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| Political Conversation and Debate This forum is not a temporary one. It will exist up to, and after the presidential elections. Some people want to talk or even argue politics, other's don't. Let's see if we can apply some reason and understanding to the debate. |
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10-17-2008, 03:30 PM
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10-17-2008, 03:35 PM
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10-17-2008, 04:50 PM
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 You sure?  What if some poor person has to pay 5% more for that flat screened TV, instead of paying 5% less on their income and [gulp] actually save it.
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10-17-2008, 05:43 PM
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I personally don't care how you classify people vis-a-vis small business owners. To me, the most important facts are the numbers. According to the government* the 80th to 95th household income strata were as follows in 2007: 80th percentile limit . . . . . . . 100,000 90th percentile limit . . . . . . . 136,000 95th percentile limit . . . . . . . 177,000 So a tax increase for those who make more than $250k is not a tax increase for many households. It just isn't. Fine, maybe the 2% (of effected small business owners) number is materially off. Maybe it's 12%, or even 22% of "small business owners." Whatever that number is, it fits neatly above the lower boundary for the 95th percentile of households. I would further hypothesize that, of that XX% number, it is probable that MOST of the effected small business owners are NOT close enough to the $250k household income boundary where they would have to make a business personnel decision relative to their own household income taxes. *http://www.census.gov/prod/2008pubs/p60-235.pdf, page 40 (file page 48)
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10-17-2008, 06:05 PM
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This is the political equivalent of ding whining. McCain makes the guy to focal point of his debate arguments and then whines when the Toledo Blade and a few bloggers start digging into his background. McCain and Drudge share every bit of their share of the blame for this one. Although, Joe the Plumber seems to be enjoying his 15 mins. He's heading to NYC this weekend to hit the show circuit. The guy does not seem to be shying away from the media attention.
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10-18-2008, 01:57 AM
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Joe the Plumber; I knew Sammy Davis Jr. Sammy Davis Jr. was one fabulous cat. You, Joe the Plumber, are no Sammy Davis Jr! 
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10-18-2008, 02:32 AM
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A consumption tax has two huge "problems" though - 1) It would truly tax the wealthy (and not just the productive) with their typically large spending habits. Alas, many if not most of our politicians are either a) part of this group already, or a) in the back pockets of this group. Trust me, the Theresa Heinz Kerrys of the world love paying < 15% on her multi million dollar income while I pay 30% on mine. Again, they soak the PRODUCTIVE, not the WEALTHY, and the wealthy like it that way. 2) Moving to a consumption tax would be easier to collect (most states have sales taxes in place already) and would be completely transparent. Ergo, it would take out of the hands of pols their massively complex tax code that they use to favor certain groups as donations/political power dictates. That is a huge problem for the consumption tax too.
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10-18-2008, 02:46 AM
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A parable to consider as we debate the idea of continuing to impose crushing taxes on the most productive sectors of our society......
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men --- the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. For those who understand, no explanation is needed. For those who do not understand, no explanation is possible. Something to think about as you try to soak these people - the top 5% of taxpayers pay OVER HALF OF THE TOTAL TAX. We are increasingly in a global economy. The dollar is losing its luster as a reserve currency. These folks are more mobile now than at any time in history. Keep abusing their generosity, trust me, many will find more tax friendly places to sell their productivity to. If just one out of five leave, we will lose 10% of our tax revenue - roughly the amount of the interest on the debt, or half of our defense or SS outlays. This is not to mention the loss to to economy by taking their productivity elsewhere. The essence of choking the Golden Goose......
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10-18-2008, 03:08 AM
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My issue is with "most productive." Couldn't a worker's productivity be measured relative to his task (as opposed to gross dollars moved)?
