What do you want taxes rates to be?

TurtleDude said:

envy is a crappy argument for tax policy. what government benefits does someone paying millions in taxes get that you do not receive

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Nobody is setting policy because of envy and we're not demonizing rich people wither. We just recognize that we had a more thriving country (e.g. a growing middle class, better opportunity, enough money to maintain the country, etc.) when tax rates on the wealthy were higher.

We also recognize that the rich aren't going to go Galt if there marginal tax-rate was risen.

The question then becomes one of numbers. In particular, how high should we set the top tax rate? If you are lucky enough to find yourself in the top 0.1%, the marginal value of a dollar to your welfare is trivial compared with the value of that dollar to almost anyone else. So the top tax rate should be set like the price of bread, where it is set at the highest price where any further rise would diminish revenue. Likewise, we should soak the rich up to the point where any further rise in the tax rate would actually reduce revenue.

What rate is that? There are statistical studies, of where that optimal top rate lies; 73%, say Diamond and Saez, maybe 80%, say Romer and Romer.

MTAtech said:

Nobody is setting policy because of envy and we're not demonizing rich people wither. We just recognize that we had a more thriving country (e.g. a growing middle class, better opportunity, enough money to maintain the country, etc.) when tax rates on the wealthy were higher.

We also recognize that the rich aren't going to go Galt if there marginal tax-rate was risen.

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Cool story bro but its fiction. Envy is what Democrats appeal to when they whine that the rich don't pay their fair share

TurtleDude said:

A flat consumption tax has lots of good things to say for it-mainly it cuts off a major way Democrats -and some Republicans-use to pander

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A flat consumption tax has no good things for it at all. In fact.. it doesn't cut off the major way that democrats AND republican panders. "whats essential". There still will be tax code exemptions etc.

AND its a tax on wealth.. not income. So if you are an older person living off your savings.. then you are still paying federal taxes.. even though you already paid tax on your income prior.

jaeger19 said:

A flat consumption tax has no good things for it at all. In fact.. it doesn't cut off the major way that democrats AND republican panders. "whats essential". There still will be tax code exemptions etc.

AND its a tax on wealth.. not income. So if you are an older person living off your savings.. then you are still paying federal taxes.. even though you already paid tax on your income prior.

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opinion noted not shared. its not a tax on wealth, its a tax on buying

MTAtech said:

Nobody is setting policy because of envy and we're not demonizing rich people wither. We just recognize that we had a more thriving country (e.g. a growing middle class, better opportunity, enough money to maintain the country, etc.) when tax rates on the wealthy were higher.

We also recognize that the rich aren't going to go Galt if there marginal tax-rate was risen.

The question then becomes one of numbers. In particular, how high should we set the top tax rate? If you are lucky enough to find yourself in the top 0.1%, the marginal value of a dollar to your welfare is trivial compared with the value of that dollar to almost anyone else. So the top tax rate should be set like the price of bread, where it is set at the highest price where any further rise would diminish revenue. Likewise, we should soak the rich up to the point where any further rise in the tax rate would actually reduce revenue.

What rate is that? There are statistical studies, of where that optimal top rate lies; 73%, say Diamond and Saez, maybe 80%, say Romer and Romer.

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That whole "we were better when tax rates were higher".. is just so much a load of crap. And its been debunked over and over again. From the fact that it was not an effective rate.. to the fact that it was post WWII and competition and manufacturing were different etc, to the fact that taxing me more.. does nothing for my employees.

All the "but.. but.. but.. we could spend it".. right.. and we have been borrowing and spending like madmen for the last decade.. and what happened.. a recession.

this "we should soak the rich".. is just as dumb as thinking that employers will hire a person because of a tax cut.

TurtleDude said:

opinion noted not shared. its not a tax on wealth, its a tax on buying

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Of course its a tax on wealth. You pay the tax regardless of whether you have income or not.

