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Truth about taxes.

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  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    142,000 have incomes greater than 25 million dollars. These are people hiring people to help them give their money away. Well, if theses people gave an average of 10 million dollars back in taxes that would generate over 14** trillion dollars a year in income revenue for the country. Shouldn't be a problem for people promising to give billions away. Paying off debt and spending that money would start an economic boom/boon and set an example for the world.

    **Correction: should read 1.4

  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Chet Ruminski Wrote: 142,000 have incomes greater than 25 million dollars. These are people hiring people to help them give their money away. Well, if theses people gave an average of 10 million dollars back in taxes that would generate over 14 trillion dollars a year in income revenue for the country. Shouldn't be a problem for people promising to give billions away. Paying off debt and spending that money would start an economic boom/boon and set an example for the world.

    All you have to do is add up the numbers and you will realize this is nowhere near enough money. 142,000 times 10 million equals roughly one and a half trillion dollars. The 2015 federal budget was 3.8 trillion.

    Do we need an overhaul of the tax code so corporations and hedge fund managers pay their fair share? Absolutely. But blaming the rich for everything that's wrong in this country just doesn't make sense. Automation, globalization, and other factors are more responsible than a handful of rich people taking advantage of the system.

    Mandatory spending like Social Security, Medicare, Medicaid, and various other safety net programs make up far more of a percentage of the budget than military spending does. That's just a fact. And that isn't going to change any time soon because old people vote and they will never vote to give their benefits away, even if it is to the detriment of the country as a whole.

    Americans are woefully under educated when it comes to understanding how the federal budget works. There's mandatory and discretionary spending. Mandatory spending are things that are by definition mandatory. It doesn't matter if there's enough revenue or not. That's why we need to raise taxes on everyone because there aren't enough rich people in America to pay for the things the average American has grown accustomed to. I know that's not a popular thing to say, but it true.

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    jaredsxtn, It is the real monetary theory that is being jeopardized. If the government spent that 1.42 Trillion Dollars the economy would boom. I would even put more than that back into the economy. I'll even bet there is a law some place addressing taking money out of the economy. Money is the lifeblood of an economy. Bleeding the money out of the economy is wrong and dangerous. When the top rate was 90% the economy did good because it had money. Taking money out creates another 1929 scenario. It is wrong no matter what anybody says to take a huge amount of money out of the economy. My theory!!!
  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    That is why we lost jobs to overseas. Shortage of money.
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Chet Ruminski Wrote: jaredsxtn, It is the real monetary theory that is being jeopardized. If the government spent that 1.42 Trillion Dollars the economy would boom. I would even put more than that back into the economy. I'll even bet there is a law some place addressing taking money out of the economy. Money is the lifeblood of an economy. Bleeding the money out of the economy is wrong and dangerous.

    This just doesn't make any sense. Rich people still pay taxes on their incomes. It's not like they don't pay anything at all and the only people paying taxes are the poor and downtrodden.

    Do I want to see taxes raised on the super rich and loopholes closed? Yes. A million times yes. But you are lying to yourself if you honestly think that a handful of rich people are solely to blame for everything that's wrong in America.

    Money is not the lifeblood of an economy; people are the lifeblood of an economy. As I said earlier--the vast majority of the budget is on non discretionary spending. That means things that have to be paid for no matter if the government has money for it or not. As I explained in my previous post, all non discretionary spending is for social services. That's just a fact.

    Chet Ruminski Wrote: When the top rate was 90% the economy did good because it had money. Taking money out creates another 1929 scenario. It is wrong no matter what anybody says to take a huge amount of money out of the economy. My theory!!!

    The rich found just as many ways to avoid that 90% tax rate as they do avoiding their rates now.

    What brought about the middle class of the baby boom generation was the fact that we won World War II and didn't have to spend trillions of dollars rebuilding our infrastructure. There was also a lot of low skilled jobs available for people who didn't have a great education. That is no longer the case due to globalization and the interconnected world economy.

    If you honestly believe that taxing the rich at 90% will bring the middle class back then you will be sorely disappointed when it doesn't turn out that way.

  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Chet Ruminski Wrote: That is why we lost jobs to overseas. Shortage of money.

    We lost jobs overseas because it became cheaper for companies to move their manufacturing overseas. It had nothing to do with a shortage of money.

    They wanted to make a bigger profit. That's it.

    Is it right? No. Is it illegal? No.

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    jaredsxtn Wrote:
    Chet Ruminski Wrote: That is why we lost jobs to overseas. Shortage of money.

    We lost jobs overseas because it became cheaper for companies to move their manufacturing overseas. It had nothing to do with a shortage of money.

    They wanted to make a bigger profit. That's it.

    Is it right? No. Is it illegal? No.

    We lost jobs overseas because discretionary money was diminishing and people stopped shopping quality and started shopping price. Money is the lifeblood of any economy. Shortage of money for spending is exactly what is going on. Money is tied up securing the derivative market. Money is stagnant and therefore reduction in production. The lifeblood is stagnant and hoarded. No money being spent. No secret.
  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    Simple test of logic. Is their validity to the value of a stimulus?
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    This entire post is so dangerously out of paradigm I don't know where to begin.

    As a simple point of logic, the government spends the currency first, and then and only then could anyone use that currency to pay taxes or purchase government debt from the government, or spend it to buy stuff for themselves. The funds to pay taxes or buy government securities comes from government spending. Not the other way around.

