The Public Apparently Isn't Interested In Sound Economics
from the this-is-unfortunate dept
So I hear there’s some sort of election happening this week (have you heard anything about it?). Earlier this year, we wrote about an awesome effort by the folks at NPR’s Planet Money to bring together a group of five different economists, from all over the political spectrum, and see if they could find points that all of them agreed upon. They came up with a list of six things that all of them agreed would be smart ideas for a President to implement — and what was striking about all six was that not a single one of them was anywhere near politically tenable. Every one of them would be argued down immediately.
Part of the problem, honestly, was that nearly all of them required understanding a) a little bit of economics and b) being willing to understand nuanced situations and how different moves reverberate through the economy. Those, unfortunately, are rather difficult things — and it was seen in our comments too. We had over 200 comments, and many of them showed exactly that problem. People made broad, sweeping generalizations based on the short one-sentence versions, without understanding the details or the nuances. Also, ridiculously, many people insisted that the plans were all a nefarious plot of one particular side of the political spectrum, totally ignoring the fact that the economists came from all sides. The idea that, for example, anyone might consider economists Dean Baker or Bob Frank “right wing” is so hilarious as to defy comment.
Since then, Planet Money continued the series with some really interesting followups. First they discussed some of the ideas that the economists couldn’t agree on (free heroin!). Then it got fun. They brought in some political spin-meisters to take the policy planks that everyone admitted would never get very far coming out of a real politician’s mouth and see if they could spin them positively. It’s a really enjoyable/scary episode, in which complex economic ideas are reduced to crowd pleasing soundbites, mostly focused on misdirecting people from reality and, well, accentuating the positive.
Finally, last week, they decided to focus group the ideas and proved what we already knew: that the ideas, when explained to everyday Americans, were immediately and sometimes caustically shot down as being horrible, horrible ideas. They then tried to take some of the spin-meister versions, and present them as commercials… and got a little budge from a few people, but that was about it. In the end, it was clear that these ideas — no matter how good they might be — would immediately be shot down by the public, meaning that any candidate who proposed them wouldn’t have much luck.
That’s somewhat depressing, but a sign of the world we live in today. I’d argue that a big part of the problem is that nearly all of the proposals involve what appears to be short-term pain for long-term benefit — and we live in such a short-term focused society. But as someone who tends to think that we really need much more understanding of economics and its impact among the general populace, this kind of thing only confirms how weak our economics education is today.
Comments on “The Public Apparently Isn't Interested In Sound Economics”
Point 4: A "consumption" tax isn't practical.
Everything would get an exception, and how to collect it all?
But on the surface, all are appealing.
That’s why putting STEEPLY in front of “progressive income tax ” is the only practical way. Income tax started out as only on the top 1%, and we need to return to that. — For every reader here, it’d still be zero.
Some might be surprised that I’d go for zero corporate tax too, but while that’s tied in with proper industrial policy it’s workable so long as The Rich are taxed ruthlessly to prevent corporations from being merely “privatized” re-distribution schemes.
Re: Point 4: A "consumption" tax isn't practical.
I have a better idea, an idiot comment tax. They’ll make a fortune just from your comments alone!
Re: Point 4: A "consumption" tax isn't practical.
Personally, I think we should go with a flat tax. No deductions. No loopholes. That way everyone gets to be equally miserable come April 15th.
More importantly, everyone has an equal stake in how their taxes should be spent. Currently, people who pay zero in taxes number enough to outvote the top 25% of earners. That’s a whole lot of incentive to vote for a handout party and no immediate consequences whatsoever.
I know rich people are the last minority it’s still socially acceptable to hate but I can’t bring myself to jump on that discrimination bandwagon.
Re: Re: Point 4: A "consumption" tax isn't practical.
A flat income tax is a good start, however that would only begin to solve the problems. In addition (or in place of) income tax you also need a VAT Tax on everything you buy except food and prescription medicines.
A ‘consumption’ tax solves several problems, such as those who work on a cash basis, you know the drug dealers, call girls, tax dodgers… all end up paying into the system.
A ‘Luxury tax’ for those with excessive tastes, like million dollar mansions…
Everyone should contribute to the family budget in some way, and everyone should contribute to the national budget as well.
Just my two cents worth.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
> Everyone should contribute to the family budget in some way, and everyone should contribute to the national budget as well.
But taxes do not contribute to the national budget; they exist as a way of creating value for the currency in use by creating a final sink for the money to disappear into. Monetarily sovreign governments never need to tax OR borrow to spend, they can always trivially credit the accounts that they purchase goods from.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
Everyone should contribute to the family budget in some way, and everyone should contribute to the national budget as well.
True
The concept of the state budget being somehow analogous to a family budget is the biggest lie of the present age.
People should remember that one man’s deficit is another man’s surplus. If you want to be in surplus, personally, then someone else somewhere has to be in defeicit – the most convenient “person” to be in deficit is the state – because the state does not die.
Remember that the total amount of money ion the world is exactly zero.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
I think you mis-understood the point I was trying to make.
Everyone needs to contribute so they have a stake in the game. If you don’t have a stake in the game then there is little incentive for you to act responsibly. Like a family where the child has 0 responsibility, but reaps all the benefits from those who cook, clean, make money…
The problem now is that nearly 50% pay no federal taxes, so they have exactly 0 incentive to do anything other than vote for whomever is waving the most money in their face.
To put it another way we are playing poker, you have to bet using REAL money. I on the other hand get to bet using monopoly money. Who do you think is going to play like they have something to lose? The worst I can do is break even, while you on the other hand stand to lose all the money on the table. I would expect you might be a little upset if we started playing poker and I walked away with $10,000 of your real, hard earned money, when all I put up was monopoly money.
Everyone has to have a stake in the game, therefore everyone needs to pay taxes. You can’t tax one class and not the other. Unless of course you want to take the vote away from those who do not contribute.
Back to the family analogy, much like the baby that simply eats, poops, and cries. The parents may choose to take care of the baby, but the baby doesn’t get to choose what it wants (unless the parent agrees with the choice). I don’t think that is the principal that the US is based on.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
“The problem now is that nearly 50% pay no federal taxes, so they have exactly 0 incentive to do anything other than vote for whomever is waving the most money in their face.”
Yes, let’s just ignore the excise tax, the gas tax, the food tax, the payroll tax, the social security tax, the state and federal withholdings that come out of every paycheck.
Let’s just ignore that.
Stop listening to Fox News and get some real information.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
I understand everyone pays some taxes, I was referring to the INCOME TAX. I know it was only implied and not expressly stated for the comprehensively impaired, I apologize. Oh, and just so you know, there is no tax on FOOD (unless it is prepared), at least not at the Federal level (to the individual).
