Rich people and taxes

[jeff]

Originally Posted by Epee_Pox

Or, if it's the greater good we seek to serve, why not target the mode?

Or the standard deviation. Or kurtosis!

[jeff]

Originally Posted by jBirch

I vaguely remember something like that. Tell me though, can rich folk SPEND that money too or does it end up coming out as income in some way or another?

Oh yeah, indeedy. Though you don't spend it yourself, your fund or shelter spends it for you. So, the non-revocable trust (you're the only beneficiary) buys the Gulfstream - you get to fly in it any time you want.

Originally Posted by jBirch

Half. The limit of your series there is 1 and I'm not forking over all of my nothing just because you ask. I'm Canadian, sure, but not all of us are THAT altruistic.

Ah, that was too easy for you. I ought to try that out on Inq - he says he hates equations and maybe I can get away with it.

Originally Posted by jBirch

Totally unsubstantiated conjecture. Playing devil's advocate here, but I figure someone has analysed that idea to death and there's some merit in it. Haven't you ever seen Brewster's Millions? Do you know how hard it is to spend large gobs of cash without having any benefit for your spending?

James.

Spend gobs of cash without benefit? Hey, we haven't brought up the subject of what happens after they get our revenue

[jeff]

Originally Posted by lochinvar

I'm not sure what a "tax shelter" is, but I assume it's a place to stash your money where the government has agreed not to tax it. The reason they allow it is because it puts private money into causes they feel benefit the nation as a whole, but which they don't really want to fund directly. So they make it attractive for rich people to fund the cause for them.

(snip)

In other words, rich people get a tax break for putting their money to use in ways the government wants money used.

Sometimes it's deliberate, as in the example you gave, but very frequently it's because very well paid tax lawyers have combed the thousands of pages of tax code for loopholes and figured out how to exploit them. Other times it's because lobbyists have used their influence to get specific revisions to the tax code for the benefit of their clients. Sometimes it's even for a single client! Or for a class of client, such as the several hundred rich families that instigated and were the main beneficiaries of the changes to eliminate the estate tax. You didn't think that "just happened", now did you?

[Inquartata]

That may be true, but my response is the same as it would be to a complaint that it's raining on your picnic, to wit: What on earth can anyone do about it? Those with more resources can always do more than those with less, under any imaginable system. So what boots it to point out that sewers stink, or that pain hurts? Where does it get us, O Obviousman?

[lochinvar]

Originally Posted by Inquartata

So what boots it to point out that sewers stink, or that pain hurts? Where does it get us, O Obviousman?

It gives us an opportunity to exercise our indignation.

[jeff]

It's also an exercise in self-fulfilling prophecy. It used to be taken for granted that corporations could pollute at will with impunity and without recourse. It used to be taken as a given that violent street crime was always going to be endemic and nothing could be done about it. It used to be taken for granted that the US would live in a state of racial apartheid or have its older population eating out of cat food cans, and there was nothing that could be done about it. There have been plenty of defeatist visions proven to be utterly false.

I find it tiresome that some people are just willing to shrug their shoulders and give up. It seems to miss the whole point of representative democracy, and is often selective in which things to not even try to fix, ya know?

[lochinvar]

Some of the "defeatist visions proven to be utterly false.":

Originally Posted by jeff

It used to be taken for granted that corporations could pollute at will with impunity and without recourse.

They still do. See entries under "acid rain" and "Kyoto agreement".

It used to be taken as a given that violent street crime was always going to be endemic and nothing could be done about it.

It is still endemic--ask any inner city dweller--and whatever we've been doing about it for the last 100 years doesn't seem to have fixed the problem. Or are you suggesting that we've just been sitting on our hands all this time?

It used to be taken for granted that the US would live in a state of racial apartheid

We still do, only now the separation is cultural and voluntary rather than legal.

or have its older population eating out of cat food cans, and there was nothing that could be done about it.

See entries under "the aging of America", "Social Security debate", and "Medicare reform". Only 1 in 4 persons of retirement age can actually afford to retire. 25% are still working, 25% recieve some sort of public assistance, and 25% are getting assistance from their children--who are getting close to retirement age themselves. Then what?

I understand your frustration, Jeff. I'm the last one to throw up my hands and say, "Nothing can be done!". We try to fix what we can in the time that's given, but some problems just can't be permanently fixed.

