O-Trap;1835126 wrote:Okay. What is the reasoning? Why 80%? Why not 90% or 70%? Why 80%?

What is it that makes 80% fair? Hell, what is it that makes any non-uniform percentage fair?

If we use Sleeper's example, if we had 0% rates on capital income and a strong deduction to encapsulate some reasonable estimate of non-discretionary consumption adjusted for where you live, the rate structure might not be far off. How do you set the rates? Well it is my humble opinion that the rates should float and since they are reaching consumption only they can be tied to the market's inflation expectations. If inflation is rising above the FED's target the rates rise.

Maybe you coulds set up hypothetical Rawlsian bargains or simulations to see what individuals would bargain for under the original position?

HitsRus;1835405 wrote:The only true "fair share" is that a person is entitled to the fruits of his labor. If you don't work, then you must subsist on charity. What this discussion is about is how much the government should/can forcibly extract from productive people to support the non productive.

What I find interesting is that welfare state capitalism was basically started by a Classical Conservative in Otto Von Bismarck in response to the claims by marxists and such that unbridled capitalism rested on the unjust misappropriation by unproductive rentiers as a way to tame the desire for overthrow. (See the Soviet Constitution which charged that work was a duty and an honor for every able-bodied citizen in accord with the principle "he who does not work, neither shall he eat.")

Centuries later, the contemporary conservative levies the marxist critique that was used against the capitalist - the unjust misappropriation of the fruits of labor - against the institution that classical conservatives came up with - the welfare state - arguing that the welfare state beneficiary through an unjust government unjustly misappropriates the fruits of labor - particularly through the income tax.

And that I think is where the Progressive liberals of yore might have made a mistake was looking to the "Income tax" to support the welfare state which necessarily targeted the fruits of labor. They might have had more success I think and kept classical conservative embrace of the welfare state had they chosen something like Cleveland Democratic Mayor Tom L. Johnson's idea of a land value tax following Henry George.

BoatShoes;1836930 wrote:If we use Sleeper's example, if we had 0% rates on capital income and a strong deduction to encapsulate some reasonable estimate of non-discretionary consumption adjusted for where you live, the rate structure might not be far off. How do you set the rates? Well it is my humble opinion that the rates should float and since they are reaching consumption only they can be tied to the market's inflation expectations. If inflation is rising above the FED's target the rates rise.

Maybe you coulds set up hypothetical Rawlsian bargains or simulations to see what individuals would bargain for under the original position?

Personally, I am sympathetic to Rawls' model, and I think that it can work on a small scale, because the advantage of commonality within a community can bolster sympathy for one another. I don't like the notion of forcibly manipulating society to favor any group over another, so I'm not keen on half of his theoretical construct, but if it was possible to remove the "forcibly" part, I think it could be a great effort at answering the question of wealth inequality.

Having said all that, I really struggle to see it working on a larger scale than a community one, of only for one reason: an absence of familiarity or connection. I think this leads to the increased animosity between classes.

When you're helping someone who either you know, or at least whose story you're familiar with, it's easier to justify giving. It's easier to trust or have compassion on them. And help would mostly be voluntary at that point.

But when we try to do it on a scale where we remove familiarity, I think we get too large for Rawls' model to work in the long term.

I have to say, though, that I appreciate an intelligent response. Thank you.

With taxes due in a couple days, I came across this video. I had a debate with my friend a couple weeks ago, I still haven't heard a legitimate answer to what "fair share" exactly means.


[video=youtube;dGnFcmHH7t4][/video]

like_that;1835274 wrote:How do you all feel about a flat tax? The pros outweigh the cons imo and it incentives people to work harder to make more money.

I'm for it. You can't get any fairer than that, because everyone is treated equally, just like a flat sales tax. People who make 80% of the income will pay 80% of the taxes. Collect it as a sales tax, and you have de-incentivized a taxpayer's desire to fudge on his tax return, because there are no more tax returns.

Are there pitfalls? Yes, but that's a separate issue to deal with. It's fair, it's equitable, it's equal. We all know it is, so nobody need bother trying to deny it.

Send those thank-you checks to:

Zunardo
Wilds of Upper Strombolia

The main question I would have is: Who would set the arbitrarily/subjective defined percentage of a flat tax?

That's one of the pitfalls - but once it's established and enforced across the board, it automatically becomes a "fair-share".

The problem with a 0% corporate tax rate is retained earnings sitting on a balance rather than being invested or distributed as dividends, effectively making taxes [again] "voluntary" for a lot of wealthy people.

If you can solve that problem, then just get rid of corporate taxes...which also eliminates most of the double/triple taxation arguments....and you can scrap capital gains as well.

I don't know if 20% is the right number, but it's probably close. Maybe exclude the first $50k of income and it's something like 25%.

gut;1848538 wrote:The problem with a 0% corporate tax rate is retained earnings sitting on a balance rather than being invested or distributed as dividends, effectively making taxes [again] "voluntary" for a lot of wealthy people.

