patrick.net

TwoScoopsPlissken says

We didn't have an income tax when the Constitution first became law of the land and didn't until temporarily during the Civil War and later permanently around 1917.

Yep, but they pretty clearly articulated that all men are created equally and that rich people shouldn't have larger voting rights than poor people. That pretty much goes against everything this country was founded upon.

Patrick says

Part of the beauty of Georgism is that land values appropriately reflect the economic activity taking place on them, more or less.

And doesn't penalize people for improving their property - nor benefit them to keep their property in shabby condition (ie slumlords pay the same as the similarly sized apartment building that's brand new and shiny that's the same size plot on the same block)

Nor is there any means for criminals or wealthy people to dodge the tax. You can't launder or conceal a geospatial location.

Patrick says

It would be interesting to find these numbers for other countries.

Remember when Hollande wanted to raise the top tax rate to 75%?

It had the support of six out of 10 voters in the COUNTRY (this would mean all people making over $188,000 USD would give up 75% of their income to the government).

If the courts had not struck it down, it would have went into law.

HappyGilmore says

Actually it IS a zero sum game. Real growth in the US is measured by productivity growth. That is a couple percent a year. So, for all intents and purposes it is a zero sum game.

Income inequality is, by far, the biggest problem in the US economy right now.

False.

Apple didn't exist in 1960.

Apple has a market cap of nearly a trillion dollars now.

The pie simply gets bigger.

Goran_K says

It had the support of six out of 10 voters in the COUNTRY (this would mean all people making over $188,000 USD would give up 75% of their income to the government).

I doubt it. It almost certainly was a graduated tax, meaning only income over 188K would be taxed at the highest rate. The US used to have a top rate of 90% and the country prospered.

HappyGilmore says

The US used to have a top rate of 90% and the country prospered.

No it didn't. Individual wealth is higher today than it was 6-7 decades ago when that was the tax rate.

A 90% tax rate today would completely annihilate U.S global competitiveness.

Goran_K says

No it didn't.

It didn't? What part of the economy is better now vs. then?

Goran_K says

A 90% tax rate today would completely annihilate U.S global competitiveness.

It would have nothing to do with competitiveness.

Here's a table with the best GDP growth years and their corresponding top tax rate. Sure seems like higher tax rates HELP growth.

Goran_K says

The top 20% of income earners pay 95% of the tax burden in the United States

Does not include social security and medicare taxes that all poor people pay. Have not we gone over this a million times on this forum? Income tax is only 47% (and soon to be less) part of Federal government revenue.

Tax burden does not include sales taxes that all poor people either.

anotheraccount says

Goran_K says

The top 20% of income earners pay 95% of the tax burden in the United States

Does not include social security and medicare taxes that all poor people pay.

Another straw man.

The chart in the OP says INCOME TAX, not medicare or S.S.

Goran_K says

1 - Income inequality is a fake problem. We had this conversation already. The economy is not a zero sum game.

This is not a zero sum game but the question is everyone's share rising? The answer is no as evidenced by flat wage growth. And even flat wage growth hides:
- flat on average but the poor fared even worse than flat.
- flat in overall inflation adjusted terms hide that housing, or healthcare prices went through the roof.
So we just went through 30 yrs of the lowest 50% of the population seeing their standards of living eviscerated while the rich made out like bandits.

You can't simply hide behind a "it's not a zero sum game".

Goran_K says

2 - The tax cut hits everyone across the board not just the rich.

Right but the rich still got most of the nominal breaks.

Goran_K says

3 - "the main bottleneck of the economy is poor end-demand (outside debt) due to poor people not having any money" WTF?

Yep! we need to add several trillions of debts - every year - just to maintain the current "end demand". If we stopped adding debt, the end demand would collapse, like it did in 2008. The gov had to start compensating by adding huge amount to the national debts.
Why are we in this situation????
Because the poorest 70% have no fucking money to spend, and the richest don't NEED to spend. They don't know what to do with their money outside accumulating it.

Conclusion: some right wing people are still fighting Reagan's war, even though we now have the opposite problems.

Patrick says

There are no farms where Facebook is, and no Facebook where the farms are. The tax rates would be orders of magnitude different.

But even with different land values, the land value is still a tiny fraction of what Facebook earns, whereas it is hugely superior to what a farm earns.
You would have to adjust tax rates based on something else than land value to be fair.
I still don't understand the idea here.

Are we sure about wages being flat since say February 2017?

HappyGilmore says

Do you believe in the Constitution? The Founding Fathers answered that question quite conclusively.

