Already found the tax loopholes...

[Critter7r]

Yeah.. I don't think you can argue that the right will bellow about jealousy and envy. Currently the exemption is about 5.49 million. and I don't hear the right screaming for taxing that poor person that's going to get moms house to live in.

What you hear is the right bitching about "jealousy" and "envy" and that "why only tax the rich?", which is what that inheritance tax does. So yes, I can argue that the right will bellow about jealousy and envy. They're already doing it. In this thread.

 

[jaeger19]

Except that "absurd position" worked extremely well for decades. We had CEO's making 30 times their average employee not 300. How do you think that happened? How much would an average worker make today if CEO's still made 30 times what they make?

That absurd position did not work for decades. Companies were NOT paying workers more because of higher taxes.. they were not paying CEO's less because of higher taxes.

How do you have CEO's making 300 times more? Lets start with the globalization of the workforce and the rise of more and more outsourcing so that the American worker is competing with a Chinese worker making 2 dollars an hour. So while a company can easily outsource some of its manufacturing out to china...

It can't so easily outsource its management. That's one major reason.

 

[jaeger19]

What you hear is the right bitching about "jealousy" and "envy" and that "why only tax the rich?", which is what that inheritance tax does. So yes, I can argue that the right will bellow about jealousy and envy. They're already doing it. In this thread.

Yeah.. the current exemption is 5.49 million. they are not bitching about jealousy and envy and calling to tax people below that.

 

[Critter7r]

Yeah.. the current exemption is 5.49 million. they are not bitching about jealousy and envy and calling to tax people below that.

Which is confusing to me and was my point. They bitch about envy and jealousy whenever a tax is geared to collect more from wealthy people. And. That's. What. It. Does.

 

[jaeger19]

Could be, but these guys were dealing with businesses started by WWII vets mostly (been a few years) and they had lots of stories of that generation handing off to their kids and the absolute disasters that arose, often immediately. A lot of it was people starting the business were frugal and lived frugally, but their kids were brought up in relative wealth and didn't have the same values, and in those businesses it was often catastrophic.... One of our clients was in that boat and we worked with these guys for two weeks and the stories were pretty hilarious. They said the transfer was the biggest single risk facing their overall business at that time, which is why really talented guys like we worked with were spread out across the country serving as effectively unpaid but very effective business advisors. They were also hard nosed, and imposed sometimes harsh spending discipline as conditions for extending credit, and if they failed, would shut them down. Their approach was fascinating - learned a lot from them.

Anyway the point is there is no good reason to believe kids of extraordinary business people inherit that extremely RARE ability, which isn't intelligence really but a unique gift at making money.

Well.. now while I agree for the most part.. there is very good reason to believe kids of extraordinary people inherit ability to "make money". My children certainly have inherited that gift.. at least it appears so thus far. Not only are they smart (which they get from their dad and mom).. but they have taken advantage of the resources that they have available (advantages I didn;t have). Of course that also takes effort on my part to encourage a work ethic so on and so forth.
My goal is that estate tax won't be a factor for my children.. not a real factor because they will be rich in their own right well before I am ready to retire.. and hopefully well before I die.

 

[jaeger19]

Which is confusing to me and was my point. They bitch about envy and jealousy whenever a tax is geared to collect more from wealthy people. And. That's. What. It. Does.

Well.. I think they have a point there.

You have the left.. that thinks the answer to getting higher pay.. is to make me pay a higher tax.. so while the only answer to the economy for the right.. is "lower taxes".. the only answer on the left seems to be "tax the rich".

Neither of those two extremes have any basis in reality. I don't pay people more simply because I get a tax break.. and I certainly don't pay them more because of a tax hike.

 

[Critter7r]

Well.. I think they have a point there.

You have the left.. that thinks the answer to getting higher pay.. is to make me pay a higher tax.. so while the only answer to the economy for the right.. is "lower taxes".. the only answer on the left seems to be "tax the rich".

Neither of those two extremes have any basis in reality. I don't pay people more simply because I get a tax break.. and I certainly don't pay them more because of a tax hike.

I'm so confused.

How is it that we can write tax policy that encourages individuals to spend many times their annual salary to purchase a house, but we just assume that nobody could ever possibly figure out how to write tax policy encouraging businesses large and small to pay their employees more?

So maybe charging you MORE tax won't make you pay your employees more, but what about offering you a tax credit that you can only get by having an average hourly employee wage of $1x.xx? That's not charging you more tax, it's allowing you to pay less.

 

[jaeger19]

I'm so confused.