If you can solve that problem, then just get rid of corporate taxes...which also eliminates most of the double/triple taxation arguments....and you can scrap capital gains as well.

I don't know if 20% is the right number, but it's probably close. Maybe exclude the first $50k of income and it's something like 25%.

Moreover, making the tax rate less of a burden on those with the ability to do as you suggest ALSO decentivizes the use of loopholes and such to get out of taxes. The loopholes aren't particularly cheap for Average Joe Thousandaire, but if we're talking about someone who would otherwise be paying a half million or more in taxes, it's worth it, since you can essentially outsource the actual work, and the ROI can be very sensible.

O-Trap;1848578 wrote:Moreover, making the tax rate less of a burden on those with the ability to do as you suggest ALSO decentivizes the use of loopholes and such to get out of taxes. The loopholes aren't particularly cheap for Average Joe Thousandaire, but if we're talking about someone who would otherwise be paying a half million or more in taxes, it's worth it, since you can essentially outsource the actual work, and the ROI can be very sensible.

I think the "loopholes" for individuals is a little overstated. The ones that aren't related to a business are mostly done in the set-up (i.e. offshore investment vehicles or carried interest) and aren't something a savvy tax accountant just "finds". It's not that Joe Thousandaire can't afford them, it's that Joe Thousandaire simply doesn't have the qualified investable assets. Or along the same lines, Joe Thousandaire doesn't have disposable income he can afford to defer for favorable tax treatment.

Saw a blurb today that 35% didn't pay federal income taxes in 2014, and actually collected $90B in net redistributions. That's a relative drop in the bucket, but my issue has always been that if you don't pay federal taxes, then you have no incentive to restrain gubmit spending. The tax code becomes a source of income for you, and it's scary to have 35% of the electorate looking to leech off hard working Americans (which would be somewhere between 60-63% that hardly qualify as "rich").

Between some retirees and probably the top half of the 1%, most of their income is capital gains...and they'll pay roughly 15-20%. But cap gains is actually double taxation. So if you are talking 25% flat, say above $50k, you're giving a decent tax break to the truly middle class and making up for eliminating those taxes and corporate taxes on the Romney-types who have effective rates below 20%.

Another thing to consider: a flat tax that also eliminates corporate taxes would put a hell of a lot of accountants out of work. Probably not overnight, so there could be natural "stickiness" that doesn't cause any transitionary shocks.

gut;1848581 wrote:I think the "loopholes" for individuals is a little overstated. The ones that aren't related to a business are mostly done in the set-up (i.e. offshore investment vehicles or carried interest) and aren't something a savvy tax accountant just "finds". It's not that Joe Thousandaire can't afford them, it's that Joe Thousandaire simply doesn't have the qualified investable assets. Or along the same lines, Joe Thousandaire doesn't have disposable income he can afford to defer for favorable tax treatment.

To be sure, I'm certainly not suggesting that loopholes account for a drastic difference in personal income tax, and I tried to allude to the notion of deferred income, just through different means, I suppose.

I was thinking more along the lines of forming S-corps or LLCs to run income through a la transfer pricing (which, if used with IP, services, consulting, etc., doesn't require much actual "business") or parent-to-subsidiary loans (with a fat interest rate) ... in conjunction with offshore registration of course. I mean, it's hairy to set up, but if I recall correctly it's legal, and if you have the money to throw at setting it up (since Joe Thousandaire isn't usually a tax expert), it's doable.

gut;1848581 wrote:Saw a blurb today that 35% didn't pay federal income taxes in 2014, and actually collected $90B in net redistributions. That's a relative drop in the bucket, but my issue has always been that if you don't pay federal taxes, then you have no incentive to restrain gubmit spending. The tax code becomes a source of income for you, and it's scary to have 35% of the electorate looking to leech off hard working Americans (which would be somewhere between 60-63% that hardly qualify as "rich").

Agreed completely. Make no mistake, I certainly have sympathy for those caught in the cycle of poverty, and beyond that, I understand that there are people who fall on bad times and need help. But there is, as it currently stands, a segment of the population (which I would say is predominantly based on geography more than anything else) that is essentially reared with the belief that living that was is just a fact of life ... that it's just "what you do."

It would be nice if there were a way to change that view without risking putting good, hard-working people in a worse financial state. But I just don't think it's possible, and I think that the programs that started out as well-intentioned means of helping hard-working people fill employment gaps as a result of bad circumstances have turned into comfortable golden cages that keep people in need of them.

gut;1848581 wrote:Between some retirees and probably the top half of the 1%, most of their income is capital gains...and they'll pay roughly 15-20%. But cap gains is actually double taxation. So if you are talking 25% flat, say above $50k, you're giving a decent tax break to the truly middle class and making up for eliminating those taxes and corporate taxes on the Romney-types who have effective rates below 20%.

