A REALLY bad day for liberals

[jaeger19]

Preferential tax treatment. The very wealthy earn most of their money from capital gains, which is taxed at a far lower rate than what paychecks are taxed.

Which is an example of why marginal rates does not equate with revenue.

 

[Fenton]

That's right. The attack on liberals is just a defense of the right of the privileged to keep and extend their privileges. We liberals aren't trying to 'punish' the rich. We just want them to pay a higher marginal tax rate.

Why ? ...

 

[jaeger19]

This is completely wrong.

Tax cuts ballooned the budget deficits. Tax increases can DEFINITELY reduce budget deficits. You are being dishonest.

Find me someone somewhere that proves the claim "You cannot tax your way out of the deficit." Because from an economic standpoint, that sounds like a completely bogus position that extremely wealthy people manufactured in the hope of reducing their personal tax obligation.

You're evading the concept of "fairness" by saying that you don't like the solution of someone else dictating your salary. It is not "fair" for, for example, a sweatshop owner to become a billionaire while his employees are so impoverished that they routinely starve to death and must be replaced. Notice, the owner doesn't have to do anything other than assist orchestration, he can even pay some manager beans to run the place on his behalf.

This is a very important question because, as evidenced by economic history, the economy grows much more powerful when wealth is not so wholly consolidated.

Nope.. not wrong at all.

Tax cuts ballooned deficits... a deficit that happened with increased spending as well. Something that you liberals ignore. You are concerned about the budget...oh yes.. so concerned that's why you have to have higher rates.. "because of the budget"... but the minute you talk about spending... "but we need to spend MORE".. which of course increases the budget deficit.

Anyone with at least a lick of sense realizes that you can't tax your way out of a budget deficit. Because if you don't control spending.. and it increases faster than taxes.. then you still have a deficit. You have to have control over spending AND control over revenue to balance a budget.
It seems a bogus position to you because you are an ideologue.

You're evading the concept of "fairness" by saying that you don't like the solution of someone else dictating your salary. It is not "fair" for, for example, a sweatshop owner to become a billionaire while his employees are so impoverished that they routinely starve to death and must be replaced

Except here is the problem with your version of fairness. Okay.. what if the sweatshop owner makes the same as his employees and routinely starve to death and are replaced? How well does your concept of fairness work.. when both starve?

Answer this regarding fairness. Would you personally rather make 100,000 while your employer makes 1 million... or would your rather make 10,000 dollars a year while your employer makes 20,000 dollars?

The second example is more fair according to you..so which would you choose. 100,000 a year.. or 10,000 a year but "more fair"?

 

[Absentglare]

Nope.. not wrong at all.

Tax cuts ballooned deficits... a deficit that happened with increased spending as well. Something that you liberals ignore. You are concerned about the budget...oh yes.. so concerned that's why you have to have higher rates.. "because of the budget"... but the minute you talk about spending... "but we need to spend MORE".. which of course increases the budget deficit.

Anyone with at least a lick of sense realizes that you can't tax your way out of a budget deficit. Because if you don't control spending.. and it increases faster than taxes.. then you still have a deficit. You have to have control over spending AND control over revenue to balance a budget.
It seems a bogus position to you because you are an ideologue.



Except here is the problem with your version of fairness. Okay.. what if the sweatshop owner makes the same as his employees and routinely starve to death and are replaced? How well does your concept of fairness work.. when both starve?

Answer this regarding fairness. Would you personally rather make 100,000 while your employer makes 1 million... or would your rather make 10,000 dollars a year while your employer makes 20,000 dollars?

The second example is more fair according to you..so which would you choose. 100,000 a year.. or 10,000 a year but "more fair"?

Okay. Good. So you abandoned that claim and accept the obvious point that tax increases can help with budget deficits. I agreed that spending cuts may be necessary, or even a one-sided approach in a different context.

If the sweatshop owner is also starving, solution is simple: business fails. There's no guarantee that every business succeeds. The idea that the public should bear the cost of a business that relies on pushing employees into poverty is asinine.

What i make should not simply be a function of my employers salary. It is not simple to come to a conclusive fairness in every case and that's a big part of the reason why fairness is so difficult to define.

A free market relies on the individual actors to compete with one another. For that to be true, they have to be on relatively equal footing, otherwise a small minority of extremely wealthy business owners could suffocate any competition, raise prices, lower wages, and maximize personal profit at the expense of the public. Like comcast and their comical >97% profit margin on high speed internet service.

 

[mmi]

Because GDP is not income

But how much of a difference is there?

>>You can have lower GDP.. yet have higher taxable income... you can have higher GDP.. and yet have lower taxable income.

I've noticed that. But that doesn't necessarily mean that they're not almost exactly the same pile of money. If both GDP and GDI are $17.7 trillion, one can go up a fraction of a percent while the other goes down. They could both still be right around $17.7 trillion.

