World Politics

[Alpe d'Huez]

Consider a hypothetical extreme example. You pay no tax on income up to $100K, then 50% tax on all income above that. So if you make $100K you pay no tax; if you make $200K, you pay $50K; if you make $300K you pay $100K.

Actually, this would make for a very interesting flat tax plan. Though I think the numbers are a little high, and may not replace current revenue.

 

[Cobblestones]

Actually, this would make for a very interesting flat tax plan. Though I think the numbers are a little high, and may not replace current revenue.

No. That would be a progressive tax.

Progressive: the higher the income, the higher the tax rate (in %)
Flat: everybody pays the same % of income as tax.

Progressive income tax is the rule in practically every country (can't think of any counterexample).


And what Merckx describes is really nothing new. Good olde Saint Ron was campaigning against bracket creep. Any good conservative should know this. It's in the Gospel according to Nancy.

 

[rhubroma]

Of course, if everyone paid all their taxes, but I know this is science fiction, everyone, rich and poor alike, would pay less.

This not insignificant fact, as far as I can tell, makes much of this debate irrelevant. But what do I know? Being the fool that I am.

 

[Cobblestones]

Of course, if everyone paid all their taxes, but I know this is science fiction, everyone, rich and poor alike, would pay less.

This not insignificant fact, as far as I can tell, makes much of this debate irrelevant. But what do I know? Being the fool that I am.

I'm pretty bored by the tax debate as well, but the Gaddafi thread only revolves around whether one has the right to celebrate someone else's death, so that's pretty pathetic, too. Time to check out babes on bikes then.

 

[gregod]

No. That would be a progressive tax.

Progressive: the higher the income, the higher the tax rate (in %)
Flat: everybody pays the same % of income as tax.

Progressive income tax is the rule in practically every country (can't think of any counterexample).


And what Merckx describes is really nothing new. Good olde Saint Ron was campaigning against bracket creep. Any good conservative should know this. It's in the Gospel according to Nancy.

a comment a flat vs. progressive tax.

although at first blush, a flat tax seems to be very fair; if i make $100 and you make $1000 and we both pay 10%, i pay $10 and you pay $100 dollars and the discrepancy can be rationalized that the person making $1000 is paying for taking better advantage of the opportunities a democratic/capitalist society provides.

there are several arguments about why this is unfair to the LOWER payer, but the two most compelling that i can think of are as follows:

1) opportunity is not linear. with increased income the ability to sustain and increase that income increases exponentially. with the increased income inequality in the US, this graph has actually steepened.

2) a dollar to a low income individual is not the same value as the dollar to a high income individual. remember when you were a young child and you got $20 dollars from your grandmother for your birthday. it seemed like all of the money in the world. now, it is a few cups of coffee at your-favorite-coffee-shop. so, the payment of 10% of your income is a much greater burden to a low income individual than paying 30% of of a high income earner.

 

[ramjambunath]

Basque Seperatists ETA End Armed Struggle

The Basque separatist group ETA said on Thursday it was ending four decades of armed struggle and called for talks with the Spanish and French authorities on ending Europe's last major guerrilla conflict.

"ETA has decided the definitive cessation of its armed activity," the group said in a statement through Basque-language newspaper Gara and an online video.

"ETA calls upon the Spanish and French governments to open a process of direct dialogue with the aim of addressing the resolution of the conflict," it added.

Three masked ETA members sat behind a table to read the statement, raising their fists in the air at the end of the video.

http://www.reuters.com/article/2011/10/20/us-eta-idUSTRE79J66R20111020?feedType=RSS&feedName=topNews

 

[Amsterhammer]

Food for thought......

