Doctor Fate wrote:So, spending more than we take in is sustainable?

If you measure debt as relative to the GDP, and your GDP is growing, yes, that's exactly what that means.

geojanes wrote:On your other point, as I've said here before, that attitude is a red herring. American's are supposed to follow the law and pay the tax they owe. No one pays more taxes than they owe, nor should they.

Someone told me Buffett hasn't paid taxes in ten years.

Better to give it away (as Buffet has done, much more than would ever be taxed BTW) to causes they believe in.

Well then, he doesn't really believe in lowering the debt, thus "hypocrite." What he really believes in is making other people do what he won't do.

Go ahead and raise taxes on the rich. Big deal. It won't really make much of a dent in the deficit, though its symbolic purpose should end the liberal squawk about fairness. They'll have to find something else to blame for our mess. In any event, the thing to keep in mind is that we have INCOME taxes, not WEALTH taxes. Warren probably paid less tax than his secretary did because the bulk of his wealth and earnings comes from investments, properties and such, not straight income, as his secretary's earnings are certainly based on. I would not be at all surprised to find that many really wealthy people make little straight income, from a taxable standpoint. It's not like Scrooge McDuck or Jack Benny, hoarding mountains of cash in some underground vault obtained from weekly paychecks. To be clear, I'm not some Libertarian totally against taxes. I understand there are several national concerns that require revenue.

But even though I am fiscally conservative (ask my wife), I'm okay with proving the point and raising rates for the really rich, in spite of ongoing nonsense such as "the Bush Tax Cuts are only for the rich" and that the rest of us have to "pay" for them. Getting your own money back is not a cost to anybody else, unless they were spending it in the first place.

Anyway, The Rich can afford to pay more, in spite of whatever principal of fairness we want to employ. Go jack the rate back to 90% if you like, then sit back and watch the National Debt thermometer continue to climb; especially when the increased tax revenue goes towards propping up existing government programs.

If the true issue is something slippery called "fairness" and "income equality", why we should just forbid people from becoming too successful. And that reminds me of a Kurt Vonnegut story about the future, were the US Constitution was amended to make it illegal anybody to be better, quicker, richer, or smarter than anybody else.

But, since I'm not rich, I'll pay more taxes, but it will suck.

How about we increase taxes on everybody 20% on everything (Investments/income/inheritance/gambling). That would cause the "rich" to pay MUCH more, and the pain of tax increases would be spread across all people.

How about we reduce EVERY expenditure by 20%.

George, THAT would reduce the deficit. It needs to take both income and expenditures to be dealt with. I am sure you understand that. The problem is that both sides want the other side to bear the brunt of the work to reduce the debt/deficit. Yes, we can plan on GDP growth, but until that happens, we should not be counting on that. It is irresponsible to continually plan on growth and see the debt increase.

Both sides have failed in debt/deficit reduction, and both blame the other side. My plan would make both sides take a hit, and the people would suffer. Unfortunately, the people will suffer. Sooner or later the people will have to suffer, it is lying to ourselves if we think we can solve this without suffering.

georgeatkins

Go jack the rate back to 90% if you like, then sit back and watch the National Debt thermometer continue to climb; especially when the increased tax revenue goes towards propping up existing government programs.
If the true issue is something slippery called "fairness" and "income equality", why we should just forbid people from becoming too successful. And that reminds me of a Kurt Vonnegut story about the future, were the US Constitution was amended to make it illegal anybody to be better, quicker, richer, or smarter than anybody else.

When the tax rate was 90%, the debt thermometer decreased. As it did from 45 through 80 when taxation rates were much higher than today. . And rich people did pay much higher taxes. And yet the economy generally ticked along. And America was prosperous, and most of its citizens enjoyed opportunity (socail mobility) and viewed their nation as prosperous. So higher taxes won't hurt the economy or society.Unless you view the period of 45 through 80 in the US as some kind of hell.Do you?

When income and wealth become disproportionally distributed to only a few..... as it does in many African and South American countries you see an interesting phenomenon. The rich shut themselves off from the rest of the populace, guarding themselves, their families and their possessions. Meanwhile, the economy sputters as their is little economic activity for a middle class to develop.

The most prosperous nations are those whose middle class has a large share of economic activity. The distribution of wealth and income in the US has changed as taxation and business regulation changed and that has affected the middle class and working class.... Naturally the economy has suffered. Well, finally suffered. Debt, hid the changes for a good dozen years or more. But that debt bubble bursting (housing crash) destroyed much middle class wealth. And the reality of fairly radical income redistribution that started in the 80s... has finally been realized.

You can't have sufficient economic activity to sustain a middle class, if only a small group of people have too much of the money.
And thats not an issue of fairness. Its just the way the economy works in the modern world.
There are ways that govenrment gives a share of income to working and middle class people without directly giving them money. Universal health care through taxation (Which has also proven to be the best fiscal management of health spending) and free education are two ways. Neither does more than provide opportunity to poor and middle class. It doesn't guarantee them anything.
And for millionares and wealthy in a country with a healthy middle class, its a measure of freedom. Yeah they might have a less wealth, but they also enjoy the benfits of a healthy society. Less crime. Less disease. Essentially they are freer to enjoy the money they have without fearing those outside the gates of their estate.

