Maybe an easier fix would be to simply outlaw lobbying by corporations?
This is a sticky thing given that the SCOTUS has been pushing the whole "Corporations are people too!" thing. I'll agree that it's a solution but not one with out problems and loopholes. I have read, I don't have sources at this moment, that lobbying Congress has a pretty good ROI, so why invest when you can just lobby Congress and have the money pour in!
I had this typed out earlier in the conversation but got called away from my pc before I could post!
I don't claim to be a professional psychologist, but is there any value to the "American Dream"? I am legitimately asking because I am not sure. Does the prospect of starting your own business and having it become a booming success to the point you make over a mil and can go get a hedonism bot provide some motivating factor on society? Would we be worse off without it?
For the same and additional reasons that Scott pointed out, income tax is the real problem. Are there any consumption-based tax plans that would bring in enough income to balance our insanely huge budget?
The depressing part is that nobody on either side of the political aisle is talking about fixing our finances. The GOPs bickers about cutting a billion here or there but the actual gap is hundreds of times larger than that! Increase taxes, cut spending, fix the gap. Our future is unsustainable if we don't, yet nobody will tackle the issue. It's like we need to call a special government convention (congress isn't working) to work out some master plan and lock these guys in a room until they walk out with the new new deal.
Can anyone reasonably argue that an individual person, no matter their job or status, deserves to make more than, say, $10,000,000 a year? What the fuck do you do with that kind of money aside from Hedonism Bot it up?
I think it gets ludicrous far before then. But I dunno. The only reasons I can think of are greed, really. Like being able to buy your own private business jet or use that money to create more money. Eventually, maybe finance your own immortality.
Private business jets start at around $1 million, so you don't need to be quite that high to be able to purchase one.
Huey Long once proposed a "share our wealth" program that basically capped incomes at about $5 million, if I remember correctly, with everything above that being taxed at 100%.
I'm not so sure I favor an arbitrary cap on how much income you are allowed to have... but a steep graduation as you go further and further up the income scale does make sense to me. I mean, if it was your own lifelong dream to own a business jet and somehow you managed to work your butt off as an entrepreneur (as opposed to just pushing paper around for profit), combined with the good luck that's necessary to truly make it crazy rich, to get the income where you can afford one, why not let you buy one?
This is a sticky thing given that the SCOTUS has been pushing the whole "Corporations are people too!" thing. I'll agree that it's a solution but not one with out problems and loopholes. I have read, I don't have sources at this moment, that lobbying Congress has a pretty good ROI, so why invest when you can just lobby Congress and have the money pour in!
It's a possible solution. Obviously, the specifics would be really difficult to parse out, as lobbying is a pretty integral part of government.
Scott made an excellent point when he said that the rich just sit on a lot of their money.
One way republicans were able to sell these lower taxes for the rich was an appeal to the oversimplified Looney Tunes cartoon version of economics we all saw as kids that stated as an immutable truth that a large portion of profit is cycled back into business for improvements, research, and so on.
So people like Reagan said, "If we lower taxes on rich, greedy, whoreson bastards, they'll use their extra money to invest, and we'll all profit."
In the Looney Tunes cartoons, this might have worked. In real life, when rich people get more money, they sit on it like Scrooge McDuck, or pay accountants and lawyers to make sure they pay even less in taxes, or if they invest, they invest in overseas tax havens.
Reagan was right, higher personal income taxes creates jobs.
I know what you're thinking, "when did Reagan say that?" He said it in reference to how the top marginal rates prevented actors from making more than two movies a year.
Say you have a high income job and 20 more hours of work show up. We could use Rym as an example. Rym looks at the workload, looks at the effective pay he will get due to the higher tax rate and sees that he will be compensated less money for the extra work.
Rym walks into his boss's office and says,"not for nothing but I'm not putting in extra hours for less take home pay. Either you make up the tax hit or higher someone else to assist me."
If that top rate is 90% and Rym normally takes home $100 an hour his boss has to pay him $1,000 an hour to cover the extra taxes OR he can hire a second worker.
See, higher personal income tax rates create jobs.
Are there any consumption-based tax plans that would bring in enough income to balance our insanely huge budget?
The Fair Tax Plan Is a Libertarian favorite, and has even been endorsed by Hilary Clinton. It has many merits and has a nice loop hole to push it away from the repressiveness that inherent to most sales taxes.
Part of the problem with most consumption based taxes, sales taxes, is that the rich people don't spend all of their money, only a fraction of it, whereas poor folks tend to spend 100% of their income. As such most, if not all, sales taxes are regressive in nature. A sales tax of 15% on someone who spends 100% of their income is a 15% tax, but that same tax is only 7.5% on someone who spends only 50% of their income.
It basically encourages hording of money as well, which could drive down demand for material goods. That could/can be balanced out with inflation however.
See, higher personal income tax rates create jobs.
