Tax Cuts Extended to All Americans

[haha]

Let's compare this to some of the stories we here from people who got a cancer screening, caught it early and it saved their life, and now they preach to everyone to go for screenings. Seems reasonable.

But when you analyze it, you may find that to have the same success, everyone would need this screening every 6 months (just making up numbers here). And there is a risk to the screening. So overall, there may be more harm than good. And 99.6% would never get that cancer anyhow.

I think that you may find this is not a very persuasive argument for Martha. Some things it is usually better to just abide with in private.

Anyway, the things she mentioned do not strike me as the things that most conservatives would rather not spend money on. What could be more important than making education available to motivated students, and making disabled people able to survive? SS disability is not easy to secure.

Ha

 

[jdw_fire]

I didn't misquote you, since I used capital letters and apostrophes.

LOL

then what you did was make a statement that you argued against, thus implying that is what i said. you are a politician, it is soo a waste of time trying to expain this to you.

 

[MichaelB]

I'm off on a road trip so I won't be posting in this thread for a few days. If this thread is still open then I will take it up again.

The selfishness expressed by some is surprising. I'm not referring to the desire to minimize taxes paid, but instead the lack of recognition and acknowledgment on how our society works and how it enables us. The ability to create value and generate prosperity is the result of giving, not taking.

Sunsetsail, you can find intelligence and reason in other people's views even where there is disagreement. You just have to first realize there are other intelligent people in the world besides yourself, and they might even know things you don't.

 

[Danmar]

I'm off on a road trip so I won't be posting in this thread for a few days. If this thread is still open then I will take it up again.

The selfishness expressed by some is surprising. I'm not referring to the desire to minimize taxes paid, but instead the lack of recognition and acknowledgment on how our society works and how it enables us. The ability to create value and generate prosperity is the result of giving, not taking.

Sunsetsail, you can find intelligence and reason in other people's views even where there is disagreement. You just have to first realize there are other intelligent people in the world besides yourself, and they might even know things you don't.

Hurry back. I find your views refreshing but rare on this board.

 

[GregLee]

But when you analyze it, you may find that to have the same success, everyone would need this screening every 6 months (just making up numbers here). And there is a risk to the screening. So overall, there may be more harm than good. And 99.6% would never get that cancer anyhow.

This analogy does not serve your point well. It's so wrong, it's a job to figure out what you're getting at.

 

[lets-retire]

This analogy does not serve your point well. It's so wrong, it's a job to figure out what you're getting at.

Actually even the OBM stated essentially the same thing during the debate on the health insurance bill last year. Congress members were selling the preventative aspects of the bill as a cost savings. The OMB looked at the details and determined that the preventative screenings would increase the costs of health care. This was figured by determining the approximate costs for the screenings for everyone and approximate savings from catching certain issues early rather than later. The number of people who actual are effected by the maladies screened for each year is low enough that it cost more to provide the screenings than it currently costs to treat the issues.

 

[Texas Proud]

I hope that you take this with the intention of being informational as opposed to confrontational.

I believe that Westernskies is alluding to the fact that EVERYONE that went to the state schools received the same benefit of tuition. Much like if someone attends public school they also received a benefit of that education from the state.

But the reality is that if Westernskies went to the same public university, and paid the same amount of money as John Doe, but made better choices of not drinking so much, or wasting so much, and working to help keep his college tuition from building up to a large loan to be paid at a later date, that would be one of the differences. The other may happen to be in the same place at the same time, or being able to recognize opportunity more so than the miserable John Doe who chose to not take advantage of the what the state was offering, and using that to increase his income.

Both individuals received the exact same benefit. They both paid the same amount of taxes while they were using the services that the state rendered, therefore they are both even. Lest Westernskies happen to earn more and pay more taxes than the miserable John Doe who decided to drink a lot during college, stay up partying at night instead of getting enough sleep to make it to class on time, not fool around so much while attending college, etc.

