patrick.net

indigenous says

Just wanted to read that again

Good. Now print it out, frame it, put it on your wall, and jerk off to it fortnightly.

debyne says

jerk off to it fortnightly

I like the post, but not that much. OTH do what ever the fuck you want to

debyne says

Like I said, make all taxes consumption-based and then the capital gains/income tax issue goes away. Everyone pays for usage of something or sales....the rich will pay more because they spend/use more, but that's their decision.

Consumption taxes - do you mean national sales tax, VAT, or consumption taxes on specific items (like luxury vehicle taxes, for example)

control point says

debyne says

Like I said, make all taxes consumption-based and then the capital gains/income tax issue goes away. Everyone pays for usage of something or sales....the rich will pay more because they spend/use more, but that's their decision.

Consumption taxes - do you mean national sales tax, VAT, or consumption taxes on specific items (like luxury vehicle taxes, for example)

Yes. Gas taxes, toll roads, definitely luxury taxes, sales taxes, energy usage taxes, etc.

debyne says

tatupu70 says

Yes, why don't those poor people just start buying more stocks??? What the hell is wrong with them?

Again--your ideas are why the 1% own 30% (and growing) of the wealth right now. If you can't see why that is bad, then you need take a step back and try to understand how the economy works.

Like I said, make all taxes consumption-based and then the capital gains/income tax issue goes away. Everyone pays for usage of something or sales....the rich will pay more because they spend/use more, but that's their decision.

I think consumption-based taxation will ultimately end up taxing the rich more because you'd eliminate the stupid loopholes. But along with all of this, we need to shrink gov't and leave more money in the private sector to innovate and produce, which will lift the tide for all boats.

Fully agree.

debyne says

Like I said, make all taxes consumption-based and then the capital gains/income tax issue goes away. Everyone pays for usage of something or sales....the rich will pay more because they spend/use more, but that's their decision.

By percentage, you'd be giving the rich a huge tax cut and the middle and lower classes a huge tax increase. You would end up paying more taxes.

debyne says

I think consumption-based taxation will ultimately end up taxing the rich more because you'd eliminate the stupid loopholes. But along with all of this, we need to shrink gov't and leave more money in the private sector to innovate and produce, which will lift the tide for all boats.

You think incorrectly. And as Bill says--shrinking government means laying off a LOT of people. I don't disagree that we need to cut defense spending, but until we figure a way to reduce inequality, it will make things worse. Not better.

tatupu70 says

By percentage, you'd be giving the rich a huge tax cut and the middle and lower classes a huge tax increase. You would end up paying more taxes.

The tone of your statement is based on the assumption that lower and middle classes pay too much already when, in fact, they pay too little.

debyne says

The tone of your statement is based on the assumption that lower and middle classes pay too much already when, in fact, they pay too little.

lol. If you think so, why don't you quit your job and see how you like paying "too little" taxes?

tatupu70 says

If you think so, why don't you quit your job and see how you like paying "too little" taxes?

If I quit my job then I don't make any income, which means I don't pay any taxes. Not sure I understand your statement.

debyne says

tatupu70 says

If you think so, why don't you quit your job and see how you like paying "too little" taxes?

If I quit my job then I don't make any income, which means I don't pay any taxes. Not sure I understand your statement.

Then you would be paying too little, ie zero.

Call it Crazy says

tatupu70 says

By percentage,

Ahhh, playing the "percentage" card again.....

You're right, we should all just pay $100k annually in taxes. Anyone who doesn't pay is guilty of tax evasion, a felony. All felons cannot vote.

Sound about right?

consumption tax.
case closed.

Call it Crazy says

control point says

Call it Crazy says

tatupu70 says

By percentage,

Ahhh, playing the "percentage" card again.....

You're right, we should all just pay $100k annually in taxes. Anyone who doesn't pay is guilty of tax evasion, a felony. All felons cannot vote.

Sound about right?

Perfect! (I'll take that decrease)

BAHAHAHAHAHA!

Good one.

If you can't survive without working for somebody else, you ain't middle class.

Middle class means you're either a professional who works for themselves, you rent tools or housing, or have enough assets that generate enough income to live off of, even if that's at survival/poverty levels.

If you need to work for a living you are working class.

Grandma Jenkins owns a big house free and clear, by renting out the rooms or running a B&B she can survive. She's Middle Class, even though she only makes $20k a year not counting Social Security.

John Dewey-Cheatham is a lawyer, he makes $100k a year. Even if he lost 3/4 of his client base, he would make $25k a year. He is middle class.

