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« Entrepreneurship 2011 | Main | ‘Saving the American Dream’ »

13 June 2011

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Martin

To quote the liberal hero Karl Marx:
"There is only one way to kill capitalism—by taxes, taxes, and more taxes."

Ben Emery

This is a very disingenuous or very ignorant proposal of the progressive tax system.

High tax rates on the top margins only come into play after a high threshold is met.

How the progressive tax system works. Not actual numbers but made easy for comprehension

0- $50k = 5% income tax rate

$50k - $200k = 10% tax rate

$200k - $500k = 15% tax rate

$500 - $1million = 20% tax rate

$1million and higher = 50% tax rate

As we can see the millionaire only pays 5% on their first $50k then 10% on the next $150k and so on.

The high top marginal tax rates are used for incentives to reinvest the capital back into the entity that created the wealth. This is what created the strongest and largest middle class in world history. That reinvestment came in the forms of good wages, benefits, pensions, r & d, and a funded government that could invest in infrastructure that would benefit business.

The result of restructuring the tax codes to where bid business administrators are paid through compensation packages that are taxed at a maximum 15% has created an atmosphere of greed and absolute corruption of our elected representatives.

Todd Juvinall

Yeah Ben, the successful get charged more. That is unfair and stupid. A national sales tax covering all government expenditures at say 7% and then we have fairness.

Bob W

Ben,
"very ignorant proposal of the progressive tax system" Are you referring to your imaginary numbers or something George was stating. If it is something George stated then what was it he proposed? Threshold? That implies a point where something would make an abrupt change. How would that relate to progressivism? Explain to us how the top marginal rates created the strongest and largest middle class in world history. I always thought it was created by the incentive of possibly reaching the top marginal rate. Please break done these "compensation packages that are taxed at a maximum 15%" and while you're at it tell us how that produces greed and why are they for "business administrators". I am sorry but I can't pull any substance out of your comment. It sounds to me like you are parroting things you don't understand yourself.
Now I have given you a chance to show everyone how wrong I am how intellectual you are. Go for it!

wmartin

$1million and higher = 50% tax rate

As we can see the millionaire only pays 5% on their first $50k then 10% on the next $150k and so on."

And a decamillionaire pays a number increasingly close to 50%.

I don't know why I let these tax conversations drive me so crazy. The effective tax rate changes by a half dozen points or so over time (which is real money, mind you) but these high marginal rates are just a talking point picked up by mouth breathers desperately wanting to make a political case.

But this kind of sentence just slays me:

"This is what created the strongest and largest middle class in world history."

Jeez louise. You're talking a couple of hundred million people in a world of a few billion, a world war, huge technical advances, shifting trade patterns, the last breakup of the British Empire, scads of changes in culture and government, a big recession and a number of small ones, a still expanding nation into the West, a revolution in farming practice, population growth, and by golly a simple cause and effect statement pops out of all of it.

The ability of coffee shop economists generally to lay out a complete understanding of large scale human systems never ceases to amaze me.

In a nutshell, I suppose that's my main objection to either the 'Progressive' or the fascist viewpoint. The top down system design needed implies *far* more complete understanding of the interactions than anyone really has.

I probably need to stick to my meds.

Ben Emery

Todd,
That is why you are considered a regressive.

Do you believe labor/ workers deserve any credit and are entitled to a decent living?

When the incentives are to keep the capital gained by the wealth labor created we get a nation like we are experiencing today in America. A very rigid society that has a completely corrupted government who represent the economic royalists instead of the people.

Ben Emery

Here are some thoughts from one of the most influential founders of our nation on the subject of consolidated wealth. Progressive taxation was Paine's ideas as well to allow people to become affluent but not at the expense of others.

Rich and Poor

"The contrast of affluence and wretchedness continually meeting and offending the eye, is like dead and living bodies chained together. … I care not how affluent some may be, provided that none be miserable in consequence of it. But it is impossible to enjoy affluence with the felicity it is capable of being enjoyed, while so much misery is mingled in the scene."


Todd Juvinall

Ben, you are simply a run of the mill liberal. Slogans and conservative bashing makes you a cartoon. Who creates the jobs? Government? Amazing that you can be so ignorant of the real world. Your econ 101 is totally lacking. The country created a middle class because anyone and everyone still had some freedom to prosper until your ilk started down the road of government control and interference. You will forever be a minor candidate with your ignorance of economics.

Bob W

Ben,
The "wealth" does not get created with just labor. Labor itself has never been able to create "wealth" without investment. So a little simple math will illustrate that labor is not the creator of wealth. How where you in math?
Labor has known no better compensation of effort than in the capitalist atmosphere. Come down to earth and you will appreciate life to a much higher degree.
"economic royalists" you are a very envious person. I understand that you probably won't get this but if you were to lose that envy and try to acquire a little ambition that too would allow you to appreciate your position to a much higher degree.
I am only trying to help!

Ben Emery

"‘Why should I work just as hard for the dollar from which the government will let me keep twenty cents, than I do for the same dollar from which I got to keep seventy cents?"

It is called incentives towards the health of the American economy and nation.

My question would be- How much income should be enough before we agree as a society that it becomes destructive to the health of our nation as a whole?

If a person is "earning" $2million annually that should be enough for any healthy minded person to live a very very comfortable lifestyle. Having to have more money than that raises some red flags.

Ben Emery

Bob,
One of the favorite books misused by conservatives is the Wealth of Nations. A piece of wood on the ground is just a piece of wood until labor is put towards it to make an axe handle.

Actually that is interesting that you would call me envious for using the term economic royalists. It was made popular in modern America by a very wealthy individual you might know Franklin D. Roosevelt, was he envious too?
"The economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power."

I have had many opportunities to earn a high income in my life based on my work ethic. I want a high quality of life not a high maintenance life.

