL and the PARF putzes.

[Mo_Gearhead]

Read my signature line.

The U.S. tax code is like most legislation that they pass. It may start out fairly(?) concise, but over the years it gets amended, and amended, tweaked, and BLOATED ...soon it's beyond recognition. I think you can still order hard-copies from the US Government printing office in Colorado (or somewhere.) Imagine - 70 hardback copies of War and Peace, shrink-wrapped and shipped on a small wooden pallet to your door. Have fun reading!

The Tax Code is full of loopholes, special interest givebacks, tax dodges for insiders, etc. such that Money Magazine used to (perhaps they still do?) give CPA's and accounting firms "faux" tax returns each year to have them figure the taxes owed. I never ONCE saw two firms return the SAME result - for the SAME return. There's your problem.

The so called 'Buffet Rule' is based on politics and class envy. The problem is the TAX CODE itself.

If you asked Buffet or Romney WHY they only pay 15% instead of the % that some secretary pays, if they were honest with their answer they would say; "Because I'm following the Tax Code rules ...and I'm smart."

Now Washington - Go to the source and FIX the F'ing Tax Codes!

[Mo_Gearhead]

And since today is TAX DAY - I want to remind everyone to take your Tim Geithner Self-directed;

"IMaySomedayBeAppointedToAFutureAdministartionsCabi netAndBeForgiven" deduction.

After all, if the Secretary of the Treasury can't figure out HIS taxes - WTF chance do we commoners have of getting it right?

[patssle]

Yeah, because The U.S. was old Europe 12 years ago when taxes were 3% higher. Does anybody else remember those horror days of the 1990s and the bad economy? How did we survive!?!

[tabs]

With the higher marginal rates of the past everyone forget that the DEDUCTIONS that were available then to decrease ones tax bite.

[Two Rivers]

What gets me the most is, I have a relative that works at a bank. Not to long after the middle of April people that have been on welfare all year are cashing 3-5 thousand dollar tax refund checks.

[on2wheels52]

Originally Posted by Two Rivers

What gets me the most is, I have a relative that works at a bank. Not to long after the middle of April people that have been on welfare all year are cashing 3-5 thousand dollar tax refund checks.

Same at the pawnshop, except it starts in late January. I guess they all pay extra for rapid refund. Febuary was a very good month for me.
Jim

[Jim Richards]

Originally Posted by tabs

With the higher marginal rates of the past everyone forget that the DEDUCTIONS that were available then to decrease ones tax bite.

Examples?

Let's tax capital gains like ordinary income.

[sammyg2]

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that (wealth redistribution) worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, “OK, we will have an experiment in this class on (you know who's) plan”. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.
As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that wealth redistribution would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.
It could not be any simpler than that.

There are five morals to this story:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

=================================

I’ll make one final point. There are five morals to the story, but there are dozens of nations giving us real-world examples every day.

Sort of makes you wonder why some people still believe this nonsense?

Does Socialism Work? A Classroom Experiment « International Liberty

Now there may be a very small percentage of our population that actually has good intentions and really thinks wealth re-distribution is a good and moral idea (because 're just flat-out too stupid to get it) but I believe the vast majority of people who support this kind of idiocracy are just greedy selfish POS who want other people's stuff and are too darned lazy and worthless to go out and earn it themselves.

They deserve nothing and that's exactly what they should get.

[jyl]

The income inequality chart referred to in the NYT article is based on actual income and taxes, not on marginal statutory rates. The economists went through 100 years of IRS records, must have been a huge task. So it includes the effect of deductions.

My view on this is pragmatic. I'm not all that emotional about the fairness of taxation policy or the rights and wrongs of income inequality. It isn't a moral issue to me. Like William Munny says in Unforgiven, "deserve's got nothing to do with it".

I do, however, think that societies that have a certain moderate level of income inequality (example might be, the USA in the 1950s) may be more stable, more harmonious, more sustainable growth, than societies with very little income inequality (examples might be early Castro Cuba, early Mao China?) or societies with very high income inequality (examples might be the Sun King's France).

It would be interesting to see work on that. I imagine economists have done it, but not sure it is getting reported in the popular press.

[BE911SC]

"Dennis, there's some lovely filth down here!"

[aigel]

From Wikipedia ... I was curious where the upper 10% income level actually is at. $135k - that's not even upper middle-class in CA, considering the cost of living.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

[Jim Richards]

Originally Posted by jyl

I do, however, think that societies that have a certain moderate level of income inequality (example might be, the USA in the 1950s) may be more stable, more harmonious, more sustainable growth, than societies with very little income inequality (examples might be early Castro Cuba, early Mao China?) or societies with very high income inequality (examples might be the Sun King's France).

This.

[speeder]

Yep. And the reason for this is fundamental fairness.

[Superman]

Sammy's example makes sense, and would be a fitting illustration of what would likely happen if a nation tried to have a "capitalist" economy where income is seized and redistributed absolutely evenly. One might expect the capitalists to give up. Like the A students. However.....

Pure socialism does not exist anywhere on my planet. The example is a caricaturization. Capitalism in fact appears to be on the rise lately. Certainly for the third of the world's population who live in China and India. And it's on the rise for good reason. Even folks who are considered commie pinko subversive socialist fruitcakes, like me, believe in capitalism. Capitalism is good.

The dishonesty comes in when folks point at caricaturizations in an attempt to convince readers that the most financially successful Americans would pack up their toys and refuse to play the capitalism game if the tax loopholes went away. Financial success right now gets you two things. It gets you higher income, and it gets you a lower effective tax rate. The dishonesty is in suggesting that if everyone's effective tax rate were the same, the rich would no longer have desire to achieve financial success.

Horse cookies. Leopards don't change their spots. It would be just as sensible to argue that a higher tax rate for financially successful Americans would increase their commercial efforts. Steep hills are more challenging. More fun.

This thread should be in PARF though, where folks can espouse all manner of fantasy.

[Hugh R]

If I make more than you, how is that "unfair" to you?

That would be like arguing that if the top 10% of income earners can afford cars that don't catch on fire and the bottom 90% can only afford cars that do catch on fire, then the fair thing to do is make it so that the top 10%'s cars catch on fire as well, saying that would be "fair".

Does anyone here think that the "Buffet Rule", named after Warren Buffett who is in court with the IRS over $1 Billion in disputed taxes, will result in YOU getting more Federal freebies? Or that it will simply serve to further feed an already bloated Federal government?