Oh, NOW we actually like the Constitution...

Didn't seem to be the case in "repeal the 2A" thread.

Satoshi_Nakamoto says

HappyGilmore says

Do you believe in the Constitution? The Founding Fathers answered that question quite conclusively.

Oh, NOW we actually like the Constitution...

Didn't seem to be the case in "repeal the 2A" thread.

You beat me too it.

Something reeks of hypocrisy (or something else).

HappyGilmore says

Here's a table with the best GDP growth years and their corresponding top tax rate. Sure seems like higher tax rates HELP growth.

Top tax bracket rate has little to do with actual amount of tax paid. Back when top tax rate was near 90%, as it is the case in some other countries now, the top executive jobs came with perks like free cars, free residence and free blowjobs from young pretty things on the payroll of the companies and the government agencies! The employers simply didn't pay that much cash out to the executives when 90% of the pay would be intercepted by a 3rd party.

Also, if GDP growth is your primary goal, you ought to love the actual Nazi Party, which produced the highest GDP ever recorded in the modern world: 30% annual growth rate in the first few years after Hitler and Nazi Party came to power in Germany! All those huge political rallies, waste production in preparation for wars and paying thugs to beat people up and shoving them into concentration camps all add up to GDP statistics! Never mind not a single VW ("the people's car") could be made affordable to a single German consumer until long after WWII. Yup, the higher the VW Bug's cost (hence unaffordable to German consumers) the higher the GDP when sold to the Germany Army.

GDP accounting is essentially fraud when it takes into account non-market non-competitive transactions. For example, if a medical procedure cost $1000 in a competitive market place, it adds only $1000 to GDP; whereas if the hospital doing the same procedure runs up $10,000 and is paid by the government or insurance company forced by government to make only 10% profit (therefore huge incentive to run up cost; 10% of $1000 is only $100, whereas 10% of $10,000 is $1000!), it's counted as $10,000 addition to GDP.

Sniper says

The chart in the OP says INCOME TAX, not medicare or S.S.

The chart says that. Goran explicitly uses the words "tax burden" which is wrong.

HappyGilmore says

Do you believe in the Constitution? The Founding Fathers answered that question quite conclusively.

They did! They did not specify who in each state had the right to vote. It ought to be quite clear that the horses (which enjoyed the same electoral college vote apportionment as slave head count) did not vote by themselves, but had votes cast by someone else on their behalves. How the electoral college votes was to be decided in each state was up to the state legislature.

People who were wards of other people obviously did not have the vote. That meant people under 21 didn't have the right to vote. Slaves who enjoyed free housing, free food, free education and free medicine, all decided by other people (slave owners) instead of themselves making choices (buying those goods and services with their own money) did not have the right of vote. Likewise, people on welfare (i.e. enjoying free housing, free food, free education and free medicine, as ward of the state) should not have the right to vote.

anotheraccount says

Sniper says

The chart in the OP says INCOME TAX, not medicare or S.S.

The chart says that. Goran explicitly uses the words "tax burden" which is wrong.

OK, we'll try this a different way.

What "tax burden" does a person making $250K pay for Medicare and S.S. and what "tax burden" does a person making $30K pay?

Please show the dollar amounts for each.

anotheraccount says

Tax burden does not include sales taxes that all poor people either.

OK, let's cover that too.

What approximate Sales "tax burden" does a person making $250K pay on their purchases and what Sales "tax burden" does a person making $30K pay?

Please show the dollar amounts for each.

HappyGilmore says

Actually it IS a zero sum game. Real growth in the US is measured by productivity growth. That is a couple percent a year. So, for all intents and purposes it is a zero sum game.

Income inequality is, by far, the biggest problem in the US economy right now.

It is not a zero-sum game. A couple percentage a year real growth should never be taken for granted. A couple percentage a year real growth is actually very good: doubling living standards every 36 years, or every generation! Setting aside the GDP nonsense that account for more and more government waste, the US only sustained 2+% annual real growth in the "Guilded Age" from roughly mid-19th century to early-20th century.

Living standards doubling every generation can only be sustained if the decisions regarding resource allocation are left to a relatively free market process so that those given power and resources by consumers as individual free agents get to decide. If left to a government monopolistic authority to allocate resources for the society, we'd end up with the situation in Venezuela, North Korea and the first year after Mayflower landed in Plymouth: more than half the people died in that first year due to starvation because they tried to farm all the land in common instead of private ownership. Between Mayflower and Venezuela, we have the entire 20th century of over 100+ million people dying in socialist/communist countries that tried allegedly better schemes than relatively free market allocation of resources.