Lets say all your investments tank because Hillary Clinton is elected president. And your net income drops to zero... guess what? You are still paying federal taxes out of your savings then. Maybe you have to sell more investments simply to have that money to pay the tax.. because you are STILL buying.

and honestly.. how stupid in an economy that depends on buying goods and services.. to then tax buying goods and services. Talk about stupid taxes.

So I start a business and would not have to pay income taxes.. but now I have to pass a 17% increase in prices on to my customers? Not to mention that the costs of American products will go up more because in general they start at a higher price than Chinese.

Dumb.. just dumb.

And of course.. those that are just above the welfare dole? Well now with a 17% increase in costs... now we just dropped that many more people into poverty and on the government dole.

again.. dumb.. just dumb.

jaeger19 said:

Of course its a tax on wealth. You pay the tax regardless of whether you have income or not.

Lets say all your investments tank because Hillary Clinton is elected president. And your net income drops to zero... guess what? You are still paying federal taxes out of your savings then. Maybe you have to sell more investments simply to have that money to pay the tax.. because you are STILL buying.

and honestly.. how stupid in an economy that depends on buying goods and services.. to then tax buying goods and services. Talk about stupid taxes.

So I start a business and would not have to pay income taxes.. but now I have to pass a 17% increase in prices on to my customers? Not to mention that the costs of American products will go up more because in general they start at a higher price than Chinese.

Dumb.. just dumb.

And of course.. those that are just above the welfare dole? Well now with a 17% increase in costs... now we just dropped that many more people into poverty and on the government dole.

again.. dumb.. just dumb.

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you pay taxes if you BUY something. IF YOU DON'T HAVE INCOME how are you going to BUY anything?

TurtleDude said:

you pay taxes if you BUY something. IF YOU DON'T HAVE INCOME how are you going to BUY anything?

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Are you kidding me? Its called savings. You know.. that money in the bank that you live on when your income drops as you get older and stop working and or if you investments don't keep up with things like taxes, and inflation, and now a frigging 17% tax on clothes, food, heat, electricity, gas, furniture, healthcare, toilet paper etc.

Not every person has a trust fund set up by their family turtledude. Some of us have to live off what we actually made in our lifetimes.. not the accumulation of our parents and grandparents.

jaeger19 said:

Are you kidding me? Its called savings. You know.. that money in the bank that you live on when your income drops as you get older and stop working and or if you investments don't keep up with things like taxes, and inflation, and now a frigging 17% tax on clothes, food, heat, electricity, gas, furniture, healthcare, toilet paper etc.

Not every person has a trust fund set up by their family turtledude. Some of us have to live off what we actually made in our lifetimes.. not the accumulation of our parents and grandparents.

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ah the envy angle but the fact remains, any system that allows the government the power to tax people at different rates will be used to buy votes of the many by promising them more stuff paid for by others. that is what I want to cut down on

TurtleDude said:

ah the envy angle but the fact remains, any system that allows the government the power to tax people at different rates will be used to buy votes of the many by promising them more stuff paid for by others. that is what I want to cut down on

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No its not envy.. its a fact of life. Believe me.. I don't "envy" folks that are rich because of the hard work of their parents and grandparents. In my experience.. those folks have a very skewed perception of the world and not a healthy one at that. Whenever thrown into true adversity.. they tend to fold like a deck of cards.

Kind of like how the wealth in this country decry welfare.. and then have handouts for subsidies, special tax credits, and other handouts. Government officials and politicians could give a rip about the poor and middle class. That's not who they are inviting to "come out to my ranch"... and its now who is inviting them to come out and "discuss your future".. Its not the poor offering them jobs in their companies after being in congress. Politicians don't go into congress with a couple of hundred thousand in assets.. and then come out multi millionaires because they "buy votes" from the poor.

And a flat tax makes more sense than a consumption tax.

jaeger19 said:

No its not envy.. its a fact of life. Believe me.. I don't "envy" folks that are rich because of the hard work of their parents and grandparents. In my experience.. those folks have a very skewed perception of the world and not a healthy one at that. Whenever thrown into true adversity.. they tend to fold like a deck of cards.

