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Forums - General Discussion - Obama: Cut the deficit by taxing the rich

mrstickball on 14 April 2011
numonex said:
HappySqurriel said:
numonex said:

Top 1% have more wealth than the bottom 95% of society. The 4% just below the Top 1% and above the bottom 95% are the real Middle Class. It is not called shrinking middle class for nothing. 

A billionaire would be in the Top 1%. The multi-millionaires would be in the next 4% making up the remaining top 5%.

Bottom 95% of society are the working class and working poor, poor and super poor. 


Poverty is not being able to adequately cover the essential needs of life, not being unable to have the excessive level of luxury that other people have obtained; it means being unable to cover food, clothing and shelter adequately not being unable to eat steak and lobster, wear trendy brand name clothing, and live in a McMansion. Realistically, the true poverty rate in most western developed nations is under 10% of the population; and probably closer to 0% than 10%.

I define poverty as not being a millionaire and having to work for a living. Not being able to go on four overseas trips a year, buy the latest fashion, own a collection of sports cars, eat at restaurants every day and own multiple property and share investments in a growing portfolio.

The wealthy upper class elites make a lot more from their capital investments and living life of luxury. If only I had the brains to build a company like Microsoft or Facebook and become a billionaire.  

Then your definition is wrong.

But I guess if we're making up our own definition for things, I shall define dirt as being a dish made with rice, crab and seaweed, and Nintendo as being a type of frog.



Back from the dead, I'm afraid.

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mrstickball on 14 April 2011

The CBO weighed in on Obama's proposals. As per the CBO, killing the Bush tax cuts will not solve our massive deficits. If enacted, we would still face debts each and every year.

You can find a full analysis of the CBO statement(s), and a rebuttal of Obama's tax policy at: http://www.cato.org/pub_display.php?pub_id=13016



Back from the dead, I'm afraid.

Kasz216 on 14 April 2011
Mr Khan said:
HappySqurriel said:
Mr Khan said:
 

Some streamlining is necessary, but i hope to be one of those people living on bloated goverment benefits in the future (like my Uncle, whose near retirement and now spends most of his time on vacation, though he's from the self-sustaining FDIC)

Wouldn't you rather have a real pension built off of the growth in value of real investments than to live off of the work of someone else?

I agree that idle money should be put to work, which is why i like the idea of 401s, and i'm not saying that money shouldn't be put to work while it idles, but that money should be there

And again we have this implicit idea that government provides nothing of value. Public good is the most noble service at the end of the day, because it evens out the necessary inequalities of capitalism (i like my materialist excesses, which keeps me from being an advocate of Communism proper, but social democracy with a strong public sector is the best third way)

EDIT: heh, i discovered a new smiley...


Money doesn't idle though.  Right now the money paid for SS and the like... the government sells it to itself, for an IOU.  Then uses that money to spend on other stuff.

Right now, basically, it's as if I took money from my girlfrined to put away for retirement... took that money, bought some videogames and wrote an IOU on my computer that i owed her that much money 2% in 20 years.



Kasz216 on 14 April 2011

Also, taxing the rich more is a BIG risk.

Because well... when times are bad, the amount of money the rich pay in taxes shrink heavily... because the rich are hurt the most by economic crashes.

So, the times when you need money the most... you will have the least amount of money availible... and when you need the least amount of money, you have the most.

Isn't this how we got here?



Kasz216 on 14 April 2011
Rath said:
Seece said:

In a speech in Washington DC he outlined a package of tax increases and spending cuts aimed at reducing the deficit by $4tn (£2.45tn) by 2023.

The deficit is forecast to reach $1.5 trillion (£921bn) this year and both Democrats and Republicans have said cutting it is a priority.

Is that 1.5 this year alone, or total? else I'm confused, unless they expect it to peak above 4 trillion ..

Good point. Perhaps they don't mean annual deficit but reduction of net public debt?

Actually it's 4 trillion saved over the next 12 years.

And we're still supposed to have a huge deficit after that.

It's just your basic made up political numbers.

You project far enough into the future until your numbers look good.  Even though the farther you project the more inaccurate your projections are.

 

4 Trillion over 12 years = 333 Billion per year.  Which = basically nothing.

Not to mention a lot of that is probably backloaded for when he's NOT president.

 

Truth is, we need to tear down just about everything and rewrite the entirity about how government works and spends money.

