Quote :

"Why should I pay taxes on income I used to pay my rent but you don't need to pay taxes on income you used to pay your mortgage interest?"

Stupid question (even stupider rhetoric). When you have to make a $100,000 down payment to get into a lease, let me know.

Obviously there's an ideological divide here on whether or not the government should use the tax code for certain incentives like taking risk on home ownership. I won't deny that disagreement exists. But equating a mortgage in principle to rent? Shameful.

Quote :

"From what I have read the AMT is the perfect tax"

From what I've paid, it's not. We give you one set of rules, you do everything you can to follow them in a reasonable manner, and then ... whoops ... we get to change them at the last minute! Yea, that's a fair system.

I know you're describing the structure of the AMT itself as a set of rules, but that's a moot point. Mutatis mutandis -- the government created it with the foreknowledge it would be an alternative. We can talk about any flat tax in theory as ideal but the AMT is a different beast.

7/26/2008 5:05:25 AM

Quote :

"My current problem though is when those who do excel to the forefront of society use their wealth and affluence in order to evade the tax code, "influence" political figures to pass legislation in their direct benefit even if its not in the best interest of society, and consolidate their marketshare in a particular industry so they can manipulate the supply and demand curve to which the smell of monopoly begins to fume."

I agree; however, the reason manipulation is even an option is due to the increasing concentration of power in a central location (the federal government). This makes it much more convenient for third parties to have an influence on governmental affairs and the marketplace. What is truly sad is that this is precisely what the architects of this country were trying to avoid.

If power were devolved back to the states, imagine how difficult it would be to hire 50 lobbyists rather than one. Further, imagine how easier it would be to terminate or restructure failing programs.

To sum this up...

Quote :

"Experience hath shewn, that even under the best forms [of government] those entrusted with power have, in time, and by slow operations, perverted it into tyranny. -Thomas Jefferson"

[Edited on July 26, 2008 at 10:32 AM. Reason : .]

7/26/2008 10:23:59 AM

Quote :

"when it comes down to it i feel the governments role in the economy should be referee. provide a balance but they shouldn't be in the role of over regulation and forcibly participate in wealth redistribution."

We already have a duo of insurmountable referees against monopoly: consumers, and the capital markets.

If a firm is cornering the market and earning high profits, then capital will flow into that market in order to claim those profits for themselves, eliminating the monopoly in the process, as consumers chase lower prices.

This is why government has become such a huge referee: only then can monopolists protect themselves from other capitalists. The dawn of the 20th century saw the rise of a philosophy of bigness among business leaders that came to believe bigger was always better, even if it was less efficient. It was attempts to implement this belief which led to monopoly building in the private sector, known as trusts, but they all failed miserably: the proponents and financiers invariably lost their money in the process. It was only after the battle to monopolize markets privately had been lost by 1900 that they turned their efforts towards the progressive movement to stabilize irrational markets, which invariably involved using law to suppress competition.

7/26/2008 11:15:52 AM

taxing the "rich" is silly.

keep your hands off my money. it's that simple. i'm not paying more just b/c it makes some idiot feel better.

7/27/2008 3:40:23 PM

I agree don't tax anybody

7/27/2008 3:41:27 PM

Well, if the government was sufficiently sensible, it is conceivable for a free society to support its government through voluntary donations.

For example, many non-profit universities have built up massive endowments which they can use to cover a significant portion of annual operating expenses. Had we had a donation based government, the gift of estates, land, and gold would leave today's government with a vast array of property it could leverage to earn its own money, such as charging for entry to parks, to drill or log on government lands, or to buy land near urban areas outright. It would also have a large portfolio of assets earning it interest every year.

It would also be a check on bad behavior, as offending the sensibilities of the populace would cut off the flow of donations.

[Edited on July 27, 2008 at 4:59 PM. Reason : .,.]

7/27/2008 4:49:28 PM

Quote :

"For example, many non-profit universities have built up massive endowments "

And woah! Okay... endowment is a way of using donations, but the difference is of great interest when talking about a government. The government has some amount of... money and invests it to pay for their expenses, right?

I won't say that's socialism directly, as it's very different from most forms of socialism we have out there. But consider: the annual spending of the US federal government is like 2.5 trillion, and our GDP is 14 trillion. No matter how you turn it, the government would be owning like 20% of the nation, and a net capital of something like 50 trillion. Now, who's going to manage that?