Kind of like how the wealth in this country decry welfare.. and then have handouts for subsidies, special tax credits, and other handouts. Government officials and politicians could give a rip about the poor and middle class. That's not who they are inviting to "come out to my ranch"... and its now who is inviting them to come out and "discuss your future".. Its not the poor offering them jobs in their companies after being in congress. Politicians don't go into congress with a couple of hundred thousand in assets.. and then come out multi millionaires because they "buy votes" from the poor.

And a flat tax makes more sense than a consumption tax.

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ok lets get behind a flat tax then

one of the biggest errors some make is assuming those born wealthy are lazy or underachievers. True, some are that way and they don't remain wealthy very long. Others use that advantage to be able to take risks or take the long way to a goal. i.e gaining lots of education or being able to start a firm knowing you can do it right and not sacrifice quality because you need to make a buck RIGHT NOW

TurtleDude said:

ok lets get behind a flat tax then

one of the biggest errors some make is assuming those born wealthy are lazy or underachievers. True, some are that way and they don't remain wealthy very long. Others use that advantage to be able to take risks or take the long way to a goal. i.e gaining lots of education or being able to start a firm knowing you can do it right and not sacrifice quality because you need to make a buck RIGHT NOW

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One of the biggest errors that wealthy make is thinking that being poor means you are lazy or underachievers. Many of the wealthy that were born to wealth don't have any appreciation that there IS a huge advantage to being born wealthy. that they have the finances to get that education and to take a risk because its not a risk. Taking a risk is when you don't have that trust fund to fall back on. Taking a risk is when you are putting up the childs future education in the hopes that it will pay off in a successful business. that's risk. Losing a million of Dad's multiple millions is not a risk in any sense of the word.

Its this lack of understanding by the wealthy that leads to some of the resentment felt by the lower classes. I understand it.. because its hard to hear someone that's never worked a really hard day in the field.. trying to put food on the table... someone that's never gone to bed hungry or heard their kids cry because they were hungry, and someone who spent their summers at the lake house surrounded by politicians families call me lazy or a "welfare handout".

TurtleDude said:

ah the envy angle but the fact remains, any system that allows the government the power to tax people at different rates will be used to buy votes of the many by promising them more stuff paid for by others. that is what I want to cut down on

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As Donald Trump said, “We’ve had a graduated tax system for many years, so it’s not a socialistic thing. What I’d like to do, and I’ll be putting in the plan in about two weeks, and I think people are going to like it, it’s a major reduction in taxes. It’s a major reduction for the middle class. The hedge fund guys won’t like me as much as they like me right now. I know them all, but they’ll pay more.

“I know people that are making a tremendous amount of money and paying virtually no tax, and I think it’s unfair.”

MTAtech said:

As Donald Trump said, “We’ve had a graduated tax system for many years, so it’s not a socialistic thing. What I’d like to do, and I’ll be putting in the plan in about two weeks, and I think people are going to like it, it’s a major reduction in taxes. It’s a major reduction for the middle class. The hedge fund guys won’t like me as much as they like me right now. I know them all, but they’ll pay more.

“I know people that are making a tremendous amount of money and paying virtually no tax, and I think it’s unfair.”

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so he is pandering to the majority of voters. How many people who make a "Tremendous amount of money" pay virtually no tax? probably less than there were Olympic gold medalists from Mexico in the last Olympic winter games

jaeger19 said:

One of the biggest errors that wealthy make is thinking that being poor means you are lazy or underachievers. Many of the wealthy that were born to wealth don't have any appreciation that there IS a huge advantage to being born wealthy. that they have the finances to get that education and to take a risk because its not a risk. Taking a risk is when you don't have that trust fund to fall back on. Taking a risk is when you are putting up the childs future education in the hopes that it will pay off in a successful business. that's risk. Losing a million of Dad's multiple millions is not a risk in any sense of the word.