    The USD dollar is a simple tax credit and federal government debt is simply a mirror of the tax credits that have been saved by the rest of the entire world (U.S. domestic households, entities, and sub-governments, and foreign households, entities, and governments) not used to pay federal taxes.

    Federal taxes are like a needle on the thermostat of the economy that regulates the temperature of the economy.

    They are not for regulating the federal government's budget balance, but the balance of the economy.

    Government spending is about public purpose, not about stimulus. Government should not being doing things just because the economy sucks; they should do those things because it serves public purpose and benefits society and should always be done regardless of the temperature of the economy.

    The economy is like a runner that will go very fast, but will slow down if you put a bag over the runner's head.

    So if the economy is too cold that means taxes are too high for the amount of government spending and the private credit expansion that we have. Getting rid of the bag over the runner's head is not stimulus. It's reversing the government's decision to put the bag over the runner's head.

    Federal taxes regulate demand, and express other public interests, but they do not acquire the funds the federal government needs to spend.

    There is no financial crisis so deep that a sufficiently large enough tax cut or government spending increase cannot deal with. - Mosler's Law

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Carlitos -- Thank you for putting the conversation back in perspective. MMT is not easily understood, and I often fall back on the "conventional wisdom".
  • Independent
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    re: tax cuts. not any more.

    we are in interesting times. the fed has interest rates effectively negative. yet other nations and entities are still buying our debt. intriguing, that.

    imo, we are running into the beginnings of capitalism's fatal flaw which is the requirement of always needing (as opposed to simply seeking) new markets. bifurcation of wealth results in the developed world not being able to sell products to the developing world as a whole. yes, china and india are both large potential and existing markets but even they are not as large as we think. poorer developing nations such as vietnam for instance lack for a class of people with disposable income to purchase that which we wish to export. deindustrialization has created the twin concepts of the superstar and the permanent temp/micro gig/contractor. the superstar can provide his/her services and command high prices because he/she is extremely good at what he/she does. but not everyone can be a superstar and by no means can everyone afford the superstar. in conjunction with this the so-called entrepreneur symbolized by the uber driver and the like simply forces wages down. the same applies to temping and contracting. companies discard much of their wage bill in the form of benefits while pocketing the profits. since the wealthy can only impact consumption up to a certain point a much more broad pool is required to heavily impact consumption and thereby production. yet lower or stagnated wages do the opposite of stimulating production via demand. tax cuts on this broad pool amount to little individually and thus have little impact on demand as a whole. yes, they will undoubtedly spend that tax cut but then we enter into a never ending series of tax cuts unless demand can be stimulated by increased wages. at what point does the tax cut become ineffective much like the interest rate cut? companies allegedly have enormous profits. what is being done with these profits? how much is being utilized to buy back shares of stock to further pump share prices which further pumps up executive pay? how much isn't funneled to r & d? how much is paid in the form of dividends? who gets those dividends? are the rentiers simply enriching themselves? this is not about redistribution of wealth but what makes a sound economy and thereby a sound society.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    lonely bird, working people, particularly, low income working people are vastly overtaxed.

    If the economy is cold, they are the first persons who should have their taxes cut.

    And we need more government spending for public purpose.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    I, for one, believe we could eliminate the regressive, punishing federal payroll taxes and do the Sanders spending agenda without having to do a single tax increase on anyone.

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    Carlitos, You made a great post reinforcing Schmidt rectifying my post about taxes. Then you graciously reaffirmed my point when you said: "And we need more government spending for public purpose". Now to salvage your point you need to spin government spending into non tax dependency. Great wealth is the accumulation of credit not money. There is not enough money to satisfy the wealth. The government needs to reduce that credit into production by raising taxes.
    Schmidt, It is not that complicated that you have to appeal to needing special insight to understand. Or indicating a special relationship with MMT. You once agreed with me that there is too much money in derivatives. There is too much money in derivatives because huge sums are needed to service fee payments. That money (credit) securing the ballooning intrinsic to failure derivative market needs to be legislated back into the economy. Every income generator that sells hope instead of a material product fails when people decide to sell the hope back. Inflating hope to collect fees is another Ponzi scheme. The simple explanation for economic ills is the accumulation of credit. Collecting fees interrupts the cyclical function of a true economy which is trade. Collecting credit stifles trade and destroys an econmy. Winning the game and taking the ball home and locking it up ends future games. Simple as that. No conglomeration of the facts into mystical theories is needed to create elitism. Simple reduction into elements is the harsh truth unless the reduction is a challenge.
  • Independent
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    Carlitos Wrote:

    lonely bird, working people, particularly, low income working people are vastly overtaxed.

    If the economy is cold, they are the first persons who should have their taxes cut.

    And we need more government spending for public purpose.

    what taxes will you cut? how long will said tax cut stay in place? what will happen with the next economic stagnation? if you cut payroll taxes what happens to soc sec? with stagnated wages how much will said tax cuts amount to? i got my bush tax cut and it was spent. a one time shot to the economy and that was it. it did not allow me to suddenly make more purchases in the long run. tax cuts are not the issue. wages and jobs are. you are correct regarding government spending because as minsky noted the government needs to be the employer of last resort. the private sector will not and cannot lift an economy out of recession or slow growth as that is not the purpose of the private sector.