An employer who gives back to his employees when they have done right by him. http://jobs.aol.com/articles/2012/11/26 ... d%3D238226

"My employees are largely responsible for any success I've had, and they deserve to get some of the benefits of that," Lueken told the StarTribune of Minneapolis earlier this month. "You can't always take. You also have to give back."

Doesn't he realize that you're supposed to take, take, take!

GA your distinction between wealth and income taxes is curious. Yes, the reason that many rich people pay a low rate of tax is because their income comes from investments taxed at the capital gains rate of 15 percent. I don't think it is necessarily right that we should tax people who do the actual work at a higher rate than someone whose only involvement in creating wealth is writing a check (yes I understand the arguments that you want to promote investment and that some people are more heavily involved in managing their investments but still..)
As for your grudging acknowledgement that the rich could be taxed more but then sort of taking it back with hyperbole about going to a 90 percent rate, what is so controversial about not extending the Bush Tax cuts for the top two percent? Why can't we just say we tried the tax cuts, we can't afford them anymore, so we are not going to extend them? You know why the Bush Tax cuts are temporary? Because they were passed under Reconciliation due to the fact Republicans did not have the votes to get past a filibuster. They got passed via a loophole, we can't afford them, and implying that we are soaking the rich because we are raising rates 4 percent is a stretch

Doctor Fate wrote:Someone told me Buffett hasn't paid taxes in ten years.

Well then it must be true. I assume this 'someone' had evidence that helped to convince you?

That he does not voluntarily pay extra taxes doesn't invalidate what he says. What I find amusing is the rush to berate him every time he speaks out. Clearly class traitors need to be put in their place, although quite why middle class commenters here need to pile on to help the rich class assail an arrant member, I don't know.

Over here, where the top marginal rate for income tax went up from 40% to 50%, there were similar arguments being made to George's - that it was just 'spite' or 'fairness' and would just have no effect or make things worse. Our new government tussled with it, withe Conservatives saying it has raised nothing. So they reduced it (but because of pressure from their Lib Dem coalition partners, only to 45%). However, when the Chancellor announced the reduction, he also told us what it would cost to do so - in other words, how much it would impact the deficit. So it clearly was bringing in money. The reality is that spending cuts tend to affect the poor and middling

It is tiresome to see argumentum ad extremum. Buffett is not calling for a 90% rate. If the Bush Tax cuts are to end, that could be completely (so affecting all taxpayers and also a fair number elevated out of income tax a decade ago), or it could be selectively. But even then, it would not result in a rate above 40% for the highest 'earners'.

We have already discussed the difference between capital gains tax and income tax (and as far as I can see, CGT is not a tax on 'wealth', it's a tax on profit made from wealth, as and when realised, which is in reality income), and why it seems incongruous to some of us to tax income work at a much higher rate than income from non-work.

There are, however, some fairly obvious reasons to modestly increases taxes on the wealthy and high income groups: firstly, they are in a better position to be able to afford it, secondly they are benefiting more from society, thirdly that they have been less affected by recession and spending cuts, and fourthly because it would have a lower effect on the economy in terms of consumer spending.

Doctor Fate wrote:

geojanes wrote:On your other point, as I've said here before, that attitude is a red herring. American's are supposed to follow the law and pay the tax they owe. No one pays more taxes than they owe, nor should they.

Someone told me Buffett hasn't paid taxes in ten years.

Better to give it away (as Buffet has done, much more than would ever be taxed BTW) to causes they believe in.

Well then, he doesn't really believe in lowering the debt, thus "hypocrite." What he really believes in is making other people do what he won't do.

You're kidding, right? "Someone told me?" The guy put himself out there, argues to give himself, and others like him, a tax increase, and you're saying he won't pay more? Than why is he doing this? I don't normally ascribe cognitive dissonance to your arguments DF, but I don't believe you're thinking this one through.

freeman2 wrote:An employer who gives back to his employees when they have done right by him. http://jobs.aol.com/articles/2012/11/26 ... d%3D238226

"My employees are largely responsible for any success I've had, and they deserve to get some of the benefits of that," Lueken told the StarTribune of Minneapolis earlier this month. "You can't always take. You also have to give back."

Doesn't he realize that you're supposed to take, take, take!

Well it's not like a gift. An ESOP is going to ensure that he's going to get paid, perhaps not quite as much as if he sold to another party, but he's much more likely to be able to do this on his own terms. I'm a huge believer in ESOPs in theory, but in practice they are hard to do outside professional organizations. Hope this works.

geojanes wrote:

Doctor Fate wrote:

geojanes wrote:On your other point, as I've said here before, that attitude is a red herring. American's are supposed to follow the law and pay the tax they owe. No one pays more taxes than they owe, nor should they.

