Uber-Wealthy billionaire says the rich are not job creators... Gets censored by TED.

[V Chip]

Originally Posted by BHM

If you and your bride are hard up for money, the first thing you have to do is cut out all but the necessary spending. THEN you go asking friends and family for help.

But all the situations where people try and compare the US government to the average household always start out the same "if your family gets in trouble, here is what they should do" without ever looking at what caused the trouble. A more realistic approach is:

"If you and your bride are doing pretty well and then both decide to cut back your hours by 15-25%, and then decide to lease two expensive cars (ongoing expenses per year with no capital), and then a couple years later things start getting tough because your jobs both cut your pay rate by a considerable sum, now what would be the first thing to do?"

Yes, make cuts where you can in spending, but maybe you should also decide to reverse your earlier decision to cut back your hours and start working full time again or even get a second job, or stop leasing the expensive cars. It's not always "lets send the kids to school in ratty clothes, or feed them substandard but cheaper meals, or give up health insurance and hope nothing bad happens to us."

[BHM]

Originally Posted by V Chip

But all the situations where people try and compare the US government to the average household always start out the same "if your family gets in trouble, here is what they should do" without ever looking at what caused the trouble. A more realistic approach is:

"If you and your bride are doing pretty well and then both decide to cut back your hours by 15-25%, and then decide to lease two expensive cars (ongoing expenses per year with no capital), and then a couple years later things start getting tough because your jobs both cut your pay rate by a considerable sum, now what would be the first thing to do?"

Yes, make cuts where you can in spending, but maybe you should also decide to reverse your earlier decision to cut back your hours and start working full time again or even get a second job, or stop leasing the expensive cars. It's not always "lets send the kids to school in ratty clothes, or feed them substandard but cheaper meals, or give up health insurance and hope nothing bad happens to us."

Fine, raise taxes but it has to be done at the same time as serious cuts and frugal spending. You can not keep your same lifestyle but go work an extra 15 hours. That is what our government is doing. They spend foolishly and when cash gets short, they want 15 more hours.

Problem is those 15 more hours come in the form of more taxes on somebody. We get stuck on the fact that we had cut the taxes on the rich so the only plausible solution is to once again increase those taxes.

[sbadeaux]

Originally Posted by Devildog

LIES!!!! The Reagan administration said differently! I'm just biding my time for the trickle down economics to get to me.

No wonder you aren't doing as well as you would like. Your waiting for something to happen instead of making it happen.

The conversation is not about billionaires. The job creators are people who own small companies. These people usually make six figures and have net worths of just over a million dollars. According to Obama he wants a tax increase on any income over 200,000 per year. This would hit most of the people who own small companies. When you are in doubt about your taxes personal or companies, you don't make capital expenditures, this includes hiring. Not to mention the cost of the new health care law, which has added about $400 dollars per year to the cost of insurance per employee. I know the average employee has no understanding of what a company pays to employ them. Take the average of $50,000 per year. It actually cost my company $67,000 out of pocket to employ that person. We have to pay the payroll taxes, social security match, 90% Of health care cost, workers comp insurance.

To give you an idea of how screwed up the government is, we have a new mandated environmental program being introduced this year. It will cost $8,000 dollars per store location to implement. The year before we had to introduce a new training program for diversity. That cost with seminars over $500 dollars per employee. This is just a few examples of why wages have not kept up with the economy. As costs from over net mandates increase companies cover these costs by not hiring or not giving the raises they would have. The only other choice wold be to raise prices and not be competitive. Again I'm not talking about fortune 500 companies, these companies don't employ but a few percent of the workforce. Now on top of all that they want the owner to pay more taxes. Guess who ain't hiring......

[BHM]

Originally Posted by sbadeaux

No wonder you aren't doing as well as you would like. Your waiting for something to happen instead of making it happen.

The conversation is not about billionaires. The job creators are people who own small companies. These people usually make six figures and have net worths of just over a million dollars. According to Obama he wants a tax increase on any income over 200,000 per year. This would hit most of the people who own small companies. When you are in doubt about your taxes personal or companies, you don't make capital expenditures, this includes hiring. Not to mention the cost of the new health care law, which has added about $400 dollars per year to the cost of insurance per employee. I know the average employee has no understanding of what a company pays to employ them. Take the average of $50,000 per year. It actually cost my company $67,000 out of pocket to employ that person. We have to pay the payroll taxes, social security match, 90% Of health care cost, workers comp insurance.

