Congratulations to all Americans!

[splitimageview]

The tax you pay today does not cover your spending...

True, but this is the funny thing about taxes:

When tax rates are lowered, revenues go UP; i.e, the government collects more money. See previous chart.

The bad news: one could confiscate every penny of income of people that make $75,000 a year or more, and it would barely match the budget for 2010. ($4 trillion.) In other words, a tax rate of 100% for people that make $75k and up.

Yes, we are spending too much.

 

[Leigh Youdale]

It's all a bit sad really. As a nation the USA is in deep doo-doo. The rich get richer, the poor get poorer. The rich insist it's their own fault and they should be punished.
Might is right.
Personal freedom means I'm free to do as I like and I'm so free to rip you off if I can or even shoot you if that's what it takes.
Politicians of all persuasions swim with the rich because they have power and money that helps get them re-elected. Compulsory voting, as practiced in Australia might change that but it's not in the interests of the rich or the politicians so it won't get up.
A significant proportion of Americans are poorly educated, not travelled, uninterested in the outside world - don't even know or care how it affects them.
Because of their inward-looking world view many believe unquestioningly what their political and religious figures tell them - "don't confuse me with the facts, I've made up my mind".
Now locked into two unwinnable wars that are draining the economy and killing their young men, only just now waking up to the fact that continued support for Israel is deeply affecting US influence. Also causing ongoing destabilisation of the Middle East and fostering terrorism which is largely anti US, anti West and anti Christian because all those elements roll together in the experience of the marginalised people of that region.

This doesn't apply to all, but to too many, and it undoubtedly affects how the rest of the world sees the US. It's not always pretty. Fortunately in these forums we also see the moderates, the thinkers and those willing to listen. Only a few who fit the other description.

 

[splitimageview]

If you've paid attention you'd know I can't without abandoning my son. For money, I imagine you'd do that in a heartbeat. I will not. I am driven and have worked harder than you can imagine. I started out in the streets and now have a modest home and I and my son eat every day. I'm not arrogant enough to think like the conservatives insist, that anyone earns anything purely on their own.

Well, I'm a living breathing example of just that. I started with nothing. Yes, NOTHING. OK, well I had enough money ($15) to place an ad in the university newspaper, I got a client the first day, and I took his money and opened a business bank account.

And in a few years, I built two businesses with 35+ employees and revenues of $15M.

It *can* and *does* happen. And yes, it helps to have family, rich uncles, friends. In my case, I didn't, although I admit approaching my uncle. 🙂 He turned me down.

Nearly every success story has someone to assist, or at least a mentor. Michael Dell built a huge corporation, starting out of his dorm room at the University of Texas. Yes, he had help from his doctor father, but how many people can take a few grand and turn it into billions?

On the other hand I have friends who started businesses with $250k of capital and they ran out of money within a couple of years.

But that's the great thing about America. One can always try again. Most successful people were not instant successes. Most of them failed, some many times. Failure is a good thing! It's instructive...I know I learn far more from failure than I do success...

As far as abandoning my daughter, please don't go there. I'm a single father too.

There are lots of places with more opportunity. Take your son with you.

 

[Chriscrawfordphoto]

There are lots of places with more opportunity. Take your son with you.

Wish I could. Indiana law forbids custodial parents from leaving the state with the child without the other parent's permission, which my son's mother will give over her dead body. When he's 18, he and I are free to go where we want. He will graduate from high school a few months after his 18th birthday, so we'll stay till he has his diploma, then we're outta here. We already have it planned out, though I've not decided exactly where we'll go. Will decide when we get closer to the time, since my decision will be based on where my son wants to go to college and where there is economic opportunity. One thing for sure, it is NOT going to be anywhere in the midwest.

 

[splitimageview]

I applaud you for putting your son first and making sacrifices.

 

[DNG]

@Digitalintrique and Chris
Glad you found center ground 🙂

 

[splitimageview]

I only wish the best for Chris, and everyone. 🙂

I disagree with his statements about racism, and classes of conservatives, and black conservatives, but will not engage. That's his anecdotal view.