How is it that we can write tax policy that encourages individuals to spend many times their annual salary to purchase a house, but we just assume that nobody could ever possibly figure out how to write tax policy encouraging businesses large and small to pay their employees more?

So maybe charging you MORE tax won't make you pay your employees more, but what about offering you a tax credit that you can only get by having an average hourly employee wage of $1x.xx? That's not charging you more tax, it's allowing you to pay less.

Well.. I would submit that encouraging individuals to spend more of their annual salary to purchase a house.. 'because of tax policy".. has been a dismal long term failure. However, buying a house, and running a business and paying employees are vastly different.

So you offer me a tax credit by me having an average hourly employee wage of 1x.xx. Well. since my average wage is already over that.. well over that.. thanks for the credit and it didn't change a thing for how I do business.

Second.. so now I pay my employees that 1x.xx wage. Well that's an artificial increase... the reason that my wages are probably less than that number. is because of competition particularly from entities paying much less.. like say china. or mexico. I can pay a higher wage than they can because of efficiency and volume.. but there is not much more to go. So if I increase wages.. then I decrease my profit because its likely I can't raise prices accordingly. And if I could raise prices.. I would have likely already done that. So I have less profit to work with and hope it gets made back up with a tax credit. And now I have the added costs of higher FICA taxes to pay. Higher workers comp to pay, higher disability insurance costs etc.

 

[iguanaman]

That absurd position did not work for decades. Companies were NOT paying workers more because of higher taxes.. they were not paying CEO's less because of higher taxes.

How do you have CEO's making 300 times more? Lets start with the globalization of the workforce and the rise of more and more outsourcing so that the American worker is competing with a Chinese worker making 2 dollars an hour. So while a company can easily outsource some of its manufacturing out to china...

It can't so easily outsource its management. That's one major reason.

LOL You must be kidding. You think CEO's would take 20 million dollar salary's and give 80% of it to the Govt. in taxes? This is not about outsourcing it is about wages of American workers. Since Reagan cut taxes all the profits from productivity increases have gone to management.

 

[Critter7r]

Well.. I would submit that encouraging individuals to spend more of their annual salary to purchase a house.. 'because of tax policy".. has been a dismal long term failure.

Based on what metric?

However, buying a house, and running a business and paying employees are vastly different.

Not really, they both are affected, and can be directed, by tax policy.

So you offer me a tax credit by me having an average hourly employee wage of 1x.xx. Well. since my average wage is already over that.. well over that.. thanks for the credit and it didn't change a thing for how I do business.

Second.. so now I pay my employees that 1x.xx wage. Well that's an artificial increase... the reason that my wages are probably less than that number. is because of competition particularly from entities paying much less.. like say china. or mexico. I can pay a higher wage than they can because of efficiency and volume.. but there is not much more to go. So if I increase wages.. then I decrease my profit because its likely I can't raise prices accordingly. And if I could raise prices.. I would have likely already done that. So I have less profit to work with and hope it gets made back up with a tax credit. And now I have the added costs of higher FICA taxes to pay. Higher workers comp to pay, higher disability insurance costs etc.

Those are exactly the types of things that would get changed and/or offset with a tax policy that encourages higher wages.

 

[Kushinator]

we just assume that nobody could ever possibly figure out how to write tax policy encouraging businesses large and small to pay their employees more?

That's easy. The troubling part is getting it to pass. Current current tax legislation isn't about encouraging higher wages or inducing domestic investment... that's just the sales pitch to folks who haven't the slightest clue.

So maybe charging you MORE tax won't make you pay your employees more, but what about offering you a tax credit that you can only get by having an average hourly employee wage of $1x.xx? That's not charging you more tax, it's allowing you to pay less.

Bingo!

If you give a 150% tax credit on all domestic labor per employee up to $100k/year (inflation adjusted)... even with high statutory rates, we would see an explosion in both domestic labor and wages. Nobody within GOP ranks has proposed such a policy because current GOP motivation is about giving tax cuts to owners of capital. :coffeepap

 

[jaeger19]

LOL You must be kidding. You think CEO's would take 20 million dollar salary's and give 80% of it to the Govt. in taxes? This is not about outsourcing it is about wages of American workers. Since Reagan cut taxes all the profits from productivity increases have gone to management.

You must be kidding. First.. no I don't think that the CEO's would be ACTUALLY paying 80% to the government. They would and DID lobby so that they were taxed at a much much much lower effective rate.

Of course it would make you FEEL better.. seeing that high marginal rate.. but it would not make a like of difference.

And yes.. this is absolutely about the outsourcing of labor among other things of course. Taxing me more simply does not make me pay my employees more. There is no mechanism there to make me or even encourage me to pay my employees more. Its as simple as that.