I don’t listen to / watch Fox News.
Do you have any idea how many people actually get more back than they pay in over the year? Yeah so what when you pay in 10% and get back 150% of what you paid in in April That is NOT PAYING TAXES. I know people that pay in $1,200 a year and get back $3,500 or more. I know, because I do their taxes. That isn’t ‘paying taxes’.
Why don’t you try reading, and understanding an entire thread before you start spouting off. Or even better yet, try being a tax preparer for a few years, then come back and tell me all about it. There are FAR too many loopholes, and many people do end up at a net 0 or better when paying federal taxes.
I have the real information, I do it every year.
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
so what when you pay in 10% and get back 150% of what you paid in in April That is NOT PAYING TAXES.
You are only counting what people get back in money terms – state services also give back in other ways. Every rich man gets back an enormous amount from the state justice system that prevents the poor from lynching him and taking all his possessions.
(btw the distinction that you will probably make between federal and state spending is a false one)
Re: Re: Re:6 Point 4: A "consumption" tax isn't practical.
I am counting what is paid in money terms.
However, EVERYONE reaps benefits of State Services in one way or another. That said, I tend to agree that the rich tend to get back far more than they pay in.
there is a distinction between state and federal spending, however, it is clouded because of all the money the feds ‘return’ to the states.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
Everyone needs to contribute so they have a stake in the game.
Everyone also needs to be dependent on the state services in order to have a stake in the game. If your only stake is what you pay in to the system then of course you will simply try to drive that down to zero regardless of the consequences for everyone else. It is the mirror image of what you are complaining about.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
I don’t disagree with that, though it depends on how you define “State Services”. If you are referring to roads and such, I agree, and everyone is ‘dependent’.
However, I would say that “the state” offers far too many “services” that it really should not offer. It is the “Give a man a fish” / “Teach a man to fish” thing. (No I am not a particularly religious person).
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
However, I would say that “the state” offers far too many “services” that it really should not offer. It is the “Give a man a fish” / “Teach a man to fish” thing.
Well I would rather characterise it as the “threat you hope you don’t have to execute” dilemma.
The problem is that if you remove the safety net as an “incentive” then you have the people that fall to their deaths on your conscience – particularly when you discover that there were good reasons why at least some of them couldn’t avoid falling.
I have come to the view that it is better simply to put up with the (poor) “freeloaders”. Frankly it costs more effort and cash to do something about it that just to let them be.
They are not the reason the economy is in a mess. That is the result of not paying attention to the balance of trade.
The jobs that could turn them into productive members of society simply don’t exist in the west anymore -they are in China.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
VAT is a great idea but there should be no exceptions. You can have a VAT rebate on income tax forms for low-income households. But the minute you introduce exceptions, special interest groups will lobby hard to include their own exceptions. So you go from a one-page VAT tax code to a thousand plus page VAT tax code.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
I 100% agree! Only I would probably not allow a VAT Rebate. I would start the flat tax at or just above the poverty line, no exceptions there either. I wouldn’t have tax forms to file. When you make more than say 30K/year you start paying 5 (0r?)% taxes. No forms to file, no place to game the system.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
The only thing I wonder is would a consumption tax (why is that any different than sales tax?) discourage spending? Because that’s the exact opposite of what you want, especially in a recession or slow growth period.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
I don’t’ think it would really. It becomes just a part of the price, and if you drastically lower or eliminate the income tax people have more money to spend anyway.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
I don’t’ think it would really. It becomes just a part of the price,
Right, and if prices go up, spending goes down, assuming non-zero elasticity.
and if you drastically lower or eliminate the income tax people have more money to spend anyway.
True. I think what it comes down to is that any taxation will reduce the amount of money people have (ignoring the salutary effect of attendant government services or bonuses) and thus the amount they spend. However, if you want to have a government, it has to get money from somewhere, so we should pick the least damaging source. Consumption tax with reasonable exemptions sounds pretty good to me.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
The big problem with luxury taxes is that they tend to end up as either taxes for ordinary household items because of bracket creep, or code for “foreign-made item tax”.
Re: Re: Point 4: A "consumption" tax isn't practical.
A flat income tax is a good start, however that would only begin to solve the problems. In addition (or in place of) income tax you also need a VAT Tax on everything you buy except food and prescription medicines.
A ‘consumption’ tax solves several problems, such as those who work on a cash basis, you know the drug dealers, call girls, tax dodgers… all end up paying into the system.
A ‘Luxury tax’ for those with excessive tastes, like million dollar mansions…
Everyone should contribute to the family budget in some way, and everyone should contribute to the national budget as well.
Just my two cents worth.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
ANY sort of sales tax becomes a Regressive tax which is a Terrible idea that rapidly leads to poverty And reduces the number of transactions taking place, slowing the economy down over all.
higher income taxes look scary due to being in one lump sum, but cause far less problems.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
Would you mind citing some sources on that? Because at least six very well known and respected economists tend to disagree with you.
A sales tax solves many problems. It makes certain that everyone who spends pays. It makes certain that those who make more, are taxed more (why because they buy more). It makes certain that even money made from illegal activities such as dealing drugs, or being a call girl is taxed when it is spent.
Income taxes do nothing but promote class warfare and give incentives to game the system, as has been done for at least the last 50 years or so here in the US.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
Do you honestly think that people who don’t pay income tax have no “stake in the game”?
Honestly?
You think that a family of 5 who makes 50 K or less a year has no stake in the game compared to the family of 5 who makes 400 K a year?
To me, if you want to keep using “game” here… I’ll use another game…
To me, it seems like you’re saying that only the New York Yankees, Boston Red Sox and a few other teams should even play baseball and the rest that don’t get to the playoffs should just stay home.
You keep bringing up how tiered income tax brackets just promote class warfare, well, lemme tell ya something…
There’s been class warfare going on for a VERY long time now. WAY before this country was even formed.
There’s the nobles and kings and then there’s the Serfs.
And it goes back even further.
But THAT is what a lot of the rich people want to get back to. And THAT is what WILL happen so long as people keep thinking in terms of “skin in the game vs no skin in the game”.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
If you had actually READ what I have said, you would know that I don’t “keep bringing up how tiered income tax brackets just promote class warfare,…” I said there should be a flat income tax, a consumption tax, and a luxury tax.
That sounds pretty much like a tiered system to me. Those that have more will always pay more, and those that live extravagantly pay extra for that too. But EVERYONE has to pay something, no free rides. That is what I said.