The economic stagnation in the US in the past few decades is precisely the result of centralizing economic management.

Heraclitusstudent says

1- An increasing amount of money go to the rich vs poor (increasing inequalities)

In a real market economy, money going to a rich person would be the result of the rich person delivering something that is superior to all the alternatives that other people can buy. Not sure why that's even a bad thing.

2 - Rich people (Trump) have just cut taxes for themselves while increasing spending

Cutting taxes means giving people more choices where to spend money/resources, instead of letting a central authority making such decisions; that's a good thing. Increasing spending means letting a central authority make more decisions on how to spend more resources; a bad thing.

3 - the main bottleneck of the economy is poor end-demand (outside debt) due to poor people not having any money

No. That is never the real problem. If poor people have less money, the goods/services they buy would just come down in price. That is actually beneficial to the poor: they usually have less debt (as they don't qualify to borrow), so deflation doesn't hurt them. If the poor people get more money, they would bid up the prices of goods/services that they buy, resulting in inflation, which hurts the poor (usually having cash in hand instead of assets and loans) far more than the wealthy who usually have assets and loans associated with assets. The very idea of handing out money by the government hurt the poor and benefit the rich; that's precisely why the more government intervention in the market place, the greater polarization.

Goran_K says

The top 20% of income earners pay 95% of the tax burden in the United States

Funny, I thought sales taxes, property taxes, corporate taxes, FICA, taxes, excise taxes, etc., were also part of the tax burden in the United States. Despite that deceptive use of the word taxes in the name apparently in the world according to Goran they are not. You learn something new on patnet every day.

It would appear that some people believe that the no taxation without representation principal, which was the founding principal of the country, is some sort of a flexible sliding scale that can be used as a pick and choose exercise depending on what partizan political point they want to make.

But wait, there's more:
#1 Air Transportation Taxes (just look at how much you were charged the last time you flew)
#2 Biodiesel Fuel Taxes
#3 Building Permit Taxes
#4 Business Registration Fees
#5 Capital Gains Taxes
#6 Cigarette Taxes
#7 Court Fines (indirect taxes)
#8 Disposal Fees
#9 Dog License Taxes
#10 Drivers License Fees (another form of taxation)
#11 Employer Health Insurance Mandate Tax
#12 Employer Medicare Taxes
#13 Employer Social Security Taxes
#14 Environmental Fees
#15 Estate Taxes
#16 Excise Taxes On Comprehensive Health Insurance Plans
#17 Federal Corporate Taxes
#18 Federal Income Taxes
#19 Federal Unemployment Taxes
#20 Fishing License Taxes
#21 Flush Taxes (yes, this actually exists in some areas)
#22 Food And Beverage License Fees
#23 Franchise Business Taxes
#24 Garbage Taxes
#25 Gasoline Taxes
#26 Gift Taxes
#27 Gun Ownership Permits
#28 Hazardous Material Disposal Fees
#29 Highway Access Fees
#30 Hotel Taxes (these are becoming quite large in some areas)
#31 Hunting License Taxes
#32 Import Taxes
#33 Individual Health Insurance Mandate Taxes
#34 Inheritance Taxes
#35 Insect Control Hazardous Materials Licenses
#36 Inspection Fees
#37 Insurance Premium Taxes
#38 Interstate User Diesel Fuel Taxes
#39 Inventory Taxes
#40 IRA Early Withdrawal Taxes
#41 IRS Interest Charges (tax on top of tax)
#42 IRS Penalties (tax on top of tax)
#43 Library Taxes
#44 License Plate Fees
#45 Liquor Taxes
#46 Local Corporate Taxes
#47 Local Income Taxes
#48 Local School Taxes
#49 Local Unemployment Taxes
#50 Luxury Taxes
#51 Marriage License Taxes
#52 Medicare Taxes
#53 Medicare Tax Surcharge On High Earning Americans Under Obamacare
#54 Obamacare Individual Mandate Excise Tax (if you don't buy "qualifying" health insurance under Obamacare you will have to pay an additional tax)
#55 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income)
#56 Parking Meters
#57 Passport Fees
#58 Professional Licenses And Fees (another form of taxation)
#59 Property Taxes
#60 Real Estate Taxes
#61 Recreational Vehicle Taxes
#62 Registration Fees For Ne Businesses
#63 Toll Booth Taxes
#64 Sales Taxes
#65 Self-Employment Taxes
#66 Sewer & Water Taxes
#67 School Taxes
#68 Septic Permit Taxes
#69 Service Charge Taxes
#70 Social Security Taxes
#71 Special Assessments For Road Repairs Or Construction
#72 Sports Stadium Taxes
#73 State Corporate Taxes
#74 State Income Taxes
#75 State Park Entrance Fees
#76 State Unemployment Taxes (SUTA)
#77 Tanning Taxes (a new Obamacare tax on tanning services)
#78 Telephone 911 Service Taxes
#79 Telephone Federal Excise Taxes
#80 Telephone Federal Universal Service Fee Taxes
#81 Telephone Minimum Usage Surcharge Taxe
#82 Telephone State And Local Taxes
#83 Telephone Universal Access Taxes
#84 The Alternative Minimum Tax
#85 Tire Recycling Fees
#86 Tire Taxes
#87 Tolls (another form of taxation)
#88 Traffic Fines (indirect taxation)
#89 Use Taxes (Out of state purchases, etc.)
#90 Utility Taxes
#91 Vehicle Registration Taxes
#92 Waste Management Taxes
#93 Water Rights Fees
#94 Watercraft Registration & Licensing Fees
#95 Well Permit Fees
#96 Workers Compensation Taxes
#97 Zoning Permit Fees