To give you an idea of how screwed up the government is, we have a new mandated environmental program being introduced this year. It will cost $8,000 dollars per store location to implement. The year before we had to introduce a new training program for diversity. That cost with seminars over $500 dollars per employee. This is just a few examples of why wages have not kept up with the economy. As costs from over net mandates increase companies cover these costs by not hiring or not giving the raises they would have. The only other choice wold be to raise prices and not be competitive. Again I'm not talking about fortune 500 companies, these companies don't employ but a few percent of the workforce. Now on top of all that they want the owner to pay more taxes. Guess who ain't hiring......

Outstanding.

[Brown]

Originally Posted by V Chip

But all the situations where people try and compare the US government to the average household always start out the same "if your family gets in trouble, here is what they should do" without ever looking at what caused the trouble. A more realistic approach is:

"If you and your bride are doing pretty well and then both decide to cut back your hours by 15-25%, and then decide to lease two expensive cars (ongoing expenses per year with no capital), and then a couple years later things start getting tough because your jobs both cut your pay rate by a considerable sum, now what would be the first thing to do?"

Yes, make cuts where you can in spending, but maybe you should also decide to reverse your earlier decision to cut back your hours and start working full time again or even get a second job, or stop leasing the expensive cars. It's not always "lets send the kids to school in ratty clothes, or feed them substandard but cheaper meals, or give up health insurance and hope nothing bad happens to us."

Cut back hours? What kind of job are you describing? You make it sound like there is this endless well from which these two can draw.

Lets assume your bizarre acenario for arguments sake though.... What if the hours are all used up but there is no way to get an increase in the hourly rate, and they are in debt beyond their total gross worth and they have kids out the wazoo that demand to go to expensive an inefficient schools plus the family down the street hates you because you have a lot of bling and they're developing a nuclear bomb in their garage to blow your house up...

What then?

Just ask the boss to increase the hourly rate?

[the-commish]

Originally Posted by BHM

Fine, raise taxes but it has to be done at the same time as serious cuts and frugal spending. You can not keep your same lifestyle but go work an extra 15 hours. That is what our government is doing. They spend foolishly and when cash gets short, they want 15 more hours.

Problem is those 15 more hours come in the form of more taxes on somebody. We get stuck on the fact that we had cut the taxes on the rich so the only plausible solution is to once again increase those taxes.

You are correct to this extent: lowering the national debt MUST be a dual track approach. Cut out NON-ESSENTIAL services, and cut waste on ESSENTIAL services (that includes military and defense, and wasteful spending on "people programs.") But it must also include enchanced revenues. This is where the Grover Norquists of the world miss the boat. Enhanced revenues can not be gotten from the middle class, which is already squeezed against the wall. Besides, as I have pointed out before, it's the middle class that provides most of the revenues for the Walmarts, the GMs, the Sears, etc. So, killing the middle class financially also Kills the wealthy. The wealthy have to pay more, but by itself this is not going to solve the problem because it won't raise enough revenue. The Bush tax cuts, first enacted in 2001, and re-upped several times since, has taken $2.8 trillion out of the treasury in those 10-11 years they have been in effect. And they have not led to job expansion as promised (the expended employment base has been in Asia, thus doing the U.S. job market no good).

Here is something else; U.S. corporate tax rates are some of the highest in the industrialized world. But, the taxes that corporations ACTUALLY PAY bear no resemblence to the actual tax rates (because of all the loopholes). It would make sense to lower corporate tax rates, and close the loopholes at the same time. If done correctly, this could be revenue neutral, and in no way hurt business expansion. Any time you have General Electric posting a net profit of $15 billion, and paying ZERO corporate taxes, there is something wrong with the system.

[BHM]

Originally Posted by Brown

Cut back hours? What kind of job are you describing? You make it sound like there is this endless well from which these two can draw.

Lets assume your bizarre acenario for arguments sake though.... What if the hours are all used up but there is no way to get an increase in the hourly rate, and they are in debt beyond their total gross worth and they have kids out the wazoo that demand to go to expensive an inefficient schools plus the family down the street hates you because you have a lot of bling and they're developing a nuclear bomb in their garage to blow your house up...

What then?

Just ask the boss to increase the hourly rate?

I think you are misunderstanding his 15 to 20 hours. I believe he was comparing the cutting back of the hours to the cutting back if tax revenue from the rich.

[El Caliente]

Does anyone else have a major issue with a flat tax?

[drob8785]

Originally Posted by El Caliente

Does anyone else have a major issue with a flat tax?

I do.

In a world with little to no poverty, relative socio-economic equality and very limited government expenditures, a flat tax could work. Even then it might not be the ideal structure, but it could work.

Finding the best tax structure isn't as simple as finding the "fairest."

Fairness is a subjective adjective. Subjectivity tends to make bad policy.

The ideal tax structure maximizes government revenue while both minimizing and spreading the burden across the entire tax base.