Mike Thornton

The regressives see working men and women as if we're nothing more than components of their money making machine, to be bought as cheaply as possible, used up and disposed of.
The reason that a progressive tax system makes sense is because the wealthy use more of and benefit more from the country's infrastructure.
I say, tax the crap out of them and if they don't like it, let them move to Somalia.
We already know that their so called love for America is a bunch of BS anyway.
Let them take their money and run!

Bob W

Ben,
Wretchedness, dead bodies, misery. Does this describe what your envy imposes on you? Go back and read my suggestions. Remember, I am only trying to help!

Ben Emery

Todd,
As I mentioned before on Ruminations small business's create over 60% of jobs and a very high majority of those individuals are not even close to the top margins of the tax brackets. The Bush and now the Obama administration gave trillions to millionaires and billionaires in tax breaks over the last decade, where are the jobs?

Bob W

Ben,
Franklin D. Roosevelt may not have been envious but he sure knew how to evoke that in you.
" high quality of life not a high maintenance life". Now I see how you think you are dealing with your envy. Believe me, there is a much more effective method!

Ben Emery

wmartin,
We are on a blog so keeping it simple is the best way to communicate. Do you really want me to go into great detail of productivity/ wage gaps, import tariffs (there are over 20,000), intercompany transactions, wage and benefit decreases vs government social program increases, and so on.

I don't have the time.

Economics 101 outside the neocon worldview

Wages = demand
Productivity = supply
higher wages creates jobs to increase productivity.

Jobs aren't created because someone has money, jobs are created because there is a demand for a product or service.

J Cutter

Bob W., I see the condescension directed at an engaged thinker like Ben Emery as a failed attempt at masking your weak grasp of history, based solely upon your perceived ideological divide, and not in reality. I'd contend that Emery's assertions are closer allied with the principals that influenced our system of taxation than yours, based upon what little substance you have proffered.
Sad are the tri-pointy hat revisionist reenactors that selectively adopt passage of thought by their idols, much as religious zealots do their holy books, to justify their distortions.

'The necessaries of life occasion the great expense of the poor. They find it difficult to get food,and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich,and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents,therefore,would in general fall heaviest upon the rich;and in this sort of inequality there would not,perhaps,be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense,not only in proportion to their revenue,but something more than in that proportion.'
Source:Wealth of Nations by Adam Smith,published 1776.

Bob W

Sorry Ben,
"Wages = demand" Is that demand for product or labor?
"Productivity = supply" First comes productivity, then you get supply.
"Higher wages creates jobs" = No. more jobs create higher wages.
Given all the time in the world, after reading your answers, I can only deduce that your detail would be very limited.
I would suggest continuing to try but I am not sure it would be worth it.

Bob W

J,
No I can assure you that our ideological divide is not perceived. It is real and defined. And my weak grasp of history is only minuscule compared to the arrogance of your elitism.

George Rebane

A very productive and instructive display by collectivists and conservatives of how the economy works. Collectivists continue to believe that all it takes is unmarshalled labor to decide that value must be added to that piece of wood on the ground, and then to simply pick it up and add value. The enterprise requires no need of direction, capital, and understanding of risks involved - labor can handle it all. (Perhaps with a more than a little help from government.)

"If a person is "earning" $2million annually that should be enough for any healthy minded person to live a very very comfortable lifestyle. Having to have more money than that raises some red flags."

On the other hand, everyone knows that wealth in an economy is in stasis. The more that a greedy capitalist profiteer takes, the less will left to hapless labor - you see it's a zero-sum game, the size of the pie is fixed. Therefore it makes all the sense in the world to start talking about someone else deciding how much is the maximum that I should be able to earn, and, of course, use the necessary force to restrict my earnings to the number they decided.

The rest of my money goes to 'labor' (whoever they are), the poor, the destitute, ..., anyone who did not earn it. But if it was out there for the earning, one might ask 'why then did they not earn it?' And as pointed out in my post above, the liberal expects me to get back into the game and earn it all over again so they can crop the amount at whatever level they decide is "enough for a healthy minded person". (Earning above some amount is a sign of mental illness?)

But let us now come to the revealing observation here Dear Reader. The progressives in this comment thread are not some disheveled hippies or revolutionaries. They are very normal looking people whom you will greet in the grocery store and sit next to at a movie. They may well even stand next to you on the 4th of July with hat over heart when the flag goes by.

Yet, as confirmed from their arguments above, they will work and vote at every chance to bring about their described fundamental transformation of America as heralded by our current national leadership. They number more than 20% of the electorate, and can reliably attract another 20+% of 'independents' to their point of view in the voting booth.

To them we are the selfish and greedy leeches on the American workforce, taking what is not ours, and resisting its correct redistribution and proper application across this land. In the end, they will indeed seek to raise their red flags.

Mikey McD

Ben, your thoughts meet the definition of a bigot. Discrimination has many targets... do you also discriminate (hate) men of different color, race, religion, or just income levels?

It is unjust and immoral to discriminate based on income levels.

"A bigot is a person obstinately or intolerantly devoted to his or her own opinions and prejudices, especially one exhibiting intolerance, and animosity toward those of differing beliefs. The predominant usage in modern English refers to persons hostile to those of differing race, ethnicity, nationality, income levels, etc"

Mikey McD

LOVE IT!!!! RIGHT ON GEORGE!

"To them we are the selfish and greedy leeches on the American workforce, taking what is not properly ours, and resisting its correct redistribution and proper application across this land.

Posted by: George Rebane | 13 June 2011 at 11:23 AM "

Mikey McD

Mike, don't bite the hands that feed you. Don't forget that us regressives pay 97% of the taxes; fund 97% of government, employ [directly or indirectly] or are "working men and women", don't forget that it was us evil entrepreneurs that brought you medical cures/treatments, ipods, hollywood, non-fat ice cream, air conditioning, 100k mile tires, etc etc.

"I say, tax the crap out of them and if they don't like it, let them move to Somalia.
Let them take their money and run!