[Edited on July 27, 2008 at 5:09 PM. Reason : ]

7/27/2008 5:09:05 PM

Well, I doubt any volutarily funded government would ever get as large as our current government, as most of its current functions would be being performed by separate charities or for profit businesses, such as care for the poor (some of which are elderly), and retirement insurance.

That said, the government would be spending or investing money that was given to it voluntarily. If it uses the money poorly then people are unlikely to give it more.

Either way, the individuals to manage all that property would be chosen by democratic election, I suspect, just like now. The only difference I envision is removing the government's right to confiscate what others earned legally.

[Edited on July 27, 2008 at 5:31 PM. Reason : .,.]

7/27/2008 5:30:13 PM

I'm guessing that you would still tax gasoline to build the roads. I don't think anyone wants to pay for those out of good will, and there are other similar examples that would be thought to be 'fair' if paid by a 'user' fee, as any other funding scheme would constitute people who don't use an infrastructure item paying for people who do use it. That, or it would be a competition to see who in the neighborhood could put up with the pot holes for the longest.

If you did implement sparse taxes for such stuff, it wouldn't be a big problem to work into your idea. And it would be shocking similar to what the founding fathers had in mind.

7/27/2008 7:32:00 PM

Quote :

"it is conceivable for a free society to support its government through voluntary donations. "

lol that'd be the day. people donate money to the gov't as a gift haha

7/27/2008 8:02:56 PM

Quote :

"One of the leading drivers of income inequality is the premium that is now paid to human capital. As the demand for higher-educated workers has increased much faster than supply, the premium on human capital has risen. This is not a bad thing as it provides an incentive for individual investment in human capital. The answer to a more equal distribution is not to confiscate more from high-earners and blindly re-allocate to low-earners, but to equip low-earners with the resources to compete for higher-paying jobs. The only way to do this is to provide and encourage investment in human capital. For those on here who feel it necessary to tax higher-income earners more than they currently are, what would you personally do with the extra revenue? What program, in its current form, has proven so efficacious as to warrant its expansion? Where is the return on investment to maintain that 60 years of ever-expanding entitlements and blind wealth redistribution has proven to be so successful?" "

You answered your own question then asked it. Education my friend. Education.

Quote :

"This merely leads to excuses and takes away motivation for your avg. citizen to excel. A common part of parenting is expecting your child to learn and appreciate the value of money. The same goes for society. If my parents bought me an expensive sports car, paid for a dank place to live, and took care of everything where would be my motivation to excel in life. the same holds true of the population as a whole."

This is where you go wrong. Nobody is asking the government to hand out a good life. Just an adequate one. People on welfare aren't going to be living big like the parents you talked about so there will still be motivation to get better, its human nature, we always want more.

The kids you mentioned have motivation because they have been given a sample. What you're saying is if I'm a restaurant and hand out free samples then nobody will have motivation to eat at my place.

wheras without given anything there is no hope and I may not believe a good life exists for me

[Edited on July 28, 2008 at 11:26 AM. Reason : somone giving me a bite of theres is going to make me want to go get my own even more]

7/28/2008 11:16:47 AM

except when u use any marginal spare income on drugs like heroin that re-wire the pleasure center of the brain the motivation to get "new" stuff is eliminated.

7/28/2008 1:06:35 PM

which is why paper money should be eliminated

7/28/2008 1:15:48 PM

Quote :

"What you're saying is if I'm a restaurant and hand out free samples then nobody will have motivation to eat at my place."

And he would be right. That is why every establishment I know of does not give away free samples all the time or, if they do like Sam's club, then it is something different each time. Otherwise, people will just come by for the free samples then go away having been fed.

7/28/2008 2:16:17 PM

So I guess no ice cream place actually sell ice cream.

7/28/2008 2:23:12 PM

In Rich America, Third-World Inequality

Quote :

