patrick.net

What Requiem said. Silicon Valley is basically a lottery scheme with slightly better odds.

And for Christ sake stop treating religious groups differently in the tax code. I thought we were guarantied separation of church and state? All these gargantuan cathedral boxes popping up everywhere are disgusting, and really hinder my ability to worship internal combustion.

Couldn't we just blame rich people for all our problems? Then round them up, kill them, redistribute their house and personal wealth.

I call this the Pirate Solution.

@DennisN,

I never mentioned labor unions and honestly I don't even know if they're necessary or that relevant anymore. However, since you brought the subject up, I'm against forcibly hiring anyone purely due to gender or ethnicity, or preventing employers from firing for good cause (assuming it really is *good cause* and not just retaliation against whistle-blowing, etc.).

I believe we used to have "such a place" right here in the U.S. and can have it again --even without mass unionization.

I'm personally not against "targeted" taxes against pro athletes, but the problem is if any one particular group is singled out like that, cries of "discrimination" and "racism" are sure to follow. A gradually progressive "quasi-flat" tax that rises with incomes would be far easier to sell on "fairness".

Vicente says: Couldn’t we just blame rich people for all our problems?

We do that already. It's called being a socia1ist. :o

Vicente says: Then round them up, kill them, redistribute their house and personal wealth. I call this the Pirate Solution.

The worldwide decline in pirates correlates to increased housing prices. Thus a return to piracy would help housing affordability in the United States. Also, we would be able to talk about wenches without fear of lawsuits.

I like the idea of a consumption tax with modest exemptions for occupied housing (owned or rented)--eg $20K/year, food-- eg $2500/year per family member and clothing -- eg $1000/year per family member. There would be no COLAs for expensive states, etc.--too complicated.

Every legal US citizen or resident would get three plastic voucher cards from the gov't, which could be redeemed for tax free goods or services in the amounts indicated. Voucher cards would be as good as cash and could be sold or exchanged freely so that thrifty types could benefit by living on even less than the exemption amounts.

Anything and everything above the exemption amount would be subject to consumption tax. Stocks, bonds, income-producing real estate and other investments would be entirely tax free. However, antiques, artwork or precious metals would not be considered "investments," even though they may have investment-like characteristics (maybe that isn't fair, but it is easy to administer--if certain kinds of cars, arwork, etc. were exempt, it would create too many complex definitional problems).

Imagine replacing income tax and payroll tax with such a consumption tax scheme. This would instantly create powerful incentives to invest and hire employees and massive disincentives to be a wasteful spendaholic.

Glen, it's a consumer-driven economy. If people aren't spending any money on goods, then employment plummets.

Vicente Says:
July 19th, 2007 at 5:39 pm
"Couldn’t we just blame rich people for all our problems? Then round them up, kill them, redistribute their house and personal wealth.

I call this the Pirate Solution."

Ha ha, they tried that in China already, but I guess once they were allowed to see how the United States compared to their quality of life they had a change of heart.

Brent, I am so with you on taxing churches, or at the very least not allowing them to be deductible charities. A few decades ago, churches were actually an incredibly costly loophole since people would donate to them, write it off, and then do "charitable work" for them or use some other mechanism to have a portion go back to them. That was cleaned up, but it is still an abuse, and I suspect it is rife with corruption. Since churches have no penalty for income (ie income tax) then there is no control mechanism to stop a scheme of inflating contributions to them for the writeoff. You know, the same scheme of valuing an old car at 5 times what it is actually worth to basically get Uncle Sam to buy it at above market when it was donated.

Now all my 401k accounts have greater than 60% in international funds:

What will deliver the greatest returns in the next 12 months?
U.S. Stocks 30%
International Stocks 51%
Cash 8%
Bonds 6%
Real estate 8%
120269 Votes to date

I wonder if in California we could pass an initiative removing the deductibility on church contributions? It would be one line on the adjustment to federal deductions schedule on the state form, and tax software could easily automatcally do the calculation of adding the deduction back to the itemized deductions.

Eventually there will be a backlash.

Bubba in the red states, young urban people (and I don't mean the froo-froo beautiful young and rich urban people - more like the ones who far outnumber them and live in places like east & central LA, West Oakland, etc.), exploited immigrants, keep tightening the screws on everyone who comes around to realize they're all getting screwed, and the rich'll only wish that the backlash will look like a Scandanvian system.

More likely, in this country of rights to Bear Arms, the backlash'll look less like a Swedish tax system, and more like what happened in Indonesian during the Asian currency contagion.

Instead they oughta consider giving a little to keep a lot, but instead they'll allow themselves to be blinded to what is obvious. They too self-absorbed to realize the demographics are not favorable- they're not reproducing as fast as the squeezed masses. It might have something to do with the maldistribution of resources available for medical care and for leisure activity. I don't really know. But the demographics are not in their favor.

sybrib, I think a Green Goblin quote will suffice here: Here's the real truth. There are eight million people in this city. And those teeming masses exist for the sole purpose of lifting the few exceptional people onto their shoulders. You and me… We're exceptional.

