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Old 03-01-2009, 08:36 PM   #161
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I'm reading an insightful book now...

It seems to really have a descriptive grasp on the current situation, even though it was written 55 years ago. Atlas Shrugged ny Ayn Rand. It depicts a much poorer, less free America where individual initative is crushed and Washington controls all.

My DW said that if I wanted to see the country's future path, it was a good book to read.

It is scarily accurate!
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Old 03-01-2009, 08:46 PM   #162
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Originally Posted by Independent View Post
This is odd. I can agree with the 10,000 people example. I think it fits the part of my post that you quoted. However, I'm at a complete loss with "Tax laws are based on total population not individuals." I'm not saying I agree or disagree with that statement, I'm just saying I don't know what it means. Do you have a couple examples?
Sorry, I just meant something like:

The population of people with income in one range will pay X%, and the population of people with income in another range will pay Y%, etc.

The laws are not written such that if you were smart, or had good parents, or went to a good school that you are taxed differently from people in the same income. That's what I meant as "population" versus "individual".

There is no practical way to measure those things, but we can (do a poor job) of measuring income, so we do. And that's OK by me. And that is why I liked Firedreamer's post - on average, income will capture all that. I think it's about the best we can do with a (moderately) progressive tax system.

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Old 03-01-2009, 08:58 PM   #163
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Originally Posted by DougViages View Post
It seems to really have a descriptive grasp on the current situation, even though it was written 55 years ago. Atlas Shrugged ny Ayn Rand. It depicts a much poorer, less free America where individual initative is crushed and Washington controls all.

My DW said that if I wanted to see the country's future path, it was a good book to read.

It is scarily accurate!
Anjolina Jolie bought the movie rights - should be interesting.
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Old 03-01-2009, 09:34 PM   #164
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Originally Posted by eridanus View Post
The poor don't vote.
That's like saying "no one buys GM cars".

http://www.nonprofitvote.org/Downloa...8-General.html

This paper says it is just the opposite -

The Electorate by Income

Under $30,000 make up 18% of the electorate
$30,000-$50,000 make up 19% of the electorate
$50,000-$100,000 make up 36% of the electorate
$100-$150,000 make up 14% of the electorate

and....

Over $150,000 make up 12% of the electorate.

Perhaps you meant to say "There is a higher % of voter turnout among higher income people"? But, since we each get one vote (theoretically), it sure looks like the poor place more votes than the rich.

And isn't Obama referring to "rich" as the top 2% or over $250,000? A smaller subset of that breakdown. That's not a lot of voting power, and that could be why they are targeted.

-ERD50
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Old 03-01-2009, 10:06 PM   #165
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And isn't Obama referring to "rich" as the top 2% or over $250,000? A smaller subset of that breakdown. That's not a lot of voting power, and that could be why they are targeted.
-ERD50
I think that is 250K for a family or 125 for a single person - but check that.
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Old 03-01-2009, 10:23 PM   #166
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I think that is 250K for a family or 125 for a single person - but check that.
The $125k for singles was being used for some time, definitely during the campaign. But now the published budget proposal is using $200k for singles as the level where personal income taxes will be increased.

The $250k for couples and $200k for singles is really going back to the worse days of the marriage penalty that I was hoping would contine to diminish. Two life partners each making $200k will see no tax increase. Two married folks each making $200k filing jointly will get nailed with higher taxes. It makes me wonder if he chose those levels with a social agenda in mind.
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Old 03-02-2009, 12:11 AM   #167
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Sorry, I just meant something like:

The population of people with income in one range will pay X%, and the population of people with income in another range will pay Y%, etc.

The laws are not written such that if you were smart, or had good parents, or went to a good school that you are taxed differently from people in the same income. That's what I meant as "population" versus "individual".

There is no practical way to measure those things, but we can (do a poor job) of measuring income, so we do. And that's OK by me. And that is why I liked Firedreamer's post - on average, income will capture all that. I think it's about the best we can do with a (moderately) progressive tax system.

-ERD50
Ah yes..... back to the "birth lottery" argument again. The idea that says that because you were born with certain abilities that others do not have, in this case intelligence, it means you have an "unfair" advantage over others. And it is only because of this "unfair" advantage that a certain percentage (like engineers, doctors, lawyers) can command the salaries that they do. And it is also the reason that these groups owe more to society (or people who were not born with above average intelligence). But why stop there? What of people who were born with above average looks, or athletic ability, or perhaps a business acumen? Not everyone is born with the same set of skills or abilities, but VERY few people (percentage wise that is) are born with virtually NO ability for anything at all.

I am an engineer by trade, and I hope that I get to keep my job or find other employment because I am somewhat good at it. Was I born with an aptitude for it?... sure... but it still took years of training and hard work to make it pay off into a profession for myself. Same with actors and sports stars. There was no "free ride" for me... and I think the same can be said of most successfull people. When people see those that are "rich" they are seeing the "after party" in a sense. What you do NOT see are the years of effort, sleepless nights studying or working, rejections endured, battles fought, etc.