 

[MTAtech]

That's easy. The troubling part is getting it to pass. Current current tax legislation isn't about encouraging higher wages or inducing domestic investment... that's just the sales pitch to folks who haven't the slightest clue.



Bingo!

If you give a 150% tax credit on all domestic labor per employee up to $100k/year (inflation adjusted)... even with high statutory rates, we would see an explosion in both domestic labor and wages. Nobody within GOP ranks has proposed such a policy because current GOP motivation is about giving tax cuts to owners of capital. :coffeepap

Moreover, lowering corporate taxes has the opposite effect on investment. Investments in plant and equipment are expenses and deductible. Lowering the tax-rate makes investment in new equipment less attractive. Higher corporate taxes encourages investments because they reduce the corporation's tax liability.

 

[iguanaman]

Moreover, lowering corporate taxes has the opposite effect on investment. Investments in plant and equipment are expenses and deductible. Lowering the tax-rate makes investment in new equipment less attractive. Higher corporate taxes encourages investments because they reduce the corporation's tax liability.

Lower corporate taxes also effects wages in the same way and for the same reason. Wages are also tax deductible and lowering taxes makes "investment" in employees less attractive.

 

[jaeger19]

Based on what metric?

The number of housing booms and busts and the recessions that accompany them.

Not really, they both are affected, and can be directed, by tax policy.

Yes really. Listen you are trying to be obtuse if you can't see the vast difference between buying a house and running a business and paying employees.

Sure they can be affected and directed by tax policy. But they are vastly different animals

Those are exactly the types of things that would get changed and/or offset with a tax policy that encourages higher wages.

Except you seem to forget that YOU DID NOT BOLD THE VAST MAJORITY OF MY PARAGRAPH. You did not address.. competition, efficiency, volume, demand or supply.

And what you bolded? YOU FORGOT TO EVEN THINK.. about those things until I mentioned them.

Using tax policy to try and improve wages in this country is largely doomed to failure because it fails to address the fundamental issues of pay in this country.

Not to mention the issues with such a policy. Lets say you get such a tax credit..l AND change workers comp, AND change Fica.. AND change disability insurance. So I offer those higher wages... what happens in 4 years when a new administration/political party changes the policy?

 

[iguanaman]

You must be kidding. First.. no I don't think that the CEO's would be ACTUALLY paying 80% to the government. They would and DID lobby so that they were taxed at a much much much lower effective rate.

Of course it would make you FEEL better.. seeing that high marginal rate.. but it would not make a like of difference.

And yes.. this is absolutely about the outsourcing of labor among other things of course. Taxing me more simply does not make me pay my employees more. There is no mechanism there to make me or even encourage me to pay my employees more. Its as simple as that.

So you don't care if you give the money to the Govt. or to your employees. It is all the same to you? That seems to me like you don't care about your employees welfare one bit. Is that what the wage problem is about or is it just plain and simple greed? I would be in favor of tax breaks for employers who give raises to their workers. Would that help you care?

 

[iguanaman]

The number of housing booms and busts and the recessions that accompany them.



Yes really. Listen you are trying to be obtuse if you can't see the vast difference between buying a house and running a business and paying employees.

Sure they can be affected and directed by tax policy. But they are vastly different animals



Except you seem to forget that YOU DID NOT BOLD THE VAST MAJORITY OF MY PARAGRAPH. You did not address.. competition, efficiency, volume, demand or supply.

And what you bolded? YOU FORGOT TO EVEN THINK.. about those things until I mentioned them.

Using tax policy to try and improve wages in this country is largely doomed to failure because it fails to address the fundamental issues of pay in this country.

Not to mention the issues with such a policy. Lets say you get such a tax credit..l AND change workers comp, AND change Fica.. AND change disability insurance. So I offer those higher wages... what happens in 4 years when a new administration/political party changes the policy?

The only "fundamental issue of pay" I see is greed. How would you suggest we deal with that human emotion if not with money incentives?

 

[Critter7r]

The number of housing booms and busts and the recessions that accompany them.

Those booms and busts were only marginally related to the mortgage interest tax credit. The credit makes it less difficult to buy a home, but not THAT much less difficult.

Yes really. Listen you are trying to be obtuse if you can't see the vast difference between buying a house and running a business and paying employees.

Sure they can be affected and directed by tax policy. But they are vastly different animals

So do you agree with me? Or are you calling me obtuse? Because you did one, then the other here.