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10-18-2008, 08:57 AM
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I have .Yes - it could be measured that way. But generally - in regard to incomes - people are compensated by the amount of value that they bring to the market, within the parameters of supply and demand. The first objection people like to cite to this is typically members of the entertainment industry, because they are so visible and add very little value to the economy in the long run. However, these highly paid entertainers are a very small slice of the highly compensated. To a more applicable example - why do engineers from MIT command much more than an engineer from say Michigan State? Because the perception is an MIT engineer can add more value to the firm than a MSU engineer. Why do (did?) Wall St i-bankers make so much money? Because few have (had?) the combination of BOTH the talent AND willingness to work 100+ hour work weeks that the job demanded. Much smaller pool to draw from for a job that (in the past) has added huge amounts of value to the economy. Same for a consultant from McKinsey. You get the idea. The ultra-rich - while some do partake in enterprises that add enormous amounts of value (Bill Gates), others do nothing but either 1) spend their money (Sultan of Brunei) or 2) invest their money (Warren Buffet.) Unfortunately - our current tax system treats all three of these men exactly the same, and people like the Sultan (if he lived in the US), Buffet and Gates typically pay a WA rate of about 15% because of LTCGs, and thats not counting their increased net worth through increase in value to their companies, which is not taxed at all unless they take distributions from the company. If a consumption tax were instead used, someone like the Sultan would pay enormously as he funds his extravagant lifestyle with spending that does little to add value long term (luxury jet with solid silver fixtures, etc.) Conversely, it rewards men like Buffet who consume relatively little but instead funnel their capital to value creating enterprises. Honestly - the only people who I can see being against a consumption tax (other than power-whore politicians) are one of two groups. 1) Those who consistently [censored] away every dollar they get their hands on, or 2) The ultra consuming ultra rich (Sultan, Paris Hilton, etc.) that currently pay little or no tax because they have wealth and not income. In any case, I cannot for the life of me understand why people would continue to want to subsidize these two groups on the backs of the productive and talented.....
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10-18-2008, 09:28 AM
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It appears to me that the Golden Goose continues to do okay while the rest of us are choking: Quote:
My problem with the consumption tax is that it would further hurt those at the bottom who typically pay little if any income tax. Suddenly, their expenses on everyday items like toilet paper jumps by 20%. Most of these folks are already living at or below the poverty line. Without a college or trade education these days, it is more and more difficult to get a job that earns much above minimum wage. One part of the American Dream that has been lost is the dignity of the working class. Lunchbucket Joe who wants to graduate HS and go to work and support a family simply cannot. When Lunchbucket Joe cannot afford the Golden Goose's goods, neither benefits. I'm not a "wealth redistributionist" by any means. I'm just about right at the median income and I'm not complaining about my tax rate. In fact, I was against Dubya's tax cuts because I thought they were unnecessary and certainly should have been repealled at the start of the war. I am a pragmatist and am open to an idea that "works." A rising tide lifts all boats. We need to find the rising tide in the tax code. I don't pretend to know the answers, but what we have isn't working for everyone. We can fix the tax code, but their is another issue that needs to be addressed. The deterioration of the family unit is a huge burden on the system. There are far too many single parents. The often don't earn enough to support their kids and don't get the child support needed. They often rely too much on government programs. Often, these (mostly female) individuals can realize more income/benefits by not working. That's a problem. We have a system that encourages lack of productivity on their end. The one thing I appreciate about Obama's tax plan is that his "Making Work Pay" incentives are targeted at both the single working class mom and the dad that actually pays his child support. Some want to call it income redistribution, but I see it as giving these individuals incentives to work rather than sit on their asses and collect their government check. Well, that, and we also need leadership in government that can more effectively demonstrate the benefits of paying taxes. Most people would quit bitching if they realized the value of the benefits they receive each year.
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10-18-2008, 09:46 AM
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I'm right with you on this "most productive" issue. Take me as an example. I work in vocational rehabilitation. Last year I helped 38 individuals with disabilities either get or keep a job (that was 135% of my goal for the year). That is 38 tax payers who would not have been "productive" members of society without my work. However, because the market does not value social services, my master's degree is worth about half of what it would be in another field. Am I complaining? No. I knew this when I went into the field. Does that make me less "productive" than some cat with an MBA who works as a mid-level manager at some company and supervises 38 employees? You tell me.
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10-18-2008, 09:59 AM
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10-18-2008, 12:02 PM
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Please read a bit further back. You rebate everyone to the poverty level. Ergo - ppl below the poverty level pay NO tax. Problem solved.
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10-18-2008, 12:12 PM
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Well that depends. How many people do you think can or are willing to do your job? How much job security do you have? How many hours do you work a week? Are you on call 24/7? All of those things go into your compensation. A mid level manager w 38 reports will likely work 60+ hours, weekends, and be on call constantly. Further - you chose a profession that has significant compensatory factors other than money (job satisfaction - like teaching), ergo, the supply for your profession will be higher than the pay will dictate in itself. Would you feel just as good about your job if you instead were in charge of steel belt strand production for tractor trailer tires at Goodyear? Probably not, so you the lesser demand for this job will dictate more monetary compensation. When I was in college - I thought very seriously about being a professor. This was the "fun - job satisfaction" route. I would have likely had a compensation of 60-120k and that's it. Id also have a job I loved. Id also work about 20 hours a week. I decided to go another route - a job where I was always on call, averaged 90+ hours a week, often did tedious work, never took vacations, and gave up most of my holidays/weekends. Now, given those two scenarios, don't you think its fair that the second job ultimately paid several times that of the first?
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