So stop trying to twist what I said, into what you think I said. Stop trying to paint me in to whatever enemy you want to fight with today, because you are to lazy or illiterate to understand what was said, or the context it was said in.
Try Comprehension 101. You may have taken it, but I think you failed.
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
You know WHY I haven’t brought up those other points?
Maybe you should take Comprehension 101, because, it seems to me that you failed it.
Big time.
I didn’t bring up those other points because I AGREED with them.
I disagree on the flat tax though, that’s what I was commenting on.
Why should I comment on things I agree with? It’s easier to point out the stuff I disagree with.
Re: Re: Re:6 Point 4: A "consumption" tax isn't practical.
Why? Because you made a false statement of my position! That is why.
I have no problem with my comprehension skills at all. You are the one who mis-characterized what I had stated, by cherry picking and taking things out of the context with which the statements were made. i.e a “Comprehension problem”.
Re: Re: Re:2 sales taxes purely regressive?
Does that still hold in the medium and long term if you tax outbound overseas money transfers equally to purchases of the same amount? Ultimately, there is no point in saving money except to spend it later, so if Steve Job’s accumulated wealth will get spent by his heirs, or saved and spent by their heirs: after all, Scrooge McDuck isn’t a real person.
Also, if you tax spending money abroad, you create a subtle form of protectionism.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
A flat income tax is a good start,
My favourite form of flat tax is the one where the richest person pays 100% – up to the point where someone else is equally rich – then the two of them pay 100% – up to the point where a third person is equal and so on until the need for taxation is exhausted – probably not what you had in mind but….
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
If it is a flat tax, then everyone would pay 100%, regardless of wealth. Which means everyone cares what that tax rate is and everyone has an incentive to keep the rate low.
A flat tax, with no exemptions, means that the tax rate matters to everyone. If I pay no federal tax it is very easy for me to vote to raise your taxes, and of course make certain that I still pay little or no tax.
Notice that a flat tax is only a start, it is not the answer. It provides balance, so that in times where consumer spending is low there is still income.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
My flat is not the same as your flat.
My flat is aimed at real fairness. Your flat is aimed at creating more unfairness under a false flag.
The day the rich voluntarily stop using the power that comes with wealth to grind down the rest of the population under their heels is the day that your proposals would begin to have some modicum of fairness about them.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
First of all, not all rich people use “the power that comes with wealth to grind down the rest of the population under their heels” I know and actually work for some very generous, though rather wealthy individuals. So please don’t paint all the rich with the same brush. That is no more fair than painting all the poor with the same brush.
Second, a Flat Tax applies to everyone equally, how can it be flat if that is not the case? Your redistribution of wealth would not solve anything.
Take a look at the people who win millions in a lottery for instance. Many of them make poor choices and in a matter of years are financially burdened again.
You could take all the money in the world and give everyone an equal share, it wouldn’t stay that way for long. Some would put that money to work and make a new fortune, others would fritter it away and end up broke. Now what do you do? Re-distribute the wealth again?
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
First of all, not all rich people use “the power that comes with wealth to grind down the rest of the population under their heels” I know and actually work for some very generous, though rather wealthy individuals.
That may be – but only a few of them behaving badly is enough to cause serious problems for the rest of us.
Second, a Flat Tax applies to everyone equally, how can it be flat if that is not the case? Your redistribution of wealth would not solve anything.
Your flat is not flat either – the word is misapplied.
You could take all the money in the world and give everyone an equal share, it wouldn’t stay that way for long. Some would put that money to work and make a new fortune, others would fritter it away and end up broke. Now what do you do? Re-distribute the wealth again?
In a word – yes – it is called a jubilee and has an ancient and honourable history.
Re: Re: Point 4: A "consumption" tax isn't practical.
question is, for the flat tax, how is it fair?
If everyone pays 25% of their earnings, you’re hurting people who make 20 K or less a year (poverty), a family of 5 that makes 50 K or less a year (borderline poverty for that size), compared to someone who makes 80 K a year.
I’m not sure about the consumption tax, though, as Ron Paul points out, it wouldn’t matter if you did that so long as the government is as large as it is.
I support more of a “earned money” tax if we have to keep Income Tax. Instead of Capital Gains and Income tax, change it all to “Earned Money” tax. Those who, like Mitt Romney for example, make millions would have to pay the top 35% instead of the 14% that he paid in taxes. (Seriously, he’d have to pay over 7.4 million in taxes in 2010, but he only paid 3 million in taxes.)
I don’t hate the rich for being rich. That’s where we all want to be, after all.
No, what I hate is how they’re out of touch with reality and can do whatever the hell they want simply because “screw the rules, I have money”.
After all, if you want to look at fictional rich boys…
No one hates Batman or Iron Man, both of whom are extremely wealthy, not only because they’re heroes who do good work, but because they’re good people when not being heroes.
Or how about Scrooge? At the end of the story, he didn’t give away all his money, he just started acting more human.
The rich can be rich, they just need to get a taste of reality and humility.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
The rich can be rich, they just need to get a taste of reality and humility.
Actually there is another argument for not having people who are much wealthier than avarage. It is well illustrated by current events on the island of Sark
Money is also power – and it can be used to trample on the lives of ordinary people. When two men can be wealthy enough to own 1/4 of the land on an island then the islanders are basically at their mercy. You cannot rely on all wealthy people behaving like Batman or the reformed Scrooge – it is much safer simply not to have them.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
You know, that’s not a bad idea.
After all, money is the root of all evil.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
LOVE OF money is the root of all evil. How can you screw that up?
Money is a tool. It was created so you don’t need to know how many bushels of wheat equal a chicken. How can money be evil? That is ridiculous.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
Actually, it’s “pursuit of money”, not “love of money”. Though they often go hand in hand.
How is money evil?
By itself, it’s not.
But too much of a thing can become bad.
Too much bad can become evil.
Too much money can become evil because you realize that money is power and power corrupts.
Thus, money is evil.
It’s simplified, but yeah.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
In the modern world with Ayn Rand being held up by the religious social conservative types, the “LOVE OF” part can be safely taken for granted. No one has to explicitly state it.
People are far too fixated on sex and have forgotten about envy.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
It is ‘fair’ because it means everyone has to play by the same rules. No exemptions, no exceptions, no loop holes.
The problem starts when you have the loop holes and some asshat who makes 3M a year end up paying 8% while I end up paying 25%+ even though I make less than a 6 figure income.
As I have stated in other replies, if you say those making under 20K don’t have to pay taxes, they then have no stake in the game.
If you set the tax rate higher for large earners and then give the loopholes or exemptions then there is little point in setting the higher rate, they will all use the exemptions and loopholes.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
“As I have stated in other replies, if you say those making under 20K don’t have to pay taxes, they then have no stake in the game.”