There is room for everyone at the conservative table. We just aren't going to have the government foot the bill; each person has to pay his/her own way. 😉

 

[Olsen]

True, but this is the funny thing about taxes:

When tax rates are lowered, revenues go UP; i.e, the government collects more money. See previous chart.

The bad news: one could confiscate every penny of income of people that make $75,000 a year or more, and it would barely match the budget for 2010. ($4 trillion.) In other words, a tax rate of 100% for people that make $75k and up.

Yes, we are spending too much.

No, no,no, no!

It is not - not true that tax revenue goes up if taxes are lowered!

That is (part of) this Laffer crap that have brought you were you are at! The next politician that suggests 'lower' taxes': Have him shot! (You shoot so many people, both here and there that a politician to and fro means nothing...) Lure him to drive along this Grassy Knoll in Dallas. That worked fine last time, nobody found out.

In Norway, - we have also poor people, everybody earning more than '1G' - today defined as 74.000 NOK (12,333,33 $) have to pay taxes. What I have noticed is that Obama has increased the base of people that have to pay to finance this new heath care bill. That is fine, but it will be tough for those earning little. Never mind the rich, they are fine.

In Greece, I have just learned, people earning less than 24,000 $ do not pay taxes. No wonder the country is bankrupt.

 

[splitimageview]

Lower tax rates encourage economic activity and grow revenues.

In 2003 the capital gains tax rate was reduced from 20/10% to 15/5%.

Revenues were $50B before, and $103 billion after (2006.)

The reason? It encourages investment, and increases funding for ideas and projects that improve the productivity of the economy.

If you look at Greece, in terms of who doesn't pay taxes, then you should be EXTREMELY concerned about the US, where the lowest 60% of tax payers pay only 5.3% of the tax.

 

[40oz]

That's because the rich pay most of the tax.

The top 50% of wage earners pay 96% of income taxes.

The top 5% pay over 50% of all income taxes.

The top 1% pay more than ten times the tax than the bottom half do.

True, but this is the funny thing about taxes:

When tax rates are lowered, revenues go UP; i.e, the government collects more money. See previous chart.

The rich make most of the money, why shouldn't they pay most of the tax?

And you don't seriously buy that old line about "lower taxes and revenues will increase," do you? Because in order for you to fall for that line you have to forget basic economic concepts like supply and demand, or even how to count.

Do you believe that a business can drop their prices year after year and somehow make more money each year, no matter how many times their prices drop and no matter the cost of providing the product?

How long would a business be able to keep the doors open if they decided the solution to decreasing revenues was to stop charging their biggest customers entirely?

A truck driver probably owes a bit of their income to pay for the roads which make that income possible. But the person who makes a profit keeping 15 truck drivers running owes 15 times what any individual driver owes, using that logic. And if that person uses contracts to buy and sell the goods that are hauled, they owe an additional amount for the body of contract law that makes enforceable contracts possible. And if banks are used to streamline the money-handling process, there's another thing owed, for the body of banking law that makes it possible. And lest we forget, if the person with the 15 drivers has an education paid at least in part by student loans, and/or attended a state school, they're on the hook for yet another benefit of society they benefitted from.

It's pretty easy to see why the person with the highest paycheck might owe a larger percentage to society than the lowest paid worker. Well, pretty easy for someone who can acknowledge how lucky they have been and how much they've been given that shouldn't be taken for granted.

And your cute quote from Sen. Byrd to Sen. Bilbo was from a letter Byrd wrote in 1944. You didn't know that detail, did you? Did you know Byrd was elected by the people of West Virginia in 1959? Or that Byrd later said, in 2005, “I know now I was wrong. Intolerance had no place in America. I apologized a thousand times... and I don't mind apologizing over and over again. I can't erase what happened.” He was also a member of his local KKK for a short time. It certainly was an attractive group to a young white man trying to get ahead in a world he saw as run by rich white men. But I'm sure if you had been raised by West Virginia coal miners and wanted a better life, you'd have formed an equality commision or something noble. That's what makes you better than Senator Byrd, right? Because you've certainly given 50 years of your life serving the people of your own state, am I right?

You might try weaning yourself off Fox News and conservative talk shows. Anyone who can think for themselves doesn't need a voice telling them what to think.