Posted by: Mike Thornton | 13 June 2011 at 08:58 AM "

Weak sauce. This is a rediculous claim. (dept of education, HUD, FEMA, medicare, SS, WELFARE- are all used by lower income levels) "The reason that a progressive tax system makes sense is because the wealthy use more of and benefit more from the country's infrastructure."

Mikey McD

George, seen what is happening in Greece? "S&P Downgrades Greece, Says Default Likely- Reuters What is their tax structure like? I am glad you asked...


Wikipedia: "All Income Tax in Greece is progressive. An individual in Greece is liable for tax on his income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident" of Greece, tax will be calculated on his income earned in Greece and overseas. An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the tax authority every month. Income tax brackets in Greece for the year 2008 are 0% (up to 12,000 euros), 27% (from 12,001 to 30,000 euros), 37% (from 30,001 to 75,000 euros) and 40% (above 75,000 euros). For tax year 2009 the respective rates will be 0%, 25%, 35% and 40%.
GREECE Social Security Tax (in addition to income tax):

An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security as in many other EU member states. The employer's contribution amounts to 28.06% of the salary. The employee's contribution is 16%."

Strange how the progressives in the USA are ignoring this real world and timely example of the progressive tax system.

Todd Juvinall

What I read here from the "punitives" like Thornton and Ben Emery is actually explained very simply. They are jealous and envious. Rather than going out there and earning enough money to then be taxed for redistribution to the poor, these sorry examples of our society want to sit in their easy chairs and complain we who actually do the work and pay the taxes do more. I want to know how they feel about say, a rich black man who is now making two million bucks a year because he had a good idea for a new widget. He then hired a bunch of people to make it and things took off big. This black man came from sharecropper parents and was dirt poor. So, I wonder how thes leftwing ?punitives" deal with that?

D. King

"They are very normal looking people whom you will greet in the grocery store and sit next to at a movie."

Yeah, but they have a tell.
Just say Sarah Palin and watch em twitch!

Scott Obermuller

This is indeed a revealing discourse. Not that I'm that surprised. All I can say is -
This is why they're trying to take away our fire arms.

Bob W

Better yet, this is why the Constitution guarantees our right to keep them!

Cathy Pearl

they used to enter wearing masks in the middle of night to steal from you-now they just vote-same result.

Scott Obermuller

The Constitution is toilet paper to this crew. I don't trust more than 3 of the current Supreme Court Justices to even try to follow the Constitution. Our current president has publicly stated that the Constitution is "fatally flawed". Keep your powder dry.

Bob W

I actually believe that they are safer with the 2nd amendment in force.

wmartin

Mr Emery sez:
We are on a blog so keeping it simple is the best way to communicate. Do you really want me to go into great detail of productivity/ wage gaps, import tariffs (there are over 20,000), intercompany transactions, wage and benefit decreases vs government social program increases, and so on.

I don't have the time."....

Of course not, no one in the world does. The simple fact is that neither you, nor I, nor anyone else can explain why economic times are what they are. Simply listing existing law or handful of gathered statistics does not imply understanding or the ability to predict.

If your chosen models for explaining the economic interactions in a large nation are so dead on, I would suggest becoming a big-leagues stock market or currency trader. That first billion should come rather easily.

Mike Thornton

I'm sorry, put I just laughed so hard that I almost choked on my coffee!
The though of a bunch of chickenhawk regressives standing in the WalMart parking lot waiting to battle the US military is too hilarious!!!
You guys couldn't deal with the gangbangers in some of the neighborhoods I work in.
What a joke!

Bob W

I am sorry Mike. I wish I could make some kind of sense out of anything I have seen you post. Maybe some day you will write something that I will comprehend. I am trying believe me! What is it you are trying to convey about your workplace?

Mike Thornton

It's really simple, Bob.
Regressives start talking about how they're going to engage in violence if they don't get what they want, at the drop of a hat. They talk so tough, but would run like little girls if they ever had to actually back up their bluster.
These regressives couldn't fight the guys that walk the streets of the neighborhoods where I work, much less the US military if the government actually ever did try to implement some type of marshal law.
You guys watch way too much 24!!!

Bob W

Oh My! Now I am embarrassed. I thought you worked at WalMart.

George Rebane

MikeT, who are your "regressives" who promise "to engage in violence if they don't get what they want, at the drop of a hat."?

Brad Croul

Nobody “likes” to pay taxes, but most people can understand why we have taxes.

The problem most people have with taxes are the ways in which the money is spent (or wasted). Of course, for some, any tax is too much tax. But those people obviously don’t give a rat’s ass about anybody but themselves and the size of their own bank accounts.

It is silly to try to make everything about Liberals, Collectivists, Conservatives, or whatever. That banal tactic only serves to divide and conquer, keeping the masses distracted by misdirecting their anger and frustration toward each other while the foxes raid the henhouse.

Why wouldn’t “big rich businessmen” (at least some of them) want more taxes? All those taxes have to go to somebody. For instance, if you are a Halliburton or Blackwater executive, or higher up in any other company supplying goods and services to the government, more tax dollars results in more money to line your pockets with. As a big wig in one of those corporations why would you mind paying a little higher tax since you are reaping the benefit of the taxes paid by all the other executives and every other schmuck in the land? Everything is golden as long as your lobbyist has the ear of the right congressman or senator.

George Rebane

Speaking of the 2nd Amendment, it seems that Obama and his dirtbags were now the ones who put thousands of guns into the hands of Mexican drug cartels in an operation called 'Fast and Furious'. The putative intent was to track who got what guns where. It appears that the real reason was to make American gun stores look guilty of this so that more gun control laws could be passed faster. The House Oversight and Government Reform Committee is subpoenaing the DoJ on what really happened. Holder and company are stonewalling in an attempted cover-up. Wonder how this is going play out during the election?
http://www.foxnews.com/politics/2011/06/13/house-panel-to-weigh-subpoena-authority-in-fast-and-furious-gun-case/

Scott Obermuller

Wow, Mike - you work? What filthy capitalist pig do you grovel under? Details please! As far as the neighborhood you live in - sorry, guess I don't go there. NRA membership is around 4 million. How many droopy drawers, cap on backwards, 9mmm toting bangers you got? Glad you are amused. I think we are discussing the commies confiscating property. And BTW, most of the military are on our side. Boo-rah! Drop of the hat? We are so far into socialism it isn't funny and the only violence is on the left. You must of had a hard exhausting day under the thumb of the man and can't think straight right now. Take a nap and try again later.