The US today: economic stagnation, political paralysis

Given mass unemployment and stimulus spending blocked in Washington, no wonder people are taking to the streets

Mark Weisbrot
guardian.co.uk, Friday 7 October 2011 23.03 BST

The monthly employment report for September, released Friday, shows how far America remains from an economic recovery that might feel different from a recession to most of the public, nearly four years after the Great Recession began. Unemployment remained at 9.1% in the household survey. With a jump of 342,000 thousand additional people involuntarily working part-time, the labor department's broadest measure of unemployment (which includes these workers and others who have quit looking for work because they can't find it) rose to a near-record 16.5% of the labor force.

As my colleague Dean Baker pointed out, the 103,000 jobs gained in September brought the total jobs added over the last three months to just enough to keep pace with the growth of the labor force. If present trends continue, we are going to be looking at intolerably high levels of unemployment for years to come.

The distribution of unemployment is also breaking records for ugliness. Some 44.6% of the unemployed have been out of work for more than six months. This kind of long-term unemployment is unprecedented in the post second world war era, and it causes permanent damage, as many of the long-term unemployed never get jobs again. Their children suffer as well, with damage to their education.

No wonder people are taking to the streets, in a phenomenon not seen since the Great Depression: mass protests targeting economic policy. As in Europe, where the 15-M movement in Spain, the general strikes in Greece, and mass protests in other countries have attracted widespread popular support, the movement of "the 99%" targeting Wall Street is a response to the failure of our political class to do what is obviously necessary for even the immediate future. There is a chance, at least, that it will be joined by increasing numbers of "the 16.5%" (unemployed or underemployed); the "15.1%" (below the poverty line); and "the 88%" (of the labor force without union representation) – and all the other effectively disenfranchised Americans that make up the 99%.

It is a good sign that President Obama has shifted tactics and, instead of begging for crumbs from the Republican leadership, is now willing to say publicly that they will be held to account if they refuse to pass his proposed legislation that would reduce unemployment. However, his proposed jobs bill is too small to make much of a dent. Goldman Sachs, which represents "the 1%", noted that it would not even bother to change its forecast for growth next year, because even if Obama's proposal were enacted "in its entirety", it would only shift the effect of fiscal policy from a negative 1.1% of GDP to a positive 0.4%. Of course, this would still be a noticeable improvement, but Goldman Sachs is counting on the likelihood that much of it won't pass Congress.

More importantly, a positive overall stimulus of 0.4% from government – again, only if Obama's whole package were to become law – is pathetic in a time of such dire mass unemployment. One reason it is so small is that state and local governments have been tightening their budgets, shedding jobs since the recession began. This is a big drag on employment and growth. State and local governments have lost 259,000 jobs over the past year; in a time of normal growth, they would be adding that many jobs in a year.

To get us out of this hole, the federal government would have to do much more. That has been the problem from the beginning: even the main stimulus bill (the American Recovery and Reinvestment Act) that began in February of 2009 replaced only about one-eighth of the private spending that was lost as a result of the bursting of the real estate bubble. But as that stimulus ran out, employment gains petered out and the economy fell into its current state of stagnation.

For all of our political leaders' spectacular failure – the lack of leadership from the White House and the successful economic sabotage of the Republicans – we can give special thanks to the major media. With a handful of exceptions, they have been the great enablers throughout this malaise, lending credibility to ridiculous arguments that America is constrained by a "debt crisis". The federal government's net interest payments on our public debt are running at around 1.4% of GDP, about as low as they have been in the past 65 years.

We are now more than one third of the way through a "lost-decade", having barely caught up with our income at the end of 2007, when the recession began. Thank God there are people in the streets who understand that there is nothing inevitable about this misery. It is their strength and organisation that is currently our best hope for a better future.
(end)

...and Goldman Sachs were correct, as misguided Senate politicians yesterday ensured that at least for the time being, absolutely nothing would happen to lurch the country into a forward gear as far as job creation is concerned.

 

[Semper Fidelis]

Here I thought Cain did something really stupid such as having a Texas hunting camp called 'killwhitey" or maybe a memo from Godfather pizza mandating the employment of unlawful aliens.