That’s a BS argument when it comes to taxes.
No stake in the game?
Oh, I’m sorry that people who work 2 jobs just to be able to afford a place to live, gas in their car, food for their families and clothes on their back doesn’t have stake in the game.
BTW, I currently make less than 20 K a year, I work 2 jobs and I don’t have enough at the end of the month to deal with any extra expenses. I got repairs to my car I’d like to make, oh wait, those would cost thousands of dollars. I’ve got a bad ringing in my ears that I should take care of, but I can’t afford to go to the doctor and get it checked out. Most of the time when I’m sick, I have to tough it out instead of getting medicine because I can’t afford to see the doctor and get the medicine unless it’s really bad. Hell, in the past, it was my boss at work that made me go to the doctor and get checked out.
Most of the time when I go to the doctor, I’m bleeding (needed stitches, needed x-rays) or worse.
So, don’t you DARE say “no stake in the game”. People who make less than 20 K a year are damn lucky to be alive at times.
a flat tax is NOT a fair tax. It’s harsher on those who make less. 25% for someone who makes 20 K a year, hmm, that’s… 5000 dollars. Ouch. That’s a LOT for someone who’s living in poverty. Compare 25% for someone who makes 3M a year… 75 K, that’s a lot of money, but, they still have over 2 million to keep to themselves, so, comparatively, it’s not as much. It’s all relative.
I DO, however, agree that many loopholes should be removed so that the asshat who makes 3M a year would pay up to 35% a year in taxes.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
well said !!!! and very very true..
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
I don’t think you are getting the point. I actually have great respect for the working poor, as well as those who are un-employed due to the state of the economy. I have been there, more than once.
I am very well aware that some people have to work multiple jobs to make ends meet (and some still come up short). I was in that very boat for MANY years. I paid my own way through school, while working full time. I worked 3 jobs and more than 90 hours a week for more than 15 years to dig myself out of that hole. After more than 30 years in the workforce I now only work 1 job for 55+ hours a week and far less than 100K/year, and run my own business for another 20 or so hours a week.
Here is some of the reasoning behind what I have said.
A flat tax should apply to everyone for things like Social Security, Medicare, Medicaid… That should be a low amount probably like 3-5% (no I haven’t run the numbers). This is to help cover the things that you will be using later in life, when you start collecting SS, Medicare…
There should be a consumption tax on everything but food and prescription medicine. That way those who have little disposable income pay a lower tax rate. Those that buy TVs, new cars, homes… pay more in taxes. This pretty much levels the field as it were. This will cover any shortage in the ‘entitlements’ as well as most discretionary spending.
Finally, for the obscenely rich there should be “Luxury Taxes” If you want to drive a $250K care or live in a $1M mansion you should pay extra. If you get a golden parachute, we will lighten that burden for you.
If you vote and you pay nothing into the system there is no reason for you to be concerned with the debt the country is running up, and there is every reason for you to vote for the person who says you should get a little extra! If you don’t pay taxes you don’t care that we are 16 trillion in debt. (Frankly many who do pay taxes don’t care either). That is what I mean when I say no skin in the game.
In a separate reply I used gambling as an example. If you and I sit down to play poker and you are playing with real money and I am playing with monopoly money, I have nothing to lose. You on the other hand have everything on the table at risk. Who is going to take the game more seriously? You who could lose real money, or me who can lose nothing, but could win big?
So yes, I think there should be a flat tax, and no that is not the only tax, there should be both VAT (Value Added Tax) [Consumption Tax], and there should be an ‘excessive income’ tax and yes those that make more pay more. There should be no loopholes, no get out of jail free card… but EVERYONE who makes money should pay taxes.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
If you don’t pay taxes you don’t care that we are 16 trillion in debt.
How are paying taxes and caring about the national debt related? I don’t get it.
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
Well since a rather large portion of taxes paid goto paying the national debt, it seems they must be related.
Going back to a family unit. A 16 year old knows it wants a car to drive. It will gladly take one if it is given to them, but unless that 16 year old at least helps to pay for the car, insurance, fuel, maintenance… the 16 year old will have no appreciation for what it actually costs to own and drive a car. They will drive the car without regard to the associated costs. (This is not universally true of course, I refused to accept a car at 16, instead buying my own jeep. That however, is not the normal course for these things.)
Same is true with taxes. If I don’t have to pay taxes then I don’t care about the debt, it isn’t my problem. Also if I am not at least helping to pay the bill, I will gladly take what some one offers me, because it won’t cost me anything. (This is not true of course, as the national debt hurts everyone in the long run, but it is the perception.)
If you offered to buy me a Maserati, free and clear, you will buy the fuel, pay the insurance and maintenance… [My Uncle will pay for it] I might say I’ll take two thank you.
On the other hand if you offered me the Maserati, but told me there would be monthly payments, insurance, maintenance… I might say, hmmm, do I really need/want it, can I really afford it… No thanks, I am quite happy with my 3/4 ton truck.
That is why I think it is important to make certain everyone pays, and there are no loopholes. It is human nature to want things, and without the balance of what will it cost me, I want it all.
Re: Re: Re:6 Point 4: A "consumption" tax isn't practical.
Same is true with taxes. If I don’t have to pay taxes then I don’t care about the debt, it isn’t my problem.
You’re asserting that there is a strong correlation between paying some income tax (only income tax? or any federal tax?) and caring about the deficit. That doesn’t seem like a self-evident proposition to me, car analogy or no.
Re: Re: Re:7 Point 4: A "consumption" tax isn't practical.
I don’t know that it is a strong correlation, but it is certainly there.
Again, I think that falls back to human nature really. Is it worth the bee sting to get the honey. Maybe it is too far removed for most people , like buying the honey at the store, instead of getting it from the hive.
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
I’d just like to point out that the wealthy do not spend all their money, unlike most of the working poor and middle class. Consumption taxes do not level the field. Flat taxes mean the wealthy will whine about the tax rate, while those who cannot be paid reasonably for their labors (one of the roots of the problem, here) have to skip on things like eating.
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
In order to become ‘wealthy’ you sort of have to not spend all your income, or at least invest it.
However, are you trying to tell me that someone that makes $500K a year doesn’t spend more than someone who makes $75K a year? Really???
So everyone drives a 10 year old vehicle that cost less than 15k new, just like me then right?
No one has a flat screen tv larger than my 30″ one either. Right?
Everyone lives in a $70K home, right?