Because the US still has significant poverty, growing socio-economic disparity, and a government that spends far more than it takes in, it is important that we maximize government revenue.

I think everyone would agree that the current system we have right now is unsustainable. A flat tax isn't the answer.

[Cosmic201]

Originally Posted by El Caliente

Does anyone else have a major issue with a flat tax?

I would support a flat tax only if there was a restriction where the first $30,000 or so isn't taxed at all.

[dtc]

Originally Posted by El Caliente

Does anyone else have a major issue with a flat tax?

Philosophically I love it, but pragmatically, it's untenable.

Tell me you would like to see those making $50k per year go from paying zero to 10k per year in income taxes so that those making $1mil could go from $300k down to $200k.

I think what we have now is just about right except for all the confusion of the tax code. Tax all income the same at every level and everyone pays the same flat rate per given level of income.

[the-commish]

Originally Posted by Cosmic201

I would support a flat tax only if there was a restriction where the first $30,000 or so isn't taxed at all.

First $30,000 of income excluded from taxation? For a family of 4? A family of 8? 10? You see what I am getting at? Number of "exemptions" are vitally important.

How about our housing industry? It's in bad shape now, but it might be DOA if not for deduction for mortgage interest.

How about charitable contributions deductions? Goodwill Industries, Salvation Army, various churches, might go out of business, and the people they help would be SOL.

You can begin to see why a flat tax just ain't going to work, despite at first appearance being a viable concept.

[V Chip]

Originally Posted by El Caliente

Does anyone else have a major issue with a flat tax?

Yes. I don't think everyone paying the same percentage of salary is a "fair" way to distribute the cost of our government.

[whodat??]

Flat Tax Fiasco

Flat Tax Fiasco

The simplistic "flat tax" idea is once again a topic of hot conversation in political and economic circles. While this interest is largely fueled by a spate of proposals calling themselves a "flat tax" it is important to consider the idea of the flat tax itself apart from the specific proposals, especially since NONE of the "flat tax" proposals currently being considered actually addresses the true theoretical concept of a real flat tax. The proposals are primarily offered as either recommendations for tax simplification (which is an important issue but entirely unrelated to the issue of tax rate structure, as noted later in this commentary) or are not actually flat, as also noted below.

In addition to discussing the problems with the theoretical model of a true flat tax, this commentary will also briefly discuss why current proposals are not real flat tax systems at all and also discuss the important issue of tax simplification and reform.

[BHM]

Originally Posted by Cosmic201

I would support a flat tax only if there was a restriction where the first $30,000 or so isn't taxed at all.

I do not see this as being fair either. They still get to vote. Guess who they will vote for? Any politician promising more government programs. Everybody gotta have a dog in the hunt. No tax on food, clothing, utilities and housing might be an acceptable solution

.

Originally Posted by dtc

Philosophically I love it, but pragmatically, it's untenable.

Tell me you would like to see those making $50k per year go from paying zero to 10k per year in income taxes so that those making $1mil could go from $300k down to $200k.

I think what we have now is just about right except for all the confusion of the tax code. Tax all income the same at every level and everyone pays the same flat rate per given level of income.

Again, goes back to having a dog in the hunt. With little tax burden, there is little to make you pay attention to want your leaders are spending on. A flat tax with a few levels would be fine but nobody should be completely exempt.

Originally Posted by the-commish

First $30,000 of income excluded from taxation? For a family of 4? A family of 8? 10? You see what I am getting at? Number of "exemptions" are vitally important.

How about our housing industry? It's in bad shape now, but it might be DOA if not for deduction for mortgage interest.

How about charitable contributions deductions? Goodwill Industries, Salvation Army, various churches, might go out of business, and the people they help would be SOL.

You can begin to see why a flat tax just ain't going to work, despite at first appearance being a viable concept.

These exemptions is what has us in this mess now. Once you start allowing one exemption, then everybody wants an exemption for something. How many kids you have is your decision and can be controlled by you. Why should a person earning 30k that decided to have 5 kids be treated any differently or get special treatment?

Interest rates or so low right now that a tax deduction is not a big consideration when buying a home. Plus you have to file long form and most lower middle class families do not have enough exemptions to do that. Name me one person that went and purchased a home just because there was a small tax deduction.


Charities might be affected. But again, unless you are filing long form, these deductions do nothing for you. I would also question how many people donate mainly because of a tax deduction? When give a ton of clothes to Goodwill and never claim a tax write off. .f you are giving to your church only for the write off, you need to re-evaluate why you are going to church.

Originally Posted by V Chip

Yes. I don't think everyone paying the same percentage of salary is a "fair" way to distribute the cost of our government.

Why not? Are you going to go with the "rich people benefit more from government than poor people" route?