Ben Emery

Mickey,
If you want to call me a bigot because I don't like a very small segment of the population stripping rights and the ability of 98% of the American workforce to earn a respectable living, go for it if that makes you feel better.

Brad Croul

Amazing how Obama is now portrayed here as responsible for a program run by the ATF. As if he, and his all seeing eye, control every task force and operaton in the federal government. Is this yet another attempt to lever that "Great Divide" wider still?

Kenneth Melson was appointed by Alberto Gonzales to the DOJ in 2007. He is an attorney, not a career politician.

Ben Emery

wmartin,
You are right that there are many factors in what makes an economy click or not. So the indicators I look for is when the economy was doing well and looking at the policies that were in place.

From 1940's to the early 1980's we had a pretty strong economy. What were the policies that drive an economy. In my opinion 1) money in a majority of the people hands 2) incentives that promote American manufacturing (import tariffs), which leads to number one 3) tax code that allows top 1% to become affluent or rich but at the same time making the incentive to reinvest back into the workers and company which leads to number one 4) this was able to happen because we had a strong unionized work force that had enough influence to push our government to represent the majority of Americans not just those at the top which leads to number one 5) understanding we are the United States of America first and consumers second which leads to number one.

This is why we had a strong economy and middle class. We have been moving away from these policies for 30 plus years and as we do so we find ourselves deeper and deeper in debt with an economy that only works for a small minority.
This graph shows a significant change in the 1980's.

http://www.usgovernmentspending.com/downchart_gs.php?chart=H0-total&year=1900_2016&units=b

Obama and the democratic party have continued the same policies that created the problem due to the fact that those who profit off these policies own both major parties.

Barry Pruett

Ben said: "If a person is 'earning' $2 million annually that should be enough for any healthy minded person to live a very very comfortable lifestyle. Having to have more money than that raises some red flags."

First question, what is with the parenthesis? Are you trying to imply that someone who makes $2 million annually does not earn their money?

Second question, who appointed you God or jury to determine and dictate how much money people are allowed to make? I enjoy reading these comments and try to admire from a far, but damn Ben, that is the most socialist thing I have heard from you.

Ben Emery

George,
The labor I speak of the ones who made your clothes, built your house and milled the lumber, harvested the material for the sheets on your bed, tune up your car, pave the roads you drive on, put out the fires on your house or in your near by forest, ect.. Your disregard for labor is astonishing.

In your Utopian world who does the actual work? Who goes into the mines to get black lung disease so you can burn your coal?

Scott Obermuller

Ben - we had a pretty good economy from the 40s through the 80s because from the 40s through about 45 we and everyone else with the capability was bombing the crap out of anyone else that had the capability of producing anything beyond a bobby pin. We came out of the war with: an intact and booming production capacity, absolutely no regard for civil rights, the environment or any one to get in the way of production. It was a Democrat (Truman) that sent in the troops to break the unions at the steel mills. Compare that to what is going on in Minnesota. Going into the 50s the auto workers had a complete monopoly on the car industry and their wages did go way up, but look what that has brought them now. I have to laugh at your assessment that Obama as an extension of everyone else. How many trillions did Reagan give to wall street? None! Barry is printing it as fast as he can and handing it to the same folks he bad mouths. And the left laps it up.

Ben Emery

Barry,
When did I say they couldn't earn a billion dollars? They will just get taxed at a higher rate after $2million and it is their choice to reinvest or pay a high tax rate on that money.

Ben Emery

Bob,
Wages equal demand buy the purchasing power by a majority of Americans having money in their pockets.

Productivity equal supply due the increase in demand. Only demand creates sustainable jobs. When money is consolidated in a small few overall demand goes down.

Over the last three decades 80% of economic gains went to the top 1% and we see the type of economy that results from these policies.
http://www.stateofworkingamerica.org/charts/view/146

Todd Juvinall

Ben, reading your socialist screeds here begs the question. How much should every American get if you think the top 1% has most of the money? What is that take home number that would make you ecstatic? I guess I just don't get a leftwinger's thought process when it comes to this. So, if two million is a "red flag" then what is $100,000" Or $250,000? Please tell us all what the proper number of dollars a person can earn before they get on your hate list.

George Rebane

"Your disregard for labor is astonishing."

BenE, from what do you conclude that I have disregard for labor?

Ben Emery

Todd,
What I want is a fair days wage for a fair days labor at all levels. Tell me what a hedge fund manager does that deserves a $2 billion income in one year? Off the top of my head that is in the ballpark of $5million a day.

Ben Emery

George,
"The rest of my money goes to 'labor' (whoever they are), the poor, the destitute, ..., anyone who did not earn it. But if it was out there for the earning, one might ask 'why then did they not earn it?"

Is one example.

wmartin

"wmartin,
You are right that there are many factors in what makes an economy click or not. So the indicators I look for is when the economy was doing well and looking at the policies that were in place. "

I just wouldn't be so quick to assign either causes or possible solutions. It's a form of cargo-cult thinking to believe that merely resurrecting some single rule set (say, tax rates) from a previous time will cause the world to return to what you might view as better days, the birds chirping and the sun shining.

