patrick.net

Reality says

You are now engage in facetious upturning truth vs. falsehood.

And you are engaged in obfuscation. You are trying to change the point of the discussion. You know the point and you know I'm correct, so all you can do is try to muddy the waters and change the subject.

We're not talking about changing the tax code--we're talking about raising rates.

control point says

Reality says

No. Tax breaks mean lower taxes, not higher taxes, for the specific investment vehicles.

I think if you looked at the percentage of component I in GDP you might see the point.

Tax rates have decreased since 1980; Net private investment has declined from 5-7% of GDP in the 70s to 4-6% in the 80s, to 3-5% in the 90s, to 2-3% in the 2000s, to 0-2% since 2010.

Lower tax rates encourage profit taking.

Tax rates have not decreased since 1980 if you count the payroll tax increase in 1986. Government spending as percentage of GDP has increased significantly since 1980. That means, not only is government "investment" crowding out private investment, the GDP number itself is over-stating the real size of the economy therefore inserting a wrong denominator for the above numbers.

tatupu70 says

Reality says

You are now engage in facetious upturning truth vs. falsehood.

And you are engaged in obfuscation. You are trying to change the point of the discussion. You know the point and you know I'm correct, so all you can do is try to muddy the waters and change the subject.

We're not talking about changing the tax code--we're talking about raising rates.

I was not obfuscating at all. You were. Raising tax rates (effective collected rates, not just nominal brackets that nobody pays) reduces after-tax return on investment, therefore would lead to lower investment. What is your reasoning for raising tax increase investment?

Reality says

Roman Bread and Circus as one of the contributing reasons to its decline has been accepted ever since Edward Gibbon wrote the first modern treatise on the subject.

Edward Gibbon wrote about the decline and fall of the Roman Empire. Which are you talking about? The Republic or the Empire?

Weren't the romans perpetual invaders who subjugated the conquered people and made them slaves and constantly needed new territories to provide resources for their citizens? Also weren't they backwards followers of sadistic pagan beliefs who believed that either fortune or misfortune was due to pleasing/displeasing a plethora of gods which further satisfied their superego/id fused bloodlust?

Bigsby says

Reality says

Roman Bread and Circus as one of the contributing reasons to its decline has been accepted ever since Edward Gibbon wrote the first modern treatise on the subject.

Edward Gibbon wrote about the decline and fall of the Roman Empire. Which are you talking about? The Republic or the Empire?

Both. The Roman Empire was the corrupt version of the Roman Republic; many of the problems that Gibbon cited traced their origin to the Republic period.

Reality says

Edward Gibbon wrote the first modern treatise on the subject.

Modern? Gibbon wrote only based on what few of the classic works survive, long before archaeology. He was a contemporary of Benjamin Franklin.

It was also believed that the Polynesians couldn't sail the world, that the Vikings never reached North America, and that Wind and Watermills didn't exist until the later part of the middle ages. All wrong by a long shot.

Go grab a copy of any of Peter Heather's books if you want modern scholarship from people who do archaeology for a living.

Reality says

Guess how those civil wars came about? Fighting over the control of government programs and the imperial control of provinces for resource extraction for one's own cronies.

That is not the same as your initial point, is it? Why don't you just admit you made a glib comment?

dublin hillz says

Weren't the romans perpetual invaders who subjugated the conquered people and made them slaves and constantly needed new territories to provide resources for their citizens? Also weren't they backwards followers of sadistic pagan beliefs who believed that either fortune or misfortune was due to pleasing/displeasing a plethora of gods which further satisfied their superego/id fused bloodlust?

"Rulers of this Age" in the Bible refers to the Hellenistic Belief in "Daemons" or Spirits, who inhabit the air around us and give good or bad luck.

Dumbass Evangelicals interpret this as political entities.

thunderlips11 says

Reality says

Edward Gibbon wrote the first modern treatise on the subject.

Modern? Gibbon wrote only based on what few of the classic works survive, long before archaeology. He was a contemporary of Benjamin Franklin.

It was also believed that the Polynesians couldn't sail the world, that the Vikings never reached North America, and that Wind and Watermills didn't exist until the later part of the middle ages. All wrong by a long shot.

Go grab a copy of any of Peter Heather's books if you want modern scholarship from people who do archaeology for a living.

You deliberately cut out the leading phrase "ever since," so your writing is a pointless exercise in strawman tactics.