Sure. I obviously hate the idea of taxation as a whole, but if we're going to do it, that certainly makes more sense than the current model.

gut;1848581 wrote:Another thing to consider: a flat tax that also eliminates corporate taxes would put a hell of a lot of accountants out of work. Probably not overnight, so there could be natural "stickiness" that doesn't cause any transitionary shocks.

At the very least, it WOULD cause them to need to adapt. I mean, other nations might still have tax structures that require accounting, and businesses would still need someone to handle books to ensure profitability/ROI/etc. if the businesses are large enough, but it would certainly diminish the value of them, at the very least.

Has anybody taken a look at the tax cut proposal? It's not flat tax, but I think it's a good start. Now the Government needs to be serious about making cuts to their spending.

*cue sleeper crying about big govt conservatives blah blah, now let's move on to an actual discussion.

like_that;1849997 wrote:Now the Government needs to be serious about making cuts to their spending.

This.

O-Trap;1850143 wrote:This.

How do you feel about the proposal overall?

Let's be real, the government isn't going to cut spending. The tax cuts will be paid for by future generations. This is the classic GOP economic strategy; cut taxes and increase spending.

like_that;1849997 wrote:
*cue sleeper crying about big govt conservatives blah blah, now let's move on to an actual discussion.

sleeper;1850154 wrote:Let's be real, the government isn't going to cut spending. The tax cuts will be paid for by future generations. This is the classic GOP economic strategy; cut taxes and increase spending.

Too predictable.

like_that;1850168 wrote:Too predictable.

???

What more is there to discuss? That is the reality.

Does anybody else not GAF what the caricature sleeper has to say? Looking for legitimate thoughts on the tax cuts.

like_that;1850153 wrote:How do you feel about the proposal overall?

Admittedly, I've only read ABOUT it. I haven't actually read it.

However, if it is as I've gathered, it's tax cuts without spending cuts, then it's like chlorine.

Chlorine, by itself, is unhealthy to consume. So is sodium. But when combined at the molecular level, they are essentially table salt.

Tax breaks are fun, and they're easy to get behind. However, if they're not coupled with spending cuts, they're not helpful.

I heard they are expecting economic growth to cover the tax cuts. Given the large cuts to the corporate tax we should hopefully become more competitive and bring some money back home. There is still plenty of room to cut spending so that needs to happen as well for me to fully endorse the cuts.

like_that;1850178 wrote:Does anybody else not GAF what the caricature sleeper has to say? Looking for legitimate thoughts on the tax cuts.

What kind of thoughts are you looking for?

Probably the main benefit of tax cuts are increased economic growth through greater available capital and lowering the threshold for investment returns. The downsides would be lower tax receipts, a booming deficit, and an increased consolidation of wealth to the very top.

Tax cuts are only economic nirvana in theory, not reality and they are unlikely sustainable given current spending levels. Again, this is classic GOP; big tax cuts and big spending.

O-Trap;1850187 wrote:Admittedly, I've only read ABOUT it. I haven't actually read it.

However, if it is as I've gathered, it's tax cuts without spending cuts, then it's like chlorine.

Chlorine, by itself, is unhealthy to consume. So is sodium. But when combined at the molecular level, they are essentially table salt.

Tax breaks are fun, and they're easy to get behind. However, if they're not coupled with spending cuts, they're not helpful.

justincredible;1850188 wrote:I heard they are expecting economic growth to cover the tax cuts. Given the large cuts to the corporate tax we should hopefully become more competitive and bring some money back home. There is still plenty of room to cut spending so that needs to happen as well for me to fully endorse the cuts.

Pretty much my thoughts as well. I think its a good start though. I will never complain about putting more money into the people's hands, because they at least know how to spend their money better than the Government does.

like_that;1850193 wrote:Pretty much my thoughts as well. I think its a good start though. I will never complain about putting more money into the people's hands, because they at least know how to spend their money better than the Government does.

Interesting analysis. So of the 17% of the budget that's not military or entitlement programs, what's not being spent appropriately?

like_that;1850178 wrote:Does anybody else not GAF what the caricature sleeper has to say?

Not really.

But if others are allowed and welcomed to have their own schtick, then he should as well. I just gloss over those posts where he is portraying himself in that manner in the very same way that I gloss over posts where others are doing their portrayals, too. Every now and then these people have something interesting to say that catches my eye. A blind squirrel finds a nut every now and then lol

CenterBHSFan;1850199 wrote:Not really.

But if others are allowed and welcomed to have their own schtick, then he should as well. I just gloss over those posts where he is portraying himself in that manner in the very same way that I gloss over posts where others are doing their portrayals, too. Every now and then these people have something interesting to say that catches my eye. A blind squirrel finds a nut every now and then lol

Yeah I know. I was just trying to move it along to a discussion with people who are legitimately trying to discuss it, instead of sleeper banging the drum with his 2-3 recycled arguments.