| Re: What Makes a Tax System Bizarre? [message #96316 is a reply to message #96176] |
Mon, 15 July 2013 16:18   |
jklam
Messages: 43
Registered: June 2013
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"Peter Flass" <Peter_Flass@Yahoo.com> wrote in message
news:ks0oab$mf5$1@dont-email.me...
> On 7/14/2013 9:22 PM, jklam wrote:
>>
>>
>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>> news:krvhsi$ljs$1@dont-email.me...
>>
>>> There isn't much skill in selecting property that will increase vs.
>>> decrease in value,
>>
>> That is just plain wrong. In spades with stock market investments.
>
> BS. If you're rich your golfing buddy will put you on to opportunities,
> or someone who wants a favor from you in return. Who decides who gets to
> buy an IPO at the offering price? I think there was _one_ company who
> offered _part_ of their stock through a lottery, but otherwise it's all
> who you know.
There is a lot more to stock market investments than IPOs.
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| Re: What Makes a Tax System Bizarre? [message #96318 is a reply to message #96183] |
Mon, 15 July 2013 16:24 |
Rod Speed
Messages: 3507
Registered: January 2012
Karma: 0
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"jmfbahciv" <See.above@aol.com> wrote in message
news:PM0004E18C64FEEB59@ac81254f.ipt.aol.com...
> Stephen Sprunk wrote:
>> On 14-Jul-13 15:25, jklam wrote:
>>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>>> news:krusmc$gvd$2@dont-email.me...
>>>> On 13-Jul-13 15:18, jklam wrote:
>>>> > "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>>>> >> How about we first make the rich pay at least the same
>>>> >> effective tax rate as the middle class?
>>>> >
>>>> > Trouble is that it's very difficult to do that because it is
>>>> > much easier for them to make what is essentially income appear to
>>>> > be something else like capital gain.
>>>>
>>>> "Capital gains" are a subset of "income", more specifically of
>>>> "unearned income".
>>>
>>> Yes, but it's much easier for the rich to have that income show up as
>>> capital gain than for the average wage earner.
>>
>> That's true; I was disputing your assertion that capital gains are not
>> income.
>>
>>>> That we currently have lower tax rates for unearned income is a
>>>> quirk of the tax code; IMHO, they should be _higher_ than for
>>>> earned income.
>>>
>>> It is still earned,
>>
>> You have expended no labor when collecting income in from a capital
>> gain, interest or dividends. That, at least as far as the tax code is
>> concerned, means it is "unearned".
>>
>>> most obviously when someone has the skill to purchase property
>>> that will increase in value significantly instead of property that
>>> will decrease in value instead.
>>
>> There isn't much skill in selecting property that will increase vs.
>> decrease in value, at least if one doesn't account for the effects of
>> inflation--and the tax code does not.
>>
>> Individual stocks may lose value, and even a diversified portfolio may
>> lose value over a short period, but the market as a whole has _never_
>> lost value over a period of 10 years or more.
>>
>> Nearly all other assets are pretty much guaranteed to either gain or
>> lose value over time, and that property is well known.
>>
>>> And one of the reasons it isn't taxed at the same rate is because
>>> there is no accurate way to allow for inflation with capital gain.
>>> That problem does not arise with wages.
>>
>> The income tax rate is only different for long-term capital gains, but
>> even short-term capital gains are not subject to FICA/SECA, which are
>> only applied to earned income.
>>
>> Also, there is no significant difference in inflation (or skill) in
>> holding an asset for 366 days vs. 364 days, certainly not enough to
>> justify cutting the tax rate by up to 24.6 percentage points.
>
> The reason for short/long term diferences is encourage long-term
> savings and investements and discourage churning.
The real reason for the difference is because you don’t need to have
some crude allowance for inflation with short term capital gains.
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| Re: What Makes an Architecture Bizarre? [message #96320 is a reply to message #96314] |
Mon, 15 July 2013 16:31 |
scott
Messages: 4237
Registered: February 2012
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Andrew Swallow <am.swallow@btinternet.com> writes:
> On 15/07/2013 20:45, Stephen Sprunk wrote:
> {snip}
>
>>
>> ... except that the CBO's studies show that the rich _don't_ spend their
>> money; they mostly hoard it. That same amount of money in the hands of
>> the working classes (or the govt) generates far more economic
>> activity--and therefore real wealth.
>>
>> S
>>
>
> Gold bars under the bed are hoarded money. Any other store and the rich
> have lent their money to someone else to use. Normally the government,
> banks and big business.
Which is why they hoard picasso, rembrandt, warhol, land, old cars and private jets.
Only the latter trickles down in any form, and that is relatively inconsequential.
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| Re: What Makes an Architecture Bizarre? [message #96322 is a reply to message #96181] |
Mon, 15 July 2013 16:38 |
Rod Speed
Messages: 3507
Registered: January 2012
Karma: 0
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"jmfbahciv" <See.above@aol.com> wrote in message
news:PM0004E18C200BB9CC@ac81254f.ipt.aol.com...
> Stephen Sprunk wrote:
>> On 14-Jul-13 08:12, jmfbahciv wrote:
>>> Charles Richmond wrote:
>>>> No, BAH... the goal is *not* to get rid of the rich. The goal is
>>>> for the middle class to get a bigger share of the pie. ...
>>>
>>> I'm not talking about a belief system. I'm talking about how wealth
>>> is created.
>>>
>>> How do you propose that this middle class get a larger share? by a
>>> Congressional edict?
>>
>> By reducing the tax burden on the middle class and increasing it (to at
>> least parity) on the rich? Congress could easily do that.
> But they won't.
They did. That's why the bottom HALF pay no net federal income tax.
> I still have problems moving monies from wealthy (which
> would be used for investment) to government which will
> be used to double that government's debt.
That last is just plain silly.
> These days, for every tax dollar a government
> brings in, the legislature spends $3.
Just another Limbaugh lie mindlessly respouted.
>> The distribution of wealth in the US was a lot more even before
>> Reagan shifted the tax burden from the rich to the middle class;
>> since then, the inequality has gotten out of control, which has
>> caused all sorts of social and economic problems.
> Wealth is not a static number. What you are calling wealth is
> disposable income. It wasn't Reagans' tax policies which made it
> go away.
It didn’t go away.
> It was unions, unreasonable minimum wage editcs,
> and too much government handouts which started
> manufacturing to move out of the country.
Wealth in a modern first world economy is about
a hell of a lot more than just manufacturing.
The reason manufacturing moved out of the country is because
China had enough of a clue to toss communism in the bin and
exploit the vastly lower labor costs there.
>>> Every single one of those companies you want government control
>>> over once started out as a small business.
>>
>> Who said anything about "government control" over those companies?
> You are proposing to limit the amount of business
> the company can do by contolling revenue.
No he is not.
>> We're just talking about slightly different tax strategies.
> No,
Yes.
> you are talking about destorying trade
> by using the tax system to punish success.
No. Making the top 1% pay the same tax rate as the next 20%
does isnt punishing success, its just restoring equity in taxation.
> If a government's tax system punishes success,
What he is proposing is not doing that.
> all business and trade will move out to a better financial climate.
Bullshit. It isnt possible for most of it to move because most of it
has to be done in the US because that is where their customers are.
> That's what happened to manufacturing.
No, it's just moved to where labor costs are much lower.
> It's going to happen to medical services.
Not even possible with most medical services.
You cant do treatment for heart attacks that way, the patient
will be dead by the time you get them out of the country. And
it costs a hell of a lot more to move them to mexico than to the
local ER anyway, so it wont happen even with car accidents either.
It wont even happen with the treatment of diabetes or what you have either.
>>> If you punish success, there will not be small business because
>>> there isn't any point in starting one.
>> Any govt needs revenue to provide public services, and there are only
>> three things that can _be_ taxed to provide that revenue: production,
>> consumption and wealth. And taxing any one of those directly results in
>> an indirect tax on the other two.