FYI. I never graduated college. 99.9% of the people that I work with have either 4 year - 12 year degrees. I worked my tail off to get to my income level, although I paid only 2.4%-2.5% in FIT last year (with a 6 figure salary) because my wife and I planned on her being at home with our children, allowing me to focus on work and increasing my income (i.e. networking, etc.). The fact that we have 4 eligible children for the child tax credit helps a lot, as does the pre-tax healthcare that I have (along with my colleagues), FSA, and pre-tax 401k (just like my colleagues), mortgage interest deduction, and high property taxes, thanks to the state of NJ and our own decision to remain here. Choosing to work within the tax guidelines (and not even remotely trying to really stress our tax filings in the least).

The reason to mention the above about my life is merely to point out that there aren't that many people who can generate that kind of income without a degree, and sometimes even with a degree. Does that require my taxes to be increased automatically because I'm using the guidelines that were presented to me and allowed me to make my decision. I don't think so.

I fully understand (at least I understand what I believe I understand )...

But Westerskies was making an argument that he did not get any extra benefits of society that would have helped him achieve his level of success... one of those was a statement that he paid 100% of his tuition. I just pointed out that even if he did so, going to a state university and paying 100% means taxpayers in that state paid for him to go also....

As an example.... I just looked and say that in Virginia out of state tuition is over $30K and in state is about $16K... and I bet that even the out of state students are not paying the full cost to educate them...

I just looked up Texas and their funding for the next two year period is projected to be over $8 billion... If you go to any public university, community college etc. etc... you are getting a benefit from this money...


I do agree that these benefits were offered to others in the state where Westerskies received his degree.... but who cares... he did not do it all on his own... the 'system' helped him along the way... this system needs funding.... the question is how much and who pays....


I will be the first to say that the system is spending way to much and needs to cut back.. and I also think that everybody should pay in SOMETHING into this system... but the argument is that the people who are receiving the most benefits from this system (no matter if it is because of luck, skill, knowledge, hard work etc. etc....) should pay a higher percent of their gain back to the system.... I really do not see a problem with this... I do it in my life with others...

As an example... I have a good friend and we go out to eat or catch a movie or whatever.... and the bill comes in at $22.... I usually say 'give me a $10 and we are good'.... because I earn more than twice what he earns... and even though I have a family and he does not... I am better off than he is and don't mind doing it...

The problem is what should everybody pay and why are we spending so much... (and guess what.... SS and medicare are big drivers of what we are spending).... I am not for a very high upper tax bracket... I even think that 36% is to high... but I also think we give to many tax breaks... another example... there is a guy at work who complains about the spending and the dems... but this guy pays NOTHING in FIT... he has 5 kids.. his wife does not work etc.... he benefits greatly from our system... but he complains about it... and his changes would hurt others more than him... that is normal... he does not want to get rid of the child credit... and the college credit (since his kids are at that age now)... but I think that we should..


Note that I am not for a flat tax (flatter would be better... but not flat)... I am strongly against a VAT tax.... I lived in London for awhile and know that it hits the poor more than the rich...

 

[ERD50]

I think that you may find this is not a very persuasive argument for Martha. Some things it is usually better to just abide with in private.

Anyway, the things she mentioned do not strike me as the things that most conservatives would rather not spend money on. What could be more important than making education available to motivated students, and making disabled people able to survive? SS disability is not easy to secure.

Ha

On your first paragraph, I agree, I don't expect it to be persuasive to Martha (and I mean no disrespect or right/wrong in that, it is just the way it is). I threw it out there as a more general statement to the forum regarding the topic.

Please understand, I tried to be careful with my words - I didn't say we shouldn't provide these benefits, I said we need to be very careful in how we do it. It gets discussed from time-to-time how a student racks up a mountain of student loans for a degree that provides a very low chance of providing the kind of employment that will allow them to pay back those loans. Were they served by this benefit, or enslaved by it? Just one example.

RE: hypothetical example of proselytizing frequent health screenings:

This analogy does not serve your point well. It's so wrong, it's a job to figure out what you're getting at.

What lets-retire said regarding costs. Plus more importantly IMO, is that in some of these cases the total sum of the health risks of the frequent screenings can create more problems, pain, suffering, deaths for the general public than the few cases that are caught in time. A colonoscopy, for example, is not without risks. You need to balance the total risk/reward, not base it on anecdotes of success.