So yeah, consumption taxes do level the playing field. I don’t know any ‘rich’ people that don’t put their money to work and keep it tucked away in a mattress. They buy real property (oops consumption tax); use more energy, to heat their pools (more consumption tax); buy stocks (another place for a consumption tax); buy expensive toys to show off (still more taxes)… Need I go on really?
Actually, MANY if not most of the nations wealthy would be considered cash poor (as a ratio of assets to spendable income). Typically a short term problem for them. They do INVEST their money, in real estate, paintings, and a host of other things. All of which they would pay a consumption tax on.
Maybe it is time to re-evaluate what the middle class spends their money on. If they spend more on a monthly smart phone plan or Cable TV than they do on the electricity for their home, that might be a problem. (and for the record I am probably one of those, because I am certainly not rich.)
Re: Re: Re:5 Point 4: A "consumption" tax isn't practical.
Consumption taxes do not level the field. Flat taxes mean the wealthy will whine about the tax rate, while those who cannot be paid reasonably for their labors (one of the roots of the problem, here) have to skip on things like eating.
Are you intentionally addressing the separate proposals of flat tax and consumption tax, or accidentally conflating the two?
Re: Re: Re:4 Point 4: A "consumption" tax isn't practical.
> A flat tax should apply to everyone for things like Social Security, Medicare, Medicaid…
You sound exactly like someone that says “but I have a black friend”.
You clearly have never been there and haven’t ever bothered to educate yourself either.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
Compare 25% for someone who makes 3M a year… 75 K, that’s a lot of money, but, they still have over 2 million to keep to themselves, so, comparatively, it’s not as much.
That would be $750,000. I agree with your point though. It’s hard to even get by with $20,000 a year, so taking away even a small percentage hurts. While if you can’t afford $750,000 in taxes on $3M income, well you’re just an idiot who has no idea how to manage money, and I have little sympathy.
Re: Re: Point 4: A "consumption" tax isn't practical.
The problem with flat taxes and consumption tax is their effectual regressiveness. An unit of money becomes less and less useful the more you have it. If you are barely scraping by on a couple of hundred dollars a month, 10% extra off your income might mean starvation, on the other hand if you make hundreds of thousands, the same 10%, while much larger in absolute terms will at most mean that you’re buying that speedboat you always wanted a month later.
Have some sense of perspective, the value of a unit of money to an individual decays exponentially with the amount of money the person has, thus saying that flat tax is fair is completely asinine because it assumes a constant relationship between the amount of money at hand and its usefullness to the individual.
Re: Re: Re: Point 4: A "consumption" tax isn't practical.
The problem with flat taxes and consumption tax is their effectual regressiveness.
That’s why consumption tax plans exempt things like food and medicine. Zero tax on those, and a flat tax on all other spending (or perhaps an additional luxury tax on some high price goods). But a flat income tax, yeah that is just regressive taxation.
Re: Re: Re:2 Point 4: A "consumption" tax isn't practical.
Similarly, most flat tax plans either:
A. Exempt the first X dollars of earned income. Say the first 30 – 50K
or
B. Exempt all income if the total is less than X (Say 30-50K)
At least that is what I have seen.
I have never seen a VAT (consumption) tax that was to be levied on food or medicine.
Almost every reasonable tax plan I have seen exempts the lowest wage earners, and essentials from the taxes.
Re: Re: Re:3 Point 4: A "consumption" tax isn't practical.
Similarly, most flat tax plans either:
A. Exempt the first X dollars of earned income. Say the first 30 – 50K
or
B. Exempt all income if the total is less than X (Say 30-50K)
I could live with those. The only question is, would it end up being a thousand pages to define what is “income” in a way that makes it hard to dodge taxes? It seems like a consumption tax would be much simpler. But maybe that would have a thousand pages describing what’s exempted, I don’t know.
Re: Re: Point 4: A "consumption" tax isn't practical.
A flat tax rate is unfair on the lowest earners. Imagine how someone on min wage would feel paying the same percentage of their income as someone earning 7 figures. Then there is the fact that someone on min wage CANNOT AFFORD TO PAY THAT SORT OF TAX.
And don’t give me that bollocks about how people should just look for a better job because there will NEVER be enough ‘better’ jobs for everyone. Like it or not, a tiered system based on income is the only way to allow low earners to live their lives in some measure of comfort.
Re: Point 4: A "consumption" tax isn't practical.
You already collect it all… it’s called sales tax. Every business has implemented methods of collecting it, with the exception of a couple of states.
Read about the Fair Tax proposal for more information on how a consumption tax could (a) be implemented, and (b) be fair to all income levels.
However your point about exceptions is an excellent one.
Markets are efficient if and only if P = NP
?Markets are efficient if and only if P = NP?
by Philip Maymin (NYU-Polytechnic Institute)
May 2010
I think your average citizen doesn’t trust the plans economists come up with because economists are frequently wrong about the predictions their models come up with. The Economist had an article explaining why this happens: http://www.economist.com/node/14031376
Economists at the 2011 World Economic Forum in Davos also discussed why economists are so bad at predicting the effects of whatever policies are in effect, as reported by the BBC: http://www.bbc.co.uk/news/business-12294332
Paul Krugman also had quite a lengthy op-ed in the NY Times a few years back on why economists so drastically failed to predict the 2008 economic crash: http://www.bbc.co.uk/news/business-12294332
When economic theory fails to predict a crisis as large as the 2008 depression and, in some cases, seems to be at fault for setting up the conditions to allow it to happen, it is understandable that the average citizen would be skeptical of such drastic ideas which economists promise will help us.
Re: Re:
That third article doesn’t appear to have anything to do with Paul Krugman…
Re: Re:
Sorry, that last link by Paul Krugman should be http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?pagewanted=all&_r=0
Re: Re:
Pretty sad that economists failed to predict the 2008 crash when both Ron Paul and Byron Dorgan did years before it happened. Ron Paul in 2002 and Byron Dorgan in 1999.
Note that Ron Paul is a Republican from Texas and Byron Dorgan was a Democrat from North Dakota. He was also one of 9 Senators who voted against the repeal of Glass-Steagle.
Re: Re: Re:
No, not all economists, heterodox economists like Steve Keen noticed the bubble and coming financial collapse years before it happened. It’s only the ideologically blinded neoclassical economists that utterly failed to see the train coming, mostly because their utterly useless models don’t take such minor things like reality into account.
Re: Re: Re: Re:
“mostly because their utterly useless models don’t take such minor things like reality into account.”
Curse that reality! It’s always screwing up people’s fantasies.
Re: Re:
I think your average citizen doesn’t trust the plans economists come up with because economists are frequently wrong about the predictions their models come up with. The Economist had an article explaining why this happens: http://www.economist.com/node/14031376
I think there are two separate issues here. Economics is never going to be good at *predicting* the real world, since you can’t account for all the different variables.