>> That is not the same thing as "punishing success".
> You want the few who are successful to fund those who are not.
That’s what ALL welfare systems do.
> That's slavery.
No, its welfare.
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| Re: What Makes an Architecture Bizarre? [message #96323 is a reply to message #96185] |
Mon, 15 July 2013 16:42 |
Rod Speed
Messages: 3507
Registered: January 2012
Karma: 0
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"jmfbahciv" <See.above@aol.com> wrote in message
news:PM0004E18C4A637D69@ac81254f.ipt.aol.com...
> Peter Flass wrote:
>> On 7/14/2013 4:30 PM, jklam wrote:
>>>
>>>
>>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>>> news:krutt9$or4$1@dont-email.me...
>>>> On 13-Jul-13 17:27, jklam wrote:
>>>> > "Charles Richmond" <numerist@aquaporin4.com> wrote in message
>>>> > news:krse3h$rc3$1@dont-email.me...
>>>> >> I am saying that the most wealthy 1% should have more
>>>> >> responsibility to *improve* the general economy rather than just
>>>> >> stuffing their pockets with more and more money.
>>>> >
>>>> > Yes, but it is quite hard to work out how to structure things so
>>>> > that happens, particularly now that the sticking rich mostly get to
>>>> > be stinking rich by doing something that does allow them to float
>>>> > their operation on the stockmarket and get stinking rich that way.
>>>> >
>>>> > It is very far from clear that it would be a good thing to stop that
>>>> > happening.
>>>>
>>>> I know a guy who started a small business in his dorm room and sold it
>>>> a
>>>> few years later for over $5 _billion_. He paid (drum roll, please) 15%
>>>> in taxes on that gain.
>>>>
>>>> If he had paid 25% on that gain, which is the rate that Congress
>>>> _intended_ for him to pay, do you think he would have never started
>>>> that
>>>> business?
>>>>
>>>> If he had paid 39.6% on that gain, which is the rate that would now
>>>> apply if it were earned income, do you think he would have never
>>>> started
>>>> that business?
>>>>
>>>> If he had paid 54.9% on that gain, which is the rate that would now
>>>> apply if it were earned income and the full amount were subject to
>>>> FICA/SECA, do you think he would have never started that business?
>>>>
>>>> In all of the above cases, he'd still be a billionaire today, which is
>>>> far more than he ever expected.
>>>
>>> Yes, he would still be stinking rich even if that capital gain was
>>> taxed at 95% and he would still try to do that.
>>
>> This is a "feel good" argument. That guy was just lucky and a lot sess
>> deserving than the lady who cleans the toilets in his house, so let's
>> take it from him and give it to her. Everyone would feel better, right?
>> Of course it wouldn't go to her, it would go to the big black hole of
>> government bureaucracy, but even aside from that, a 100% tax on people
>> making more than $1 million would run the government only for about four
>> months.
>
> Right. None of his profits would be later used to create more wealth.
> That's what I'm trying to point out but people don't seem to understand
> this welath creation process; instead they emulate the Democrat leadership
> whose goal is to create a class warfare so they can keep political power.
Just another Limbaugh lie mindlessly respouted.
>> The fair way is to let everyone keep the money they earn (or "earn")
>> except for the _minimum_ required to run the government.
> that's the prolbem. The people in charge of governments spend three
> times what they take in, no matter how much money is received.
Just another Limbaugh lie mindlessly respouted.
The govt spends nothing even remotely like
3 times what it gets in total tax revenue.
> Voters and the rest have come to expect all freebies from the government.
And the terminal stupidity that the bottom HALF of them pay no net federal
income tax.
> It's a viscious cycle.
All democracys are.
>> Then we'll let
>> the market decide what each person's efforts are worth. Sure I think a
>> lot of athletes, actors, and dot-com millionaires are way overpaid, but
>> why is my opinion worth more than the votes of millions of people
>> expressed in the free market?
> I'd much rather have those monied people
> spending their cash than the governments.
But are happy to use the government services like librarys,
roads, cops, medicare, social security etc etc etc that govt provides.
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| Re: What Makes an Architecture Bizarre? [message #96324 is a reply to message #96186] |
Mon, 15 July 2013 16:48 |
Rod Speed
Messages: 3507
Registered: January 2012
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Walter Banks <walter@bytecraft.com> wrote
> jmfbahciv wrote
>> Robert Wessel wrote
>>> You would, of course, still need some additional
>>> assistance for people at the very bottom of the heap.
>> That's why our massive tax mess exists today....those who need
>> "assistance".
> Create a tax and policy structure that makes it profitable to export low
> end jobs overseas
That isn't what happened.
That had nothing to do with Congress at all.
It happened because China had enough of a clue to toss
communism in the bin and exploit their vastly lower labor costs.
> and then be "surprised" that some who
> used to have those jobs need "assistance"
That isnt what happened either given that the unemployment rate
bottomed at 4.x%, one of the lowest in the entire world, with an
immense legal and illegal immigration rate and the participation
rate at an all time historic high, just before the clowns were allowed
to completely implode much of the world financial system, again.
> There are long term consequences to short term gains.
The gains arent just short term, they are long term gains.
And what is wrong with Chimerica anyway ?
http://en.wikipedia.org/wiki/Chimerica
That way they get to keep the inevitable pollution that comes
with manufacturing over there and see vastly more than just
americans end up with a vastly better standard of living than
they used to have.
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| Re: What Makes an Architecture Bizarre? [message #96325 is a reply to message #96241] |
Mon, 15 July 2013 16:53 |
127
Messages: 41
Registered: July 2013
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"Shmuel (Seymour J.)Metz" <spamtrap@library.lspace.org.invalid> wrote in
message news:51e406f8$4$fuzhry+tra$mr2ice@news.patriot.net...
> In <PM0004E18C200BB9CC@ac81254f.ipt.aol.com>, on 07/15/2013
> at 12:55 PM, jmfbahciv <See.above@aol.com> said:
>
>> But they won't. I still have problems moving monies from wealthy
>> (which would be used for investment) to government which will be used
>> to double that government's debt.
>
> What are you smoking?
>
>> These days, for every tax dollar a government
>> brings in, the legislature spends $3.
>
> Did yoou read that in Tass?
>
>> No, you are talking about destorying trade by using the tax system
>> to punish success.
>
> Your lips are moving.
>
>> That's what happened to manufacturing.
>
> What happened to manufacturing was rich owners moving their plants to
> countries with lower wages.
No, the owners are in fact almost everyone except the poorest of the poor
via their pension and mutual funds.
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| Re: What Makes an Architecture Bizarre? [message #96327 is a reply to message #96248] |
Mon, 15 July 2013 16:59 |
jklam
Messages: 43
Registered: June 2013
Karma: 0
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"Andrew Swallow" <am.swallow@btinternet.com> wrote in message
news:xq2dnfNy8_p4t3nMnZ2dnUVZ7sOdnZ2d@bt.com...
> On 14/07/2013 21:14, jklam wrote:
>>
>>
>> "Andrew Swallow" <am.swallow@btinternet.com> wrote in message
>> news:T6qdncK698AzMn_MnZ2dnUVZ8rednZ2d@bt.com...
>>> On 14/07/2013 14:04, Peter Flass wrote:
>>> {snip}
>>>
>>>>
>>>> I'd like a flat tax with *NO* deductions or exemptions allowed. All
>>>> income from whatever source is taxed the same. Have maybe three or
>>>> four
>>>> tax brackets so it's "progresive." Studies have shown you could reduce
>>>> the tax rates across the board and still bring in more money, and it
>>>> wouldn't cause the economic distortions the current system does.
>>>>
>>>>
>>> Margaret Thatcher and the following governments removed allowances
>>> like mortgage interest and children from Britain's Income Tax.
>>
>> No they did not with children. Those with children are still taxed
>> less than those with the same income and no children.
>
> The UK Income Tax form no longer asks how many children you have.
Doesn’t alter the fact that those with children are still taxed
less than those with the same income and no children.