I don't mean that as a literal example (though it might be true even in that case), but just that we really need to be careful in applying these 'cures'.

-ERD50

 

[lets-retire]

Westernskies went to college in the state education system as an adult. I did not. I busted my butt an put myself through a private college. Does that mean he should have to pay more taxes because the state system supported him more than me? Or does that mean I should get a tax break because I didn't burden the state system with my needs?

As far as who receives more of a benefit, I think the poor receive the most benefit. Look at countries with little to no safety net. Their poor are very poor. Many live in tent cities on essentially abandoned property. Most do not have decent food and almost no clean drinkable water, while the rest of society has these things. As is often said we have the richest poor people in the world. This can't necessarily be said of the wealthy.

 

[Alan]

Wealth distribution certainly enabled me and my family to move from working class to investor class and it wasn't just tuition subsidized schools and universities, but at a much more basic level.

We grew up in a pit town in England and in the 1950's we lived in 2 rooms in a terraced house, another family of 4 living in the rooms below. The back yard was concrete and enclosed by 4 large brick walls and it contained a small building containing a flushable toilet and a standpipe used by both families in the house. No running water in the house. It was an improvement on what my parents had grown up in as the outside toilet had been solid waste.

In 1960 the local authorities upgraded the houses, we moved into a similar terraced house close by, and had all 4 rooms plus we now had an inside sink and fawcet so at least we had cold running water in the house even though we still only had an outside toilet.

In 1969 was another major upgrade to the houses, where one of the bedrooms was divided in two and a bathroom provided with bathtub and toilet, plus a hot water system was put in with a boiler behind one of the fires so we also now had hot running water, though no heating other than the downstairs room with the fire.

There was absolutely no way that our family and the hundreds like them could have made those housing improvements without taxes from those better off to make the upgrades.

I only had a small glimpse of what had been going on for the previous 100 years as the taxes from the wealthy made living conditions for the poor better, schools provide and the prosperity of the whole country raised. In the mid 19th century the industrialists had an excellent standard of living while the workers lived in terrible conditions. In big industrial towns like Manchester and Liverpool the male life expectancy was less than 20 years old.

While I complain about my taxes being wasted on pet projects and large, inefficient government bodies, I have no illusion that properly thought out and managed wealth distribution is anything but a good thing.

 

[ERD50]

... I have no illusion that properly thought out and managed wealth distribution is anything but a good thing.

Absolutely. It's one of the reasons that my main (and almost singular) charity is Heifer (although there is a lot of assumption on my part that it is properly thought out and managed, but it appears to be and I haven't seen much in the way of significant negative critique).

But many of us feel that the present government system is anything but. I'm in favor of reform, not elimination.

-ERD50

 

[Texas Proud]

Westernskies went to college in the state education system as an adult. I did not. I busted my butt an put myself through a private college. Does that mean he should have to pay more taxes because the state system supported him more than me? Or does that mean I should get a tax break because I didn't burden the state system with my needs?

As far as who receives more of a benefit, I think the poor receive the most benefit. Look at countries with little to no safety net. Their poor are very poor. Many live in tent cities on essentially abandoned property. Most do not have decent food and almost no clean drinkable water, while the rest of society has these things. As is often said we have the richest poor people in the world. This can't necessarily be said of the wealthy.

I guess two points... which has nothing to do with the discussion... even going to a private school you do not pay 100% of the cost of education... but you are not being subsidized by the taxpayer (unless of course you count the federal funding of research that a lot of them get... plus I would be some others that I do not have a clue what they are)....


I am not trying to equate what someone should pay today based on what benefits they received earlier in life... or even the benefits they receive today... your post seems to suggest this... all I was pointing out is that NOBODY got to where they are today without help from the 'system'... no matter how much you claim to have busted your butt....

And I busted my butt by running my own company during college... I worked 4 days a week and took a full college load of 16 or 17 hours each semester on the other 3... every day was a 14 to 18 hour day of work... except Sunday night when I would visit my mother... but I took advantage of the system... got a couple of grants, got a loan from the accounting society... borrowed from my mom... I have more than paid back these costs with the taxes I have paid over the years.... but it would have been a lot harder to do without this help....