However, that’s entirely different from recognizing what kinds of policies make more sense in terms of economic growth.
Most economists don’t actually do things like “predicting recessions.” The problem is that people seem to think they do.
Re: Re: Re:
But I would consider these policy recommendations “predictions”. If an economist makes a suggestion that “eliminating the corporate income tax” would lead to a more fair economy and that it would better drive economic growth, that’s a prediction.
Re: Common sense and wishful thinking.
You also have economists that come up with ideas that are pure fiction with nothing behind them that then get used as building blocks of some political party’s platform.
The dogma about “job creators” and taxation is a good case in point here. Much is taken on pure assumption without anything as much as any real mathematical model. It’s all wishful thinking with as much detail as what you had on the original cocktail napkin.
The 2008 recession was a simple bubble. Anyone with a little skepticism realized it was coming sooner or later. You really didn’t have to be an economists.
Academics have a tendency to ignore the practical and basic ideas like “if it’s too good to be true then it probably is”.
Maybe once the baby boomers die out, along with their antiquated ideas, we’ll get more progressive voters and politicians who actually know what they’re doing?
HA! Sometimes I’m surprised by how naieve I can be! Politicians don’t change!
…but voters do.
Re: Re:
Wrong. People never change. Period.
Re: Re: Re:
ehhh sort of.
the basic nature of large groups of people remains the same, yes.
however, individual persons can change quite drastically if given motivation to, and the culture of an institution, on any scale, changes how these two factors translate into actual behaviour.
Re: Re: Re:
Episocial norms change at a rate of continental drift, barring some kind of “disaster”, which ranges from “Civil War” to “9/11” to “Credit Crunch”.
Bringing this garbage up again...on Election Eve no less.
Here we go with this crap on this blog again. Now, according to our genius blogger, if you don’t want massive tax cuts for the rich and tax hikes for the poor and middle class (what’s left of them), and aren’t completely on board with the religion of Economics, then you’re merely stupid and uneducated.
All of these proposals boil down to replacing all other taxes with consumption taxes. Rich people pay a small percent of their income on consumption (and will, of course, offshore any consumption that they don’t want taxed), so will pay a very small amount of tax overall…of course, the whole idea of this scheme. The middle class and the poor pay a much higher percent of their incomes on consumption, because they have a smaller income to begin with…their taxes will go through the roof, once again, as designed.
And just how will progressive consumption taxes be enforced, as suggested? Rich people have to carry around a card every time they go to the doctor or the gas station, so that they’ll be charged an extra tax? Good luck with that.
Maybe these focus group participants live in the real world, and pretty much know what’s going to happen if these “glorious” proposals are put into effect. It’s not about thinking in a nuanced way, it’s about thinking in a strategic way, Mr. Masnick…understanding how people will react to changes in “the rules”.
Obviously, with the small number of comments, no one’s reading this. And if this blog posts this claptrap again, I’m not coming back.
Re: Bringing this garbage up again...on Election Eve no less.
I’m a frequent Techdirt reader who generally agrees with Mike and I also agree with tax brackets. The more you make the more you should pay in taxes and you should pay a higher tax rate. In fact, economic theory is exactly why I believe this. The very justification for this is economic theory and the principles underlying property rights, something known as the backward bending labor supply curve.
If you read what Thomas Jefferson said, he says that, in nature, everything belongs to everyone equally. Property rights are merely an artificial tool to allocate resources in the public interest. So how should resources be allocated? Well, according to ones contribution back to society would make sense, right? and that’s the justification behind tax brackets, to prevent rich people from owning a lot of property without contributing back.
Re: Bringing this garbage up again...on Election Eve no less.
see ya
Re: Bringing this garbage up again...on Election Eve no less.
All of these proposals boil down to replacing all other taxes with consumption taxes. Rich people pay a small percent of their income on consumption (and will, of course, offshore any consumption that they don’t want taxed), so will pay a very small amount of tax overall…of course, the whole idea of this scheme. The middle class and the poor pay a much higher percent of their incomes on consumption, because they have a smaller income to begin with…their taxes will go through the roof, once again, as designed.
And just how will progressive consumption taxes be enforced, as suggested? Rich people have to carry around a card every time they go to the doctor or the gas station, so that they’ll be charged an extra tax? Good luck with that.
So you admit that you don’t bother to understand the details of the proposals being discussed, but instead prefer to jump to erroneous conclusions and write them off… and I’m the problem?
Wow.
Re: Bringing this garbage up again...on Election Eve no less.
Did you even read the whole article? “People made broad, sweeping generalizations based on the short one-sentence versions, without understanding the details or the nuances.” That is exactly what you did there.
And if this blog posts this claptrap again, I’m not coming back.
If your plan is to spout vitriol without bothering to understand what you’re even commenting on, you won’t be missed.
My biggest complaint about your post . . .
. . . is that you used “focus group” as a verb. But such mis-uses of the English language do really annoy me, though, so don’t think you’re getting off TOO easily.
Yes, I think it’s true that most of us are too focused on the short-term to provide much opportunity for the success of any plan with a real chance of solving long-term issues. And I do agree that this seems to be independent of political ideology. Everybody feels like they’ve bitten the bullet enough, and it’s someone else’s turn to bear the cost for a while.
On the one hand, I’d love to see ANY viable candidate actually say outright that things are going to suck for a while for everybody, but they’ll then start getting better after X years. As much as I disagree with President Obama on many issues, I think he did make a brief (and weak) stab at an approach like this during the campaign for his first term. He didn’t stick with it long, though, and has never really returned to it. Anybody who tried it for real would go down in flames, I think, unless he (or she) had some sort of superpowers.
HM
Re: My biggest complaint about your post . . .
I’m sorry you object. I’m glad you came right out and didnt dance around the issue. It is important to cover these kinds of mistakes. Unfortunately, I bear some bad news. It is perfectly legal to verb a noun. In fact, I will present some examples from your own text:
You think it’s true? Everybody feels somehow? You’d love to see? He didn’t stick?
Re: Re: My biggest complaint about your post . . .
Also inappropriate capitalization:
……”off TOO easily.”
Re: Re: My biggest complaint about your post . . .
heh. even ‘to verb a noun’ is a case of verbing a noun, in this case, the word ‘verb’ is a noun assigned to … verbs… (i’m going to stop there before this becomes recursive or something…)
Re: Re: My biggest complaint about your post . . .
Between what is perfectly legal, and what is in good taste, there is sometimes an impassable distance.