Heraclitusstudent says

Yep! we need to add several trillions of debts - every year - just to maintain the current "end demand". If we stopped adding debt, the end demand would collapse, like it did in 2008. The gov had to start compensating by adding huge amount to the national debts.
Why are we in this situation????
Because the poorest 70% have no fucking money to spend, and the richest don't NEED to spend. They don't know what to do with their money outside accumulating it.

This explanation makes no sense whatsoever. Does Bezos have $100 Billion dollars stacked up in his basement? Of course not. His wealth is in his ownership of Amazon, the stocks of which have been bid up on the marginal transactions, just like the 5% transactions of housing stock every year decides the price of the housing stock. The owners of stocks and houses (and almost all other productive capitals) are not at all piling money up in their homes equal to their asset value . . . in fact it's precisely the opposite: not enough money piling up as reserves is what causes financial collapse! The collapses are always the result of bubbles, during which people over-leveraged and over-invested based on too optimistic expectations. The problem is not the rich unwilling to spend, but they invest (which is no different from spending in economic statistics) too liberally!

Recession and depression almost always result from government monetary policies that induce widespread misallocaiton of resources: a wide cross section of investors having too optimistic expectations on the future returns of their investments, resulting in expectations not being met, therefore assets have to be repriced.

We did not need to add several trillions of debts. In fact, the additional debt taken on by the government only served to prevent the repricing to a level where other consumers can buy up assets cheap! For example, the money propped up real estate prices in NYC and SFBA prevented the real clearing of the market place and have kept many on the Patnet from buying their own homes! The bailouts are the problem, not the solution. Giving more money to people who are bad at running their finances would only exacerbate the problem.

Goran_K says

Should the poor be allowed to vote other people's money to themselves via the government?

This is why we have a constitution (or used to rather)

bob2356 says

Funny, I thought sales taxes, property taxes, corporate taxes, FICA, taxes, excise taxes, etc., were also part of the tax burden in the United States. Despite that deceptive use of the word taxes in the name apparently in the world according to Goran they are not. You learn something new on patnet every day.

But not all taxes are remotely equal in weight.



Hey, how much income tax and payroll tax do illegal day laborers pay from their off-the-books job?

If they don't pay anything, does that mean their Dreamer Kids don't get to go to school at $10k/year?

Neoliberals:

1. Companies don't pay enough Corporate Tax
Yet
2. We need to have Global Trade
But
3. Companies use Inversion thanks to complex Global Trade, to mislead where and how their profits were made
And so
4. We don't collect enough Corporate Tax
Yet
5. Let's bring in millions of unskilled immigrants, that'll help solve the revenue problem. Anybody opposed to this is a racist.
And
6. Leave Amazon alone, Trump, even though it's one of the worst Corporate Inversion abusers in the World! It's no problem Bezos owns the US Capital paper of record, either!

Satoshi_Nakamoto says

Oh, NOW we actually like the Constitution...

Didn't seem to be the case in "repeal the 2A" thread.

The Founders set up a method for repealing Amendments--that is completely Constitutional.

Nothing hypocritical.