Its this lack of understanding by the wealthy that leads to some of the resentment felt by the lower classes. I understand it.. because its hard to hear someone that's never worked a really hard day in the field.. trying to put food on the table... someone that's never gone to bed hungry or heard their kids cry because they were hungry, and someone who spent their summers at the lake house surrounded by politicians families call me lazy or a "welfare handout".

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may of the biggest mistakes income redistributionists make is assuming that those who are born rich somehow should have to pay for those who were not

TurtleDude said:

you pay taxes if you BUY something. IF YOU DON'T HAVE INCOME how are you going to BUY anything?

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From savings.

imagep said:

From savings.

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If you have savings, they should be invested and making you income

TurtleDude said:

If you have savings, they should be invested and making you income

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Sure, but many people retire and don't have enough income to keep up their standard of living, so they liquidate a bit of their savings/investment each year, in addition to using whatever meager income they may have. It's nearly impossible for someone at the median income level to invest enough to ever have enough to live off of the income that their investments would bring in - shy of living like a miser.

imagep said:

Sure, but many people retire and don't have enough income to keep up their standard of living, so they liquidate a bit of their savings/investment each year, in addition to using whatever meager income they may have. It's nearly impossible for someone at the median income level to invest enough to ever have enough to live off of the income that their investments would bring in - shy of living like a miser.

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I guess we have a fundamentally different way of looking at things. I think people ought to pay for what they get and if they cannot afford stuff, they should get less. Now I understand we need a social safety net and some people-through no fault of their own-cannot afford what they truly need and we have to provide for that. But I get tired of the attitude that the rich-who are mainly rich through their own initiative (most millionaires are first generation)-have an unlimited duty to pay for stuff others want merely because others claim the rich can afford it

jaeger19 said:

That whole "we were better when tax rates were higher".. is just so much a load of crap. And its been debunked over and over again.

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My instinct tells me that studies finding that the optimal marginal rate for upper-income households is something like seventy or eighty percent are difficult to have a lot of confidence in. And I figure rates that high are also hard to sell politically, at least in today's climate.

How do you feel (sorry if I've asked you before) of the idea that we should bump up the rate on incomes above, say, $250K, a point, and then continue that approach up the scale. So add two points above $500K, three above $1 million, four above $10 million, five above $100 million. The top rate would still be under 50%, we wouldn't add a whole lot of revenue, but we'd get tens, maybe a couple of hundred billion. Money that could be used to fund some spending in education, research, and infrastructure, and maybe a bit of deficit reduction/control. I figure a deficit of around 2% of GDP is acceptable, perhaps even good policy in the sense of applying a bit of leverage, but ya don't want something like 4-5%.

TurtleDude said:

may of the biggest mistakes income redistributionists make is assuming that those who are born rich somehow should have to pay for those who were not

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Many of the biggest mistakes of the wealthy is thinking that they and they alone are responsible for their success..and not the advantages that this great country brings to us wealthy in the forms of security, of patent protection, trade security, infrastructure, environment protection and so on. And subsequently they don't believe that they bear any responsibility to pay back that debt to their country. They sneer at the poor and middle class parent who pays little in taxes but has children in the military risking their lives so that the wealthy can continue to enjoy the wealth that such security provides.

No poor person or middle class person really cares about security in the straits of Hormuz... but a lot of folks invested in businesses do care.. because it means money to them.

TurtleDude said:

If you have savings, they should be invested and making you income

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Sure.. but the amount of savings for most folks is shy of having enough income that is recession and inflation proof. Not to mention having a medical issue, or some other unforeseen event that costs money.

TurtleDude said:

I guess we have a fundamentally different way of looking at things. I think people ought to pay for what they get and if they cannot afford stuff, they should get less. Now I understand we need a social safety net and some people-through no fault of their own-cannot afford what they truly need and we have to provide for that. But I get tired of the attitude that the rich-who are mainly rich through their own initiative (most millionaires are first generation)-have an unlimited duty to pay for stuff others want merely because others claim the rich can afford it

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And I have a fundamental different way of looking at things. I think people.. the vast majority of people pay for that they get.. and they go without stuff all the time. Certainly more than a guy that can traipse all over the country and other countries spending thousands on a shooting hobby. Pretty insulting that someone who does that would lecture me on " if they cannot afford stuff they should get less"...