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| Re: What Makes an Architecture Bizarre? [message #96328 is a reply to message #96250] |
Mon, 15 July 2013 17:03 |
127
Messages: 41
Registered: July 2013
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"Stephen Sprunk" <stephen@sprunk.org> wrote in message
news:ks1a4h$svn$1@dont-email.me...
> On 15-Jul-13 07:06, Peter Flass wrote:
>> On 7/14/2013 4:30 PM, jklam wrote:
>>>> In all of the above cases, he'd still be a billionaire today,
>>>> which is far more than he ever expected.
>>>
>>> Yes, he would still be stinking rich even if that capital gain was
>>> taxed at 95% and he would still try to do that.
>>
>> This is a "feel good" argument. That guy was just lucky and a lot
>> sess deserving than the lady who cleans the toilets in his house, so
>> let's take it from him and give it to her.
>
> I'd be satisfied if he paid (at least) the same effective tax rate that
> she did on her (much smaller) earnings.
>
> Even Warren Buffet says it's ridiculous that he pays a lower tax rate
> than his secretary does.
>
>> The fair way is to let everyone keep the money they earn (or "earn")
>> except for the _minimum_ required to run the government.
>
> Who decides what the "minimum" is?
>
> Since you (unlike BAH) at least accept that _someone_ must pay taxes to
> support whatever we can agree is a valid public expense, what do you
> think a "fair" distribution of those taxes would look like?
>
>> Sure I think a lot of athletes, actors, and dot-com millionaires
>> are way overpaid, but why is my opinion worth more than the votes
>> of millions of people expressed in the free market?
>
> If someone is willing to pay them that for their labor or ideas, then
> more power to 'em. My problem is solely with said millionaires (or
> billionaires) paying a _lower_ tax rate than middle-class (and often
> even "working poor") workers.
That happens because it is so much easier for them to rearrange
their financial affairs so that their income does not show as income
for tax purposes.
No one has ever been able to work out how to avoid that.
> --
> Stephen Sprunk "God does not play dice." --Albert Einstein
> CCIE #3723 "God is an inveterate gambler, and He throws the
> K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes an Architecture Bizarre? [message #96373 is a reply to message #96314] |
Mon, 15 July 2013 17:10 |
Stephen Sprunk
Messages: 2166
Registered: March 2013
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On 15-Jul-13 15:14, Andrew Swallow wrote:
> On 15/07/2013 20:45, Stephen Sprunk wrote:
>> ... except that the CBO's studies show that the rich _don't_ spend
>> their money; they mostly hoard it. That same amount of money in
>> the hands of the working classes (or the govt) generates far more
>> economic activity--and therefore real wealth.
>
> Gold bars under the bed are hoarded money. Any other store and the
> rich have lent their money to someone else to use. Normally the
> government, banks and big business.
Borrowing money to buy things doesn't generate wealth; paying interest
on that money destroys wealth.
S
--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes an Architecture Bizarre? [message #96374 is a reply to message #96373] |
Mon, 15 July 2013 17:18 |
127
Messages: 41
Registered: July 2013
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"Stephen Sprunk" <stephen@sprunk.org> wrote in message
news:ks1o55$hds$1@dont-email.me...
> On 15-Jul-13 15:14, Andrew Swallow wrote:
>> On 15/07/2013 20:45, Stephen Sprunk wrote:
>>> ... except that the CBO's studies show that the rich _don't_ spend
>>> their money; they mostly hoard it. That same amount of money in
>>> the hands of the working classes (or the govt) generates far more
>>> economic activity--and therefore real wealth.
>>
>> Gold bars under the bed are hoarded money. Any other store and the
>> rich have lent their money to someone else to use. Normally the
>> government, banks and big business.
>
> Borrowing money to buy things doesn't generate wealth;
It can do when what is bought is used to produce wealth like
with a new factory or a service industry that produces wealth.
paying interest
> on that money destroys wealth.
No, not when it is just a cost of producing wealth with my examples.
> S
>
> --
> Stephen Sprunk "God does not play dice." --Albert Einstein
> CCIE #3723 "God is an inveterate gambler, and He throws the
> K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96375 is a reply to message #96302] |
Mon, 15 July 2013 17:19 |
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Originally posted by: Ibmekon
On Mon, 15 Jul 2013 15:25:15 -0400, Dan Espen <despen@verizon.net>
wrote:
> Stephen Sprunk <stephen@sprunk.org> writes:
>
>> Yes, and it will be gone in about a decade because the Baby Boomers
>> didn't pay in enough to build up enough of a surplus to pay for the
>> benefits they've awarded themselves. And, even with a rapidly rising
>> wage cap, Gen X, Gen Y and Millenials won't pay in enough to cover that
>> shortfall, much less pay for our own benefits.
>
> This is all much ado about nothing.
> The government deficit spends all the time.
> If they have to for SS, they will.
>
> One trend is SS's favor is people working long past "normal" retirement
> age. (Like me.)
Unfortunately many politicians follow your example :-)
When the scale of the financial crisis hit the Irish government -
their first budgetary action was to offer early retirement at 50 on
half pay to any government worker.
They REALLY thought it would all blow over in a year or two.
Carl Goldsworthy
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| Re: What Makes a Tax System Bizarre? [message #96377 is a reply to message #96311] |
Mon, 15 July 2013 17:42 |
Stephen Sprunk
Messages: 2166
Registered: March 2013
Karma: 0
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Senior Member |
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On 15-Jul-13 15:04, John Levine wrote:
>>> A) that's the worst case scenario
>>
>> That's based on the latest projections of SS's solvency, assuming
>> no changes to law.
>
> Yes, and making very pessimistic assumptions about economic growth
> and interest rates. Don't take my word for it, you can look this
> up.
Pessimistic assumptions about interest rates is reasonable considering
the SSTF is required by law to invest solely in T-bills, which have the
lowest interest rate of any investment. Heck, a few years ago it
actually went _negative_ for a while.
Regarding growth, are they using the same assumptions as the CBO?
>>> B) SS has always paid current benefits from current revenue.
>>> The myth that your contributions pay for your pension is part of
>>> the right wing disinformation.
>>
>> The entire basis of the system is that paying in entitles you to
>> benefits later. No, the money isn't specifically set aside for
>> that purpose, but your benefits _are_ calculated based on your
>> covered earnings, i.e. those that you payed FICA/SECA tax on.
>
> Yes, your benefits are calculated based on your income and
> contributions. No, that is not the same as saying that what you get
> back is the same as what you put in.
> SS recipients have always gotten back more than they put in,
Unless they die before collecting any/as much, or Congress denies them
benefits despite contributing for their entire career, or ...
> which is fine because the economy grows,
Not particularly well, much of the time. More important is the growth
of the taxbase at hand, which _isn't_ growing appreciably, since nearly
all growth over the last 30 years has been concentrated in the top 1%,
out of the reach of FICA/SECA.
> and we are richer now than we were in the past.
No, actually we're not. Income for the working classes has been
stagnant for the last 30 years, after adjusting for inflation.
Benefits are also adjusted for inflation, so the two cancel out, and
it's now purely a matter of population dynamics.
>> The SSTF will be gone _long_ before I retire; 30% is what the SSA
>> is projecting then-current contributions will cover.
>
> Look it up. I'm 99% sure you're mistaken.
Every source I've looked at projects the SSTF will be completely
depleted long, long before I'll be eligible for benefits.
Without the SSTF, the only possible source for my benefits will be
then-current contributions, and tax revenues (under current law) are
projected to cover only 30% of that amount. There will simply be too
many old people getting benefits and not enough young people working,
which is already true and trending further in that direction.
S
--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes an Architecture Bizarre? [message #96378 is a reply to message #96308] |
Mon, 15 July 2013 17:58 |
Walter Banks
Messages: 1000
Registered: July 2012
Karma: 0
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Senior Member |
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Rod Speed wrote:
>>
>> Great simple illustration example for the AI assignment.