Ernest McAdams is a C++ programmer, he owns a new car, $100k in his stocks, and 27-years left on a 30 year mortgage. If he is fired from his $50k job, he's fucked, because he owns no rental property and cannot live off dividends or appreciation on his stocks. Sucking craigslist "I could do my own website, but I don't want to bother so here is $100" dick wouldn't provide enough to even remotely meet his basic living expenses. He is WORKING Class.

control point says

Then you would be paying too little, ie zero.

That's why this "central planning" doesn't work. Politicians sit in a room and decide what is too much or too little based on socioeconomic class, and take favors to make such decisions in order to get reelected. Make what people pay based on consumption, and the guesswork and politics is taken out of it...problem solved.

jazz music says

And of of course that must be why the lower and middle classes are thriving, prospering, affording so many luxuries nowadays, yachts, cars, vacations, and not just disappearing into financial irrelevance ... uhhh how about housing? education? healthcare? retirement? nutrition?

That has nothing to do with taxes and mostly due to poor choices like having too many kids, buying nice cars, getting iphones and tablets, and saving up for that Coach bag. If the poor and middle class are suffering, it's because they're spending too much and/or making good job/career choices. If folks spent less and saved more, prices would come down to make life more affordable, and more of them could invest money in stocks, bonds or real estate.

Don't blame the tax system for the demise of the country's poor and middle class...blame our consumerism society and lack of fiscal discipline. I even think a consumption-based tax system would help drive people to earn more, save more, and spend less.

However, a purely based consumption tax will be too oppressive if we don't drastically cut the size of gov't including military, entitlements, etc. But, making transformational cuts to the size of gov't and gov't spending is something we have to do anyway.

debyne says

If the poor and middle class are suffering, it's because they're spending too much. If folks spent less and saved more, prices would come down to make life more affordable, and more of them could invest money in stocks, bonds or real estate.

Don't blame the tax system for the demise of the country's poor and middle class...blame our consumerism society and lack of fiscal discipline.

That is not entirely true, and perfunctory understanding of the situation.

indigenous says

That is not entirely true

At least you admit it's mostly true. I'm talking in generalities here. Of course there are people suffering due to job loss, healthcare crises, etc.., and those are separate, structural issues that need to be dealt with, but the tax system will NOT fix them. For example, I'm a fan of the individual mandate for healthcare and much of what Obamacare has to offer...the implementation has just sucked.

debyne says

At least you admit it's mostly true.

I do, but the overarching problem is not caused just by taxes.

The biggest problem affecting the middle class is inflation. This is what has created inequality, but more importantly a lower standard of living in the middle class.

Secondly the money that has been parked at the upper quintile is not invested in nascent business which is the engine for jobs.

It is true jobs have been off shored but part of the culprit has been the Chinese devaluing their currency and the US allowing them to do it. This is because of Milton Friedman's brainchild the floating exchange rate that is allowed to run with out being monitored and with a built in inflation target of 3%. No matter what jobs were going to be off shored but they would have not disappeared nearly as fast if the dollar had been monitored.

4th the corruption of the country by cronyism. Since the 17th amendment the country has been subject to the tyranny of democracy. This has resulted in the banking industry being bailed out, an explosion in the DOD, endless subsidies, the government getting into the healthcare business, the higher education business, etc etc. Canada has far fewer of these type problems at least in banking because these laws are voted on by a senate that is not elected by the citizens but rather appointed. Similar to this country before the 17th amendment.

5th the government has no business in healthcare.

6th borrowing money because of the reserve currency status that has allowed the fed to not have to worry about financing the non stop wars for the past what 12 years and how many trillion?

debyne says

If folks spent less and saved more, prices would come down to make life more
affordable, and more of them could invest money in stocks, bonds or real estate.

Except you forgot that people would get laid off, unemployement would rise, and you'd create a whole bunch more people with no job and no money who can't afford anything. You don't think production would stay the same as you reduce demand, do you? And lower production = fewer jobs.

debyne says

I even think a consumption-based tax system would help drive people to earn
more, save more, and spend less.

You haven't thought that scenario all the way through yet.

indigenous says

The biggest problem affecting the middle class is inflation.

I definitely agree. Monetary inflation accentuates the the disparity between the rich and the poor.

jazz music says

You've been listening to radio talk show host microphone bullies and Foxbots.

Your post was too long. I don't listen to talk shows and watch Faux News. I never said we shouldn't help the poor with any sort of social safety net, I'm just talking about how the tax system should be structured.

tatupu70 says

You don't think production would stay the same as you reduce demand, do you?

I don't think the answer is to spend beyond our means and buy crap we don't need instead of investing it. We're a global economy, so the idea is to get other countries to consume our production...that's how we get a trade surplus and make our country richer, not by consuming our own stuff.

debyne says

I don't think the answer is to spend beyond our means and buy crap we don't
need instead of investing it. We're a global economy, so the idea is to get
other countries to consume our production...that's how we get a trade surplus
and make our country richer, not by consuming our own stuff.