 

Also replacing Social Security with an actual investment would be helpeful, rather then an IOU and using it for whatever pet projects you have.



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axt113 on 14 April 2011
mrstickball said:
axt113 said:
mrstickball said:

The issue isn't raising taxes on the rich. That really won't help. Every time we've lowered taxes for the rich, the percentage of income taxes we've gathered from them has actually gone up. Not down.

The real issue is cutting of subsidies and tax credits to the rich. Some of the richest people pay less than the middle class because they are given huge credits because of one thing or another. They have great accountants, too.

In reality, if we imposed a flat tax that offered virtually no subsidies, no incentives for particular behaviors, we would likely collect a lot more, and would ensure that those not paying wouldn't be able to dodge taxes.

Furthermore, fixing the tax code won't fix the entire problem. We had a $1.5 trillion deficit in the last year alone. Put it this way, under George W. Bush, our debt increased by $5 trillion dollars. Obama's increase in the deficit was 1/3rd of that in just one year.

To fix it, we do have to increase revenues by reforming the tax code, but also slash every single budget that the government has. Jon Stewart's Ryan rebuttal is a tragedy, because you can't really project future revenues all that well by changing the tax code, because we've seen that it rarely follows along expected forecasts. The only known quantity in a budget are actual outlays in spending, which is far more stable. Therefore, the more responsible thing to do is to cut spending. Of course, a lot of people hate doing that, because you can tax and reduce spending on anyone, until it effects you. We've seen that happen to horrible results all over the Western world when the government has had to introduce austerity measures.

And if you want information about tax rates and correlation of tax revenues:

Stick, by your own chart, we recieved more money from the rich in the late 90's when taxes were higher than we ever recieved from them in the 2000's

The Bush tax cuts were started at the very bottom of that trough, not before. Therefore, you could also say that the tax cuts led to a significant increase in the top 1% paying their share of taxes. Having said that, the reason that taxes among the top 1% dropped so quickly was likely due to the .com bust in the late 90's which damaged the stock market and hurt a lot of wealth at the top end.

Furthermore, you can see a significant increase in taxation among the top 1% after the Reagan-era tax cuts. Thats why we have the argument of the laffer curve. Furthermore, you can also note that tax income from the bottom 95% dropped significantly during the late 90s, which shows that the tax burden really moved from the top 1% to the top 5%, which was still taxing the rich. So we are still recieving ever-more money from the rich. Pay attention to the red line, its the most important


No actually the first act, the Economic Growth and Tax Relief Reconciliation Act of 2001, actually occurs before the bottom of that trough, as the trough bottoms out around 2003, you could argue that the 9/11 events and the collapse of the tech bubble plays a role, but its clear that the tax cuts helped to reduce our revenue, in fact our revenue never gets back to pre tax cut levels, destrorying your argument that tax cuts increases our revenue.

 

Your argument just proves that the Clinton era tax rates are the ideal rates



Rumors indicate that it is planning on following the first approach, sticking a new, motion-sensitive controller onto an existing console. Our perspective is that this is the worst of the three options.

-Clayton Christensen back in 2007 already knew Move would be a bad idea

Mr Khan on 14 April 2011
Kasz216 said:

Also, taxing the rich more is a BIG risk.

Because well... when times are bad, the amount of money the rich pay in taxes shrink heavily... because the rich are hurt the most by economic crashes.

So, the times when you need money the most... you will have the least amount of money availible... and when you need the least amount of money, you have the most.

Isn't this how we got there?

The idea long term is that government saves during booms and spends during busts, the problem being that democratic government is very unreliable for any sort of long term plan. The end result being that booms are lesser (being that investment money is taken from the most likely investors), and then in bust time you have more moneys for necessary unemployment benefits to take out and can soften the blow, or invest in keynesian-style ditch-filling or other frills to keep people working and restart the whole thing

Optimally the tax rate would reflect the state of the economy. If the tax rate matched economic growth or decline it would be able to retard both and kick recessions out quicker (because as the economy lapses, tax rates would go down to reflect that, freeing up money being made at the top, so that you could have both supply-side and keynesian solutions working in tandem to pick things up)

The only burden being that growth in boom times would be less than it could have been, but it's only prudent to squirrel extra away in times of abundance, or at least moreso than not squirrel extra away, then expect everyone to belt-tighten when there's just less going around for everyone

The problem being, as i previously stated, that democratic politics is simply incompatible with fiscal responsibility. When people are making lots of money, they don't want the government getting more of that, and when people are making less money, they don't want the government getting more of that, but simultaneously don't want the government cutting into benefits, benefits that they may have lost back when everyone was making money and they thought "why are we paying for this again?"