Isn't it sad that his political suicide comes from taking an entirely reasonable position, coinciding with current law?

Very sad if it is the political suicide that you guys are pointing towards.

If he is as smart as he thinks he is then he should use this as a launching point. What I am trying to say is he should stand up to everyone and affirm his opinion / belief. Do not back down. As you say his point is a reasonable position and does go along with the current laws in the United States. He should make a statement that this issue has been settled already by the courts. We should move on to issues that affect the people such as jobs / medical care / etc.

 

[Semper Fidelis]

Food for thought......

The US today: economic stagnation, political paralysis

Given mass unemployment and stimulus spending blocked in Washington, no wonder people are taking to the streets

Mark Weisbrot
guardian.co.uk, Friday 7 October 2011 23.03 BST

The monthly employment report for September, released Friday, shows how far America remains from an economic recovery that might feel different from a recession to most of the public, nearly four years after the Great Recession began. Unemployment remained at 9.1% in the household survey. With a jump of 342,000 thousand additional people involuntarily working part-time, the labor department's broadest measure of unemployment (which includes these workers and others who have quit looking for work because they can't find it) rose to a near-record 16.5% of the labor force.

As my colleague Dean Baker pointed out, the 103,000 jobs gained in September brought the total jobs added over the last three months to just enough to keep pace with the growth of the labor force. If present trends continue, we are going to be looking at intolerably high levels of unemployment for years to come.

The distribution of unemployment is also breaking records for ugliness. Some 44.6% of the unemployed have been out of work for more than six months. This kind of long-term unemployment is unprecedented in the post second world war era, and it causes permanent damage, as many of the long-term unemployed never get jobs again. Their children suffer as well, with damage to their education.

No wonder people are taking to the streets, in a phenomenon not seen since the Great Depression: mass protests targeting economic policy. As in Europe, where the 15-M movement in Spain, the general strikes in Greece, and mass protests in other countries have attracted widespread popular support, the movement of "the 99%" targeting Wall Street is a response to the failure of our political class to do what is obviously necessary for even the immediate future. There is a chance, at least, that it will be joined by increasing numbers of "the 16.5%" (unemployed or underemployed); the "15.1%" (below the poverty line); and "the 88%" (of the labor force without union representation) – and all the other effectively disenfranchised Americans that make up the 99%.

It is a good sign that President Obama has shifted tactics and, instead of begging for crumbs from the Republican leadership, is now willing to say publicly that they will be held to account if they refuse to pass his proposed legislation that would reduce unemployment. However, his proposed jobs bill is too small to make much of a dent. Goldman Sachs, which represents "the 1%", noted that it would not even bother to change its forecast for growth next year, because even if Obama's proposal were enacted "in its entirety", it would only shift the effect of fiscal policy from a negative 1.1% of GDP to a positive 0.4%. Of course, this would still be a noticeable improvement, but Goldman Sachs is counting on the likelihood that much of it won't pass Congress.

More importantly, a positive overall stimulus of 0.4% from government – again, only if Obama's whole package were to become law – is pathetic in a time of such dire mass unemployment. One reason it is so small is that state and local governments have been tightening their budgets, shedding jobs since the recession began. This is a big drag on employment and growth. State and local governments have lost 259,000 jobs over the past year; in a time of normal growth, they would be adding that many jobs in a year.

To get us out of this hole, the federal government would have to do much more. That has been the problem from the beginning: even the main stimulus bill (the American Recovery and Reinvestment Act) that began in February of 2009 replaced only about one-eighth of the private spending that was lost as a result of the bursting of the real estate bubble. But as that stimulus ran out, employment gains petered out and the economy fell into its current state of stagnation.

For all of our political leaders' spectacular failure – the lack of leadership from the White House and the successful economic sabotage of the Republicans – we can give special thanks to the major media. With a handful of exceptions, they have been the great enablers throughout this malaise, lending credibility to ridiculous arguments that America is constrained by a "debt crisis". The federal government's net interest payments on our public debt are running at around 1.4% of GDP, about as low as they have been in the past 65 years.