"WASHINGTON (Reuters) - The minimum wage in the world's richest country has just been raised by almost 12 percent. That followed a 13.6 percent hike last year and looks like major progress for those at the bottom of the economic ladder. At first sight, at least. Examined more closely, the figures highlight poverty and economic inequality of Third World proportions. The latest increase took effect last week and brought the minimum wage to $6.55 an hour. Adjusted for inflation, this is less than it was in 1964, the year President Lyndon Johnson declared "unconditional war on poverty in America." Poverty won, as free-market champion Ronald Reagan put it a quarter of a century later. Then, 13 percent of the U.S. population lived below the official poverty line. In 2006, the most recent year for which the U.S. Census Bureau has statistics, it stood at 12.3 percent, or 36.5 million people. On the other end of the scale, the U.S. economy produced billionaires at a steady pace. There are 469 of them, by the latest count of Forbes magazine. In 1982, when the magazine started its annual list of the richest Americans, there were just 13 billionaires. Today, the United States has the largest gap between rich and poor of any Western industrialized country. In terms of equitable distribution of income and wealth, the U.S. is closer to Iran, Argentina or Mexico than to Canada or Germany. (That is according to the Gini index, a complex statistical measure of inequality named after Corrado Gini, the Italian economist who devised it in 1912.) "There has been a massive shift of income from the bottom and middle to the top," says Holly Sklar, director of Business for Shared Prosperity, a network of business owners supporting higher minimum wages. "The richest 1 percent of Americans have increased their share of the nation's income to a higher level than any year since 1928, the eve of the Great Depression." Poverty and inequality are not usually subject of wide debate in the United States but this is an election year which might mark the beginning of a change. A poll this month by TIME magazine and the Rockefeller Foundation showed that 85 percent of Americans are unhappy with the economy and think their country is on the wrong track. TIME termed the percentage unprecedented. The poll also showed a striking shift of sentiment towards the role of government in solving the country's problems. More than 80 percent favored public works projects to create jobs and 70 percent advocated government programs to help those struggling to survive in a sinking economy marked by falling home prices, foreclosures, and sharply higher prices for fuel and food. TIME termed the results "a counterreformation of sorts in a Republican-led era that emphasizes deregulation and self-reliance." Are there parallels between the present and the mood that led to the New Deal social reforms of the 1930s? Some scholars say yes. In the words of Jacob Hacker, a political scientist at Yale University, "we have an economic order that is not well placed to deal with the challenges of the 21st century, just as back then there was a realization that the world had changed but the government hadn't." No matter who wins on November 4, Democrat Barack Obama or Republican John McCain, it is difficult to see economic gains flowing as freely to the top 1 percent as they did in the eight years of President George W. Bush. Both candidates have announced plans to reform a health care system which has contributed greatly to the economic anxieties reflected by polls. There is a good reason why the Census Bureau's annual report is entitled "Income, Poverty and Health Coverage in the United States." The number of Americans without health insurance has risen relentlessly since the beginning of the millennium and now stands at 47 million (out of a population of 301 million). More than 22 million hold full-time jobs and for many of them, falling ill can spell financial disaster and a slide from the edge of the middle class to the ranks of what is euphemistically known as "the working poor." That is the label for those working at the minimum wage - an estimated two million - or close to it. Often they work two or three jobs and still can't make it. They include people who are forced to sleep in cars, trailers or shelters. How miserably the system has failed is highlighted by the large crowds turning up for free weekend clinics run by an organization called Remote Area Medical Volunteer Corps. It was founded in 1985 to bring medical services to the Central Amazon Basin, an area ill-served even by Third World standards. The organization's founder, Stan Brock, calls the clinics "expeditions" to where the needs are greatest. Sixty percent of the expeditions now go not to the Amazon or other Latin American regions but to places in the United States. The most recent expedition, last weekend, was to Wise, in the southwest corner of Virginia."

I don't know what these poors are complaining about, if they cared they could bootstrap it up and work a double shift, 80 hours a week, which at $6.55 an hour adds up to $2096 a month before taxes

7/31/2008 11:57:05 AM

Funny read. What do you propose we do about it? We should raise min wage to 20/hr, then you would see how many poor people that would create.

The truth is, its very hard to fail in this country if you work hard and make good decisions.

Arent most min wage earners teens living at home?

7/31/2008 12:23:22 PM

I like public works projects tbqh

7/31/2008 12:41:43 PM

me too. Beats welfare

7/31/2008 1:00:12 PM

Yeah I don't think anyone's arguing that welfare is better than public works. I know I'd like to see a renewed commitment to improving infrastructure.

And yes it's trure that the majority of minimum wage workers are under 25 but there are a still a lot of people who have jobs and still have a hard time making ends meet even if they're making a few bucks above minimum wage, especially if they have any kind of medical emergency come up.

7/31/2008 1:07:35 PM

no, they would probably qualify for medicaid.