Someone told me Buffett hasn't paid taxes in ten years.

Better to give it away (as Buffet has done, much more than would ever be taxed BTW) to causes they believe in.

Well then, he doesn't really believe in lowering the debt, thus "hypocrite." What he really believes in is making other people do what he won't do.

You're kidding, right? "Someone told me?" The guy put himself out there, argues to give himself, and others like him, a tax increase, and you're saying he won't pay more? Than why is he doing this? I don't normally ascribe cognitive dissonance to your arguments DF, but I don't believe you're thinking this one through.

I believe he was making fun of the senate majority leader.

Ah, thanks. I missed that entirely. Sorry DF.

I think you guys are missing my point, or points. The 90% isn't hyperbole, by the way. We've had higher rates in the past for the upper brackets. I threw that out because it is a number that liberals have thrown out as example of pre-existing tax rates that the rich managed to live through. Bbauska commented

How about we reduce EVERY expenditure by 20%. George, THAT would reduce the deficit./quote]. Well, yes. Of course. That IS one point of my argument. Raising taxes alone will solve the immediate federal revenue problem, but not the other.

And as I wrote, go ahead and raise taxes, because the rich can absorb them. Freeman2 wrote

GA your distinction between wealth and income taxes is curious.

No it's not; it's correct. Wealth is not simply income, but the economic value of all assets, including income, properties, your car, appraised antiques, that Babe Ruth baseball, etc.

You want to raise taxes for investment capital gains, that's fine, too. As you noted, it is another form of income, if you have not plowed it back into the investment. The idea that you profess that, somehow, investment earnings do not have the same (moral or ethical?) value as wage earnings that most of us live with is sophistry. I would bet that somebody with $100K on the line goes through as much stress and anxiety as anybody working a factory line. Maybe more. I would bet that the investor would also, as a general rule, has put in a lot of research before putting down that hunk of dough. And it is that investment that usually enables companies to exist and hire those wage earners. And it is the wage earners who plow savings into retirement plans, which are usually invested; invested in money markets and mutual funds, whose combined investments help fund new and existing companies that hire wage earners like you and me. In short, wage earners are small-time investors, as well.

Say, how about this: If we want to measure the value of earnings according to perceived effort, should actors pay more taxes (or earn less) since their income derives form a job that is, frankly, little more than playing make-believe?

Now, some of you have raised the inequity between income tax levels and capital gains tax levels. Fair enough. Of course, this has been an ongoing issue, since taxes are authored by politicians of both parties in Congress, who are also lawyers, investors, and friends of lawyers and investors.

Now, the argument made above about not being able to "afford the Bush tax cuts" is disingenuous. A tax cut is not "paid for", since it means tax payers keeping more of their own money. I don't pay more to let you keep more of your own. The only reason you might look at that as an expense is if you are the Government and no longer have enough tax revenue to sustain existing programs or pay for new ones. So, unless Congress means to change how it spends our money, the notion of paying for tax cuts is just political b.s.

georgeatkins wrote:I would bet that somebody with $100K on the line goes through as much stress and anxiety as anybody working a factory line. Maybe more. I would bet that the investor would also, as a general rule, has put in a lot of research before putting down that hunk of dough.

I completely disagree. It's a lot easier on the body and less stressful to be an investor than a factory worker, except for maybe a few months in 2008, and even then it was easier on the body. In fact, being an investor may be the world's easiest job.

I also have to take issue with georgeatkins' last part. It's all very well asserting that tax cuts are just retunring our money back to us as taxpayers, but the reality is, particularly given the scale and period of deficit, that it's really just accruing government debt. If you want to pretend that the government is just some foreign entity, fair enough, but it's not. The debt that the government has falls on society at large, because all the government is is the representation of the will of the people.

After all, what government debt really is is public debt, money owed by the people as a whole. If it is not paid off now, or if it is made worse by deciding to collect less in taxes (when tax revenues are already quite low, despite Tea Party rhetoric), all it means is that future taxpayers will have the bill to pay.

What is indeed required is a combination of tax increases and spending cuts. However, in both cases a blanket 20% will probably cause more problems, because different revenue streams have different multiplier effects on the US economy. It's true that the deficit needs to be addressed, but it's also true that the wider economy is still coming out of recession (and while the GDP figure is higher than before the crash, there's still 4 years' of 'lost growth') and in the global context things are not looking too good. So it is more sensible to look at a utilitarian position. So, does raising taxes on the poor or midlle class help as much as raising them on the rich, if it means that larger numbers of people have less disposable income to spend on genral goods, compared to a small numer of people having still a lot of disposable income to spend on luxuries. Welfare spending may seem like a waste, but pretty much all of it goes into the economy as cash because few people on welfare are saving any of it. Spending on military boondoggles won't have the same effect.

What I find amusing is the suddent rush to defend those best able to defend themselves. That the poor had the sympathies of those who here are bewailing the hard physical toll of investment or the terrible impact of a 4 point tax increase (by alluding to a 55 point increase).