 

[lets-retire]

I guess two points... which has nothing to do with the discussion... even going to a private school you do not pay 100% of the cost of education... but you are not being subsidized by the taxpayer

Which was kind of my point. If I don't receive the benefits offered by the taxpayer from going to a public school, then the argument that I have to pay higher taxes because I have benefited from the taxpayer subsidizing my education loses its effect. An argument can be made that instead of paying back the taxpayer, I should have to pay back whatever private industry subsidized my education, but that is a bit off topic.

 

[samclem]

At the age of 5 I realized I was sponging off society--using water from the municipal supplies, same for electricity, sewer, the roads used by my parents to bring food to our home, etc. So, I built a raft and established domicile in international waters (no longer dependent on a central government for protection), built a solar still from refuse I found, and survived on plankton strained through my tee shirt. I busted my butt, but I was happy. I don't owe anybody anything.

Cue the Four Yorkshiremen . . .

 

[Westernskies]

The selfishness expressed by some is surprising. I'm not referring to the desire to minimize taxes paid, but instead the lack of recognition and acknowledgment on how our society works and how it enables us. The ability to create value and generate prosperity is the result of giving, not taking.

With all due respect, many of us on the board here understand exactly how our society is working. Although everyone in the US is provided an education and multiple opportunities to make what they want out of life, there is a growing segment of our population that smugly thinks it knows better than the rest how to build the Utopian society it envisions for it's like-minded citizenry; all they need are unlimited funds and a lack of accountability to accomplish their lofty goals. For some reason, they can't quite seem to raise the funds necessary to fund all of their ever-expanding programs on their own, so they feel compelled to force their neighbors to pay a much larger share of the bill by wringing their hands and waving a banner of self-serving morality.

I do understand this- the Government never gave anyone something that it didn't take away from someone else first. The government doesn't create wealth, commerce does. Maybe the class warfare so ominously predicted in this thread should come from the top down, not the bottom up? We are several generations down the road with failed feel-good entitlement programs, our educational systems are failing, and our infrastructure is falling apart. Our government has expanded while the economic engine that generates the funds to pay for it has faltered. What we need is to reduce the size of the public sector, wean able-bodied adults away from the public trough, and demand accountability for what we already pay in taxes, not impose punitive taxes on those who already pay the vast majority of taxes in this country. Imagine how healthy we would be if we were able to put everyone on welfare/food stamps/ 99+ week unemployment, etc. who is physically able to work into a tax-generating private sector job? Shake your fist and express moral outrage at the very concept, but I believe it's the first step in making people accountable for themselves and not expect Uncle Sugar to provide for their day-to-day existence.

I also understand that it takes money to run our government, and provide essential services, and have no problems paying my fair share of taxes for this. I do have a problem when people tell me I am receiving more benefits from our government than others and therefore I need to write a bigger check each year for reparations.

 

[M Paquette]

At the age of 5 I realized I was sponging off society--using water from the municipal supplies, same for electricity, sewer, the roads used by my parents to bring food to our home, etc. So, I built a raft and established domicile in international waters (no longer dependent on a central government for protection), built a solar still from refuse I found, and survived on plankton strained through my tee shirt. I busted my butt, but I was happy. I don't owe anybody anything.

Cue the Four Yorkshiremen . . .

Oh, you had a RAFT, and REFUSE, and a Tee shirt! Sheer luxury!

 

[clifp]

At the age of 5 I realized I was sponging off society--using water from the municipal supplies, same for electricity, sewer, the roads used by my parents to bring food to our home, etc. So, I built a raft and established domicile in international waters (no longer dependent on a central government for protection), built a solar still from refuse I found, and survived on plankton strained through my tee shirt. I busted my butt, but I was happy. I don't owe anybody anything.
.

Not only that but you paddled to shore everyday, to work for the air force for free and you even supplied your own plane and mechanic.

 

[FreqFlyer]

Wealth redistribution comes in many forms. It's not just the cash payments to the unemployed or the poor (welfare, medicaid) which seem to get all the attention.

