WSJ article

[gwynedd1]

Re: WSJ article

I could not even get past this:

"did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none."

When the richest person pours their beer out in the pub the beer runs back into their barrels. Its where nearly all the money is in a flowing stream and its merely a game as to whom they allow to drink. .

They "lend money" to the government that builds a bridge that raises their property values which they can borrow against etc. etc. The money they loan flows back to them. The money the government spends flows back to them. The big money is all "capital" gains taxes which is not only 15%, but much of that is disguised and/or deferred. How can anyone just compare the top marginal rate with capital gains taxes? Its a tax differed 15%. The mega rich can have a huge capital gain , borrow money on the equity and not pay a single tax. And don't forget that loan is tax deductible as expenses or on their mansions. Its a riotous joke of such magnitude as to make the WSJ a competitor with Marvel and DC comics. May I tax defer may wages and borrow against it please...like forever? May I borrow it from my own bank too? May I create a foundation and use its assets as my personal items tax free please? I want to be able to use stuff that isn't "mine".

[shiny!]

Re: WSJ article

Why do think only 20% reached the people who needed it?

I was merely repeating the conclusion of the report I read.

While certainly there is waste - waste comes in many forms. Waste can arise from corruption or incompetence, but it can also arise from too much 'waste avoidance'.

It also comes from too many Chiefs and not enough Indians. Too many politicians and bureaucrats attempting to justify their pay by creating endless mandates and paperwork for people downstream.

Forcing ever more stringent checking to ensure no 'welfare queens' is an excellent example. Creating ever more complicated eligibility, disbursement, and usage rules for welfare can be another example of 'waste'. For that matter, paying to reach those eligible for welfare - is this waste as well?

Seems we're in agreement here. As another example, 80% of the documentation paperwork required of teachers and school administrators is for the US Dept of Education, which only provides about 10% of school funding. I would like to remove this very large level of bureaucracy and put schools back under state and local control.

Why do you think the state governments are necessarily less vulnerable to the same problems?

They aren't. But they aren't as far removed from citizen oversight. City governments are even closer to taxpayer scrutiny, and therefor must be more responsive to the voters. Two hundred angry citizens storming a City Hall meeting has much more power to change local government policy than two million votors petitioning Washington, begging them to listen to us and do our bidding. The power of angry citizens to make local government do an immediate 180-degree turnaround at a City Hall meeting is something I've personally been involved in.

In contrast, how responsive was Washington to the massive outcry of an overwhelming majority of US citizens who opposed TARP?

Using welfare as an example: from Washington it's cookie-cutter one-size-fits-all, and a tremendous amount of money is wasted in administration. In contrast, we know our neighbors. We know who's in trouble and what they need. A job? Short-term money for an emergency? Help with childcare? Grocery money or help with the electric bill? If we had the money we would help them.

Keeping more money at the local level (and in our own pockets) to help our neighbors in the most appropriate, most efficient ways makes more sense than sending it to Washington, hoping they send enough back to meet our local needs. I sit on a citizens' housing and human services advisory board for my city. I see the need, see how little comes from Washington to address that need, and how the strings attached to that pittance often keeps us from doing the most effective things to help those who need help. It's equal parts infuriating and heartbreaking.

[c1ue]

Re: WSJ article

It also comes from too many Chiefs and not enough Indians. Too many politicians and bureaucrats attempting to justify their pay by creating endless mandates and paperwork for people downstream.

Some of it is from too many chiefs, but as I noted previously, a lot of it comes from 'avoiding waste' to start with. Not enough chiefs means inadequate supervision of the indians. No small part of this administrative 'waste' is also due to things like environmental assessments, compliance with existing laws, and so forth.

Seems we're in agreement here. As another example, 80% of the documentation paperwork required of teachers and school administrators is for the US Dept of Education, which only provides about 10% of school funding. I would like to remove this very large level of bureaucracy and put schools back under state and local control.

I'd say that if it was that easy, then why aren't more school districts doing so? More importantly, how much is the administrative burden of that 10% costing the school district? Because of it is less than 10% of the overall budget, that right there is why things aren't going to change.

They aren't. But they aren't as far removed from citizen oversight. City governments are even closer to taxpayer scrutiny, and therefor must be more responsive to the voters.