All of which shouldn't be interpreted to say that I don't think taxes can be made fairer. I just believe 1) that the rich aren't being crushed under an insufferable and unconscienable tax burden and 2) that all the rich aren't managing to escape taxes altogether by using some arcane tricks that the government doesn't know about or understand.

The truth lies somewhere in between.

[lochinvar]

Originally Posted by Inquartata

So what boots it to point out that sewers stink, or that pain hurts? Where does it get us, O Obviousman?

We can engineer some sewer venting and develop pain relievers--neither of which will happen if someone doesn't complain about the stink and the pain.

"The first step to solving a problem is to recognize that there is a problem." ~ Obviousman.

[jBirch]

Heard an interesting economic argument on tax cuts the other day...

Their economic justification lies in the concept that prices stay the same, yet more things are consumed because there is more money in the system. The rebuttal? Inevitably, prices rise to the same real-value equilibrium after tax cuts. So if it cost me $1 for a basket of goods, and there is a tax cut that effects everyone equally, the cost of $1 of good rises to $1.05, effectively nullifying any stimulant effect of the tax cut. Further, more dollars in the system = less demand for dollars so there is a downward pull on the currency value overseas.

Net effect? Tax cuts don't really do anything except deplete the government's coffers. *grin*

James.

[jeff]

Originally Posted by lochinvar

We can engineer some sewer venting and develop pain relievers--neither of which will happen if someone doesn't complain about the stink and the pain.

"The first step to solving a problem is to recognize that there is a problem." ~ Obviousman.

Well said. I quite agree with you. To the previous examples I raised and you discussed: I do not claim nirvana by any means, but things are dramatically better in the spur of the moment examples I cited, and it wasn't because everyone said "oh, things can't be improved, so let's not even try". It calls to mind the endemic street crime that used to occur in New York, and the response that said it could be curtailed - and it was. Does that mean crime is eliminated? Of course not, but it's down to levels not seen since early 1960s. Defeatism is not the right answer. (in response to your examples, I would say that some of the wealthiest have found ways to avoid taxes altogether)

With respect to taxation: if they wealthiest segments are all-powerful, then why is it that they were unable to prevent the 70% taxes on income that once were levied against them? In today's situation, an excellent PR job has been done to get the public to accede to changes in tax code that disadvantage all but the richest. Such PR can be reversed

[Inquartata]

Originally Posted by jeff

It used to be taken for granted that corporations could pollute at will with impunity and without recourse. It used to be taken as a given that violent street crime was always going to be endemic and nothing could be done about it. It used to be taken for granted that the US would live in a state of racial apartheid or have its older population eating out of cat food cans, and there was nothing that could be done about it. There have been plenty of defeatist visions proven to be utterly false.

Yeah. But not the ones deeply founded in the basic laws of economics and of political science.

I find it tiresome that some people are just willing to shrug their shoulders and give up. It seems to miss the whole point of representative democracy, and is often selective in which things to not even try to fix, ya know?

I just prefer to do my tilting against other sabre fencers, rather than windmills.

Inany event, representative democracy is a great system, but not a perfect one. It cannot cure all ills---especially the ones it creates itself. And there ARE some of those.

[Inquartata]

Originally Posted by jeff

It calls to mind the endemic street crime that used to occur in New York, and the response that said it could be curtailed - and it was. Does that mean crime is eliminated? Of course not, but it's down to levels not seen since early 1960s.

As a result of policy, or of demographics? I know where I'm placing MY bet.

However, if a tree falls in a forest there's always a politician to claim that it was his opponent's fault, and if we'd only let him have his way the forest would be oh so much better off...

[TrainingDummy]

Originally Posted by Inquartata

As a result of policy, or of demographics? I know where I'm placing MY bet.

However, if a tree falls in a forest there's always a politician to claim that it was his opponent's fault, and if we'd only let him have his way the forest would be oh so much better off...

Yep, demographics, absolutely, which is why Reagan taking credit for drops in crime in the 80s was bull. You had a baby-boom generation where all the males are finally growing out of the most crime-prone stage of their lives: roughly ages 16-25. But I'm still 21, so WATCH IT!

[jeff]

Originally Posted by Inquartata

Yeah. But not the ones deeply founded in the basic laws of economics and of political science.