>> Perfect, only rhetoric no common sense or information
>> content.
>>
>> Thanks..
>
> You never ever could bullshit or lie your way out of a wet paper bag.
I already have that one sorry.
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| Re: What Makes a Tax System Bizarre? [message #96379 is a reply to message #96377] |
Mon, 15 July 2013 17:58 |
127
Messages: 41
Registered: July 2013
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"Stephen Sprunk" <stephen@sprunk.org> wrote in message
news:ks1q0j$sbt$1@dont-email.me...
> On 15-Jul-13 15:04, John Levine wrote:
>>>> A) that's the worst case scenario
>>>
>>> That's based on the latest projections of SS's solvency, assuming
>>> no changes to law.
>>
>> Yes, and making very pessimistic assumptions about economic growth
>> and interest rates. Don't take my word for it, you can look this
>> up.
>
> Pessimistic assumptions about interest rates is reasonable considering
> the SSTF is required by law to invest solely in T-bills, which have the
> lowest interest rate of any investment. Heck, a few years ago it
> actually went _negative_ for a while.
>
> Regarding growth, are they using the same assumptions as the CBO?
>
>>>> B) SS has always paid current benefits from current revenue.
>>>> The myth that your contributions pay for your pension is part of
>>>> the right wing disinformation.
>>>
>>> The entire basis of the system is that paying in entitles you to
>>> benefits later. No, the money isn't specifically set aside for
>>> that purpose, but your benefits _are_ calculated based on your
>>> covered earnings, i.e. those that you payed FICA/SECA tax on.
>>
>> Yes, your benefits are calculated based on your income and
>> contributions. No, that is not the same as saying that what you get
>> back is the same as what you put in.
>
>> SS recipients have always gotten back more than they put in,
>
> Unless they die before collecting any/as much, or Congress denies them
> benefits despite contributing for their entire career, or ...
>
>> which is fine because the economy grows,
>
> Not particularly well, much of the time. More important is the growth
> of the taxbase at hand, which _isn't_ growing appreciably, since nearly
> all growth over the last 30 years has been concentrated in the top 1%,
> out of the reach of FICA/SECA.
>
>> and we are richer now than we were in the past.
>
> No, actually we're not. Income for the working classes has been
> stagnant for the last 30 years, after adjusting for inflation.
That is not accurate with real living standards, number
and quality of cars and houses and things like that.
And isn't accurate with household income either, because
the number of wage earners per household has increased
too with many more women working than used to.
> Benefits are also adjusted for inflation, so the two cancel out, and
> it's now purely a matter of population dynamics.
>
>>> The SSTF will be gone _long_ before I retire; 30% is what the SSA
>>> is projecting then-current contributions will cover.
>>
>> Look it up. I'm 99% sure you're mistaken.
>
> Every source I've looked at projects the SSTF will be completely
> depleted long, long before I'll be eligible for benefits.
>
> Without the SSTF, the only possible source for my benefits will be
> then-current contributions, and tax revenues (under current law) are
> projected to cover only 30% of that amount. There will simply be too
> many old people getting benefits and not enough young people working,
> which is already true and trending further in that direction.
>
> S
>
> --
> Stephen Sprunk "God does not play dice." --Albert Einstein
> CCIE #3723 "God is an inveterate gambler, and He throws the
> K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes an Architecture Bizarre? [message #96380 is a reply to message #86255] |
Mon, 15 July 2013 18:30 |
blmblm@myrealbox.com
Messages: 219
Registered: July 2012
Karma: 0
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Senior Member |
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(Okay, *really* late to the party .... )
In article <1698.952T421T5023882@kltpzyxm.invalid>,
Charlie Gibbs <cgibbs@kltpzyxm.invalid> wrote:
> In article <6tk0s819q6al1bd0062ie9319gt0f77g3l@4ax.com>, Ibmekon
> (Ibmekon) writes:
>
>> I am on the clock with Windows XP - support ending on April 8, 2014
>
> Whoop-de-do. I'll give up XP when they pry it from my cold dead
> fingers. That is, on the occasions when I have to use Windows -
> which, unfortunately, includes my job. Heck, my main development
> box is still running 2000 (I finally decided that 98 was just
> too primitive). At least I can configure XP to lose its tradmark
> Fisher-Price look, although that disgustingly cute dog is still
> there during searches.
For what it's worth: I'm pretty sure you can make the puppy
go away -- I don't remember how, but I do remember figuring it
out at some point and doing it (and that the system's response
involved a little animated sequence of the puppy walking away in
what seemed like a dejected way .... ).
> (Note: all my boxes actually run Linux;
> when I do run Windows, it's under VirtualBox.)
[ snip ]
--
B. L. Massingill
ObDisclaimer: I don't speak for my employers; they return the favor.
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| Re: What Makes an Architecture Bizarre? [message #96386 is a reply to message #96328] |
Mon, 15 July 2013 19:45 |
Stephen Sprunk
Messages: 2166
Registered: March 2013
Karma: 0
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Senior Member |
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On 15-Jul-13 16:03, 127 wrote:
> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
> news:ks1a4h$svn$1@dont-email.me...
>> On 15-Jul-13 07:06, Peter Flass wrote:
>>> This is a "feel good" argument. That guy was just lucky and a
>>> lot sess deserving than the lady who cleans the toilets in his
>>> house, so let's take it from him and give it to her.
>>
>> I'd be satisfied if he paid (at least) the same effective tax rate
>> that she did on her (much smaller) earnings.
>>
>> Even Warren Buffet says it's ridiculous that he pays a lower tax
>> rate than his secretary does.
>> ...
>> My problem is solely with said millionaires (or billionaires)
>> paying a _lower_ tax rate than middle-class (and often even
>> "working poor") workers.
>
> That happens because it is so much easier for them to rearrange their
> financial affairs so that their income does not show as income for
> tax purposes.
>
> No one has ever been able to work out how to avoid that.
_How_ to do it is well known. Getting politicians to vote for such
changes, when they know doing so risks the support of those same
billionaires who line their pockets with "campaign contributions" in
return for maintaining the status quo, is another matter.
S
--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96387 is a reply to message #96295] |
Mon, 15 July 2013 19:57 |
Walter Bushell
Messages: 1834
Registered: December 2011
Karma: 0
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Senior Member |
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In article <dbe8u8dnngdlj6v70mi3ugm1r4nlhprqku@4ax.com>, Ibmekon
wrote:
> Thanks, that gave me a much needed laugh.
>
> There was no disclaimer that "no lawyers were harmed or killed during
> the making of this film" - we can only hope so.
Why? I have a little list.
>
> My original post referred to the fact that banks make 20 cents (just a
> guess) every time people make a repeat donation. So the banks can
> afford to sponsor the ads forever.
>
> Carl Goldsworthy
--
Gambling with Other People's Money is the meth of the fiscal industry.
me -- in the spirit of Karl and Groucho Marx
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| Re: What Makes a Tax System Bizarre? [message #96390 is a reply to message #96377] |
Mon, 15 July 2013 20:26 |
John Levine
Messages: 1405
Registered: December 2011
Karma: 0
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Senior Member |
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> Without the SSTF, the only possible source for my benefits will be
> then-current contributions, and tax revenues (under current law) are
> projected to cover only 30% of that amount.
I found this informative flyer on the SSA's web site:
http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2012/fa st_facts12.pdf
The Long-Run Financial Outlook on page 37 says (using the mandated
pessimistic numbers) that the trust fund will run out in 2033, and after
that, revenue under current law will cover 75% of costs. Any chance you
could tell us where that implausible 30% number came from?
It also says ths shortfall will be 2.67% of taxable payroll, which
confirms the fact that small changes like increasing the payroll cap
would be adequate to fix it forever.