. Is 1968 (as a possible best year for income equality) a normal or abnormal time? Perhaps, we are just returning to normalcy.
. You could argue that the post-war period up to the gas crunch was a time of decreasing energy prices capped off with peak oil in the US. Perhaps cheaper stuff = a better economy for the hoi polloi.
. Tax rates likely have a strong effect on *reported* income. Lower tax rates imply a lot less in the way of income hiding and thus skew the numbers.
. Maybe what's broken aren't tax rates but lack of a functioning marketplace for the wealthy. Is there any reason to pay a CEO of a Fortune 500 so much? Isn't there somebody who'll do the job for half price? Something is odd there.
. As a side note, does it make sense to leave the broken marketplaces alone and then claw back taxes? That sounds like a suboptimal solution.
. What's the chance that the runup in the net worth and income of the wealthy is based on a BS economy generally? It seems to me that wealth based on speculation on bits of paper naturally tends to concentrate.
. Maybe a lot of the runup in wealth was based on encouraging the general public to speculate in the stock market via 401k's.
. Maybe there's been a big reduction in blue collar incomes via illegal immigration. Does raising taxes effect this?
. The US doesn't operate in a vacuum. Typically, large economic events here seem to have their shadows in other countries. There's a good chance that there's something at work beyond the tax code.

I firmly believe that people vastly overestimate their ability to manipulate these large systems via something as trivial as tax policy. It's a strategy problem after all, not merely physics. It's a case where the boulder isn't merely heavy, but doesn't want to be moved.

George Rebane

BenE, how does my highlighting the assignation of money I earned to (your definition of) 'labor' constitute my "disregard for labor"? Most baffling logic.

Ben Emery

One gift item at a time. Made in America needs to be our united motto if we want a economic recovery for all Americans.

http://sanders.senate.gov/newsroom/media/view/?id=2b2545a8-9b39-477c-8135-e91c1fc326c4

Bernie Sander (I) from Vermont made it happen.

Scott Obermuller

Fair is fair only if Ben is in charge of what is fair. How about a fair day's wage for a fair day of production? If a person earns 10 billion a year then that is what is fair. If a person works his or her ass off but produces nothing of value then they get no wage. That is fair. Why should the govt put a gun to my head and demand I give my labor to some one who has a larger income than I? Supply and demand is a law of nature. Defy it at your peril. Ben wants a simpler life - the feds have doubled the amount of limos he has to pay for. How is that simpler life working for ya' Ben?

Ben Emery

George,

First you couldn't identify what or who labor is and then lumped it into the category with the poor, the destitute, and a general free loader comment.
Another example is wanting American workers to compete with third world wages and safety standards as we discussed a few days back.


Ben Emery

Just for the record the regulars at Ruminations are in the minority about taxes. And most here want to reduce tax burdens on the rich and large corporations even more, which would land you in the teens for agreement.

http://www.reuters.com/article/2011/01/03/us-usa-taxes-poll-idUSTRE7022AK20110103

"Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed."

Here is a tax plan I could back by Robert Reich talking about average American households
Excerpt
"The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.

And exempt the first $20,000 of income from payroll taxes.

Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.

And raise the ceiling on the portion of income subject to payroll taxes to $500,000.

It's called progressive taxation."


D. King

Scan to min.17 and listen through min. 25

Where have I heard this before...before?

http://www.youtube.com/watch?v=_8YxFc_1b_0

George Rebane

Again Ben, it seems you’re circling the wrong barn. I can identify precisely who labor is, and did not lump it with the other categories that were included only as other recipients of monies I earn. To you ‘labor’ appears to be anyone not in any of the other entitlement categories. ‘Labor’ to you is a new entitlement category (hence the semi-quotes) to be paid a wage you determine to be fair whether the work they do, if any, is judged to be fair by the one for whom they work. And anyone, according to your lights, who gets paid too much is automatically no longer in ‘labor’, and belongs to some oppressor class stealing his wages from someone else and, therefore, needs to be punished. This is the communist system that produced anemic and dead economies along with untold human misery.

To me labor consists of a person or persons freely willing to perform a job for an employer for a compensation that the employer is prepared to pay, and that both parties agree upon. The employer has no intrinsic right to any person’s work, and the worker has no intrinsic right to any employer’s wages. Both parties are free to seek maximum return for what they have to offer with each other or elsewhere. In no case does labor become the ward of the employer.

Bob W

Ben
Remember I'm just trying to help. I am still questioning your math skills. The thing is now I am questioning Robert Reich's math skills. But then my recollection of Reich was that he was always coming up with the goofiest ideas anyway. Try running the actual numbers on that proposition. Maybe you would be better served by spending a little less effort on memorizing the words and putting a little more attention on understanding the meaning of the words.

wmartin

Here is a tax plan I could back by Robert Reich talking about average American households
Excerpt
"The most direct way to get more money into their pockets is ...
[remove some words which change the tax tables]....
It's called progressive taxation.".....

Meh. Really, progressive taxation is any table which increases rates with income (or wealth perhaps), all based on a reasonable assumption that the marginal value of money drops with increasing amount. I'm afraid that Reich's 'plan' isn't the only thing that qualifies.

Taxes are funny things. Should they be constructed to absolutely maximize how much you can squeeze out of any given individual? be whatever feels 'fair' to the code writer? be used to drive behavior?

It's hard to escape the fact that the footprint of the combined size of government has increased over time. I suspect it's a law of nature with an inevitable denouement built in when it finally collapses.

You can argue that the growth is so inevitable at this point that it will occur regardless of funding issues. Where taxes or fees aren't available, debt will do. No debt? Sell off some assets. The roads must roll.

When the currency collapse happens, everyone can look surprised and begin the cycle anew. That being said, sometimes these things can go for quite a while. Byzantium lasted a good long time as it shrank in influence, at least until the Moslems decapitated it (a common behavior it seems) and got the ball rolling again for a few hundred years.