I just prefer to do my tilting against other sabre fencers, rather than windmills.

Inany event, representative democracy is a great system, but not a perfect one. It cannot cure all ills---especially the ones it creates itself. And there ARE some of those.

Inq, this is well-trodden territory for us. If memory serves, you've alternated between the position that the rich do not dodge taxes, and that they inevitably do.

One cliche is that the popular mob uses its vast voting power to enrich themselves at the expense of the wealthy, and the other is that the wealthy minority uses its economic power to dodge taxation - and each of these opposing forces is supposedly too powerful to be defeated by the other. Obviously such a simplistic view cannot capture the reality of the complex situation which has evolved over time and is still evolving. To call attempts to redress inequities in the system (in any direction) mere "tilting at windmills" is ahistoric, and to base that on cliches is either defeatism or unwillingness to confront the issue in the first place. (You didn't answer my question: if the rich are so powerful, how were high tax rates - or tax rates at all - imposed on them in the first place? If the poor are so powerful, how were they removed?)

[jeff]

Originally Posted by Inquartata

As a result of policy, or of demographics? I know where I'm placing MY bet.

However, if a tree falls in a forest there's always a politician to claim that it was his opponent's fault, and if we'd only let him have his way the forest would be oh so much better off...

You're claiming that the reduction in crime that occured (say) during the Giuliani administration was purely due to a change in demographics, not do to the dramatically altered procedures for law enforcement? There is some evidence that the politicians and law enforcement types benefited by a change in demographics, but there's plenty of evidence to show causality: when changes were introduced to a neighborhood, crime dropped. The incidence of mooks born 18 years previously didn't change from one block to the next, but the crime rate did.

[lochinvar]

Originally Posted by jeff

One cliche is that the popular mob uses its vast voting power to enrich themselves at the expense of the wealthy, and the other is that the wealthy minority uses its economic power to dodge taxation - and each of these opposing forces is supposedly too powerful to be defeated by the other.

Or, as the sainted Yogi Bera once put it, "Good pitching can always beat good batting. And vice versa."

[jessicasimpson]

Originally Posted by Epee_Pox

1. So? Are you suggesting that people who pay LESS in taxes should receive GREATER tax cuts than others? Don't forget about people whose tax liability went to zero, or even became eligible for tax credits -- one might say their subjective benefit is the greatest, even from across-the-board reductions.

That is just income tax, payrole tax went up, and most americans pay most of their taxes through payrole taxes

3. Pro rata taxation comes to mind -- each person pays X dollars, period, regardless of how much more cash they have or don't have. It costs a zillion bucks to do all the functions we demand of our government, there's 300 million people in the country, so each person owes (1 zillion divided by 300 million) dollars for their fair share of the cost. Some would say that THIS is only fair. Which leads to..

Because a family of 4 would have to pay over $33,000 per year just to the federal gov

5. Why do you keep putting words in people's mouths? Where do I say anything of the sort? Like I said before, I'm not sure where you're coming from. A little more #4 from you might work wonders.

I never said you said that, I was responding to jbirch who said:

I'm wondering why the beneficial social effect of buying a lear jet for purely private use is not included in calculating how much personal tax a person is required to pay. In particular, why the tax on a lear jet should be significantly greater then the tax on a cessna.

And as to your unnumbered #6, of course I read the article, and I'm not sure what a few people's tax-evasion crimes have to do with taxing wealthy people.

The company in question is a 15 billion dollar company with more than just a few clients, I also could not find any accusation that they were helping get middle class people out of paying taxes, just people with over 20 million dollars

[Epee_Pox]

Originally Posted by jessicasimpson

That is just income tax, payrole tax went up, and most americans pay most of their taxes through payrole taxes

False. An individual's payroll taxes are income tax, social security payments, and medicare payments. It is a falsehood that the income tax went up, because it went down. It is a falsehood that social security and medicare went up, because they stayed the same. So it is a falsehood to say that individuals' payroll taxes went up.

Originally Posted by jessicasimpson

Because a family of 4 would have to pay over $33,000 per year just to the federal gov

Whatever the figure happens to be, the point I was making is that SOME people (not necessarily me) think everyone ought to pay equally for the services they equally share.

Originally Posted by jessicasimpson

I never said you said that, I was responding to jbirch who said:

But you were talking to me.