We are now more than one third of the way through a "lost-decade", having barely caught up with our income at the end of 2007, when the recession began. Thank God there are people in the streets who understand that there is nothing inevitable about this misery. It is their strength and organisation that is currently our best hope for a better future.
(end)

...and Goldman Sachs were correct, as misguided Senate politicians yesterday ensured that at least for the time being, absolutely nothing would happen to lurch the country into a forward gear as far as job creation is concerned.

Instead of taking to the streets I am going to move either to Schiedam or Monaco. I had thought about Calgary or Vancouver but those places are much too close to the preoccupied group in NYC.

 

[VeloCity]

Wonder what effect this will have on Marco Rubio's chances of being the VP nominee?

http://www.washingtonpost.com/polit...cuments-show/2011/10/20/gIQAaVHD1L_story.html

 

[VeloCity]

There really is something seriously wrong with Republicans these days.

http://www.nytimes.com/2011/10/21/u...r-obamas-jobs-bill-now-piecemeal.html?_r=2&hp

"...the bill was narrowed to provide $35 billion to state and local governments to prevent layoffs of teachers, police officers and firefighters. To offset the cost, the bill would impose a surtax of 0.5 percent, starting in 2013, on income in excess of $1 million...Republicans objected to the tax..."

Hope those teacher, police, and firefighter jobs were all in Republican districts.

 

[VeloCity]

It is an interesting contrast the way you guys will settle for far less emperical data with a theory like climate change

Sorry, what? You're really not looking very hard, are you. There's a mountain of empirical data out there, that's what we keep trying to tel you. And which you keep ignoring for, I have to assume, purely ideological reasons. The reason that 97-98% of climatologists agree that climate change is real and that it's human-driven is exactly because of the strength and depth of the empirical data. Ever see 97-98% of economists agree on anything?

 

[Anonymous]

You're missing it. It's not behavior, it's math. The top 1% paid a higher percentage of their income in taxes because a higher % of their income was in the highest tax brackets. As I said before, if you compare equivalent incomes, the Clinton incomes paid a higher % in taxes. Tax brackets are always designed around income levels, not percentile levels.

<snipped for brevity>

If you want to argue that the reason the % levels were higher under Bush was because of greater economic growth, then discuss what caused that growth, that is another issue. But there is nothing in these data that show that lowering tax rates will result in someone paying a larger proportion of taxes on a particular level of income. That really would be voodoo economics.

Okay, I see it. But there's still more to the story...

There are four ways to file taxes, married filing jointly, married filing separately, single and head of household. For the sake of this discussion I'll just talk about married filing jointly (but the effect applies to all categories)

1993 Top Marginal Rate = 39.6% Threshold for Top Rate = $250,000
1994 Top Marginal Rate = 39.6% Threshold for Top Rate = $250,000
1995 TMR = 39.6% Threshold = $256,500
1996 TMR = 39.6% Threshold = $263,750
1997 TMR = 39.6% Threshold = $271,050
1998 TMR = 39.6% Threshold = $278,450
1999 TMR = 39.6% Threshold = $283,150
2000 TMR = 39.6% Threshold = $288,350
2001 TMR = 39.1% Threshold = $297,350
2002 TMR = 38.6% Threshold = $307,050
2003 TMR = 35.0% Threshold = $311,950
2004 TMR = 35.0% Threshold = $319,100
2005 TMR = 35.0% Threshold = $326,450
2006 TMR = 35.0% Threshold = $336,550
2007 TMR = 35.0% Threshold = $349,700
2008 TMR = 35.0% Threshold = $357,700

Now, according to what I could find, During the Clinton years the Top 1% averaged income growth of 10.3% annually whereas the thresholds only went up around 3% per year or so.