Mike Thornton

Gee, George, why don;t you try reading your own blog and you'll see how often regressives go from whatever the topic is into violent rhetoric of one form or another within a pretty short period of time.
Ben, as I've said before, regressives see workers as spare parts. Workers are to be bought as cheaply as possible, used up, discarded and disposed of (also) as cheaply as possible.
The assault on unions, social security, medicare, public education, social services, etc. are all examples of how the capitalists are trying to cut costs and undercut anything that might work in the favor of labor. The fact is that Marx had it (basically) right.
The sooner the working class recognizes this fact and starts acting accordingly, the better off we and the country will be!

wmartin

I'll indulge myself with another short post.

A thing everyone should look up, just for shits and grins, are a few charts on this business of income or wealth disparity.

I run into a lot of impassioned stories on why this is so and why it's changed over time, always over simplified and convinced of some solution to the problem. I suspect it usually comes from reading a book on the matter (or hearing about the reading of a book from another) which builds a convincing case for a simple model. I admit that scarcely anyone has the time, interest, or intellect to do original research, plus the telling of a good tale trumps all.

In any case, it's interesting to look at the various charts of share of national income and then compare those to other charts. Not that you can imply cause from correlation, but it is interesting. Marvel at the similar charts from other Western (particularly English-speaking) countries, be amazed at how these charts often appear to shadow stock prices.

It would be interesting to see any kind of rigorous analysis of wealth cycles on a worldwide basis, and not merely a Greek chorus of people who claim that since cars had tailfins in 1960 and since 1960 was better, we should reintroduce tailfins. Post 'em if you got 'em.

theworkingclass

The sooner the working class recognizes this fact and starts acting accordingly, the better off we and the country will be!

Posted by: Mike Thornton
------------------------

What do you mean 'we', paleface?

Dixie Redfearn

Great comment thread!

George Rebane

"violent rhetoric"?? Hard to find that from the conservatives on RR. MikeT, do you have some specific examples in mind?

Is it only me, or does anyone else perceive that with each succeeding comment MikeT and BenE are sounding more and more like a couple of Lenin's Lads? ... and I would want to be the last to attempt stilling their voices. Carry on comrades!

George Rebane

wmartin, wealth cycles have been approximated by the Gini Index (GI) or coefficient that measures income inequality, which I covered here http://rebaneruminations.typepad.com/rebanes_ruminations/2009/03/our-new-course-is-declared.html

I also provided a simplified explanation of the GI and its generating Lorenz curve here http://rebaneruminations.typepad.com/files/tn0903-1-gini-index-1.pdf

A more technical discussion of the GI with a chart of its historical values for major countries can be found here.
http://en.wikipedia.org/wiki/Gini_coefficient

Bob W

Ah Charts! Some mention of charts has occurred hear. And at other times in these blogs. I have tried to interject consideration of math also. Fact is these to subjects are inexorably linked as I am sure George and Russ are aware. How about it George and Russ? Maybe it is time for a discussion on how irrelative charts are when they compare two or more types of data that are measured in different units
But then you and I already know how many of these participants would be able to follow that!

Mike Thornton

George, I think you need to have your medical marijuana RX reevaluated.....
The regressives on RR, regularly drop down into their 2nd Amendment rhetoric whenever they feel like it.
I have no problem with taking the valid points of Marx's economic theory and applying it to the current situation in America. Clearly, Marx is a more authoritative source than Ayn Rand with her "Cult of the killer" philosophy.
Regressives worship at the feet of the fraud, who in the end took all of the governmental "socialist" assistance she could get her grubby little hands on.

George Rebane

MikeT, I take it from your "2nd Amendment rhetoric" answer that you have no evidence of conservative "violent rhetoric" on RR, or that the mere mention/discussion of 2nd Amendment rights is already sufficiently violent to those of you who promote a disarmed citizenry.

Rand's "Cult of the killer" philosophy? Does that have the same heritage as your use of the pejorative "regressives"?

Bob W

"Down into 2nd Amendment rhetoric". "valid points of Marx's economic theory". Yes! "medical marijuana" indeed!

Scott Obermuller

The problem with Reich's tax plan is that he fails to think through what would be the result of it's implementation beyond the part about how some middle class folks would have more money to spend. What about the wealthier folks that now have a lot less money to spend/invest? Ooops - kinda forgot to factor that in, huh? I'm sure the polls can 'prove' that most Americans want some one else to pay their taxes, but if they are also told that it won't balance the budget or take care of the entitlement bomb or increase employment, then you might get a different answer.
Mike's comments are a constant source of wonder. He refers to 'the working class' a lot and I'd like to know why conservatives aren't included. Don't we work? Gee - I kinda thought that's what I did for about 40 years. I certainly didn't get rich. I actually made less than a lot of the oppressed working class. Kinda confusing - any thoughts, Mike?

Scott Obermuller

Oh - I missed that last post by Mike. "Clearly, Marx is a more authoritative source than Ayn Rand with her "Cult of the killer" philosophy." How many millions of innocent lives perished under the wise adages of Marx? And he claims we conservatives are violent?

Todd Juvinall

Keep posting Thornton, please. You are a perfect example of a ideology of failure. The folks who inhabit the middle class have no conformity with you or your beliefs. Only in the hills and woods of perhaps Cuba would we find your ilk.

Mike Thornton

Marx, was an economic theorist and some people killed as they called themselves "Marxists"
How many people have died at the hands of people who described themselves as "capitalists"?
Rand (herself) said she modeled her "perfect man" on a brutal sociopath and killer. This became the touchstone for her theory of socio-economics.
George, you and I both know, that in this very thread your regressive friends raised the issue of engaging in violence and their (supposed) justification in doing so, on their own, with nothing to provoke it.
Regressive randism is ruining this nation. The only thing that interrupted the American people's recognition of that, was a stupid fool, who could keep his "Anthony" in his pants.
But them again, even he wasn't paying hookers to spank him while he wore a diaper, getting caught hustling sex in an airport bathroom or while living in a Christian Cult house, "C Street", with a bunch of Republican Nazi worshiping Congressmen,engaged in hush money payoffs, for having sex with his (married) staffer.