 

[radi(c)al_cam]

You might try weaning yourself off Fox News and conservative talk shows. Anyone who can think for themselves doesn't need a voice telling them what to think.

YES!

Dear Anti-Socialist friends in troubled waters:

Call me a conceited wealthy guy with progressive idées fixes, if you want, but IMHO,

Fox News etc., that is exactly what Orwell meant with "prolefeed".

 

[40oz]

Lower tax rates encourage economic activity and grow revenues.

In 2003 the capital gains tax rate was reduced from 20/10% to 15/5%.

Revenues were $50B before, and $103 billion after (2006.)

The reason? It encourages investment, and increases funding for ideas and projects that improve the productivity of the economy.

If you look at Greece, in terms of who doesn't pay taxes, then you should be EXTREMELY concerned about the US, where the lowest 60% of tax payers pay only 5.3% of the tax.

So what you are saying is the USA needs to cut all taxes to zero to see the most possible tax revenue? That seems to be the logical conclusion you are insisting on.

 

[fergus]

In Greece, I have just learned, people earning less than 24,000 $ do not pay taxes. No wonder the country is bankrupt.

Hello Olsen,

It may depend on how the others are taxed. Here in Australia, with various offsets (example: low income tax offset) one must earn close to $30,000 before paying income taxes (15% at that income) and the medicare levy (1.5% - pays for our free hospitals).

However jump to $80,000 and the marginal tax rate is 39.5% or 47.5% if you have been to university and incurred a student loan (to put it in international langauge, we call it Fee-HELP or HECS).

Average incomes here in Sydney are around $70,000 per year (about US$64k).

Zero tax for low income earners does not equal a bankrupt country, so long as richer people are taxed heavily. Our maximum tax rate is 46.5% and if you've been to uni that means +8% until the loan is repaid, so 54.5%. Yes, more than half of each incremental dollar of earnings. Ouch!

You mentioned our interest rates earlier in this thread; currently 4% and rising another 75 basis point to 4.75% later this year. Our economy is already at full capacity and the reserve bank (our central bank) is looking to reign-in inflation yet again.

Hence; I would not discount an economy simply due to the low taxes at one end of the scale... there must be something else going on in Greece?

Cheers...
Fergus.

 

[splitimageview]

The rich make most of the money, why shouldn't they pay most of the tax?

I don't remember making any comment about who, or who shouldn't, pay most of the tax.

I merely presented the facts, because many people have no clue how much the rich actually pay. The fact is, they pay nearly everything. 🙂

That said, the only fair way is to tax a flat percentage of income. That penalizes no one, and favors no one.

 

[dfoo]

I too agree a flat tax is a fair tax. However, I think there should be a high personal exemption. Say a 25% flat tax, with a $20k personal exemption. It would be cheaper to administrate, easy to judge compliance. No loop holes, no nothing. Reduce the IRS (and the CCRA in Canada) to the bare bones.

 

[antiquark]

That said, the only fair way is to tax a flat percentage of income. That penalizes no one, and favors no one.

What are you, a raving liberal? 😀

The most equal tax is a poll tax: everyone pays the same amount, X dollars. 🙂

In the US, that would work out to about $8000 per person, waitresses and billionaires included. Actually I'm surprised a poll tax isn't a big talking point with conservatives. It's perfectly equal!

 

[Olsen]

Hello Olsen,

It may depend on how the others are taxed. Here in Australia, with various offsets (example: low income tax offset) one must earn close to $30,000 before paying income taxes (15% at that income) and the medicare levy (1.5% - pays for our free hospitals).

However jump to $80,000 and the marginal tax rate is 39.5% or 47.5% if you have been to university and incurred a student loan (to put it in international langauge, we call it Fee-HELP or HECS).

Average incomes here in Sydney are around $70,000 per year (about US$64k).

Zero tax for low income earners does not equal a bankrupt country, so long as richer people are taxed heavily. Our maximum tax rate is 46.5% and if you've been to uni that means +8% until the loan is repaid, so 54.5%. Yes, more than half of each incremental dollar of earnings. Ouch!

You mentioned our interest rates earlier in this thread; currently 4% and rising another 75 basis point to 4.75% later this year. Our economy is already at full capacity and the reserve bank (our central bank) is looking to reign-in inflation yet again.