--
Regards,
John Levine, johnl@iecc.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. http://jl.ly
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| Re: What Makes an Architecture Bizarre? [message #96432 is a reply to message #96380] |
Mon, 15 July 2013 20:14 |
Charlie Gibbs
Messages: 5313
Registered: January 2012
Karma: 0
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Senior Member |
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In article <b4jbgdFphb4U1@mid.individual.net>,
blmblm.myrealbox@gmail.com (blmblm@myrealbox.com) writes:
> (Okay, *really* late to the party .... )
No problem, here's some slightly stale cake and warm punch.
> In article <1698.952T421T5023882@kltpzyxm.invalid>,
> Charlie Gibbs <cgibbs@kltpzyxm.invalid> wrote:
>
>> In article <6tk0s819q6al1bd0062ie9319gt0f77g3l@4ax.com>, Ibmekon
>> (Ibmekon) writes:
>>
>>> I am on the clock with Windows XP - support ending on April 8, 2014
>>
>> Whoop-de-do. I'll give up XP when they pry it from my cold dead
>> fingers. That is, on the occasions when I have to use Windows -
>> which, unfortunately, includes my job. Heck, my main development
>> box is still running 2000 (I finally decided that 98 was just
>> too primitive). At least I can configure XP to lose its tradmark
>> Fisher-Price look, although that disgustingly cute dog is still
>> there during searches.
>
> For what it's worth: I'm pretty sure you can make the puppy
> go away -- I don't remember how, but I do remember figuring it
> out at some point and doing it (and that the system's response
> involved a little animated sequence of the puppy walking away in
> what seemed like a dejected way .... ).
That rings a bell. I know I've done a similar thing to that
damned paper clip.
--
/~\ cgibbs@kltpzyxm.invalid (Charlie Gibbs)
\ / I'm really at ac.dekanfrus if you read it the right way.
X Top-posted messages will probably be ignored. See RFC1855.
/ \ HTML will DEFINITELY be ignored. Join the ASCII ribbon campaign!
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| Re: What Makes a Tax System Bizarre? [message #96433 is a reply to message #96029] |
Mon, 15 July 2013 21:42 |
brad
Messages: 191
Registered: February 2013
Karma: 0
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Senior Member |
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"Walter Bushell" wrote:
> In article <b4h17hFa1gvU1@mid.individual.net>,
> "jklam" <jkl@nlgrf.com> wrote:
>
>>
>> Yes, but FICA/SECA are not true taxes, they are more a system
>> where you pay into the system while working and get that back
>> when you have retired etc.
>
> The government reserves the right to change the benefits you get, if
> any at any time.
Yes, including a sizeable increase.. In a few years there will be a big
windfall for homosexuals who "marry", all governemnt had to do was redefine
a rather simple word. They just have to dot the 'i's and it will be a done
deal. A "spouse" who has never worked a day in his life can get something
like $12,000 a year for the rest of his life starting at age 65. This is
going to be a big shock to the system.
So much for worst case analysis, you change the rules in the middle of the
game you the change the results.
Spouses can "game" the rules. My sister draws SS on her dead husband's
account while she continues to work (and pay FICA) on her personal account.
When she retires on her own account she hopes it will exceed the payment she
"inherited". as a widow.
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| Re: What Makes a Tax System Bizarre? [message #96434 is a reply to message #96390] |
Mon, 15 July 2013 22:35 |
Stephen Sprunk
Messages: 2166
Registered: March 2013
Karma: 0
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Senior Member |
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On 15-Jul-13 19:26, John Levine wrote:
>> Without the, the only possible source for my benefits will be
>> then-current contributions, and tax revenues (under current law)
>> are projected to cover only 30% of that amount.
>
> I found this informative flyer on the SSA's web site:
>
> http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2012/fa st_facts12.pdf
>
> The Long-Run Financial Outlook on page 37 says (using the mandated
> pessimistic numbers) that the trust fund will run out in 2033,
.... before I'll be eligible for benefits, under current law.
> and after that, revenue under current law will cover 75% of costs.
> Any chance you could tell us where that implausible 30% number
> came from?
Directly from the statement they send me every year. My best guess is
that they won't short everyone by the same percentage but rather pay
everyone the same amount until they run out of money, which means I'll
get shorted by more than the average worker.
> It also says ths shortfall will be 2.67% of taxable payroll, which
> confirms the fact that small changes like increasing the payroll cap
> would be adequate to fix it forever.
Congress has raised the cap 40 times since 1971, and it's already more
than double what it was when I started working, yet SS is still
insolvent. That doesn't seem to be working.
The real problem is on page 36 of that source: the number of workers per
retiree has dropped from over 8 in 1955 to 3 today, and it will continue
to drop over time. That's the thing with Ponzi schemes: you eventually
run out of suckers and the whole thing collapses.
S
--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96435 is a reply to message #96299] |
Mon, 15 July 2013 22:41 |
wclodius
Messages: 16
Registered: March 2013
Karma: 0
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Junior Member |
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John Levine <johnl@iecc.com> wrote:
>>> The reality is that the gap between SS expenditure and SS revenue is
>>> not large.
>>
>> A 70% gap is "not large"? The annual statements I get from the SSA
>> claim that, by the time I retire, there will only be enough funds to
>> cover 30% of the benefits I've already earned (and paid for). For
>> younger workers, it's even worse.
>
> A) that's the worst case scenario
>
> B) SS has always paid current benefits from current revenue. The myth
> that your contributions pay for your pension is part of the right wing
> disinformation. For several decades the taxes were deliberately more
> than expenses to build up a surplus for the entirely predictable
> retirement of the baby boom, the SS trust fund. Now it's being spent
> down, slowly, just as planned. If 30% comes from the trust fund, that
> means the other 70% come from current revenue. Actually, 100% always
> comes from current revenue, since the trust fund is just treasury bonds
> paid back out of the government's general revenue.
>
>>> If we took the income cap off the SS tax to make it less regressive,
>>> that would be enough to fund SS forever. Even with no changes, it
>>> will be decades before there's any shortfall at all.
>>
>> SS benefit payouts _already_ exceed contributions, despite Congress
>> increasing the cap by more than 50% over the last two decades.
>
> Shortfall in payout. The SS surplus built up over the past several
> decades is quite large.
FWIW I tend to worry less about whether SS will be covered by the
FICA/SECA and the SS surplus, than about what will happen to other taxes
and interest rates as first the SS trust fund reduces its rate of
cumulative purchase of government bonds, and then begins to cash out its
bonds.
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| Re: What Makes a Tax System Bizarre? [message #96436 is a reply to message #96379] |
Mon, 15 July 2013 23:03 |
Stephen Sprunk
Messages: 2166
Registered: March 2013
Karma: 0
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Senior Member |
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On 15-Jul-13 16:58, 127 wrote:
> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
> news:ks1q0j$sbt$1@dont-email.me...
>> On 15-Jul-13 15:04, John Levine wrote:
>>> and we are richer now than we were in the past.
>>
>> No, actually we're not. Income for the working classes has been
>> stagnant for the last 30 years, after adjusting for inflation.
>
> That is not accurate with real living standards, number
> and quality of cars and houses and things like that.
People more readily go into debt to buy such things now, mainly due to
lower interest rates, but they're not making more money (adjusted for
inflation) to pay for them, which is why the average American now has a
_negative_ net worth--something that was unthinkable to our parents.
> And isn't accurate with household income either, because
> the number of wage earners per household has increased
> too with many more women working than used to.
Yes, more women work now, but at the same time divorce rates have been
trending up and marriage rates have been trending down, with the net
result that average _household_ income has been roughly flat.
S
--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96438 is a reply to message #95971] |
Mon, 15 July 2013 23:50 |
mrs
Messages: 42
Registered: May 2013
Karma: 0
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Member |
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In article <b4ggfuF6oorU1@mid.individual.net>, jklam <jkl@nlgrf.com> wrote:
>
>
> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
> news:kruurf$tvh$1@dont-email.me...
>> On 14-Jul-13 14:21, John Levine wrote:
>>>> > So for capital gains, would you tax the total sale price, with
>>>> > no deduction for the basis?