D. King

"George, you and I both know, that in this very thread your regressive friends raised the issue of engaging in violence and their (supposed) justification in doing so, on their own, with nothing to provoke it."

Yes, we're scary people...Boo!

Todd Juvinall

ooga booga. Libs are so funny!

Bob W

Where are those strawberries?

Mike Thornton

You guys don't scare me, even a little bit.
I'm just pointing out that you're a bunch of hypocrites and that George is either in denial or nothing more than a biased and phony apologist trying to pose himself as an intellectual.

wmartin

"Maybe it is time for a discussion on how irrelative charts are when they compare two or more types of data that are measured in different units"

Irrelevant?

Anyhow, here's a chart filled with different units that still manages to display some information, and it looks good to boot.

http://upload.wikimedia.org/wikipedia/commons/6/63/Minards_chart_Napoleons_Russian_campaign_of_1812_made_in_1869.jpg

Scott Obermuller

Mike - Why should you be afraid of us? I wasn't trying to scare anyone. Marx's theories put into practice always lead to mass extermination because most of the intelligent productive folks have to be done away with in order to set up a commie shop. I know that you think that it can some how be done peacefully but it would be limited to a small voluntary communal setting. You want Marx in America? I thought it was being done quite a bit right now. Notice any violence from the right?

Paul Emery

Scott

I have to remind you that Marks was never a member of the Communist Party. He died in 1983 and the Communist party did not emerge till around 1919 as a spinoff of the Bolshevik revolution. Some Socialistic ideas have been incorporated into many Western European Democracies that have yet to see mass extermination and actually have some very intelligent people running the show that obviously were not "neutralized".

Todd Juvinall

Marx was one of four brothers who would never get a laugh out of the old sourpusses like MikeT etal. Paul, 1983? Hmmm. And you spelled his name wrong man, come on.

What is interesting to me about the leftwing is they really sincerely believe in their crap. It has been thrown out of almost every country on the planer but the hangers on like MT are in total denial.

Scott Obermuller

Yes, Paul - True facts that mean nothing apropos to my point. America has already started to follow Marx and as I have stated, the violence is always on the left. These lovely communities you mention are falling apart and their violence is getting worse. Germany and the Scanda-hoovians are only doing well because we protect them. Once we continue to Marx-lite our economy it will continue to decline and our economy will not allow us to field a military powerful enough to protect the other socialist countries. You follow Marx and you will have mass violence. Marxisms of all stripes only are implemented by promising the masses that they will have milk and honey at the expense of some other bad class of humans. Once in place the rulers quickly (or slowly, if we ease into it) run out of the bad peoples' resources and the whole mess goes to hell quite quickly. That's the way it always works. Venezuela is the latest example.

George Rebane

PaulE, I don't think that anyone joining this comment stream would mistake Marx as a member of the actual party the name of which finally bore the name of his political philosophy. But Marx and Engels did indeed name the party in their 'Manifesto of the Communist Party' (1848). And small political factions came to call themselves communists even though their organizations had other names (e.g. the Bolshevik Party, which was not a spinoff but the former name of The Communist Party of the USSR.)

Communists were called Marxist first, and again later when communism began to have ideological schisms and began "merging" with various socialists and workers parties across the world after WW2 when communism became a dirty word.

Bob W

wmartin- I wish I could read French if that is what that is but sadly I cannot. At any rate I already indicated that not many on this forum would understand. You have just illustrated that. Russ is good with charts Perhaps he can try to enlighten you.

Bob W

I would like everyone to take note of the fact that Mike wants us all to know that he is not afraid of us. You would do well to keep that in mind when reading his comments.

wmartin

"Russ is good with charts Perhaps he can try to enlighten you."

Cool. I can always stand enlightenment.

Paul Emery

Scott

So are you saying that Western Europe will soon see bayonets in the streets and mass violence? Also, include Canada, Australia, Japan and New Zealand in this scenario since I'm sure you would consider them to be Marxist-Socialist countries.

Paul Emery

Even Bruce Bartlett, Reagan and Bush 1 economic guru doesn't go for this lower taxes means prosperity weeper story.

"Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.

By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950 according to the Office of Management and Budget."

Here's more and the link to Forbes, not exactly a Liberal rag.

"If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are."

http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

Mike Thornton

The regressive "randers" see Communist Muslims hiding everywhere.
I just heard an interesting analysis regarding the regressives and their obsessional fear with fundamentalist Islam and and totalitarian forms of government.
In essence, the reason they focus on these things is because they actually describe the regressives themselves. They are (for all intents and purposes) "Fundamentalist/Totalitarians".
You can spend days, weeks, months and years showing them all the data and facts you want, but they'll never ever admit they're wrong, Paul. They simply can't do it!
"Sieg Ayn!"

wmartin

"They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, "

Really, it's been the other side of the aisle that drones on and on about statutory tax rates, thus all the fuss about how "IT USETA BE 90% BACK WHEN THINGS WERE BETTER THAN NOW". You were doing it yourself a few days ago, so 'fess up.

Effective tax rates are where it's at. The important thing to make sure of is that they include all the jillion taxes that have been added in the last half century. I'd probably leave Medicare out of that since practically everyone gets more out of that than they put in.

The real change in spending, ever since we had that ratchet up in the size and scope of federal government under FDR for various reasons, has been at the state and local level. You could argue that that's a form of growth in the federal government since so much of it is federal mandates.

Since there's been a pretty straight line of growth over the last 100 years, I wonder if it'll flame out or stabilize in the near future. I can't imagine shrinkage in the size of government now that so much of the population has gotten used to depending on it for their livelihood. Philosophically, a modern American is from a different planet than one from a century ago.