Child tax credits/deductions for example. Children don't "pay" into the system for the government services they enjoy. Shouldn't parents pay extra rather than less?

In countries without big-government social safety nets the kids work in the fields or in factories. These kids help feed their families. Kids in America run up massive student loans while majoring in art history or (gasp) french literature.

Just a modest proposal..

 

[Independent]

I'm convinced of the importance of small businesses to our economy, but since not all small business owners are rich and not all rich people are small business owners, I don't think it is clear that increasing taxes for the rich will harm the economy.

Yes.

 

[Independent]

It's all a matter of degrees, and you seem to want to turn it into all-or-nothing. So you agree that (in general) the business managers and/or owners have a rarer skill set (and/or work harder or whatever) and are generally better compensated for that. No one should be saying that increasing the marginal rate on them is going to stop them dead in their tracks. But it is just a simple economic fact of life that if you reduce the effective compensation for a position, you are going to reduce the demand for that position. Just as raising the price of a product reduces demand for the product. How can anyone argue that? On average, people just aren't going to work as hard and top people won't compete for those positions as much if you offer them less.

Again (and again) - we don't know where we are on the Laffer curve, so we can't say whether increasing marginal rates would drag the economy more than it takes in or not. But I can't see how anyone can reasonably argue that it would not be somewhat of a drag on the economy. And that includes encouraging companies to move off-shore. I think we need to proceed with caution rather than just automatically assume that taxing the 'rich' is the answer.

The more I think about something I said earlier, the more I'm beginning to believe in it - if we want people to really understand this whole Federal deficit and spending issue, maybe we need to raise Federal Income Taxes on everyone. If that 50% of filers that on average provide only 1 or 2% of the FIT revenue (or get a credit) suddenly saw they had to pay a flat 10% because of all the government spending and interest, there might be a whole lot more people pushing for real solutions when they go to the ballot box. As long as some 'rich guy' is paying the bill, why should the majority of voters give a hoot about Federal spending?

I'm quite confident that we're on the left side of the Laffer curve for almost all taxes in the US. I've never seen a "serious" economist who disagrees with that. The US Treasury did a study of the 2001 tax bill back when Bush was president. Their number was about 93%. That is, if the "static" analysis shows that you lose/gain $1.00 in revenue, then the "dynamic" analysis shows that you should offset that by $0.07 in taxes on the increased/decreased economic activity, so your net loss/gain is $0.93. They had different impacts for different parts of the bill, so some were further to the right, but I don't recall anything paying for itself.

But the real decision isn't "taxes or no taxes" it's "how do we shift taxes around?" The claim is that the lost economic activity when you raise taxes on high income people is greater than the lost activity when you raise taxes on middle class people. That's the thing that I've never seen validated.

Or we could up the ante' - how about a head tax for everyone? Now there is a 'flat tax' for you - everyone share equally, amount-wise rather than %-wise!

Exactly. Do you really want a head tax? If not, why not? Even a flat-rate tax on income will collect more dollars from someone who works more hours than a similar worker who just doesn't work overtime. Is that "fair"? We're really talking about how tilted taxes should be, not whether or not there should be a tilt.

 

[Independent]

Point of fact, I agree. Rich people should not have special tax rules. Unfortunately, the Federal Tax code does not agree, and so "rich" people are taxed at a special (ie., higher) tax rate than the "average Joe".

So, if you don't want the rich to be taxed at a special rate, do you advocate a flat tax for everyone?

Okay, I should have been more careful with the wording. People disagree on how much our taxes should be tilted and will provide various pros and cons for their positions. I think lines like "A poor person never gave me a job" are misleading and therefore don't count as valid arguments. I was trying to say that $100,000 in the hands of 100 middle income people will generate just as many jobs or just as much productivity growth as the $100,000 dollars in the hands of one high income person.

 

[ERD50]

I'm convinced of the importance of small businesses to our economy, but since not all small business owners are rich and not all rich people are small business owners, I don't think it is clear that increasing taxes for the rich will harm the economy.

Yes.