Your attempt to impress has failed. None of them has much to do with the subject at hand. It's quite irrelevant whether Polynesians reached Rome. Polynesians found their Waterloo on the Thanksgiving Island.

Reality says

What is your reasoning for raising tax increase investment?

It's pretty simple really. Think of the tax as the cost of taking profits out. The higher the tax, the more incentive there is to not take the profits out, but rather reinvest them.

Bigsby says

Reality says

Guess how those civil wars came about? Fighting over the control of government programs and the imperial control of provinces for resource extraction for one's own cronies.

That is not the same as your initial point, is it? Why don't you just admit you made a glib comment?

What makes you think these are separate subjects? The province of Egypt (the bread basket of Med) was officially the personal possession of the Emperor. Being the boss to run the dole program at taxpayer expense was a highly profitable business for the Emperor and his cronies.

tatupu70 says

Reality says

What is your reasoning for raising tax increase investment?

It's pretty simple really. Think of the tax as the cost of taking profits out. The higher the tax, the more incentive there is to not take the profits out, but rather reinvest them.

Re-investment is generally not tax-deductible except for under special provisions. It is almost always not tax-deductible in the current tax year when investing in new and alternative business ventures. Profit generally becomes taxable when it is made, regardless whether the owner re-invest it or not.

Reality says

What makes you think these are separate subjects? The province of Egypt was the personal possession of the Emperor. Being the boss to run the dole program at taxpayer expense was a highly profitable business for the Emperor and his cronies.

Which has what to do with your initial comment? Your argument is misplaced in time and the weight that you are seemingly putting on it.

Bigsby says

Reality says

What makes you think these are separate subjects? The province of Egypt was the personal possession of the Emperor. Being the boss to run the dole program at taxpayer expense was a highly profitable business for the Emperor and his cronies.

Which has what to do with your initial comment?

The Roman Dole created and enlarged dependent population (by both bankrupting the middle class farmers and encouraging welfare recipients), created financial/political power nexus, and brought about the down fall of the Republic as well as the Empire (Empire was just a corrupt phase of the Republic, as per Toynbee and Burke, etc.).

Reality says

Re-investment is generally not tax-deductible except for under special provisions. It is almost always not tax-deductible in the current tax year when investing in new and alternative business ventures. Profit generally becomes taxable when it is made, regardless whether the owner re-invest it or not.

You're seriously continuing to try this BS? Profit is taxable--that's why I was talking about using earnings and investing them rather than taking them as profits.

And if you are concerned that I called it reinvestment vs. investment--you are beyond idiotic.

Reality says

The Roman Dole created and enlarged dependent population

Sactly, gives me a haunted feeling of deja vue.

Reality says

The Roman Dole created and enlarged dependent population (by both bankrupting the middle class farmers and encouraging welfare recipients), created financial/political power nexus, and brought about the down fall of the Republic as well as the Empire (Empire was just a corrupt phase of the Republic, as per Toynbee and Burke, etc.).

The dole did not bring about the collapse of the Republic. That is a complete mischaracterization of a complex series of events.

tatupu70 says

You're seriously continuing to try this BS? Profit is taxable--that's why I was talking about using earnings and investing them rather than taking them as profits.

And if you are concerned that I called it reinvestment vs. investment--you are beyond idiotic.

Earnings are taxable regardless whether it is subsequently invested / re-invested or not. Say, if you are an apple dealer, you spend $2000 buy apples, and sell them for $3000; that $1000 earnings become taxable regardless whether you put it towards new apples or new oranges or anything else or nothing at all.

Bigsby says

Reality says

The Roman Dole created and enlarged dependent population (by both bankrupting the middle class farmers and encouraging welfare recipients), created financial/political power nexus, and brought about the down fall of the Republic as well as the Empire (Empire was just a corrupt phase of the Republic, as per Toynbee and Burke, etc.).

The dole did not bring about the collapse of the Republic. That is a complete mischaracterization of a complex series of events.

Only to the people who can not think what the average middle class farmer faced with declining grain price and rising welfare or wage from joining the army and fighting abroad.

Think of the middle class worker who lost job to outsourcing then decided to take the $80k job driving truck in Iraq as a contractor. His female counter-part may as well get pregnant and get on welfare.