7/31/2008 1:38:04 PM

Construction laborers earn an average of $14.88 an hour, substantially more than the minimum wage. As such, more public works would do nothing to produce work for the poorest of the poor which lack the skills to work construction jobs. We need to find work for the poorest, not the middle class. Mandating a higher minimum wage does not do that; if anything, it destroys their work.

http://www.bls.gov/oes/current/oes_nat.htm#b47-0000

7/31/2008 2:03:53 PM

"Minimum-wage laws, an icon of the political left, are particularly damaging to low-income workers. Many are locked out of jobs. The Employment Policies Institute figures that the first 50 cents out of the $1 hike in the minimum wage in 1996 through 1997 cost 645,000 jobs."


"People in minimum wage jobs do not stay at the minimum wage permanently. Their pay increases as they accumulate experience and develop skills. It increases an average of 30 percent in just their first year of employment, according to the Cato Institute study. "

"Most minimum wage earners are young -- 53 percent are between the ages of 16 and 24.
Furthermore, only 5.3 percent of minimum wage earners are from households below the official poverty line; 40 percent of minimum wage earners live in households with incomes of $60,000 and higher, and over 82 percent of minimum wage earners do not have dependents."

I don't agree with minimum wage laws.

7/31/2008 3:14:26 PM

Milton Friedman talks about minimum wages at the beginning of this old school interview http://www.youtube.com/watch?v=JfdRpyfEmBE.

I love the line about the well-intentioned welfarists: "I admire them for the softness of their hearts...but it often extends to their head as well." lol

7/31/2008 3:24:56 PM

^^Simply place a minimum job requirement on every company based on revenue. BAM. problem solved.

8/7/2008 12:07:34 PM

Quote :

"Simply place a minimum job requirement on every company based on revenue. BAM. problem solved."

What. the. hell.

Problem solved; fifty problems created.

8/7/2008 12:09:02 PM

elaborate

8/7/2008 1:52:55 PM

Quote :

"Simply place a minimum job requirement on every company based on revenue. BAM. problem solved."

If you don't mind making Americans among the poorest people on the planet, sure.

Some businesses have a lot of revenue and very few employees, some businesses have a lot of employees and very little revenue. Such a rule would bankrupt the former and have no impact upon the latter, rendering about 25% of Americans unemployable.

8/7/2008 3:05:35 PM

Not to a direct degree then. There are enough profits with most big corporations to double employment and still make a profit while keeping the same wages. Also many companies outsource jobs overseas. These jobs could easily stay in America and decrease the profits of some of these greedy companies. Corporate profits are through the roof right now, at the expense of the American people.

8/7/2008 3:10:15 PM

Quote :

"There are enough profits with most big corporations to double employment and still make a profit while keeping the same wages"

Please provide examples, using Q2 balance sheets, which companies are in a position to do this while maintaining their current capital investment?

8/7/2008 4:59:37 PM

You're asking me to be an economist right now which isn't fair when we all know what the deal is anway. Sign of you losing right there.

8/7/2008 5:20:08 PM

I'm asking for evidence behind your baseless argument.

8/7/2008 5:23:53 PM

Just look at incomes from 2007 of the fortune 500 ceos

8/7/2008 5:29:02 PM

So, redirecting CEO salaries would provide enough to double most companies' current headcount?

8/7/2008 5:51:30 PM

No but that is the evidence you were asking for. a good representation of how much money is going to big fat pockets in management that could easily be chopped down a little througout providing more balance.

8/7/2008 5:54:17 PM

No, I was requesting evidence to your assertion that most companies have the resources to double their headcount.

8/7/2008 6:03:17 PM

Quote :

"Corporate profits are through the roof right now, at the expense of the American people."

It seems as if you're arguing under the premise that the desire for profit is corrupt, and that excess profits should be subordinate to a communities needs. Is that correct?

8/7/2008 11:36:27 PM

The desire for profit is not corrupt in itself but excessive profits should be limited. I'm not an economist but if one was given the idea I'm sure a formula could be drawn up to determine when profits reach an exception level and limit these profits by regulating employment, wages and prices.

[Edited on August 8, 2008 at 10:03 AM. Reason : prime]

8/8/2008 10:02:45 AM

In a perfectly competitive market, unhindered by government involvement, there would never be sustainable, "excess profits."

"Economic profit does not occur in perfect competition in long run equilibrium. Once risk is accounted for, long-lasting economic profit is thus viewed as the result of constant cost-cutting and performance improvement ahead of industry competitors, or an inefficiency caused by monopolies or some form of market failure."

http://en.wikipedia.org/wiki/Profit

Quote :

"I'm not an economist but if one was given the idea I'm sure a formula could be drawn up to determine when profits reach an exception level and limit these profits by regulating employment, wages and prices."