Perhaps the term GDI is one I shouldn't be using. I'm looking at "money." We get that 3 trillion out of 17.7, or something very close to it, somehow.

>>You cannot tax your way out of the deficit... that's largely been proven.

If that's the case, where's the evidence proving it?

In his 1993 Budget Act, Clinton raised the top marginal rate from 31% to 39.6%, removed the cap on the 2.9% Medicare payroll tax, raised the corporate tax rate to a point to 35%, and increased the taxable portion of Social Security benefits. As I recall, he proposed a 10% surtax on income above $1 million, but I guess that didn't survive.

The number I find for his effective rate on the top 1.2% of earners is 43.7 — 39.6 plus 2.9 plus some kind of "limit on high-income taxpayers' itemized deductions." (AEI)

Here are the spending and deficit/surplus figures, in billions, from his terms:

1993 — 1409 -255
1994 — 1462 -203
1995 — 1516 -164
1996 — 1561 -107
1997 — 1601 -22
1998 — 1653 +69
1999 — 1702 +126
2000 — 1789 +236
2001 — 1863 +128

Spending went up by more than 32% over eight years, while deficits were eliminated and replaced by surpluses. I'd say Mr. Clinton raised taxes on upper-income households while he was steadily increasing spending … and got out of the red and into the black.

Speaking of black, Mr. Obama seems to have dramatically reduced deficits, raising taxes on the wealthy back up to Clinton-era levels while holding spending more or less flat.

2009 — 3518 -1413
2010 — 3457 -1294
2011 — 3603 -1297
2012 — 3537 -1087
2013 — 3454 -680
2014 — 3506 -485

>>even if you look at times when marginal rates where much higher on the wealthy.. the tax rate per GDP was around 18%

I'd accept a level under 20%.

>>Depending on how you do the calculation we are spending roughly 30% of GDP in government spending.

If you include state and local government spending, the figure is about 40%. I don't see how you could get it down to thirty.

>>Sure you do.. you just don't want to admit it

Boy, when you get an idea in yer head, you sure are reluctant to let it go. I can offer you 100% assurance that I have ZERO interest in "punishing the rich." You should be reasonable and accept. What reason could you have for thinking that I do?

>>Please explain why you "don't like severe maldistributions"

They're dysfunctional. If a very small percentage of the population has almost all the money, how can the economy operate effectively? I'll expand if you want, but this seems obvious to me.

>>Why would you be happier if my employees all made a third of what they make now... as long as there was less of a difference between me and them?

You've asked this sort of thing before and perhaps I didn't answer it.

No, I would not be happier. I again encourage you to give us some credit for not being complete idiots. Let's look at some real numbers rather than hypotheticals.



I want numbers more like this:

bottom — 7
second — 13
middle — 18
fourth — 23
81-99 — 31
top 1% — 8

We went backwards between 1979 and 2007. The numbers in 2011 were something like this:

bottom — 5
second — 10
middle — 14
fourth — 20
81-99 — 37
top 1% — 14

I'm convinced that we'd be in a position to grow the economy more rapidly with a distribution more like the one I prefer. And that's a big part of why I prefer it. I also think a 7% share for the bottom 20% (about an extra $350 billion) will provide resources to not only create more opportunity for social mobility but also take some of the edge off being poor.

 

[jaeger19]

Okay so half of this unfounded personal accusations seeking to discredit my authority, thanks for ignoring my request that you stop doing that.

You're flip-flopping here. If you actually agreed with me, instead of just claiming that you "voice concern" over "the fact that the wealthy do control politics," you could probably get over your personal vendetta and acknowledge that i raised some fair points. I don't profess that i'm always right, or that i never get caught up in my own emotions.

If you weren't so clouded by ideology, you could acknowledge that individuals are selfish actors and that, in many cases, forcing the redistribution of wealth through taxes and services is a viable solution.

You might think there are better solutions, that that proposal has issues. But you'd have to be completely detached from reality to insist that such a solution does not effect wealth inequality.

\

Well for one.. you have no "authority" to discredit.. this is an internet forum. Credibility? that's on you.

No flip flop from me. First and foremost.. I am not clouded by ideology.. not one bit. And my posts show that.

forcing the redistribution through taxes and services is NOT a viable solution.. its been tried.. its failed. As has already been proven. We have made our income tax system more progressive.. and we have increased spending on services/..and we have MORE inequity.. not less.
.

 

[Neomalthusian]

From my extensive reading in this area, I can tell you that most public pension systems are very solvent,

What level of funding ratio do you consider "very solvent?"

Those that seem to have difficulty are those where the politicians intentionally under-fund the pension system for political reasons.