During the Bush years the average annual income gain for the Top 1% was 10.1% only calculated until the "great recession", where over the 2 year period of 2007/2008 the Top 1% annual income growth annualized was -19.7%. This is important because if you annualize 10.1% income growth starting at, say $350,000 (I have no idea of what the average income for the top 1% was), beginning in 2001 thru 2006 the income will be about $640,000. But in 2007, the income would be (on average) about $514,000 and for 2008 about $413,000.

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2008.pdf


So your point is true (higher percentage of total income being taxed at the top rate) it looks like my point is also true.

Anyhow, I now have a headache.

 

[Anonymous]

There really is something seriously wrong with Republicans these days.

http://www.nytimes.com/2011/10/21/u...r-obamas-jobs-bill-now-piecemeal.html?_r=2&hp

"...the bill was narrowed to provide $35 billion to state and local governments to prevent layoffs of teachers, police officers and firefighters. To offset the cost, the bill would impose a surtax of 0.5 percent, starting in 2013, on income in excess of $1 million...Republicans objected to the tax..."

Hope those teacher, police, and firefighter jobs were all in Republican districts.

35 Billion is chump change. Why not 535 billion? We wasted that much on Solyndra and the Prez just kinda shrugged his shoulders about it.

Yep, let's fund these positions for a year and then we'll deal with it next year when the funding runs out (See State Grants from the last 'stimulus').

I have an idea. Why don't we just make teachers, firefighters and cops Federal Employees. That'll fix it.

 

[VeloCity]

I have an idea. Why don't we just make teachers, firefighters and cops Federal Employees.

Sounds good to me.

 

[Rouetheday]

35 Billion is chump change. Why not 535 billion? We wasted that much on Solyndra and the Prez just kinda shrugged his shoulders about it.

Yep, let's fund these positions for a year and then we'll deal with it next year when the funding runs out (See State Grants from the last 'stimulus').

I have an idea. Why don't we just make teachers, firefighters and cops Federal Employees. That'll fix it.

That's 535 million, with an 'm' not a 'b'.

 

[Anonymous]

That's 535 million, with an 'm' not a 'b'.

Oops! Good catch

 

[Cobblestones]

Wonder what effect this will have on Marco Rubio's chances of being the VP nominee?

http://www.washingtonpost.com/polit...cuments-show/2011/10/20/gIQAaVHD1L_story.html

Zero effect. His chance was nil before and is still zero.

 

[Alpe d'Huez]

No. That would be a progressive tax.

I thought the flat taxes that Jerry Brown, Paul Tsongas, Steve Forbes* and others worked with some sort of floor/ceiling as well. That being you didn't pay anything on the first $17k of your income (or whatever the number)?

Although at first blush, a flat tax seems to be very fair...there are several arguments about why this is unfair to the LOWER payer, but the two most compelling that i can think of are as follows:

1) opportunity is not linear. .

2) a dollar to a low income individual is not the same value as the dollar to a high income individual.

Understand, and accept those. But let's play with the numbers Merckx put up. Let's say you pay zero taxes on the first $50k of your income. For most working people, and the poor, they wouldn't pay any taxes. If you were making good money, you'd pay a reasonable amount. And if there were no exemptions, this % could be not too high, something like 25% above $50k. Again, I'm doing fuzzy math here. Just kicking the tires to stimulate conversation.

*Of note, I recall one of Forbes "flat tax" plans also had exemptions, and no taxes were paid on capital gains. Not very flat when you think about it. I also know Tsongas never endorsed a flat tax, but did discuss it as a way to help eliminate the absurdities and loopholes of the tax code.

 

[redtreviso]

""*Of note, I recall one of Forbes "flat tax" plans also had exemptions, and no taxes were paid on capital gains. Not very flat when you think about it. I also know Tsongas never endorsed a flat tax, but did discuss it as a way to help eliminate the absurdities and loopholes of the tax code.""

can you imagine all the CEOs who would get paid almost exclusively in stock options so that their incomes would be capital gains? Absurd indeed. Oh wait.. They already do that..