Really? My impression is that the worst cases of abuse are almost always local. More responsive to voters is a double edged sword.

[doom&gloom]

Change corporate taxes

Take them to ZERO. That's correct, ZERO. Increase income taxes by several levels in the tax code to make up the difference and more. Why would we do that?

1) To level the playing field in the business world. Small biz would be able to compete with large biz who have built in tax deductions in the tax code.
2) To incent the GE's and Apples and Googles of the world to repatriate capital and reinvest it here
3) To grab the taxes at the individual level from the rent seekers who live here since we know the ivory tower will grab more money when they show more profits at home
4) To eliminate the 15% tax rate that hedgies pay themselves and take them into the normal tax system
5) to increase taxes paid to SocSec & Medicare
6) To make the US a magnet for foreign capital investment
7) To eliminate much of what Citizenes United did, which was build PACS for political corporate influence.
8) to take a LOT of the money out of politics, since there would be no need to lobby for special favors on the part of corporations

[Ghent12]

Re: WSJ article

That's true, but we are certainly not going in that direction.

That's the money point right there.

[c1ue]

Re: WSJ article

Take them to ZERO. That's correct, ZERO. Increase income taxes by several levels in the tax code to make up the difference and more. Why would we do that?

1) To level the playing field in the business world. Small biz would be able to compete with large biz who have built in tax deductions in the tax code.
2) To incent the GE's and Apples and Googles of the world to repatriate capital and reinvest it here
3) To grab the taxes at the individual level from the rent seekers who live here since we know the ivory tower will grab more money when they show more profits at home
4) To eliminate the 15% tax rate that hedgies pay themselves and take them into the normal tax system
5) to increase taxes paid to SocSec & Medicare
6) To make the US a magnet for foreign capital investment
7) To eliminate much of what Citizenes United did, which was build PACS for political corporate influence.
8) to take a LOT of the money out of politics, since there would be no need to lobby for special favors on the part of corporations

I can't say that your proposal makes any sense to me whatsoever.

You're saying now that corporations - which enjoy all manner of privileges not available to people - should gain the additional privilege of not paying any taxes whatsoever.

And somehow that a corporation which doesn't have to pay taxes - won't spend money lobbying?

Why exactly would a corporation not want to lobby - even if it didn't have to pay any corporate tax? Corporate lobbying isn't just about corporate taxes - they lobby over all sorts of things including trade barriers, subsidies, patents/monopolies, etc etc.

I also don't see how having a zero corporate tax rate makes any difference whatsoever in the long term with regards to investment. Delaware has extremely low corporate tax rates, and in fact they are zero for corporations headquartered there but not actually doing business there - yet Delaware is hardly a prime example of a highly developed state.

[flintlock]

Re: Change corporate taxes

People have wildly varying ideas of what they call rich. First and foremost in these discussions, that needs to be defined. Some dump warren buffet in with the guy who sells his business one year for a windfall, but only made $75k most years. Cost of living in some areas is also misunderstood. But mostly, how income is earned and taxed matters.

The problems in the USA will not be solved by higher or lower taxes. Nor by austerity alone. Nor simply smaller govt. The problems are multi-faceted, complex, and the root lies in the core of the various systems the US is trying to work within. Trying to compete on a Global scale with an unlevel playing field. Trying to grow it's way out of problems. The US is like anyone deep in debt. They tend to make bad long term decisions based on the desire to avoid short term problems. The population grows while the economy does not. Good paying jobs are replaced by low wage ones. "Cheap" labor is not so cheap when you pay it all back in govt benefits. Well its cheap for the businesses who pawn off the true costs on the taxpayer. But TANSTAAFL still applies here. The owners of the companies should pay some of these costs, not simply the general taxpayers. Tax capital gains as ordinary income, passing costs along to stockholders, and eliminate special distinctions between Americans and how they pay taxes. Higher rates wont work as long as income can be sheltered and gamed by armies of accountants. But I am not in the "rich dont pay their share" camp. Most do. But even taxing those who do not will not reign in deficits growing at a trillion a year.

I am of the belief nothing of consequence will change and things will get drastically worse before this is all over. So I plan accordingly. A Dramatic change in the way we do things would need to occur and that is simply not possible with the current system. We are all too invested in our little boxes to think outside of them I'm afraid.