Why is it that so many continually feel that they are entitled to more? I hear this sort of quasi reasoning all the time from lots of people. The logic being... "Well I work hard.... so I should get paid more"... Ok fine... why not choose a better paying profession? And then the excuses start.... I have no time... I am not smart enought.... the economy is bad right now... and on ... and on... and on some more. So after listening to all the reasons why they cannot achieve any more, I will always ask... "ok... so if you cannot do any more... then why do you think you deserve any more?" And it is usually followed by a deafening silence....
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Old 03-02-2009, 07:13 AM   #168
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This is an interesting discussion. No matter what side of this tax argument you're on , shouldn't it be possible to simplify this arcane absurd document called the tax code?I know it's a reflection of the abuse of power of politicians, lobbyists and interest groups but if we can't even simplify this shameful unintelligible tome maybe there's no hope.
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Old 03-02-2009, 07:35 AM   #169
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No matter what side of this tax argument you're on , shouldn't it be possible to simplify this arcane absurd document called the tax code?
I'm firmly on the record as despising the current tax code. Either a National Retail Sales Tax ("Fair Tax"), or a flatter income tax (more equitable sharing of the tax burden as a percentage of income with fewer exclusions) would be improvements over what we have. At least in the abstract. But in the real world, I'm happy to stay with the disgusting pile of undecipherable guano that is the current tax code rather than give the present group of government-loving, success-loathing "architects" of the stimulus plan a license to mess with the tax rules.

I'll stick with the mess we have. It is an abomination, but it could get worse.
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Old 03-02-2009, 07:59 AM   #170
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This is an interesting discussion. No matter what side of this tax argument you're on , shouldn't it be possible to simplify this arcane absurd document called the tax code?I know it's a reflection of the abuse of power of politicians, lobbyists and interest groups but if we can't even simplify this shameful unintelligible tome maybe there's no hope.
CF&P Foundation Prosperitas, March 2007: The Hong Kong Tax System -- Key Features and Lessons for Policy Makers
Even after 60 years, the entire tax code is only about 200 pages
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Old 03-02-2009, 09:33 AM   #171
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Politicians have two means of buying votes, Pork, and the Tax Code. I don't see them cutting off an arm!
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Old 03-02-2009, 09:55 AM   #172
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Heard that up to the '80s, all interest was deductible but Reagan and company didn't want to go anywhere near the mortgage interest deduction.

Some other facts, 1/3 of Americans have mortgages, 1/3 rent and 1/3 own their homes outright.

Also, for people thinking that 3% increase to the top two brackets is onerous, until the '80s, the top bracket had a marginal rate of 90%.
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Old 03-02-2009, 10:01 AM   #173
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Also, for people thinking that 3% increase to the top two brackets is onerous, until the '80s, the top bracket had a marginal rate of 90%.
Nope, it was 70%. The 90% bracket was eliminated by the JFK-led tax cut of the early 1960s.
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Old 03-02-2009, 10:05 AM   #174
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Also, for people thinking that 3% increase to the top two brackets is onerous, until the '80s, the top bracket had a marginal rate of 90%.
explanade, this is getting to be a broken record with you:

asked -

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Nobody is arguing for higher taxes, just saying they may be necessary and that it doesn't lead to the economic catastrophe that opponents claim --
and answered -

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As long as we're honest that *any* tax increase does have at least *some* drag on taxable economic activity, ....

The question is not whether it is onerous, not whether it has or has not been done in the past, not whether it will be catastrophic, but the question is:

Isn't increasing taxes on the "rich" going to have some drag on the economy? Then why is it being done at the same time as a "stimulus" plan is being pushed?

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Old 03-02-2009, 10:06 AM   #175
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Also, for people thinking that 3% increase to the top two brackets is onerous, until the '80s, the top bracket had a marginal rate of 90%.
Sorry, but no. The top rate any time in the '80s was 69.125%. You have to go back to 1963 to find a rate over 90%. And Kennedy pushed the scrapping of that high rate for a very good reason--it was hurting the US economy and leading to a decrease in overall tax revenue. When the top rate was lowered, tax revenues increased. It is entirely possible that increasing taxes now will have a similar impact, reducing tax revenue.





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Old 03-02-2009, 10:21 AM   #176
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I'll add that marginal rates are not a very good measure of "taxation". Our tax code is so complex, that it is tough to know what anyone pays, and tough to compare one time frame to another.

Now, with a simple system like this, we could make some comparisons over time. And then we could have abetter idea what works and what doesn't. That sounds good to me:

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dex, I skimmed over that article - I don't have time now, but maybe you would like to start a new thread on that - I think it is a great topic, and this one is already getting long.

A friend of mine travels there each year, his wife has an annual business trip there and he tags along. He loves it, raves about the place. He's got some good stories.