 

[Cobblestones]

I thought the flat taxes that Jerry Brown, Paul Tsongas, Steve Forbes* and others worked with some sort of floor/ceiling as well. That being you didn't pay anything on the first $17k of your income (or whatever the number)?


Understand, and accept those. But let's play with the numbers Merckx put up. Let's say you pay zero taxes on the first $50k of your income. For most working people, and the poor, they wouldn't pay any taxes. If you were making good money, you'd pay a reasonable amount. And if there were no exemptions, this % could be not too high, something like 25% above $50k. Again, I'm doing fuzzy math here. Just kicking the tires to stimulate conversation.

*Of note, I recall one of Forbes "flat tax" plans also had exemptions, and no taxes were paid on capital gains. Not very flat when you think about it. I also know Tsongas never endorsed a flat tax, but did discuss it as a way to help eliminate the absurdities and loopholes of the tax code.

That might be, but any kind of exemption on a minimum amount makes it in fact a progressive tax. It is clear that every moderately sane person who has suggested a 'flat' tax so far, has included exemptions in order to make it progressive. In other words, it seems everybody understands that a truly flat tax would be utterly insane. So can we then just stop talking about the canard of a flat tax?

And of course, a tax should be leveled on any type of income. May it be salary, capital gain, inheritance etc.

 

[Captain_Cavman]

This is the interesting part. GDP tripled yet if growth slows down the whole economy is in trouble. So for the world to live in it's comfort zone the economy must grow indefinitely.

I may not be as good at math as some on this forum, but indefinite growth on a finite planet doesn't calculate. Something has to give, and my bet is that the planet goes first.

I think you will find that the planet is quite safe.

GDP may have tripled but over the same period debt has increased to a degree that makes such increases in GDP immaterial. GDP has been artificially inflated by increasing debt. I.e. by paying for goods now with future earnings and then a bit more in interest. In fact far more of future earnings has now been pedged against borrowing than there is possible future earnings.

Real GDP has barely risen in the West since the nineties. At some point there will be a reset, a massive financial implosion. The only question is how much of your and my purchasing power are our Governments going to surrender to the banks before the inevitable happens.

 

[Alpe d'Huez]

That might be, but any kind of exemption on a minimum amount makes it in fact a progressive tax.

I see what you are saying.

So, what do you think about the progressive tax idea of having the first $50k of income tax free, and everything above that taxed at 30% or so, with no exemptions? (Or whatever numbers equal current revenue).

I brought it up because what Merckx said about % of income going to basic needs. Hence, someone making $20k a year is going to pay most of that money just to stay alive. Someone making $50k will have some spending money, if not be super wealthy. They can likely afford a home, a car, vacations, health care, retirement, etc. Then we look at someone making a healthy $300k a year. They'd still only pay about $75k a year to taxes, leaving them a nice $225k a year. And are the people between these groups not the most inclined to spend their extra cash, not hoard it, stimulating the economy? Someone making $1m would pay about $275k, leaving them over $725k, etc. Call it the "50/30 Plan".

I think the basic conservative reaction to this must be rooted in supply-side economics. The thinking that the wealthy people use their money to create jobs, so they shouldn't be taxed that much. But I've yet to come across any compelling numbers to show this being true.

Again, my numbers may be fuzzy math - maybe the floor needs to be higher or lower, and the % higher or lower. Maybe there should be exemptions for things like primary residence, health care, education, home business expenses, children, etc. Maybe not? Just trying to stimulate the conversation.

 

[Semper Fidelis]

Edited by Mod.

 

[redtreviso]

"""He is the ugliest, most divisive president in American history. He brings out the worst in America. The nazi (sic) party, Obama's latest addition to his constituency.""

http://www.theprovocation.net/2011/10/lunacy-alert-pamela-geller-links-obama.html