Reality says

Earnings are taxable regardless whether it is subsequently invested / re-invested or not. Say, if you are an apple dealer, you spend $2000 buy apples, and sell them for $3000; that $1000 earnings become taxable regardless whether you put it towards new apples or new oranges or anything else or nothing at all.

Wrong-- that $1000 earnings can be reduced by depreciation among many other things reducing tax liability.

Reality says

Say, if you are an apple dealer, you spend $2000 buy apples

This is not investment. This is inventory.

Reality says

that $100 earnings becomes taxable regardless whether you put it towards new apples or new oranges or anything else or nothing at all.

What if you put it towards new equipment to (hopefully) increase apple yield (an apple polisher)? What if you put it toward hiring more apple sales people?

Reality says

Only to the people who can not think what the average middle class farmer faced with declining grain price and rising welfare or wage from joining the army and fighting abroad.

Think of the middle class worker who lost job to outsourcing then decided to take the $80k job driving truck in Iraq as a contractor. His female counter-part may as well get pregnant and get on welfare.

Average middle class farmer? And grain prices rose and fell subject to a number of factors throughout that period. You are just letting your current economic views oversimplify and misrepresent much of what was happening in that period. And dishing out free corn to a minority of the 200-250,000 households and that only beginning towards the end period of the Republic is not something that caused the decline of Rome. The actual decline of Rome happened much later and for a myriad number of reasons.

Reality says

Tax rates have not decreased since 1980 if you count the payroll tax increase in 1986.

Corporate Profits taxes have not decreased since 1980? Corporate Profits taxes were over 50% pre-1970, went to 48-49% in the 70s, went to 46% in the early/mid 80s, went to 40% in the late 80s, went to 35% in the 90s to today.

One thing I've realized is that workers can make 6 figures if they choose to make good decisions and work their ass off. People who are billionaires generally got lucky...they're no smarter or harder-working necessarily than those making $250K per year. This is why I'm more of a proponent of an ultra-rich wealth tax as opposed to taxing households in the Bay Area making $250K who can't even afford to buy a decent house.

I also agree with a very high estate tax for estates of an exorbitant amount.

tatupu70 says

Reality says

Earnings are taxable regardless whether it is subsequently invested / re-invested or not. Say, if you are an apple dealer, you spend $2000 buy apples, and sell them for $3000; that $1000 earnings become taxable regardless whether you put it towards new apples or new oranges or anything else or nothing at all.

Wrong-- that $1000 earnings can be reduced by depreciation among many other things reducing tax liability.

Why would anyone spend $100 on something that he doesn't need to get a $33 reduction in tax liability back? assuming the tax rate is 33%; likewise for any other rate that is not 100+%. At 100+% tax rate, why would anyone work? Most people would stop working long before that rate is reached.

Reality says

Why would anyone spend $100 on something that he doesn't need to get a $33 reduction in tax liability back

So there's no middle ground in your world where something makes sense if it costs $60 but not $80?

control point says

that $100 earnings becomes taxable regardless whether you put it towards new apples or new oranges or anything else or nothing at all.

What if you put it towards new equipment to (hopefully) increase apple yield (an apple polisher)? What if you put it toward hiring more apple sales people?

If new equipment indeed increase apple yield by, say 50%, why wouldn't the owner of the business buy it to begin with regardless tax policy? If the tax rate is raised from 20% to 40%, the after tax benefit of that piece of new equipment just dropped from 40% (=50% * (1-20%)) to 30% (= 50% * (1-40%)). In other words, a $40k piece of equipment may have to drop to $30k in price in order for the business owner to get the same after-tax return on the investment.

As for hiring, raising taxes would most likely result in shifting domestic employees to business employees in book keeping, thereby unnecessarily making the books opaque. That's exactly what the Japanese and Europeans did by providing personal assistants and drivers to the executives while capping executive nominal income.

tatupu70 says

Reality says

Why would anyone spend $100 on something that he doesn't need to get a $33 reduction in tax liability back

So there's no middle ground in your world where something makes sense if it costs $60 but not $80?

The return from the investment would be a lot lower when taxes are raised.

control point says

Reality says

Tax rates have not decreased since 1980 if you count the payroll tax increase in 1986.

Corporate Profits taxes have not decreased since 1980? Corporate Profits taxes were over 50% pre-1970, went to 48-49% in the 70s, went to 46% in the early/mid 80s, went to 40% in the late 80s, went to 35% in the 90s to today.