If the teeming masses are growing, does that mean that we can have a few more exceptional people? I am working towards that moment when the mundane hoist me onto their shoulders! :twisted:

All this talk about Germany, Scandanavia and other European countries tends to ignore one obvious fact. Americans are rampant consumers. We want it super-sized, and we want it right now. European citizens accept a more humble lifestyle in exchange for their many benefits. To attain better social balance, Americans either have to consume less or produce more. We're running a ridiculous budget deficit as it is.

My guess: We're not going to do a damn thing. People will clamor for change, but NIMBYism is not limited to just backyards. They want taxes from somebody, just not themselves. Any politicians put in office on the premise of changing things will quickly be ousted when people stop perceiving a benefit to themselves. Every soccer mom wants to save the whales and rainforests, but they'll make seat-covers from baby seal hides before they give up their 9 mpg Ford Expedition.

And I have said this many times, but it bears repeating. THE RICH ARE MOBILE. If you want to see the wealth move swiftly to a different country, start slamming the rich here. How many rich foreigners do you think emigrated to the U.S. to avoid persecution? A damn lot. Their descendants can just as easily emigrate somewhere else--the Cayman Islands, Lichtenstein, Eastern Europe or dozens of other global tax shelters.

The fault lies primarily with the teeming masses. Their greed is causing this train wreck (my greed and your greed included). To punish the exceptional is a naive, jealous approach that will only cause immediate wealth drain. What's the cultural message--don't become exceptional, because the lazy peasants will penalize you?

Yeesh.

One of the reasons for the growing disparity between the rich and the poor here in the U.S. is the out sourcing of jobs to third world countries. I know the idea of a global economy and free trade is a sacred cow to many on this blog but I wonder if the loss of good high wage manufacturing jobs and wage suppression for those jobs that remain might outway any gains. Those companies that choose to remain and manufacture goods here at home must overcome enormous obsticles to profitability in the form of increasingly strict environmental regulation and labor issues. The temptation to say to hell with it and move the factories overseas is only made worse by free trade agreements that have allowed many of their competitors to do exactly that. The predictable result is that these competitors can now lower their prices while at the same time increasing profitability due to lower production costs. This in turn causes the manufacturers that kept their plants here to loose market share or lower their prices(if they can) in an effort to remain competitive. Lowering prices makes them less profitable and increases the temptation to jump ship and follow their competitors example by letting their American employees go and moving their own factories over seas. To allow this to continue seems suicidal to me. I believe that if a company like Nike wants to build a plant in China to make shoes that are sold in China and other less developed countries that is their right. However; under no cicumstances should those shoes be allowed back into the U.S.! If they wish to sell shoes here they need to make them here. Free trade agreements should only be made between nations of like economic status and circumstance. Unions and labor laws are of no benefit if companies can get around them simply by leaving and still have unfettered access to our domestic markets. The most beneficial way for any company to share it's wealth is not through taxes but rather decent paychecks to employees.

Can someone please get my comment out of moderation.

Every time a new law is enacted, I lose another piece of my freedom.

I am in favor of only one new law:

"For every new law enacted, 10 old laws have to be eliminated."

As for the current tax system, and the overall sorry state of affairs, nothing is going to change until enough people quit being so politically apathetic, and get off their fat, stupid, over-consuming rear-ends and do something about it ...

But I don't see that happening anytime soon, so the small portion of middle class that actually realizes how screwed they are will just have to find a way not play in a game that is so unfairly stacked against them.

Maybe the founding fathers had a small glimpse of the future, and could foresee how the populace would eventually devolve into lazy, uneducated masses, hence the Electoral College... ;)
(On the flip side, did they foresee how the uber-rich could eventually just buy the presidency?)

Unionism was an early 'real world' response and reaction to inequality -- it's effectively a way of redistributing wealth in more laissez-faire economies when the govt won't do it through tax schemes or welfare redistribution. Unions empower workers and force the 'owners of the means of production' to return a greater share to the workers (who are actually producing the good) by mass action or the threat thereof. Historically strongly unionised countries like the UK, Australia and possibly Germany have therefore managed to claw their way up to a more egalitarian position in a ranking of welfare states due to leveraging higher wages for their workers.

Maybe the Founding Fathers looked around and saw their brave countrymen, fresh from shedding their blood in the name of freedom. And they decided that none of their descendants could possibly end up as lazy, entitled, apathetic or childish about their civic responsibilities.

By the way, the other reason I'm against penalizing the newly wealthy is because many of them are recent immigrants. If you choke off the supply of hardworking foreigners, then we're going to be *really* screwed.

LurkinLeech Says:
Maybe the founding fathers had a small glimpse of the future, and could foresee how the populace would eventually devolve into lazy, uneducated masses, hence the Electoral College…

They already had a mistrust of the uneducated, unwashed masses at that point in time -- it was an inherently elitist system that argued against 'the tyranny of the majority' -- that the average joe in 1776 was uneducated, ignorant, lacked judgement and was out of touch with matters of good govt and realpolitik -- therefore an electoral college of your betters was necessary to act as a check. Modern views of 'pure' democracy would say that this was an unfair artifice. But modern views of what democracy should be don't think highly of 1 seat-1 electorate systems or 'representative democracy' in general either -- rather that all major decisions affecting the polity should go to a referendum -- e.g. did the people of the US as a majority decide to invade Iraq and create a 'Coalition of the Willing' of a few begrudging allies?