So are you saying that you just don't accept the laws of supply and demand? Increasing the costs of something will diminish the demand for it, plain and simple. How much is debatable, but not 'if'. If the price of a Big Mac is raised one penny, there will be an effect. Otherwise, they'd just keep doing it.

Of course, whatever good the government does with the money can have an offsetting effect. So if the government used the money more wisely than private citizens rofl, it could be a good thing. But then I guess we'd all be clamoring to have our taxes raised and be relieved of all these purchase decisions we need to make. Govt Vodka, Govt Cheese, Govt TV, Govt Cars (whooops!).


RE: (paraphrasing), 'more of something good is always better':

This analogy does not serve your point well. It's so wrong, it's a job to figure out what you're getting at.

I'm curious if you 'get it' now that it has been more fully explained.

-ERD50

 

[haha]

Wow, very impressive spawn of my simple news report on the tax bill. Way to go guys!

Ha

 

[GregLee]

I'm curious if you 'get it' now that it has been more fully explained.

I said it was a job to figure out, not that I couldn't do it. It was such a miserable analogy that it made your point more obscure, rather than clarifying it, as I suppose you meant the analogy to do. I believe I did understand your intention in making the analogy (though I don't agree with you at all). I hope I'm approaching clarity, here. I haven't wanted to go into substantive issues about the value of screening colonoscopies, because that would be a distraction from the arguments in this thread.

 

[ERD50]

I think lines like "A poor person never gave me a job" are misleading and therefore don't count as valid arguments. I was trying to say that $100,000 in the hands of 100 middle income people will generate just as many jobs or just as much productivity growth as the $100,000 dollars in the hands of one high income person.

I'm not sure you made that point at all (though this thread is getting long, I may have missed it).

You did make the point that those 100 middle income people may well create as much demand for jobs as 1 rich person. I can accept that as a hypothetical (might even be more). But remember, those homeowners aren't going to separately deal with every laborer and co-ordinate the work. That takes a businessperson/manager, and they likely make a better buck to take on that work. If they get less compensation, expect fewer of them (or they marginally work less hours, and take on less jobs as it is marginally worth less to do so). With fewer of those managers available, you are going to have to compete harder for their business (and the ones that stay in the business are the ones who couldn't find higher paying work - probably not the best/brightest). Prices go up for these services, and some people decide to do without - whoops, fewer jobs for those workers now!

The paycheck is literally coming from the businessperson, not the homeowner (it is indirectly). Hence the saying. Again, it takes two to tango.

I'm quite confident that we're on the left side of the Laffer curve for almost all taxes in the US.

I would not be surprised at that.

But the real decision isn't "taxes or no taxes" it's "how do we shift taxes around?" The claim is that the lost economic activity when you raise taxes on high income people is greater than the lost activity when you raise taxes on middle class people. That's the thing that I've never seen validated.

Well, I don't think I ever claimed that, and it might or might not be true. I'm simply responding to the claims that taxing the rich will not affect them at all. I don't think that is right either. There may very well be a multiplier effect. We need someway to understand the sum total of the relative effects.

But I'll re-repeat myself - I am thinking that raising taxes on everyone to the point that we would balance the budget and make a dent in the debt would get enough voters attention to actually start changing policy approaches. Announce a 10 year phase in to give people time to think about what it means. Of course, politicians won't do this, they hope to kick the can down the street. One of these days I'm afraid they are going to find an angry mob at the end of that street, picking up the can and looking to do some damage.

Exactly. Do you really want a head tax? If not, why not? Even a flat-rate tax on income will collect more dollars from someone who works more hours than a similar worker who just doesn't work overtime. Is that "fair"? We're really talking about how tilted taxes should be, not whether or not there should be a tilt.

No, I don't think a head tax is workable. But I like to throw it out there as sort of a mental "reset button" when we talk about flat versus progressive. A head tax could be considered 'fair' by some, so it's worthy of discussion, right?

I'm in favor of progressive taxes. And tax simplification so that actually has some meaning. I just don't like the knee-jerk reaction that taxing the rich even more, while half the filers pay such low single-digit average FIT is a slam-dunk 'solution'.

-ERD50