Except you seem to forget that YOU DID NOT BOLD THE VAST MAJORITY OF MY PARAGRAPH. You did not address.. competition, efficiency, volume, demand or supply.

And what you bolded? YOU FORGOT TO EVEN THINK.. about those things until I mentioned them.

Using tax policy to try and improve wages in this country is largely doomed to failure because it fails to address the fundamental issues of pay in this country.

Not to mention the issues with such a policy. Lets say you get such a tax credit..l AND change workers comp, AND change Fica.. AND change disability insurance. So I offer those higher wages... what happens in 4 years when a new administration/political party changes the policy?

Look, I'm not going to create the tax policy, but it's just numbers. Arbitrary numbers at that. If we as a nation figuratively sat down and thought for a few moments about what we're trying to accomplish, we could come up with a tax policy that makes it more attractive for businesses to spend money one thing over another.

 

[jaeger19]

If you give a 150% tax credit on all domestic labor per employee up to $100k/year (inflation adjusted)... even with high statutory rates, we would see an explosion in both domestic labor and wages. Nobody within GOP ranks has proposed such a policy because current GOP motivation is about giving tax cuts to owners of capital. :coffeepap

Hmmm.. you are going to pay me to hire people. At a 150% tax credit.. It would pay me to simply hire people to sit around the office all day and do nothing. and the more people I hired.. the more money I make....(assuming a refundable tax credit).

Its seems a bit questionable just how sustainable such a tax credit system would be.

 

[jaeger19]

So you don't care if you give the money to the Govt. or to your employees. It is all the same to you? That seems to me like you don't care about your employees welfare one bit. Is that what the wage problem is about or is it just plain and simple greed? I would be in favor of tax breaks for employers who give raises to their workers. Would that help you care?

Hmmm.. you don't get it. Under your system.. if I give more money to my employees.. the profit that I get.. (which will be less).. WILL BE STILL TAXED AT YOUR HIGHER RATE;... so I end up with even LESS money.

I explain this to you already.
but I'll try a again.

Lets say that I spend 20,000 in wages . My gross business income is 120,000 so I make a profit of 100,000 after those wages are paid. ANd I get taxed at 40%. That means I get 60,000 in my pocket.

You say.. we are going to increase that tax to 80%.

Okay.. so now.. according to you.. I will then pay my employees more. So now I increase wages so that my wage cost is now 40,000. Demand for my product/service did not change..so again.. My gross income is 120,000.. and so now my profit is 80,000.

And NOW you are going to tax me at 80% so now my take home is 16,000.

Yeah.. sorry man.. but there is no incentive for me to increase wages.

If I did not increase wages.. my take home would be 24,000.

I care about my employees and pay a good wage but I am not a charity. I did not get into business and take all that risk.. work that hard.. and still have such risks.. simply to pay other people.

You liberals think that I should run my business like a non profit charity.

A tax break for employers? For me... maybe in my seasonal business. Maybe.. depending on how the tax break was structured. A refundable credit? Certainly.. But I probably would not take advantage of it in my other business were I have long term employees. Because what happens when that tax credit goes away? such a tax credit is ripe for abuse and is likely unsustainable in America.

 

[Critter7r]

Hmmm.. you are going to pay me to hire people. At a 150% tax credit.. It would pay me to simply hire people to sit around the office all day and do nothing. and the more people I hired.. the more money I make....(assuming a refundable tax credit).

Its seems a bit questionable just how sustainable such a tax credit system would be.

Well ... the current proposed legislation is subject to that same sustainability question, yet it's getting praise and will probably become law, while not helping middle class workers. #shrug

Maybe .. if it were structured so that the credit was based only on wages, and not benefits, it would cause employers to raise wages to help cover the expense of the benefits.

There are several ways to skin this cat.

 

[Critter7r]

Hmmm.. you don't get it. Under your system.. if I give more money to my employees.. the profit that I get.. (which will be less).. WILL BE STILL TAXED AT YOUR HIGHER RATE;... so I end up with even LESS money.

I explain this to you already.
but I'll try a again.

Lets say that I spend 20,000 in wages . My gross business income is 120,000 so I make a profit of 100,000 after those wages are paid. ANd I get taxed at 40%. That means I get 60,000 in my pocket.

You say.. we are going to increase that tax to 80%.

Okay.. so now.. according to you.. I will then pay my employees more. So now I increase wages so that my wage cost is now 40,000. Demand for my product/service did not change..so again.. My gross income is 120,000.. and so now my profit is 80,000.

And NOW you are going to tax me at 80% so now my take home is 16,000.

Yeah.. sorry man.. but there is no incentive for me to increase wages.

If I did not increase wages.. my take home would be 24,000.