). To punish the exceptional is a naive, jealous approach that will only cause immediate wealth drain.

What's exceptional about winning the Sperm Lottery?

DS says: (the Founding Fathers believed) that the average joe in 1776 was uneducated, ignorant, lacked judgement and was out of touch with matters of good govt and realpolitik

So basically we haven't moved much in 231 years, huh? :)

Brand says: To punish the exceptional is a naive, jealous approach that will only cause immediate wealth drain.

then Jimbo says: What’s exceptional about winning the Sperm Lottery?

Jimbo, how much U.S. wealth do you think is hereditary?

Many of the "founding fathers" owned slaves.

One of them fathered children by one of the slaves that he owned. I think we'd call that rape in today's language. Is that what you meant by "founding fathers?"

Enough about the founding fathers.

Median per capita income in the United States has not been going up for quite a while, not since 1998 or so. And even going all the way back to 1974, as far as I can find, it has only gone up 0.7% per year.

Unfortunately I cannot find good statistics for any of the European countries. Anyone know where to look?

Jimbo Says:
Unfortunately I cannot find good statistics for any of the European countries. Anyone know where to look?

The LIS? Luxembourg Income Study...

Jimbo, how much U.S. wealth do you think is hereditary?

Most wealthy people in the US are born to wealth. Most of them had the advantages of wealth passed on them by their parents long before they inherited a dime.

How much US wealth do *you* think is hereditary?

The answer is not settled by the way and is subject to a great amount of debate between economists.

Jimbo: I know a hell of a lot more self-made millionaires than heirs. I would point out that being children of someone rich carries a lot of benefits, but the money source isn't yours until the rich parent dies.

I would be interested to know what ratio of Americans on the Forbes wealthiest 1000 list are self-made vs. heirs/heiresses.

Oh my. And I even used to like Motorhead when I was a teenager.

I guess now's not a good time to launch into my "eliminate all forms of income and gains taxation" set of irresistibly logical arguments...

As someone who made all of my own money by sacrificing many things others choose not to, and further as someone who has been the source of much backfill to parents, aunts and uncles, and siblings, my short answer to this proposal is "No. You'll tax my money out of my cold dead hands".

I'll translate my money into another currency and ship it off shore if you try to take it from me much beyond the current soaking I get. And no, I'm not kidding.

When do we get a real fiscally conservative political party again? I'm impatiently waiting.

According to this survey, 44% of the Forbes 400 inherited their wealth:

http://www.faireconomy.org/press/archive/Pre_1999/forbes_400_study.html

70% were born to wealthy families.

I am not saying everyone inherits their wealth, but there is not as much class mobility in the United States as people here like to think. Most of the "self-made" millionaires I know were born to upper-middle class parents, who were professionals of some sort or another. None of them are old enough to have inherited any wealth directly from their parents, but they gained a lot from having an upbringing where their parents were able to give them every advantage, as well as not having to worry about paying for college.

Mostly I am just bitter though, since I grew up poor and had to pull myself up by my own bootstraps. I guess I shouldn't bitch that much though, since I guess I am one of those "self-made" millionaires myself now.

No. You’ll tax my money out of my cold dead hands

That sounds like a vote for an estate tax to me. IMHO not a bad idea; you're letting people keep the fruit of their labor, and helping keep an aristocracy from forming.

If I were designing a tax system, I would include estate taxes for those same reasons. The goal wouldn't be to drain wealth from the Kennedey's but come on, all the arguments against taxes have to diminish somewhat after you're dead.

Inheritance should be taxed as either a gift, or income. I'm not particular either way.

Man you guys are taking a thread that started with a pirate flag too seriously.

I'm still picturing the first 10 minutes of Monty Python's "Meaning of Life", the Crimson Permanent Assurance segment. Reminds me I need to watch YellowBeard again too.

AVAST, YE SCURVY DOGS!

Jimbo,
Randy has spoken to this, and I have a similar background to yours. I actually believe not having at some point in one's youth makes you a better manager of wealth later on.

I should note that one consistent factor I've observed in success was essentially education. There's always the trust fund kids and the blue-collar "worked their way up", but those seem to be the outliers. I think if the goal is to improve class mobility, you need to reach kids in elementary school and make them realize that there are more options in life than "president", "sports star", and "working at the tire shop". This is unfortunately not something free markets are optimized to provide.

I'm with ya, Randy. Tax consumption. The more of a burden on society, the more that commodity gets taxed.

I would have an estate tax, though. Otherwise you'd have people who only ever amassed money and didn't spend it. Although if they didn't spend it, maybe they couldn't exert influence, which would require transfer or consumption...

Who would determine how much of a burden to society something is? Why have a tax that is avoidable by the ones who can afford the tax the most? No matter how creative I get, I can't think of a fairer tax than a progressive income tax.