In addition to the fact that the government receiving the income might be able to use it to level out the deficit (ie. keep it from getting a whole lot worse), and may not have to cut social programs that allow old people to retire and young people get hired to replace them and begin paying their student loans.
"The New Gilded Age" - One player is Congress, the others are all Corporations attempting to make as much money as possible through a variety of means, including spending money on lobbying and becoming multinational! Draw the "Cayman Islands" card and transfer much of your wealth to an offshore account, leaving your workers to struggle!
Reagan was right, higher personal income taxes creates jobs.
I know what you're thinking, "when did Reagan say that?" He said it in reference to how the top marginal rates prevented actors from making more than two movies a year.
Say you have a high income job and 20 more hours of work show up. We could use Rym as an example. Rym looks at the workload, looks at the effective pay he will get due to the higher tax rate and sees that he will be compensated less money for the extra work.
Rym walks into his boss's office and says,"not for nothing but I'm not putting in extra hours for less take home pay. Either you make up the tax hit or higher someone else to assist me."
If that top rate is 90% and Rym normally takes home $100 an hour his boss has to pay him $1,000 an hour to cover the extra taxes OR he can hire a second worker.
See, higher personal income tax rates create jobs.
The 90% tax rate drops his income from $100 to $10 per hour.
There is one flaw in my example, it assumes he goes from a zero to 90% marginal rate. He would slowly be bringing home less of his income as he makes more money.
The conclusion still holds true, high income taxes create jobs because people don't want to work harder for less money.
Please excuse any spelling errors, posting from phone.
In real life, when rich people get more money, they sit on it like Scrooge McDuck.
Do you seriously imagine rich people have moneybins? They keep their money in a bank, like you or I. It doesn't matter that they might also own that bank. The point is: banks earn money by giving out loans, which is just one step from actually investing in something. That being said, I'd rather see that money taxed than in bank.
Name one rich person who keeps a significant amount of money in a bank instead of hedge funds, sovereing bonds, or physical collateral. You illustrate the main problem with the current tax debate, which is that normal people have no concept of the amounts of money that the wealthy 2% have. It simply does not scale.
Name one rich person who keeps a significant amount of money in a bank instead of hedge funds, sovereing bonds, or physcal collateral. You illustrate the main problem with the current tax debate, which is that normal people have no concept of the amounts of money that the wealthy 2% have. It simply does not scale.
The thing is, nobody in this country puts their money in the bank. The savings rate is ridiculously low, and rich people have ways of outfoxing the tax system by funging their money (moving it around to minimize their tax rate); tax rates simply change too slowly for any single tax to be effective on the rich.
Let me debunk another Republican myth: "increasing tax rates on small business is a job killer."
After a quick perusal of the IRS website regarding small business I found that the small business is able to deduct the money paid to employ a worker, as long as it is reasonable.
Do you know what this shit means? It means higher income taxes have zero impact on a small business hiring people because the business is able to deduct the cost of the employees!
While the rest of us are sticking pumping out 18 year tax deductions that cost more than they save a business can just hire more people to lower its taxable income!
Damn, higher taxes really do create jobs! Why is no one making this argument but me?
tax rates simply change too slowly for any single tax to be effective on the rich.
Capital Gains tax.
If the capital gains tax goes up, people take more money in the form of a paycheck. If the income tax goes up, people take more money in the form of capital gains. Because the tax rates can only change each fiscal year, unless both of them go up rich folks can largely avoid paying higher rates.
The thing is, nobody in this country puts their money in the bank. The savings rate is ridiculously low, and rich people have ways of outfoxing the tax system by funging their money (moving it around to minimize their tax rate); tax rates simply change too slowly for any single tax to be effective on the rich.
I put my money primarily in a bank account, mostly because I don't have enough of it to actually invest. And I don't count owning a house as an investment really.
tax rates simply change too slowly for any single tax to be effective on the rich.
Capital Gains tax.
You'll never tax their accumulated wealth if you focus on income taxes. You can stop new people from becoming rich by raising income taxes but you'll never destroy the wealthy with income taxes unless your plan is to limit their ability to replenish their spent wealth over time. Which will likely take a very long time...
So a flat tax on consumption combined with a tax on stored accumulated wealth would seem to cover all of our bases, but how do we get at the accumulated wealth? Wouldn't you just invest/store all of your money overseas?
So a flat tax on consumption combined with a tax on stored accumulated wealth would seem to cover all of our bases, but how do we get at the accumulated wealth? Wouldn't you just invest/store all of your money overseas?
Tax all money as it enters or leaves the country. If someone wants to make their money in another country and keep it there, then that's none of the US' business.
So a flat tax on consumption combined with a tax on stored accumulated wealth would seem to cover all of our bases, but how do we get at the accumulated wealth? Wouldn't you just invest/store all of your money overseas?