OK--how does having Americans save more lead to other countries buying our stuff?

tatupu70 says

You haven't thought that scenario all the way through yet.

Don't you think that if our income top line increased but so do our variable costs (with consumption based taxes), people would save more and buy more of the things that they need? This is how the rich would get hit because they gotta have their stuff...but they can afford it.

debyne says

I definitely agree. Monetary inflation accentuates the the disparity between
the rich and the poor.

My lord. You guys live in an alternate universe. Inflation is too low. The biggest problem affecting the middle class is lack of wage increases.

And it's caused because labor has no leverage right now--corporations pay as little as possible. What you end up with is all time high corporate profits and large percentage of the population earning minimum wage.

The best part is folks like you complaining because the minimum wage earners aren't paying enough in taxes. It's really laughable except that there are so many clueless folks like you out there.

debyne says

Don't you think that if our income top line increased but so do our variable
costs (with consumption based taxes), people would save more and buy more of the
things that they need?

People wouldn't buy more of things they need. If it's a need, people purchase to satisfy that need regardless of income.

If people save more, they are buying less. By definition.

So, buying less = less demand = fewer jobs = higher unemployment.

tatupu70 says

Inflation is too low. The biggest problem affecting the middle class is lack of wage increases.

Real inflation is closer to 6% right now...don't believe the crap from our "trustworthy" gov't. I actually don't disagree with raising the minimum wage...it'll make people work harder for fewer better-paying jobs, and it'll drive low-labor-providing companies to innovate better ways to automate tasks currently performed by humans.

tatupu70 says

If it's a need, people purchase to satisfy that need regardless of income.

What I'm saying is that they'll be driven to ONLY buy more of the things that they need, and less of the crap that society tells them they need. That way they'll have more money left to invest and build their wealth. That's what I meant.

debyne says

Real inflation is closer to 6% right now

Ah--another shadowstats guru? I should have known.

debyne says

What I'm saying is that they'll be driven to ONLY buy more of the things that
they need, and less of the crap that society tells them they need. That way
they'll have more money left to invest and build their wealth. That's what I
meant.

Fine. Then you agree that if people do that, it will lead to many more people unemployed? And it's very hard to build wealth without a job.

tatupu70 says

Ah--another shadowstats guru? I should have known.

By that you must mean "truth seeker" :)

tatupu70 says

debyne says

What I'm saying is that they'll be driven to ONLY buy more of the things that

they need, and less of the crap that society tells them they need. That way

they'll have more money left to invest and build their wealth. That's what I

meant.

Fine. Then you agree that if people do that, it will lead to many more people unemployed? And it's very hard to build wealth without a job.

You're probably right in the short term, but capitalistic economies are pretty adaptable and I think it would serve us better in the long run. I do agree that job losses would likely happen in the short term though.

Shadowstats shows inflation probably averaging 7-8% in 2008/09, when:

Housing crashed ~20%
Rents weakened to flat
Oil crashed from $140 to $40
Cash for clunkers
down brand electronics gained market share
food prices decreased

wtf???

control point says

Shadowstats shows inflation probably averaging 7-8% in 2008/09, when:

According to my calculations and research it is around 3%-5%, similar to the EPI. Even 3% is breaking the middle-classes neck, because their wages do not appreciate 3% yearly. What are we going to do now, raise the minimum wage by 3% per year? Inflation caused by QE and ZIRP has benefited the wealthy and (slowly) bankrupted the middle-class.

mell says

Inflation caused by QE and ZIRP has benefited the wealthy and (slowly)
bankrupted the middle-class.

That's just BS. The problem isn't 3% inflation--the problem is the lack of wage increases. Inflation is a distraction. If we get real wage growth, who cares what the inflation rate is--it's just a meaningless number. If wages grow faster, all is well.

mell says

According to my calculations and research it is around 3%-5%, similar to the EPI.

Right, because housing and cars, for example, are expenditures where price changes don't matter.

Of course gas prices matter more than housing prices, since most spend at least 20% on gas compared to housing.

FFS, the CPI is accurate.

tatupu70 says

The problem isn't 3% inflation--the problem is the lack of wage increases.

Aggregate income (for workers, wage) growth IS inflation.

The problem is the allocation of income growth. This is reflected in falling real MEDIAN wages, as capital has been favored to labor, and non-specialized labor has been commoditized.

Labor in an ever more global economy is powerless without leverage. Wage arbitrage sure is an easy game to play as the world shrinks.

tatupu70 says

If we get real wage growth, who cares what the inflation rate is--it's just a meaningless number.

Isn't the definition of "real" wage growth calculated as nominal wage growth against inflation? If yes, inflation is VERY relevant in calculating "real" wage growth.