Short-sightedness that i would not blame on any political ideology, just that short-sightedness like that is human nature, and human nature tied to self-government then yields these flaws



Monster Hunter: pissing me off since 2010.

axt113 on 14 April 2011
Kasz216 said:

Also, taxing the rich more is a BIG risk.

Because well... when times are bad, the amount of money the rich pay in taxes shrink heavily... because the rich are hurt the most by economic crashes.

So, the times when you need money the most... you will have the least amount of money availible... and when you need the least amount of money, you have the most.

Isn't this how we got here?


Actually the rich emerged from this recession in a better position than anyone else



Rumors indicate that it is planning on following the first approach, sticking a new, motion-sensitive controller onto an existing console. Our perspective is that this is the worst of the three options.

-Clayton Christensen back in 2007 already knew Move would be a bad idea

Kasz216 on 14 April 2011
axt113 said:
Kasz216 said:

Also, taxing the rich more is a BIG risk.

Because well... when times are bad, the amount of money the rich pay in taxes shrink heavily... because the rich are hurt the most by economic crashes.

So, the times when you need money the most... you will have the least amount of money availible... and when you need the least amount of money, you have the most.

Isn't this how we got here?


Actually the rich emerged from this recession in a better position than anyone else

Not according to the statistics. The Gini coefficent grew slower, and in some years dropped.

When the economy was healthy the gini coefficent grew fast.  Espiecally under Clinton and the .com boom.

From wikipedia

http://en.wikipedia.org/wiki/Gini_coefficient#US_income_Gini_indices_over_time

  • 2000: 46.2
  • 2005: 46.9
  • 2006: 47.0 (highest index reported)
  • 2007: 46.3
  • 2008: 46.69
  • 2009: 46.8


Kasz216 on 14 April 2011
Mr Khan said:
Kasz216 said:

Also, taxing the rich more is a BIG risk.

Because well... when times are bad, the amount of money the rich pay in taxes shrink heavily... because the rich are hurt the most by economic crashes.

So, the times when you need money the most... you will have the least amount of money availible... and when you need the least amount of money, you have the most.

Isn't this how we got there?

The idea long term is that government saves during booms and spends during busts, the problem being that democratic government is very unreliable for any sort of long term plan. The end result being that booms are lesser (being that investment money is taken from the most likely investors), and then in bust time you have more moneys for necessary unemployment benefits to take out and can soften the blow, or invest in keynesian-style ditch-filling or other frills to keep people working and restart the whole thing

Optimally the tax rate would reflect the state of the economy. If the tax rate matched economic growth or decline it would be able to retard both and kick recessions out quicker (because as the economy lapses, tax rates would go down to reflect that, freeing up money being made at the top, so that you could have both supply-side and keynesian solutions working in tandem to pick things up)

The only burden being that growth in boom times would be less than it could have been, but it's only prudent to squirrel extra away in times of abundance, or at least moreso than not squirrel extra away, then expect everyone to belt-tighten when there's just less going around for everyone

The problem being, as i previously stated, that democratic politics is simply incompatible with fiscal responsibility. When people are making lots of money, they don't want the government getting more of that, and when people are making less money, they don't want the government getting more of that, but simultaneously don't want the government cutting into benefits, benefits that they may have lost back when everyone was making money and they thought "why are we paying for this again?"

Short-sightedness that i would not blame on any political ideology, just that short-sightedness like that is human nature, and human nature tied to self-government then yields these flaws


Except supply side kensyian solutions never work.  Saving money so you don't have a deficit is good... but time and time again it's been shown that overspending does nothing but cause trouble.  Unless you also think all the stimulus money "wasn't enough".  In which case, what is enough?  And could any country afford it, even a fiscally disciplined one.

Also i wouldn't say it was impossible, some countries like Denmark do a good job investing.

Put social security into an investment fund instead of an IOU written by the government that's then spent on garbage and you've got spare money all around cause you'll definitly pass what you've promised.

I want to say one of those scandanavian countries investment portfolios brought back 14% or so.