Considering what the big corporations are actually paying, the nominal rates have little relevance. The debate here is mostly about personal income tax (including payroll tax, capital gain, etc. that show up on the 1040 form).

debyne says

One thing I've realized is that workers can make 6 figures if they choose to make good decisions and work their ass off. People who are billionaires generally got lucky...they're no smarter or harder-working necessarily than those making $250K per year. This is why I'm more of a proponent of an ultra-rich wealth tax as opposed to taxing households in the Bay Area making $250K who can't even afford to buy a decent house.

I also agree with a very high estate tax for estates of an exorbitant amount.

I'd rather have 1500+ billionaires to choose from in terms for whom I work for, instead of one single Emperor to whom I have to pay my homage.

Reality says

I'd rather have 1500+ billionaires to choose from in terms for whom I work for, instead of one single Emperor to whom I have to pay my homage.

You lost me.

tovarichpeter says

We are doomed without a wealth tax

Reality says

If new equipment indeed increase apple yield by, say 50%, why wouldn't the owner of the business buy it to begin with regardless tax policy?

Risk.

Lets say a business owner has $100 profit. In a 50% tax world, his after tax profit is $50. If he invests in something, say, an new employee, and the cost is $50 - his $100 earnings is now $50, and his after tax profit is $25. His "cost" or risk for the $50 new employee is $25. The government subsidized $25 of the cost or risk.

In a zero tax environment, all of the risk (and cost) is beared by the business owner.

First of all, I don't think that most romans lived high on the hog. The senators and most patricians certainly did. The plebes lived rather modestly to say the least. The conquered slaves did not have citizenship rights and were viewed as property.

To the extent that whatever perks the plebes enjoyed (and they were transitory depending on the rulers), I don't think that the leadership viewed them in the context of "welfare state." What they were was basically a validation of the roman power and they came at the expense of the slaves and conquered people. It's almost as of the perks were a sense of pride and a booty to be "shared" following the decimation of other lands. In a sense, certain jobs became too good for the romans and were deemed "worthy" only of those who were conquered and evidently cursed by gods.

It is somewhat similar to certain modern elites who for example feel that they are too good to cook their own food, landscape/maintain the garden and take care of household chores. While they outsource the work and pay others to do it as opposed to the romans who had slaves do these tasks, the concept and inherent power structure/differential remains very similar.

debyne says

Reality says

I'd rather have 1500+ billionaires to choose from in terms for whom I work for, instead of one single Emperor to whom I have to pay my homage.

You lost me.

When you go looking for a job, do you prefer to have a dozen places where you can fit, or would you prefer one single employee called "the government"?

Raising tax on the rich is just a way of impoverishing most potential employers to make the top dog and the cronies even more monopolistic.

Reality says

The return from the investment would be a lot lower when taxes are raised.

Perhaps, but that return is discounted back so to present value. So, higher taxes promote investment.

tatupu70 says

Reality says

The return from the investment would be a lot lower when taxes are raised.

Perhaps, but that return is discounted back so to present value. So, higher taxes promote investment.

No it does not. Go ahead and grind through the math yourself, instead of the silly hand-waiving nonsense like the suggestion that people can get fat by eating one's own arm or a business can grow just by giving employee more money to pay for the firm's own product.

control point says

Reality says

If new equipment indeed increase apple yield by, say 50%, why wouldn't the owner of the business buy it to begin with regardless tax policy?

Risk.

Lets say a business owner has $100 profit. In a 50% tax world, his after tax profit is $50. If he invests in something, say, an new employee, and the cost is $50 - his $100 earnings is now $50, and his after tax profit is $25. His "cost" or risk for the $50 new employee is $25. The government subsidized $25 of the cost or risk.

In a zero tax environment, all of the risk (and cost) is beared by the business owner.

Hmm, if the revenue doesn't change (which is the assumption you have implied above), the business owner just reduced his after-tax income from $50 to $25 by hiring someone. Why would he do that? Why would he choose to pay an employee wage that is double his own after-tax income?

Reality says

tatupu70 says

Reality says

The return from the investment would be a lot lower when taxes are raised.

Perhaps, but that return is discounted back so to present value. So, higher taxes promote investment.

No it does not. Go ahead and through the math yourself, instead of the silly hand-waiving nonsense like the suggestion that people can get fat by eating one's own arm or a business can grow just by giving employee more money to pay for the firm's own product.

I have.