My personal bet for the future is that no change in tax law will save the day. The paper pyramid that forms the bond and stock markets seems largely formed by a common illusion of value combined with money parked by those the Left wishes to tax. Nasty feedback loops could easily erupt if you start confiscating money from the wealthy in any great amount to make the books balance. Scrabbling for what's left could get interesting in a country filled with a hungry bureaucracy (both current and pensioners), 20 million Mexican nationals, a collapsing currency value, an aging population, and the inability to make it's own clothing or shoes.

It should be quite a show.

wmartin

"Sieg Ayn!"

I think you might mean "Heil Ayn".

When skirting Godwin's Law, "Victory Ayn" has kind of a strange sound to it. I suppose noting that she was from a Jewish family isn't valuable here either.

George Rebane

Bartlett’s argument about the nation’s effective tax rate has a very large hole in it. First and foremost dividing federal revenues by GDP is not the aggregate tax rate that can be compared to or directly (mathematically) derived from the personal and corporate income tax tables – it’s an apples and oranges comparison. Second, the total taxes, fees, etc paid to government make up the existential friction that government puts on individuals and businesses. Third, capital migrates to where it is most productive, and US capital evinces that today by going where profits are minimally confiscated.

The result is that federal revenues under the current tax and regulatory burdens have therefore decreased – in short, the feds ain’t pulling in as much with respect to the GDP. This therefore reduces the fed revs to GDP ratio, which is not then an aggregate national tax rate, but represents the decreasing revenues as a result of the escape of capital while government is pumping in new dollars to increase the GDP denominator. If we want to see this ratio go even lower, just increase the tax rates and regulatory burdens. Then everyone will begin to understand what Art Laffer was talking about. (Again the NYT gets a C- in economics.)

Paul Emery

George

The NYT had nothing to do with the substance of this article. It was an opinion piece written entirely by Bruce Bartlett whose Conservative credentials are unchallenged. More from Bartlett

"The G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development........
The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment."

Cracks are appearing in the Republican cathedral all over the place on this. Even the Grover Norquist rule of no new taxes is being challenged most recently by Oklahoma Republican Senator Tom Coborn

From the Christain Science Monitor

"Sen. Tom Coburn's bid to end tax subsidies for ethanol failed. But the measure got 34 GOP votes, suggesting that many Republicans are open to eliminating tax breaks to trim the deficit."

http://www.csmonitor.com/USA/Politics/2011/0614/Ethanol-vote-First-step-toward-extinction-for-federal-tax-subsidies

Also, from the Seattle PI
"An intra-GOP feud played out in the U.S. Senate on Tuesday.

The dispute is between Sen. Tom Coburn, R-Okla., and Grover Norquist of Americans for Tax Reform. Norquist insists – and many Republican politicans have agreed – that policy makers sign a “no new taxes” pledge. But Norquist’s definition of taxes is broad. For instance, he says eliminating the multi-billion dollar subsidy for ethanol is a tax increase, something Coburn has publicly said is absurb, especially if Republicans are going to be effective in cutting the federal deficit.

There was a complicated procedural vote in the Senate in which 43 Republicans sided with Coburn and against Norquist. (Check out Ezra Klein’s post on the subject if you want to go deeper into the weeds). The practical upshot is Coburn took a big chink out of Norquists’s armor.

Speaking later Tuesday on ”The Last Word with Lawrence O’Donnell” on MSNBC, Coburn said: “Grover’s old news, it doesn’t matter what he says.”

wmartin

"The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment."

Cracks are appearing in the Republican cathedral all over the place on this. "

I'm certainly not going to wet my pants over the Republican cathedral. From where I sit, the difference between elected officials of both parties is pretty small. They mostly squabble about which end of the egg to crack open first.

If you believe these numbers:

http://www.usgovernmentrevenue.com/downchart_gr.php?year=1910_2010&view=1&expand=&units=p&log=linear&fy=fy12&chart=11-fed_12-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s

It looks like individual taxes currently are more than 1950, less than 1960 and interestingly peaked in 2000. This last I attribute to that last stock market blowout and the associated capital gains, but I'm not sure. It'd be a sad thing if we needed regular financial frenzies to keep the books balanced. Pct of GDP seems as good a measure of any of taxation I think.

Squinting at the chart, individual taxes look to gyrate between 6% to 8.5% (ignoring 2000 as an outlier) and are currently at 6.5%ish. No doubt, they are lower than Sweden and all of the other model countries. Also, keep in mind that our current financial issues have resulted in less tax collections than normal.

The obvious notable change is the one in 1940. Maybe it's just proves some sort of Universal Ratcheting Law of government. The number was cranked up to defeat the Nazis (who still live, per Mr. Thornton above), but *never came back down*. If you hunt for pie chart representations of the federal budget, you'll see that a much larger slice was apportioned to defense in the immediate post war period, but accreted over to social programs since.

It looks to me like the essential lesson here is that once government gets it's mitts on a funding source, it never ever gives it back. There's always some good deed to be done.

Scott Obermuller

Once again I see the lefties here conflating the R's with conservatives. I'm not an R and don't think that having that after your name makes you a conservative. There are lots of RINOs - Arnie was the latest greatest example. That article on taxes is so bad it's funny.
The US has one of the highest corporate tax rates in the world. What he was showing was how much money actually comes in. You can't run a govt on rates. It runs on cash. Well, except for our govt right now running on a printing press. That article actually shows what a disaster the high rates are. They end up bringing in less money and drive jobs over seas. A multi-national company based in the US will leave it's cash over seas to avoid paying the higher rate here. SEC filings and stock holder reports show over all earnings, but the company will only pay taxes on what gets taxed here. Another thing to consider is that GDP includes our govt expenditures. That has sky rocketed from the 50s so it skews the whole mess since there will be no tax revenue from that. Focusing on only one tax out of many also is deceptive as it doesn't take into account all of the other costs imposed on businesses by the various levels of govt. These are taxes just as surely as any other. The over all regulatory and tax burden on businesses is large and growing. It is wasteful and non-productive. It drives manufacturing out of our country. The left has done an excellent job to get rid of jobs in this country - why are they unhappy?

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