It would be convenient if we were that omniscient, but, unfortunately, as evidenced by the failure of planned economies, one man or group of men cannot process relevant information as quick or efficiently as market participants.

8/8/2008 10:45:29 AM

Quote :

"The desire for profit is not corrupt in itself but excessive profits should be limited. I'm not an economist but if one was given the idea I'm sure a formula could be drawn up to determine when profits reach an exception level and limit these profits by regulating employment, wages and prices."

If you wish. As such, let us play that game. Exxon is currently pocketting the ungodly high margin of 8.5% return on sales. Meanwhile, the family owned italian restaurant that everyone suddenly likes is enjoying a margin of 40+% return on sales. As such, with any fixed equation you will almost never punish a large business yet be slapping down most small businesses at any given time. This would be bad, in my opinion, since small to medium businesses play a necessary role in maintaining economic stability and were it not for the promise of absurd return they would stop acting as risk absorbers. To put it another way, Exxon already only drills for sure things. Only a small company would risk to going to drill in unproven territory, yet society needs that oil. Well, if the two equally likely possible outcomes are bankruptcy and 1000% profit margins, eliminating the potential for windfall profits through statute would be disasterous for most product markets.

8/8/2008 11:03:05 AM

Exemption for small companies would obviously be written into the formula as well as any other type of obvious reason for exemption.

8/8/2008 12:45:06 PM

Then I guess we are in agreement. It would be a waste of time as it would have no impact, but a law which exempts everyone would at least do no harm.

8/8/2008 1:08:53 PM

^^ So how do you define small business? Income? Profits? Profit margins? Employees? Public or private ownership? Is a privately owned franchise like say a Chik-fil-a a small business but a corporate owned Hardee's not?

8/8/2008 1:17:55 PM

^All would be factors going into the formula for determining exemption and degree of exemption.

^^ Everyone would not be exempt but my guess is less than 1% of companies would be mostly affected.

The method for this could probably be implemented through the stock market as well.

8/8/2008 4:16:33 PM

wethebest, you read me explain why that would be a perverse incentive, right? And all for what, so you can get a warm-fuzzy feeling about how you wrecked the profits of rich people? They might just have the last laugh as they simply move their business to Ireland.

Afterall, if we assume there are two types of business, those that are hit by your law and those that are not, Americans will simply specialize in the latter and foreigners will specialize in the former. The drop in American wages would not be severe as long as the former was only 1% of companies.

[Edited on August 8, 2008 at 5:27 PM. Reason : .,.]

8/8/2008 5:21:41 PM

Quote :

"The desire for profit is not corrupt in itself but excessive profits should be limited."

Then won't undue amounts of power be in the hands of those that determine exactly what "excess" means?

8/9/2008 1:48:05 AM

wethebest your reasoning is everything that is wrong with the country already.

Not only do you have no idea what you are saying or the implications of what you are saying...

You also fail to realize our tax code already has similar provisions that all help produce the inefficiency and rent seeking jobs (accountants, lawyers, lobbyists, etc *ahem*) that are bankrupting this country at the expense of the middle class population.

8/9/2008 11:42:26 AM

Quote :

"wethebest your reasoning is everything that is wrong with the country already. Not only do you have no idea what you are saying or the implications of what you are saying... "

Yep.

He's one of those people who needs to stay away from the "post" button for at least a few months, and just read and learn for a while.

8/9/2008 11:55:11 AM

Quote :

"wethebest, you read me explain why that would be a perverse incentive, right? And all for what, so you can get a warm-fuzzy feeling about how you wrecked the profits of rich people? They might just have the last laugh as they simply move their business to Ireland. Afterall, if we assume there are two types of business, those that are hit by your law and those that are not, Americans will simply specialize in the latter and foreigners will specialize in the former. The drop in American wages would not be severe as long as the former was only 1% of companies."

They would not perverse incentive because all profit would not be gone but the larger the profit the lower the % of it you keep. There still would be higher profits. Just increasingly lower as they get higher.

Heavy windfall profit taxes are already going in place in 2009 for the oil industry so my ideas are making progress.

8/11/2008 12:32:16 PM

i hope that i make enough to complain about this

8/11/2008 12:37:13 PM