I have eaten enough ramen noodles and prego in my university days to understand a little "cannot afford stuff you should get less".. a lot more than people that grew up with a trust fund.

I am as close to a self made millionaire as they come. And I recognize the responsibility I have for the prosperity that has come about largely due to the greatness of this country.. and therefore it makes sense that because of the advantages that it has given me and that I take advantage of.. (like patent protection by the way.. ) I have a responsibility to pay more.

mmi said:

My instinct tells me that studies finding that the optimal marginal rate for upper-income households is something like seventy or eighty percent are difficult to have a lot of confidence in. And I figure rates that high are also hard to sell politically, at least in today's climate.

How do you feel (sorry if I've asked you before) of the idea that we should bump up the rate on incomes above, say, $250K, a point, and then continue that approach up the scale. So add two points above $500K, three above $1 million, four above $10 million, five above $100 million. The top rate would still be under 50%, we wouldn't add a whole lot of revenue, but we'd get tens, maybe a couple of hundred billion. Money that could be used to fund some spending in education, research, and infrastructure, and maybe a bit of deficit reduction/control. I figure a deficit of around 2% of GDP is acceptable, perhaps even good policy in the sense of applying a bit of leverage, but ya don't want something like 4-5%.

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Your instinct suffers from the single inescapable fact that tax rates.. and in particularly marginal rates have little to do with improving the economy or improving the condition of the poor and middle class.

Your whole theory is predicated on the idea that "well maybe it could be used".. well guess what.. we have been spending like drunken sailors.. and it hasn't got us anywhere but in a recession.

We don't have a taxing problem.. especially now that we are taxing about the historical average of our country... we have a spending problem in this country... and until this is addressed all the "marginal rates" in the world and studies aren't going to matter to a hill of beans.

pdog said:

#1 I thought we were talking about manufacturing jobs now?? The vast majority of businesses might be small businesses - but they are service oriented businesses for AMERICAN consumers. There is no work for a drywaller, electrician, or house cleaner in mexico.

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Well, some small businesses still manufacture items, they are not all service oriented. No, there is no need for the drywaller, etc, to move to Mexico. It can be as simple as moving from California to Texas so they can perform their services with less overhead and Government regulation compliance cost.

Ok fine what are the other reasons to outsource labor other than the labor price? And no I'm not talking about intrastate moves so that the corp can enjoy a lower corporate tax.

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One example would be to move to a right to work state. A business can pay non union workers the same rate, but save a bundle on the overhead cost that comes with a unionized workforce. Labor price is only part of the cost associated with an employee. Governance compliance can get costly depending on the locality.

Not true. Corporate taxes are on profits not on operations. The only reason to raise prices is to try to maintain a profit margin, but they do so against the current supply/demand equlibrium.

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The passing of the cost of taxes on to the customer is absolutely true. I got a chuckle from your use of the words "only reason". Maintaining a profit margin is the only reason for having a business. When you cease to maintain a profit, you are no longer a business, you are a charity. Unless your name is Clinton, running a charity does not make money.
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The most regressive tax since again it taxes a larger part of income for those with the highest MPC (those that have the most impact on our economy).

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I disagree. A consumption tax affects the rich more than the poor. One who spends more, pays more. In my state staple food items are already not taxed. Therefore, the purchase of necessary items do not cause a tax burden to the poor. Yes, the poor pay something, but as I said, they need to have skin in the game.

You're talking about tax loop holes and capital gains tax. If all income was taxed at the same rate (progressive or flat), this would not be a problem.

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Taxing capital gains is tricky. If it is treated like income, then the tax payer is also subject to writing off losses. As it is now, capital gains are treated special because the Government only collects on the gains, and ignores the losses. A consumption tax would be collected as the George Soros's of the world spend their money. The consumption tax would be collected regardless of what tax shelter the money was earned in.