Hence; I would not discount an economy simply due to the low taxes at one end of the scale... there must be something else going on in Greece?

Cheers...
Fergus.

Fergus,

I have great respect for the financial policy of the current Australian government. It is one of the very few who have dared to increase the interest rate, which I think, is the only sensible thing to do today.

But I am surprised that you have such a low tax profile. There is a great difference between Austraia and Greece. You prosper from a huge fortune of minerals and oil -- plus a big dash agriculture. But the more you sell of your natural resources, the less you have left.

Then it is smart to build up a Sovereign Wealth Fund in pace with depleted natural resources. Like Singapore, China, Unitied Arab Emirates, Norway, etc. Which Australia just have started:

The Australian government Future Fund (to cover the pension for the government employees)

Building Australia Fund (to secure long term finance of infrastructure investments)

Health and Hospitals fund (to secure long term finance of health care infrastructure investments)

Education Investment Funds (to secure long term finance of educational facilities)

Very smart! (- Think of, if USA had done the same....)

For a Norwegian, Australia seems to be a paradise!

 

[dfoo]

...
But I am surprised that you have such a low tax profile. There is a great difference between Austraia and Greece. You prosper from a huge fortune of minerals and oil -- plus a big dash agriculture. But the more you sell of your natural resources, the less you have left.
...

Tax in Australia is crazy high. The highest taxation rate kicks in so low as to be useless (might as well have a flat tax). And they have massive tax on so-called luxury goods (such as Audi).

 

[fergus]

Fergus,

I have great respect for the financial policy of the current Australian government. It is one of the very few who have dared to increase the interest rate, which I think, is the only sensible thing to do today.

But I am surprised that you have such a low tax profile. There is a great difference between Austraia and Greece. You prosper from a huge fortune of minerals and oil -- plus a big dash agriculture. But the more you sell of your natural resources, the less you have left.

Then it is smart to build up a Sovereign Wealth Fund in pace with depleted natural resources. Like Singapore, China, Unitied Arab Emirates, Norway, etc. Which Australia just have started:

The Australian government Future Fund (to cover the pension for the government employees)

Building Australia Fund (to secure long term finance of infrastructure investments)

Health and Hospitals fund (to secure long term finance of health care infrastructure investments)

Education Investment Funds (to secure long term finance of educational facilities)

Very smart! (- Think of, if USA had done the same....)

For a Norwegian, Australia seems to be a paradise!

Wow, the headlines have worked! (our government's plan?)

The Education funds have resulted in buildings costing twice or more of the true cost... schools get less not more in the end (I work in education).

The 'future fund' is a sad joke; basic economics based on the post-wwII baby-boomer generation; not enough taxpayers to fund the pensions for those who were in the 'good' (defined benefit) pensions plans; as opposed to us now in the mere 'savings' plans. The Howard government a few years ago managed to transfer the risk of investment returns back to the retired workers. The current Future Fund does not have enough money to pay the pensions, if the current gov't workers retire today.

The point = we have many economic flaws. Example; we still offer tax breaks against loss-making investments (we call this negative gearing).

But... our economy thrives, through 'stupid' spending (my phrase). The average worker spends more than they earn. Yes seriously. Savings don't exist. People buy on credit; 'interest free' lures them. Average mortgages are 5 times pre-tax earnings. Ouch!

But, this keeps the money flowing around the circular flow, hence we are all busy, hence inflation pressures build. Interesting economics, yes?

A long-term recipe for personal financial disaster; but a short-medium term recipe for economic boom-time.

And, due to personal debt levels, 98% of the population are slaves-for-life paying interest...

Cheers...
Chris.

 

[fergus]

Tax in Australia is crazy high. The highest taxation rate kicks in so low as to be useless (might as well have a flat tax). And they have massive tax on so-called luxury goods (such as Audi).

This has improved greatly in the past 2 or 3 years.

The highest personal tax rate now kicks in at $180,000 (used to be just $60k).

The massive tax on luxury goods = a luxury car tax on cars above about $57000... an extra 1/3 is added (to encourage buying the locally built cars which are exempt from this tax). Doesn't apply to any other goods.

But yes, still crazy high at 54.5% for me...