The problem with this is its regressive nature: for those whose income is too low to invest, it punishes savings by taxing the only two options available (consume or spend). Rich people would simply invest all of their savings right before tax time, and cash out right afterwards.
Tax all money as it enters or leaves the country. If someone wants to make their money in another country and keep it there, then that's none of the US' business.
The problem with this is it discourages imports and exports. Much of our basic goods (those necessary for survival; food, etc.) are imported from around the world, and again, it would disproportionally affect the poor (who would be affected more by higher food prices because more of their income goes to buying food).
Tax all money as it enters or leaves the country. If someone wants to make their money in another country and keep it there, then that's none of the US' business.
That's basically tariffs, and that is one idea put forth to keep domestic economies strong. However, they are isolationist and cruddy in a variety of ways, so not the best solution.
Part of the problem is we sort of stepped over the line where a lot of these solutions could have fixed things before they became problems. Many of these people are simply so rich that they can tank whatever tax hit you get them with as they move their money into places where the government can't get at it.
I wish bringing nuclear force against tax havens were a realistic option. Turn the Cayman Islands into the Cayman Radioactive Cloud and everyone else will clean up their tax laws real quick :P
Comments
I had this typed out earlier in the conversation but got called away from my pc before I could post!
For the same and additional reasons that Scott pointed out, income tax is the real problem. Are there any consumption-based tax plans that would bring in enough income to balance our insanely huge budget?
The depressing part is that nobody on either side of the political aisle is talking about fixing our finances. The GOPs bickers about cutting a billion here or there but the actual gap is hundreds of times larger than that! Increase taxes, cut spending, fix the gap. Our future is unsustainable if we don't, yet nobody will tackle the issue. It's like we need to call a special government convention (congress isn't working) to work out some master plan and lock these guys in a room until they walk out with the new new deal.
Huey Long once proposed a "share our wealth" program that basically capped incomes at about $5 million, if I remember correctly, with everything above that being taxed at 100%.
I'm not so sure I favor an arbitrary cap on how much income you are allowed to have... but a steep graduation as you go further and further up the income scale does make sense to me. I mean, if it was your own lifelong dream to own a business jet and somehow you managed to work your butt off as an entrepreneur (as opposed to just pushing paper around for profit), combined with the good luck that's necessary to truly make it crazy rich, to get the income where you can afford one, why not let you buy one?
One way republicans were able to sell these lower taxes for the rich was an appeal to the oversimplified Looney Tunes cartoon version of economics we all saw as kids that stated as an immutable truth that a large portion of profit is cycled back into business for improvements, research, and so on.
So people like Reagan said, "If we lower taxes on rich, greedy, whoreson bastards, they'll use their extra money to invest, and we'll all profit."
In the Looney Tunes cartoons, this might have worked. In real life, when rich people get more money, they sit on it like Scrooge McDuck, or pay accountants and lawyers to make sure they pay even less in taxes, or if they invest, they invest in overseas tax havens.
I know what you're thinking, "when did Reagan say that?" He said it in reference to how the top marginal rates prevented actors from making more than two movies a year.
Say you have a high income job and 20 more hours of work show up. We could use Rym as an example. Rym looks at the workload, looks at the effective pay he will get due to the higher tax rate and sees that he will be compensated less money for the extra work.
Rym walks into his boss's office and says,"not for nothing but I'm not putting in extra hours for less take home pay. Either you make up the tax hit or higher someone else to assist me."
If that top rate is 90% and Rym normally takes home $100 an hour his boss has to pay him $1,000 an hour to cover the extra taxes OR he can hire a second worker.
See, higher personal income tax rates create jobs.
Part of the problem with most consumption based taxes, sales taxes, is that the rich people don't spend all of their money, only a fraction of it, whereas poor folks tend to spend 100% of their income. As such most, if not all, sales taxes are regressive in nature. A sales tax of 15% on someone who spends 100% of their income is a 15% tax, but that same tax is only 7.5% on someone who spends only 50% of their income.
It basically encourages hording of money as well, which could drive down demand for material goods. That could/can be balanced out with inflation however.
There is one flaw in my example, it assumes he goes from a zero to 90% marginal rate. He would slowly be bringing home less of his income as he makes more money.
The conclusion still holds true, high income taxes create jobs because people don't want to work harder for less money.
Please excuse any spelling errors, posting from phone.
After a quick perusal of the IRS website regarding small business I found that the small business is able to deduct the money paid to employ a worker, as long as it is reasonable.
Do you know what this shit means? It means higher income taxes have zero impact on a small business hiring people because the business is able to deduct the cost of the employees!
While the rest of us are sticking pumping out 18 year tax deductions that cost more than they save a business can just hire more people to lower its taxable income!
Damn, higher taxes really do create jobs! Why is no one making this argument but me?
I wish bringing nuclear force against tax havens were a realistic option. Turn the Cayman Islands into the Cayman Radioactive Cloud and everyone else will clean up their tax laws real quick :P