>>>>
>>>> That's just silly. A capital gain (i.e. income to be taxed) is
>>>> defined as the difference between the sale price and the cost
>>>> basis; there is no "deduction" involved.
>>>
>>> Well, OK, is it the nominal cost basis or inflation adjusted cost
>>> basis? If you buy something for $1000 and sell it decades later for
>>> $1500, but in the meantime prices have doubled, is that a gain or a
>>> loss?
>>
>> AFAIK, our tax code has never considered the effects of inflation on an
>> asset's cost basis, nor does GAAP or IFRS.
>
> Basically because it just isn't feasible to allow for inflation.
Or, maybe that _is_ the design of the entire system, and you've just
have never realized it.
See, if they devalue money to just 10% of what it was over X years,
and everybody pays income on the 90% gain in valuation caused by the
loss in value of that money, then, the tax rate isn't the 15% of the
gain, but rather 15% of the 90% of the wealth over that time frame.
The interesting question is, should we create a system where the CEO
has an incentive to destroy the value of the stock? In the private
markets, the CEO's goal is actually to cause the share price to go up,
and he is rewarded if that happens. If it goes down, likely he will
find himself out of a job. The government is rewarded when they
destroy the value of money. Ever ask yourself why the value of money
always goes down? Probably not. Think about it.
Instead, consider this, what is the gain, if you have 1 kilogram of
gold, and next year, you have 1 kilogram of gold. Ask a physicist.
The will invariably say 0. Now, if you ask your tax accountant, they
will explain to you, that you have to cut off a portion of the gold
and give it to the government. Over time, you will wind up with no
significant amount of gold. This is 100% certain, as that _is_ the
nature of the game.
So, what we have is a system, where the few, get to take money from
the 99% that have some money, but not enough to protect it from the
people that take the money. The people that benefit the most, are the
1% that don't participate in the scheme. If you want to look into
this world, take a look at the Wallmart finances and corporate
structure. You won't find 99% of the people in the US doing that.
Among the the 1%, it is more common. I'd contend this is just an
advanced shell game, and most people don't have any clue what the game
is, that it exists at all, how to play, or the rules.
It is amusing to watch you guys discuss it.
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| Re: What Makes an Architecture Bizarre? [message #96480 is a reply to message #96386] |
Tue, 16 July 2013 00:16 |
127
Messages: 41
Registered: July 2013
Karma: 0
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Member |
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"Stephen Sprunk" <stephen@sprunk.org> wrote in message
news:ks2181$2qo$1@dont-email.me...
> On 15-Jul-13 16:03, 127 wrote:
>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>> news:ks1a4h$svn$1@dont-email.me...
>>> On 15-Jul-13 07:06, Peter Flass wrote:
>>>> This is a "feel good" argument. That guy was just lucky and a
>>>> lot sess deserving than the lady who cleans the toilets in his
>>>> house, so let's take it from him and give it to her.
>>>
>>> I'd be satisfied if he paid (at least) the same effective tax rate
>>> that she did on her (much smaller) earnings.
>>>
>>> Even Warren Buffet says it's ridiculous that he pays a lower tax
>>> rate than his secretary does.
>>> ...
>>> My problem is solely with said millionaires (or billionaires)
>>> paying a _lower_ tax rate than middle-class (and often even
>>> "working poor") workers.
>>
>> That happens because it is so much easier for them to rearrange their
>> financial affairs so that their income does not show as income for
>> tax purposes.
>>
>> No one has ever been able to work out how to avoid that.
> _How_ to do it is well known.
How do you propose that that be done ?
> Getting politicians to vote for such
> changes, when they know doing so risks the support of those same
> billionaires who line their pockets with "campaign contributions" in
> return for maintaining the status quo, is another matter.
>
> S
>
> --
> Stephen Sprunk "God does not play dice." --Albert Einstein
> CCIE #3723 "God is an inveterate gambler, and He throws the
> K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96481 is a reply to message #96436] |
Tue, 16 July 2013 00:31 |
127
Messages: 41
Registered: July 2013
Karma: 0
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Member |
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"Stephen Sprunk" <stephen@sprunk.org> wrote in message
news:ks2cqm$n52$1@dont-email.me...
> On 15-Jul-13 16:58, 127 wrote:
>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>> news:ks1q0j$sbt$1@dont-email.me...
>>> On 15-Jul-13 15:04, John Levine wrote:
>>>> and we are richer now than we were in the past.
>>>
>>> No, actually we're not. Income for the working classes has been
>>> stagnant for the last 30 years, after adjusting for inflation.
>>
>> That is not accurate with real living standards, number
>> and quality of cars and houses and things like that.
> People more readily go into debt to buy such things now, mainly due to
> lower interest rates, but they're not making more money (adjusted for
> inflation) to pay for them,
They are actually when you calculate it by household, because
more women are working now than did 30 years ago, and it is
the household income that determines what real things can
be purchased that determine the real standard of living.
> which is why the average American now has a
> _negative_ net worth--
No they do not when you include the equity in the house they live in.
> something that was unthinkable to our parents.
No it was not. Many were in that situation in the great depression,
particularly small business owners and farmers and people like that.
>> And isn't accurate with household income either, because
>> the number of wage earners per household has increased
>> too with many more women working than used to.
>
> Yes, more women work now, but at the same time divorce rates have
> been trending up and marriage rates have been trending down,
Marriage rates are irrelevant to the number of households.
with the net
> result that average _household_ income has been roughly flat.
That is not correct. Household income has increased significantly
over that time.
http://en.wikipedia.org/wiki/Household_income_in_the_United_ States#Household_income_over_time
> S
>
> --
> Stephen Sprunk "God does not play dice." --Albert Einstein
> CCIE #3723 "God is an inveterate gambler, and He throws the
> K5SSS dice at every possible opportunity." --Stephen Hawking
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| Re: What Makes a Tax System Bizarre? [message #96482 is a reply to message #96438] |
Tue, 16 July 2013 00:45 |
jklam
Messages: 43
Registered: June 2013
Karma: 0
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Member |
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"Mike Stump" <mrs@kithrup.com> wrote in message
news:Mq0G09.9sr@kithrup.com...
> In article <b4ggfuF6oorU1@mid.individual.net>, jklam <jkl@nlgrf.com>
> wrote:
>>
>>
>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>> news:kruurf$tvh$1@dont-email.me...
>>> On 14-Jul-13 14:21, John Levine wrote:
>>>> >> So for capital gains, would you tax the total sale price, with
>>>> >> no deduction for the basis?
>>>> >
>>>> > That's just silly. A capital gain (i.e. income to be taxed) is
>>>> > defined as the difference between the sale price and the cost
>>>> > basis; there is no "deduction" involved.
>>>>
>>>> Well, OK, is it the nominal cost basis or inflation adjusted cost
>>>> basis? If you buy something for $1000 and sell it decades later for
>>>> $1500, but in the meantime prices have doubled, is that a gain or a
>>>> loss?
>>>
>>> AFAIK, our tax code has never considered the effects of inflation on an
>>> asset's cost basis, nor does GAAP or IFRS.
>>
>> Basically because it just isn't feasible to allow for inflation.
> Or, maybe that _is_ the design of the entire system, and you've just
> have never realized it.
It can't be the design of the entire system when so little of the income
tax revenue comes from capital gains.
> See, if they devalue money to just 10% of what it was over X years,
That does not happen in any well run economy.
> and everybody pays income on the 90% gain in valuation caused by the
> loss in value of that money,
That does not happen in any modern first or second world tax system
either, because most of the capital gain on the principle residence is
not taxed in any of those.
then, the tax rate isn't the 15% of the
> gain, but rather 15% of the 90% of the wealth over that time frame.
Sure, but that isn't seen in normal well run economies.
> The interesting question is, should we create a system where the CEO
> has an incentive to destroy the value of the stock?
Obviously not. And the non tax system doesn’t do that either,
none of the incentive schemes for CEOs reward that sort of result.