Re: Re: My biggest complaint about your post . . .
You think it’s true? Everybody feels somehow? You’d love to see? He didn’t stick?
Uh… “think”, “feel”, “love”, “see” and “stick” are all verbs. “Focus group” and “verb”, on the other hand, are not.
Re: My biggest complaint about your post . . .
I’m not going to complain about using focus groups as a verb. That’s just how English change and grows. I’m thinking about Shakespeare who broke just about any grammar rule that you can imagine and invented a few dozen words along the way, too.
On the topic I’m inclined to believe that the system of government in a country determines whether or not “short term pain for long term gain” will work or not.
In the early 90’s the Jean Chretien majority faced down Canada’s horrid debt by cutting services, transferring responsibility for others to the provinces and jacking up taxes. Keep in mind that Canada is a parliamentary democracy where the governing party needs only to maintain the confidence of the House of Commons and steer clear of violating the Constitution. They were challenged and lost a couple of cases dealing with the division of powers between the Feds and the provinces.
By the time an election came around the debt was going down rapidly, taxes were slowly being reduced, business was doing much h better and we were doing very, very well thank you. Chretien’s Liberals stayed in power till they got decimated in 2009 by the Conservatives.
As the Tories settled in they repeated the formula and we escaped by far the worst effects of the bank caused recession/depression that followed the banking crash. Our taxes are going down again, our trade is going guns and, as a country, we’re confident and looking at a prosperous future.
Oh, and we never deregulated the banks.
In Chretien’s time the formula was controversial but it worked. With Harper now, we accept that the formula works even if we grumble about the short term pain part.
Both leaders have maintained the confidence of the House in both majority and minority situations while we’ve done this.
And both have campaigned on it and won.
It leads me to the conclusion that the differing systems have as much, or more, to do with our divergent economic situations at the moment as much as anything else.
That, and a Tim Horton’s at every second section in Canada.
Re: Re: My biggest complaint about your post . . .
He never did so without a very good reason.
Re: My biggest complaint about your post . . .
I’m not going to complain about using focus groups as a verb. That’s just how English change and grows. I’m thinking about Shakespeare who broke just about any grammar rule that you can imagine and invented a few dozen words along the way, too.
On the topic I’m inclined to believe that the system of government in a country determines whether or not “short term pain for long term gain” will work or not.
In the early 90’s the Jean Chretien majority faced down Canada’s horrid debt by cutting services, transferring responsibility for others to the provinces and jacking up taxes. Keep in mind that Canada is a parliamentary democracy where the governing party needs only to maintain the confidence of the House of Commons and steer clear of violating the Constitution. They were challenged and lost a couple of cases dealing with the division of powers between the Feds and the provinces.
By the time an election came around the debt was going down rapidly, taxes were slowly being reduced, business was doing much h better and we were doing very, very well thank you. Chretien’s Liberals stayed in power till they got decimated in 2009 by the Conservatives.
As the Tories settled in they repeated the formula and we escaped by far the worst effects of the bank caused recession/depression that followed the banking crash. Our taxes are going down again, our trade is going guns and, as a country, we’re confident and looking at a prosperous future.
Oh, and we never deregulated the banks.
In Chretien’s time the formula was controversial but it worked. With Harper now, we accept that the formula works even if we grumble about the short term pain part.
Both leaders have maintained the confidence of the House in both majority and minority situations while we’ve done this.
And both have campaigned on it and won.
It leads me to the conclusion that the differing systems have as much, or more, to do with our divergent economic situations at the moment as much as anything else.
That, and a Tim Horton’s at every second section in Canada.
Re: My biggest complaint about your post . . .
My biggest complaint is the assertion that a focus group “proved” something.
they don’t care because those ideas don’t have the words terrorists, bullying, abortion, suicide, children, or cyber-whatever in it.
Welcome to the Twitterverse. #publicimplosion
Flat tax is dumb
Never ever use a flat tax.
You have to set it so low that you will have lost your tax base (say 10%) or provide far more services then you do right now.
If you set it at 10%, then you will starve the government and require a bunch of other taxes who that will for the most part hit low wage workers first and hardest.
If you set it high (like 30% or 40%) you have to have the govt provide far more services to the population then they already do. Americans (read republicans) will then get mad at the situation and demand we cut programs (Free healthcare for all? NEVER!). On the bright side you will have money for those programs but on the down side our political willpower is run by a vocal minority called the Tea Party who get mad that we provide any services that they don’t use at all.
The reason you will need to give more services is the vary fact that you took 40% of there money, and they need to see a return on that (like healthcare, safety nets, reasonable education).
If you want to keep things the way they are, then tax brackets are a perfect solution, And going after total money earned including investment income is a really good start. This lets you ensure that low earners can end up getting money from the system and high earners and investors give back to the system that allowed them to earn that money in the first place. You are deluding yourself if you think that high earners and investment income did not in part come from the infrastructure and business legal systems and consumer protections we enjoy today.
Re: Flat tax is dumb
> then you will starve the government
There. You’ve hit it. Governments are the problem, not the solution. Think about the areas you pay too much for things. Then look at the list of areas that are “government regulated”.
Re: Re: Flat tax is dumb
“There. You’ve hit it. Governments are the problem, not the solution. Think about the areas you pay too much for things. Then look at the list of areas that are “government regulated”.”
*looks at the State Bank of North Dakota and the State Grain Elevator of North Dakota, both of which are government owned, regulated and controlled.*
They look okay to me.
Maybe if all banks were controlled and regulated by the government, we wouldn’t have had the big collapse back in 2008.
Given the consensus the impossibility of these possibilities, one would think they could agree on improved public education.
Re: Re:
Ugh that was an ugly way to write that. Hopefully you get the point. My poor sentence structure apparently makes my own point 🙂
The Upside
The public isn’t interested in economics… yet.
People aren’t interested in something until they can see a tangible use in their lives, which is why things like Schoolhouse Rock work so well by mixing abstract idea and history into musical memes.
So, while it’s unfortunate there isn’t more interest in economics, I can’t help but get excited?this is a huge opportunity to educate the public.
For example, make a series of entertaining (read: viral) short videos explaining the nuances of economic theory. With the right person at the helm, a well-crafted video could make a significant impact over the long-term. I mean, who doesn’t remember Schoolhouse Rock? Why not do something similar, a more adult version (meaning, without the music), but for economics?
(I’d help crowdfund that.)
it’s good to see, that most if not all, normal intelligent people shoot these moronic idea’s down and refuse to listen to these idiots who seem to understand economics about as well as Masnick does.
these are the exact same genius economists who did not see the American caused/led World Financial crisis !!!
no wonder as soon as they open their mouths with yet “another” great idea, people are rightly going to call ‘BULLSHIT’ on them.