Reality says

Top tax bracket rate has little to do with actual amount of tax paid. Back when top tax rate was near 90%, as it is the case in some other countries now, the top executive jobs came with perks like free cars, free residence and free blowjobs from young pretty things on the payroll of the companies and the government agencies! The employers simply didn't pay that much cash out to the executives when 90% of the pay would be intercepted by a 3rd party.

I agree that there was non-cash benefits during those times, but I'm pretty sure that there is a decent correlation between top tax rate and actual amount of tax paid. But, it's interesting that inequality was much lower during times with high top tax rates. GDP growth was much stronger. Tax burden was spread out much more evenly. There was a much stronger middle class. Real wage growth was much stronger. Families could be comfortable on one income. None of those are coincidental.

Reality says

Also, if GDP growth is your primary goal, you ought to love the actual Nazi Party, which produced the highest GDP ever recorded in the modern world:

lol--so GDP growth is a bad thing now?

Reality says

A couple percentage a year real growth should never be taken for granted. A couple percentage a year real growth is actually very good: doubling living standards every 36 years, or every generation! Setting aside the GDP nonsense that account for more and more government waste, the US only sustained 2+% annual real growth in the "Guilded Age" from roughly mid-19th century to early-20th century.

The US averaged 2.8% productivity growth from 1948 - 1973. (In case you forgot--that was when we had high top tax rates.)

https://www.bls.gov/lpc/prodybar.htm

Reality says

The economic stagnation in the US in the past few decades is precisely the result of centralizing economic management.

The truth is exactly the opposite of the above statement.

Reality says

Slaves who enjoyed free housing, free food, free education and free medicine, all decided by other people (slave owners) instead of themselves making choices (buying those goods and services with their own money) did not have the right of vote. Likewise, people on welfare (i.e. enjoying free housing, free food, free education and free medicine, as ward of the state) should not have the right to vote.

Sorry--just want to make sure I understand this. You are equating someone who maybe lost their job and is having some tough times with a slave?

So, all men aren't created equal then?

Excluding googles 57 versions of sex is gender racism
HappyGilmore says

So, all men aren't created equal then?

HappyGilmore says

So, all men aren't created equal then?

Neither individuals nor groups are born with the same gifts. Inequality then begets more inequality. Its an enormous issue that no state or economic system has solved. The closest we get are within small, homogeneous societies. These small groups are effectively modernized tribes, with most people holding the same values and affinity for group loyalty.

(Now ask yourself if allowing in murderous migrants who refuse to assimilate helps of hurts these small modern tribe societies. Compare Sweden and Iceland for real world experiment.)

Limiting voting rights to those land owners who had skin in the game wasnt a terrible idea. Elitest as fuck, but it worked due to the shared value system amongst the landowners.

CBOEtrader says

Neither individuals nor groups are born with the same gifts

I don't think the Founders perceived the right to vote as a gift.

CBOEtrader says

Limiting voting rights to those land owners who had skin in the game wasnt a terrible idea.

Who doesn't have skin the game of life?

HappyGilmore says

I don't think the Founders perceived the right to vote as a gift.

Yes I am aware I took that in a different direction than you intended.

HappyGilmore says

Who doesn't have skin the game of life?

No one. Neither would land owners be the most applicable modern day interpretation of that concept. Goran is pondering if net worth is a better proxy for voting on tax issues only. If we had the constitution back protecting against income taxation, we wouldn't need to worry about this.

of course, there is a case to be made that the resulting unequal load balancing between states of our previous tariff based economy is why we had a civil war.

taxation is destruction one way or another. i dont pretend to have the answer

I have long believed that people paying too little in taxes cannot vote, period.

CBOEtrader says

of course, there is a case to be made that the resulting unequal load balancing between states of our previous tariff based economy is why we had a civil war.

A very poor case that is easily disproven.

CBOEtrader says

Goran is pondering if net worth is a better proxy for voting on tax issues only

Yep, and I'm just pointing out that his pondering seems to be against the very principles this country was founded upon.

HappyGilmore says

Yep, and I'm just pointing out that his pondering seems to be against the very principles this country was founded upon.

Like the 2nd amendment?

Sniper says

Like the 2nd amendment?

No, I'm fine with guaranteeing militias the right to bear arms.

HappyGilmore says

It would have nothing to do with competitiveness.

Why?

If the corporate tax rates in comparable markets are much lower, why would a company invest into the U.S?

HappyGilmore says

Here's a table with the best GDP growth years and their corresponding top tax rate. Sure seems like higher tax rates HELP growth.

Was it the high tax rate, or a globally interdependent competitive economy?