There are so many "highlights" from that article, a few:

Quote:
  • Hong Kong has a low-rate optional flat tax of 16 percent on personal income. Taxpayers can choose an alternative system with graduated rates, though the top rate in this system is only 17 percent.2
  • There is no Pay-As-You-Earn (that is, no withholding of tax on income from employment) in Hong Kong, meaning that taxpayers pay their entire income tax liability themselves (usually twice a year).
  • Corporate income is taxed at a flat rate of 17.5 percent.3

The Hong Kong government's main sources of revenue ....... ; and the interest on the government's accumulated reserves (which has sometimes covered as much as 10 percent of public spending).

Hong Kong has no general sales tax, no VAT and no GST.

capital gains are simply not taxable.
And the food is incredible!


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Old 03-02-2009, 10:36 AM   #177
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Sorry, I just meant something like:

The population of people with income in one range will pay X%, and the population of people with income in another range will pay Y%, etc.

The laws are not written such that if you were smart, or had good parents, or went to a good school that you are taxed differently from people in the same income. That's what I meant as "population" versus "individual".

There is no practical way to measure those things, but we can (do a poor job) of measuring income, so we do. And that's OK by me. And that is why I liked Firedreamer's post - on average, income will capture all that. I think it's about the best we can do with a (moderately) progressive tax system.

-ERD50
I agree with this. I suppose we'd disagree somewhat on where to draw the "moderate" line.

I think Sam said that "flat percent" is the right way to go (post #104). Maybe I mis-interpreted him. I expect a couple other posters feel the same way.
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Old 03-02-2009, 10:55 AM   #178
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Because we all know Todd doesn't work nearly as hard as Mike. Right?
I think the point of FireDreamer's post was that Todd and Mike worked equally hard. The big difference in income was caused by a difference in luck. We seem to be talking past one another.

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How about Todd's colleague Sally, who was born with a 99th percentile IQ, grew up poor, was the 1st college grad in her family, worked her way through State Univ & borrowed her way through Med School, & works 80 hour weeks to make her 350k. Should her "excess earnings" be taxed at progressively higher rates on account of her "good fortune" too?
Note that I added the bold part. In my opinion, if she was born with a median IQ, she wouldn't become an MD making $350k, regardless of how hard she worked. This perception may be why we seem to disagree on the tax issue.

IMO, Todd shouldn't say "Mike should pay just as much tax as I do because the difference in income is entirely the result of me working 17 times harder than Mike." If we had some practical way of splitting income into "came from hard work" and "came from good luck", I'd be comfortable with taxing the luck portion more than the work portion. This isn't because I "like" taxing good luck, but because I don't like taxing hard work. Of course we don't have any such system. The fact (as I see it) that progressive taxes do tend to vary in this direction is one on the "pros" I see for progressive taxes.
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Old 03-02-2009, 11:14 AM   #179
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Well, let's tax "good fortune".

Todd was born in America (+5%) with good genes and a good brain (+5%). He grew up in an upper middle class family (+5%). Todd's Papa and Mama lived in a safer and nicer neighborhood (+5%) which allowed Todd to attend a good high school (+5%) which fostered Todd's natural abilities. Due to his good grades, Todd attended Harvard (+5%) which his family was able to afford (+5%) to become a doctor with an annual income of $350,000 (+5%). Therefore Todd should pay 40% in taxes on his income.

Mike was born in America too (+5%), but was unfortunately not as genetically gifted as Todd (+0%). He grew up in a poor family (+0%), living in a poor, rural area (+0%). His high school sucked (+0%) and it didn't foster his natural abilities. Therefore Mike didn't go to college (+0%). Mike found a job, bagging groceries at the Piggy Wiggly (+0%) making $20,000 a year with overtime.

So Todd should pay 40% in taxes on his income and Mike should pay 5% in taxes on his income... Which is similar to what they would be paying under our current tax code (give or take).

In other words, we already tax "good fortune".
May I commend this short story for your entertainment...

Harrison Bergeron

by Kurt Vonnegut (1961)

THE YEAR WAS 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.
...
"Harrison Bergeron" by Kurt Vonnegut
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Old 03-02-2009, 11:15 AM   #180
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I think the point of FireDreamer's post was that Todd and Mike worked equally hard. The big difference in income was caused by a difference in luck. We seem to be talking past one another.
Actually, in order to make my point (taxation based only on "good fortune") I had to assume that both Todd and Mike worked equally hard.

On a personal level, though, I think there is little doubt in my mind that Todd, a doctor who has gone through one of the tougher medical schools in the country and many years of residency has had to work much harder than Mike to get to where he is today. Good fortune helped, for sure, but we shouldn't discount Todd's own merits on the base that he was born under a lucky star.

I have had many jobs in my life. I have swept floors, I have emptied trash, I have operated heavy machinery on production lines, and I was a bank teller for a while too. Some of them had long/odd hours, some were utterly boring, some were physically demanding. But there is no doubt that my hardest "job" (in terms of workload and fatigue) was, by far, getting my PhD. No question about it.
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