Do a bit of research find out how many millions or billions of dollars Harvard lost due to the financial crisis that they did not see coming !!!
there is a reason why these ‘economists’ dont work in the real world !! that is they are not that good at what they do!.
the good ones do it, the shit ones teach it, and the really bad ones write about it.
http://www.harvard.edu/president/letter-from-president-faust-about-global-economic-crisis
what taxes are you talking about ??
federal, state, local, municipal, what state, they are all different the states are also independent, so how is the president going to make states or municipalies comply ?
who is going to pay for the things you refuse to go without ?
a tax on carbon, is the only one that should be considered, it is no different than paying your local council to employ garbage collectors, to keep you environment clean, it’s has nothing to do with the level of consumption of your car, it has to do with manufacturing and agriculture, it would take everything you buy cost in carbon, your happy to pay to not pollute your local environment, with sewage systems, water treatment, garbage and street cleaning, parks, reserves are all paid for by taxes.. carbon tax is no different.
in the long term it is going to be far less costly to reduce carbon emmissions than it is to clean up the damage said carbon causes the environment, think Sandy every 2 or 3 years !!
think 1000 year storm events every 20 years, who do you think pays for the damage ?? YOU WITH TAXES !!!!
your country is not taxing enough to pay the bills as it is, they have to continuously borrow huge sums of money from china.
your not going to fix your economy by screwing around with reducing taxes, INCREASE taxes to the middle and upper wealthy, fooling with the taxes of the maga rich has very little actual (real) effect on your overall economy, but it play an important political role (you lose / gain votes)..
stop borrowing, stop borrowing !!!! FFS
start manufacturing, and making things people are willing to pay money for, and not so many things you drop on peoples head that go bang.
if the money spend over the last 15 years on military was directed to medical, or alternate energy, or even big science fusion energy, you would be in a far better place than you are now.
your not going to get out of your problems by ‘paying’ less money, in taxes or more in sales tax for your ‘over’ spending habbits, you need to buy American, and develop and export markets, trade your way out, if you want some cash MAKE SOMETHING AND SELL IT !!!! dont just ring china and ask for a few hundred million on tick.
do you honestly believe that legalising pot is going to have any great impact ?? do you think the US is being restricted by the hugs sums catching Otto ??
respected economists ?? really,, !!!!!!
your country is not taxing enough to pay the bills as it is, they have to continuously borrow huge sums of money from china.
your not going to fix your economy by screwing around with reducing taxes, INCREASE taxes to the middle and upper wealthy, fooling with the taxes of the maga rich has very little actual (real) effect on your overall economy, but it play an important political role (you lose / gain votes)..
stop borrowing, stop borrowing !!!! FFS
start manufacturing, and making things people are willing to pay money for, and not so many things you drop on peoples head that go bang.
if the money spend over the last 15 years on military was directed to medical, or alternate energy, or even big science fusion energy, you would be in a far better place than you are now.
your not going to get out of your problems by ‘paying’ less money, in taxes or more in sales tax for your ‘over’ spending habbits, you need to buy American, and develop and export markets, trade your way out, if you want some cash MAKE SOMETHING AND SELL IT !!!! dont just ring china and ask for a few hundred million on tick.
do you honestly believe that legalising pot is going to have any great impact ?? do you think the US is being restricted by the hugs sums catching Otto ??
respected economists ?? really,, !!!!!!
Re: Re:
Actually, if we’re going to talk about our debt, let’s be fair and honest: most of the money we borrow, we borrow from ourselves.
I'm not so sure it's a matter of "uninterested"
I think it has more to do with “not trusting”.
So many of those economic solutions require being able to trust that they are implemented correctly. History teaches us many things, one of which is that the odds of that happening are very low.
So these proposals come with a perceived risk that they will turn out to be yet another way for the wealthy and powerful to screw over the rest of us.
Also, some of them involve non-economic considerations. The purpose of the progressive tax, for example, is to retard the accumulation of great wealth. This is desirable because in our society, wealth is power and the accumulation of great power in a few hands is toxic to society and government.
As if this ever happens to a significant extent.
Re: Re:
What’s hilarious about that proposal is that encouraging reinvestment into the business is the big win of a high corporate (or personal, if we’re talking marginal tax rates) income tax rate. Business expenses are deductible. If a corporation makes a megaton of money and they are facing a huge tax bill for it, they’ll reinvest in themselves as a tax dodge. If they don’t face a huge tax bill, they’ll just sit on the money to the benefit of nobody.
Re: Re: Basic Corporate Taxes
Yes. It never ceases to amaze me how many people fall for the idea that if you reduce taxes on “job creators” that they will take that money and use it for the public good. If business is doing well, they will re-invest what they have. They don’t need the government to encourage them to create jobs.
Motivated self interest already does that.
More employees means more labor they can buy low and sell high and more widgets they can sell.
Point 4: A "consumption" tax isn't practical.
Actually, I have been there, done that, thank you very much.
Clearly, you don’t have a clue what you are talking about!
I think perhaps you mis-interpreted my meaning. I mean the flat tax is there to help cover the eventual use, by you, of those services (Mush like the current SS taxes), not that income from those sources should be taxed.
Point 4: A "consumption" tax isn't practical.
I like the idea of equal handouts to all, and flat taxes personally.
No arguing about deductions etc., simply everyone gets $X every month (no matter what they’re income), and everybody pays X% on everything (ideally consumption, as it helps with trade imbalance and saving rate which are both very bad in the US).
The tax would work out greatly negative for the poorest, somewhere approaching neutral at some level, and approaching the actual percentage as one got wealthier.
Additionally, it would cheat and tax accrued generational wealth that is currently tax free, which is of course why we will never go to a consumption tax.
Re: Point 4: A "consumption" tax isn't practical.
Another variation is to set the minimum wage at the cost of living for the desired number of children, then charge income tax at a flat rate above that with no deductions. To offset the increased costs off employment, cut the payroll tax (and other flat corporate taxes) until the amount not raised is equal to the amount saved on income support: that means that employers which pay fair wages are no longer subsidising those who are not. This, of course, means that low-value work like clueing and burger flipping is more expensive, but that high-value work (i.e. the work we actually want to encourage) is cheaper.
It would also be necessary to require employers to provide all necessary equipment and other employment-related items, since that is far too easy to abuse as a tax loophole.
Additionally, if the cost of living (and thus the minimum wage) were calculated locally, it would create incentives for business to move to impoverished areas, which would make them less impoverished and would thus help to even out wealth across the country.
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