In the private
> markets, the CEO's goal is actually to cause the share price to go up,
> and he is rewarded if that happens. If it goes down, likely he will
> find himself out of a job.
Yes.
The government is rewarded when they
> destroy the value of money.
Not really, because capital gains is a small part of total income tax
revenue.
Ever ask yourself why the value of money
> always goes down?
I know why it does, we call that inflation which is inevitable for various
reasons.
> Probably not. Think about it.
I have thought about it quite a bit and have commented on that in usenet.
> Instead, consider this, what is the gain, if you have 1 kilogram of
> gold, and next year, you have 1 kilogram of gold. Ask a physicist.
> The will invariably say 0. Now, if you ask your tax accountant, they
> will explain to you, that you have to cut off a portion of the gold
> and give it to the government. Over time, you will wind up with no
> significant amount of gold.
That is not what happens if you retain the gold, because there
is no realisation of the capital gain and so no payment of part
of that gold to the government.
> This is 100% certain,
No it is not for the reason I listed.
as that _is_ the
> nature of the game.
> So, what we have is a system, where the few, get to take money from
> the 99% that have some money,
We actually have a system where the voters decide that they want
government to do some things and we have a taxation system
which raises most of the money which government spends.
but not enough to protect it from the
> people that take the money. The people that benefit the most, are the
> 1% that don't participate in the scheme.
The 1% who pay no tax at all do not in fact get much in the way
of government services at all.
In fact in the US the bottom HALF pay no net federal income tax at all.
If you want to look into
> this world, take a look at the Wallmart finances and corporate
> structure. You won't find 99% of the people in the US doing that.
> Among the the 1%, it is more common. I'd contend this is just an
> advanced shell game, and most people don't have any clue what the game
> is, that it exists at all, how to play, or the rules.
You don’t have any idea about how the system works yourself,
particularly with capital gains that are only taxed when the capital
gain is realised.
> It is amusing to watch you guys discuss it.
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| Re: What Makes a Tax System Bizarre? [message #96483 is a reply to message #96438] |
Tue, 16 July 2013 02:52 |
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Originally posted by: Ibmekon
On Tue, 16 Jul 2013 03:50:33 GMT, mrs@kithrup.com (Mike Stump) wrote:
> In article <b4ggfuF6oorU1@mid.individual.net>, jklam <jkl@nlgrf.com> wrote:
>>
>>
>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>> news:kruurf$tvh$1@dont-email.me...
>>> On 14-Jul-13 14:21, John Levine wrote:
>>>> >> So for capital gains, would you tax the total sale price, with
>>>> >> no deduction for the basis?
>>>> >
>>>> > That's just silly. A capital gain (i.e. income to be taxed) is
>>>> > defined as the difference between the sale price and the cost
>>>> > basis; there is no "deduction" involved.
>>>>
>>>> Well, OK, is it the nominal cost basis or inflation adjusted cost
>>>> basis? If you buy something for $1000 and sell it decades later for
>>>> $1500, but in the meantime prices have doubled, is that a gain or a
>>>> loss?
>>>
>>> AFAIK, our tax code has never considered the effects of inflation on an
>>> asset's cost basis, nor does GAAP or IFRS.
>>
>> Basically because it just isn't feasible to allow for inflation.
>
> Or, maybe that _is_ the design of the entire system, and you've just
> have never realized it.
>
> See, if they devalue money to just 10% of what it was over X years,
> and everybody pays income on the 90% gain in valuation caused by the
> loss in value of that money, then, the tax rate isn't the 15% of the
> gain, but rather 15% of the 90% of the wealth over that time frame.
>
> The interesting question is, should we create a system where the CEO
> has an incentive to destroy the value of the stock? In the private
> markets, the CEO's goal is actually to cause the share price to go up,
> and he is rewarded if that happens. If it goes down, likely he will
> find himself out of a job. The government is rewarded when they
> destroy the value of money. Ever ask yourself why the value of money
> always goes down? Probably not. Think about it.
>
> Instead, consider this, what is the gain, if you have 1 kilogram of
> gold, and next year, you have 1 kilogram of gold. Ask a physicist.
> The will invariably say 0.
Ask an economist what happens if in that year gov sell tons of gold
futures at low prices.
Your gold weighs less measured in dollars.
The gov is driving your investment vehicle.
> Now, if you ask your tax accountant, they
> will explain to you, that you have to cut off a portion of the gold
> and give it to the government. Over time, you will wind up with no
> significant amount of gold. This is 100% certain, as that _is_ the
> nature of the game.
When you work you get paid by the hour - noone can make or destroy
time.
So you cannot short change the system.
If you refuse to work, you end up in the workhouse, now called the
prison complex.
If you still refuse to work, you end up in solitary confinement.
And this is how your time is stolen.
>
> So, what we have is a system, where the few, get to take money from
> the 99% that have some money, but not enough to protect it from the
> people that take the money. The people that benefit the most, are the
> 1% that don't participate in the scheme. If you want to look into
> this world, take a look at the Wallmart finances and corporate
> structure. You won't find 99% of the people in the US doing that.
> Among the the 1%, it is more common. I'd contend this is just an
> advanced shell game, and most people don't have any clue what the game
> is, that it exists at all, how to play, or the rules.
>
> It is amusing to watch you guys discuss it.
The game is Mornington Crescent.
You can get free tickets for "I'm Sorry I Haven't a Clue".
https://en.wikipedia.org/wiki/Mornington_Crescent_%28game%29
Carl Goldsworthy
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| Re: What Makes a Tax System Bizarre? [message #96484 is a reply to message #96483] |
Tue, 16 July 2013 02:57 |
Rod Speed
Messages: 3507
Registered: January 2012
Karma: 0
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Senior Member |
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"Ibmekon" wrote in message
news:grp9u81bve9217lu3bv1icdl6h16d0gbov@4ax.com...
> On Tue, 16 Jul 2013 03:50:33 GMT, mrs@kithrup.com (Mike Stump) wrote:
>
>> In article <b4ggfuF6oorU1@mid.individual.net>, jklam <jkl@nlgrf.com>
>> wrote:
>>>
>>>
>>> "Stephen Sprunk" <stephen@sprunk.org> wrote in message
>>> news:kruurf$tvh$1@dont-email.me...
>>>> On 14-Jul-13 14:21, John Levine wrote:
>>>> >>> So for capital gains, would you tax the total sale price, with
>>>> >>> no deduction for the basis?
>>>> >>
>>>> >> That's just silly. A capital gain (i.e. income to be taxed) is
>>>> >> defined as the difference between the sale price and the cost
>>>> >> basis; there is no "deduction" involved.
>>>> >
>>>> > Well, OK, is it the nominal cost basis or inflation adjusted cost
>>>> > basis? If you buy something for $1000 and sell it decades later for
>>>> > $1500, but in the meantime prices have doubled, is that a gain or a
>>>> > loss?
>>>>
>>>> AFAIK, our tax code has never considered the effects of inflation on an
>>>> asset's cost basis, nor does GAAP or IFRS.
>>>
>>> Basically because it just isn't feasible to allow for inflation.
>>
>> Or, maybe that _is_ the design of the entire system, and you've just
>> have never realized it.
>>
>> See, if they devalue money to just 10% of what it was over X years,
>> and everybody pays income on the 90% gain in valuation caused by the
>> loss in value of that money, then, the tax rate isn't the 15% of the
>> gain, but rather 15% of the 90% of the wealth over that time frame.
>>
>> The interesting question is, should we create a system where the CEO
>> has an incentive to destroy the value of the stock? In the private
>> markets, the CEO's goal is actually to cause the share price to go up,
>> and he is rewarded if that happens. If it goes down, likely he will
>> find himself out of a job. The government is rewarded when they
>> destroy the value of money. Ever ask yourself why the value of money
>> always goes down? Probably not. Think about it.