I care about my employees and pay a good wage but I am not a charity. I did not get into business and take all that risk.. work that hard.. and still have such risks.. simply to pay other people.

You liberals think that I should run my business like a non profit charity.

A tax break for employers? For me... maybe in my seasonal business. Maybe.. depending on how the tax break was structured. A refundable credit? Certainly.. But I probably would not take advantage of it in my other business were I have long term employees. Because what happens when that tax credit goes away? such a tax credit is ripe for abuse and is likely unsustainable in America.

Somewhere in there is the tax credit that makes it worthwhile.

 

[iguanaman]

Hmmm.. you don't get it. Under your system.. if I give more money to my employees.. the profit that I get.. (which will be less).. WILL BE STILL TAXED AT YOUR HIGHER RATE;... so I end up with even LESS money.

I explain this to you already.
but I'll try a again.

Lets say that I spend 20,000 in wages . My gross business income is 120,000 so I make a profit of 100,000 after those wages are paid. ANd I get taxed at 40%. That means I get 60,000 in my pocket.

You say.. we are going to increase that tax to 80%.

Okay.. so now.. according to you.. I will then pay my employees more. So now I increase wages so that my wage cost is now 40,000. Demand for my product/service did not change..so again.. My gross income is 120,000.. and so now my profit is 80,000.

And NOW you are going to tax me at 80% so now my take home is 16,000.

Yeah.. sorry man.. but there is no incentive for me to increase wages.

If I did not increase wages.. my take home would be 24,000.

I care about my employees and pay a good wage but I am not a charity. I did not get into business and take all that risk.. work that hard.. and still have such risks.. simply to pay other people.

You liberals think that I should run my business like a non profit charity.

A tax break for employers? For me... maybe in my seasonal business. Maybe.. depending on how the tax break was structured. A refundable credit? Certainly.. But I probably would not take advantage of it in my other business were I have long term employees. Because what happens when that tax credit goes away? such a tax credit is ripe for abuse and is likely unsustainable in America.

But cutting taxes across the board is sustainable? That is what is wrong with your mentality. I am talking about progressive tax rates which would only effect much higher income rates than your example. The 80% rate would only kick in above a million$ in income. Taking less than that and paying your employees more with the difference is what I was talking about. Why do you think we had rates that high in the past BTW? I believe it was to prevent exactly what is happening now and is what caused the Great Depression. Also you are wrong if you think paying more wages does not increase demand, it is about the ONLY thing that can. Our middle class is tapped out and has borrowed up to it's neck to increase demand.

 

[jaeger19]

Those booms and busts were only marginally related to the mortgage interest tax credit. The credit makes it less difficult to buy a home, but not THAT much less difficult.
.

Hmmm didn't you just argue for the effectiveness of the mortgage interest credit in "getting people to spend" on buying a house:

How is it that we can write tax policy that encourages individuals to spend many times their annual salary to purchase a house,

So is it effective in getting people to buy houses when they normally wouldn't.. or is it not effective? You can't have it both ways.

I would suggest that if you are buying a house you normally wouldn't buy.. but are doing so because of a tax policy.. then you are buying a house you shouldn;t be buying (thus eventually a boom and bust).

So do you agree with me? Or are you calling me obtuse? Because you did one, then the other here.

I am trying to be nice.

Most Birds fly.. so do airplanes.

Would you suggest that because of that similarity.. it makes sense that they would respond similarly to the same public policy?

Your " they can be affected by tax policy".. means they are about as similar as birds are to airplanes.

Look, I'm not going to create the tax policy, but it's just numbers. Arbitrary numbers at that

no its not. Its about behavior..and what that behavior does to supply , demand, and a global economy.. \\
\

If we as a nation figuratively sat down and thought for a few moments about what we're trying to accomplish, we could come up with a tax policy that makes it more attractive for businesses to spend money one thing over another

.
Oh we might.. but since doing so would be "just numbers".. the actual overall effect would likely be disastrous.

 

[jaeger19]

Well ... the current proposed legislation is subject to that same sustainability question, yet it's getting praise and will probably become law, while not helping middle class workers. #shrug

Maybe .. if it were structured so that the credit was based only on wages, and not benefits, it would cause employers to raise wages to help cover the expense of the benefits.

There are several ways to skin this cat.

Yeah no its not subject to the same sustainability question.

The current proposal will not change behavior substantially..

If you have me hire employees.. and pay me to hire them.. then suddenly that's a drastic artificial change to the market.. not driven by supply or demand. When it comes to an end.. and it always seems to.. then the effect will be disastrous.