>>
>> Instead, consider this, what is the gain, if you have 1 kilogram of
>> gold, and next year, you have 1 kilogram of gold. Ask a physicist.
>> The will invariably say 0.
>
> Ask an economist what happens if in that year gov sell tons of gold
> futures at low prices.
>
> Your gold weighs less measured in dollars.
>
> The gov is driving your investment vehicle.
>
>> Now, if you ask your tax accountant, they
>> will explain to you, that you have to cut off a portion of the gold
>> and give it to the government. Over time, you will wind up with no
>> significant amount of gold. This is 100% certain, as that _is_ the
>> nature of the game.
>
> When you work you get paid by the hour - noone can make or destroy
> time.
> So you cannot short change the system.
> If you refuse to work, you end up in the workhouse, now called the
> prison complex.
No, now called welfare.
> If you still refuse to work, you end up in solitary confinement.
No, plenty of prisons don't have compulsory prison labor.
> And this is how your time is stolen.
No.
>> So, what we have is a system, where the few, get to take money from
>> the 99% that have some money, but not enough to protect it from the
>> people that take the money. The people that benefit the most, are the
>> 1% that don't participate in the scheme. If you want to look into
>> this world, take a look at the Wallmart finances and corporate
>> structure. You won't find 99% of the people in the US doing that.
>> Among the the 1%, it is more common. I'd contend this is just an
>> advanced shell game, and most people don't have any clue what the game
>> is, that it exists at all, how to play, or the rules.
>>
>> It is amusing to watch you guys discuss it.
>
> The game is Mornington Crescent.
>
> You can get free tickets for "I'm Sorry I Haven't a Clue".
> https://en.wikipedia.org/wiki/Mornington_Crescent_%28game%29
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| Re: What Makes a Tax System Bizarre? [message #96529 is a reply to message #96438] |
Tue, 16 July 2013 07:18 |
Walter Banks
Messages: 1000
Registered: July 2012
Karma: 0
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Senior Member |
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Mike Stump wrote:
> See, if they devalue money to just 10% of what it was over X years,
> and everybody pays income on the 90% gain in valuation caused by the
> loss in value of that money, then, the tax rate isn't the 15% of the
> gain, but rather 15% of the 90% of the wealth over that time frame.
>
> The interesting question is, should we create a system where the CEO
> has an incentive to destroy the value of the stock? In the private
> markets, the CEO's goal is actually to cause the share price to go up,
> and he is rewarded if that happens. If it goes down, likely he will
> find himself out of a job. The government is rewarded when they
> destroy the value of money. Ever ask yourself why the value of money
> always goes down? Probably not. Think about it.
Currency value actually moves around like the stock market. responding
to open market supply and demand. In the last 20 or so years the
Euro has moved from $0.90 US to $1.40 US and the $Can has moved
from $0.65US to about $1.00US at the same time the US currency has
devalued.
In large economies the value of currency can be manipulated to
some degree by playing games with the money supply. There is
another way that currency values can be manipulated and that is
having currency controls that restrict the flow of currency out of the
country and then release a lot of currency at once and buy back the
currency when the value drops due to an over supply. Japan did that
a lot in he early 90's
w..
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| Re: What Makes an Architecture Bizarre? [message #96576 is a reply to message #96172] |
Tue, 16 July 2013 07:55 |
Peter Flass
Messages: 8375
Registered: December 2011
Karma: 0
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Senior Member |
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On 7/15/2013 7:57 AM, Walter Banks wrote:
>
> Tax and government polies could easily change wealth distribution
> significantly with changes in those area's.
>
> The latter may very well make Obamacare ineffective and
> certainly inefficient compared to many other countries but
> it will make many companies very rich.
>
I just read an interesting analogy. Most people have two good kidneys
and really only need one. while some people have kidney problems that
harm their quality of life and significantly shorten their lifespans.
Maybe the government needs a policy to redistribute kidneys from the
healthy people to the sick?
--
Pete
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| Re: What Makes an Architecture Bizarre? [message #96577 is a reply to message #96180] |
Tue, 16 July 2013 08:00 |
Peter Flass
Messages: 8375
Registered: December 2011
Karma: 0
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Senior Member |
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On 7/15/2013 8:55 AM, jmfbahciv wrote:
>
> this is just plain flat out wrong. Unearned income such as interest,
> capital gains, and dividends are the primary source of income for the
> retired middle class.
Good point. Anyone with a retirement plan or a 401-k is dependent on
these source of income, whether they think about it or not.
--
Pete
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| Re: What Makes an Architecture Bizarre? [message #96579 is a reply to message #96250] |
Tue, 16 July 2013 08:21 |
jmfbahciv
Messages: 6173
Registered: March 2012
Karma: 0
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Senior Member |
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Stephen Sprunk wrote:
> On 15-Jul-13 07:06, Peter Flass wrote:
>> On 7/14/2013 4:30 PM, jklam wrote:
>>>> In all of the above cases, he'd still be a billionaire today,
>>>> which is far more than he ever expected.
>>>
>>> Yes, he would still be stinking rich even if that capital gain was
>>> taxed at 95% and he would still try to do that.
>>
>> This is a "feel good" argument. That guy was just lucky and a lot
>> sess deserving than the lady who cleans the toilets in his house, so
>> let's take it from him and give it to her.
>
> I'd be satisfied if he paid (at least) the same effective tax rate that
> she did on her (much smaller) earnings.
>
> Even Warren Buffet says it's ridiculous that he pays a lower tax rate
> than his secretary does.
Warren Buffet was comparing earned income to unearned income. His
secretary has a salary which is in the highest tax bracket. Buffet is
nuts.
>
>> The fair way is to let everyone keep the money they earn (or "earn")
>> except for the _minimum_ required to run the government.
>
> Who decides what the "minimum" is?
>
> Since you (unlike BAH)
You are wrong; taxes are necessary; I haven't said otherwise. My
objections have to do with stultifying business and trade. The
sugggestions here about increasing taxes are just plain wrong and
will never solve the problem. The problem is Congress spends $3 for
every $1 revenue. If they increase taxes, they'll increase spending.
The suggestions of tax increases given in this thread are, in reality,
tax increases for the middle class, not the rich.
> at least accept that _someone_ must pay taxes to
> support whatever we can agree is a valid public expense, what do you
> think a "fair" distribution of those taxes would look like?
>
>> Sure I think a lot of athletes, actors, and dot-com millionaires
>> are way overpaid, but why is my opinion worth more than the votes
>> of millions of people expressed in the free market?
>
> If someone is willing to pay them that for their labor or ideas, then
> more power to 'em. My problem is solely with said millionaires (or
> billionaires) paying a _lower_ tax rate than middle-class (and often
> even "working poor") workers.
You are again lumpiing unearned income with earned income.
/BAH
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| Re: What Makes an Architecture Bizarre? [message #96580 is a reply to message #96320] |
Tue, 16 July 2013 08:22 |
jmfbahciv
Messages: 6173
Registered: March 2012
Karma: 0
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Senior Member |
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Scott Lurndal wrote:
> Andrew Swallow <am.swallow@btinternet.com> writes:
>> On 15/07/2013 20:45, Stephen Sprunk wrote:
>> {snip}
>>
>>>
>>> ... except that the CBO's studies show that the rich _don't_ spend their
>>> money; they mostly hoard it. That same amount of money in the hands of
>>> the working classes (or the govt) generates far more economic
>>> activity--and therefore real wealth.
>>>
>>> S
>>>
>>
>> Gold bars under the bed are hoarded money. Any other store and the rich
>> have lent their money to someone else to use. Normally the government,
>> banks and big business.
>
> Which is why they hoard picasso, rembrandt, warhol, land, old cars and
private jets.
If there isn't a market for these things, they're worth $0. The land
and jets are different. Jets imply travel which generates business.
Land usually isn't allowed to lie fallow.
>
> Only the latter trickles down in any form, and that is relatively
inconsequential.
Doesn't anyone here understand how wealth is created?
/BAH
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