When you look at pensions on a generation-by-generation basis, it doesn't make any difference whether one wants to arbitrarily pin the blame on "the politicians" vs. public sector managers vs. public sector employees vs. the voters themselves. The older generation had responsibility in the creation of those benefit schemes and the moral hazard occurs in the response to a shortfall, which is that the shortfall is required by law to be handed down to the next generation that had no representation when those "promises" were originated. Because this is the response under our laws, every possible party that shared in the responsibility for the original creation of the promises gets to externalize the cost onto a generation that by and large will not benefit from pensions later, and had no voice when they were started.

One reason is that funding pensions isn't front page news, while offering tax-cuts makes headlines.

The deeper reason is no one that's making or accepting the promises really has any responsibility to adequately fund them. They simply dish the responsibility off onto an unrepresented group.

More on this, the pension crisis has largely evaporated as the financial markets have rebounded.

Citation?

We have fiscal constraints mainly because we have cut taxes on the wealthy. It's not unspeakable to say so.

No. States and municipalities have fiscal constraints because they're not monetarily sovereign, because they answer to higher levels of government, and because capital is mobile from state to state so they can't simply fleece the rich to finance their irresponsibility or else they'll experience capital flight and end up worse off. Public pensions are not underfunded because someone passed "tax cuts for the rich." That's a red herring and a cliche.

 

[mmi]

What level of funding ratio do you consider "very solvent?"

I'd say that many public pension systems, both state and municipal, are in bad shape. But why do you care? I mean these are leeches, right? People who benefit from a confiscatory tax system that steals money from hard-working Amuricans. If they have to take a serious haircut on their gold-plated pension benefits, too bad.

This may be one good result of the Great Recession — the negative effect on the investments of those funds.

 

[Neomalthusian]

I'd say that many public pension systems, both state and municipal, are in bad shape.

Why would you say this? MTAtech informs us that most public pensions are "very solvent." Why is he wrong?

But why do you care?

Because I am in the generation that has to pay for them.

I mean these are leeches, right? People who benefit from a confiscatory tax system that steals money from hard-working Amuricans. If they have to take a serious haircut on their gold-plated pension benefits, too bad.

Deferring gratification on compensation earned by cashing it in later always involves risk. Either you risk losing principal to inflation or you invest to stay ahead of inflation but that also involves risk. Defined benefits were a uniquely fraudulent way around this risk for those who created them, because our laws allowed the benefit to be guaranteed while the risk is offloaded as an externality onto a generation that could not participate politically to object to it.

 

[mmi]

Why would you say this? MTAtech informs us that most public pensions are "very solvent." Why is he wrong?

Maybe he has a better handle on the data. I see numbers (from reliable sources) for unfunded liabilities that range from $1 trillion to $4.7 trillion.

>>Because I am in the generation that has to pay for them.

But you don't. Screw 'em. Like you say, they gambled and lost.

 

[MTAtech]

What level of funding ratio do you consider "very solvent?"


.

That requires a complicated actuarial answer that depends upon future returns, future contributions and future payouts. But what isn't needed is to have all the money available right now, as some pension hysterics suggest.

 

[jaeger19]

Okay. Good. So you abandoned that claim and accept the obvious point that tax increases can help with budget deficits. I agreed that spending cuts may be necessary, or even a one-sided approach in a different context.

If the sweatshop owner is also starving, solution is simple: business fails. There's no guarantee that every business succeeds. The idea that the public should bear the cost of a business that relies on pushing employees into poverty is asinine.

What i make should not simply be a function of my employers salary. It is not simple to come to a conclusive fairness in every case and that's a big part of the reason why fairness is so difficult to define.

A free market relies on the individual actors to compete with one another. For that to be true, they have to be on relatively equal footing, otherwise a small minority of extremely wealthy business owners could suffocate any competition, raise prices, lower wages, and maximize personal profit at the expense of the public. Like comcast and their comical >97% profit margin on high speed internet service.

I didn't abandon nothing. I have always understood that tax increases can increase revenue.. tax increases can also decrease revenue depending on how you tax.

that's funny about "what I make should not be a function of my employers salary?"... Really? Come now. You really are an ideologue. Holy crap batman... So I suppose that your employer should take all the risks of starting, owning, and operating a business.. simply to pay you what you want regardless of any profit or loss he/she makes? WOW.

 

[jaeger19]

I've noticed that. But that doesn't necessarily mean that they're not almost exactly the same pile of money. If both GDP and GDI are $17.7 trillion, one can go up a fraction of a percent while the other goes down. They could both still be right around $17.7 trillion.

And neither of them are taxable income. At anyone time.. the number of people in my community might equal your salary... that doesn't mean that its a good idea to use that statistic to calculate your taxes.

Spending went up by more than 32% over eight years, while deficits were eliminated and replaced by surpluses. I'd say Mr. Clinton raised taxes on upper-income households while he was steadily increasing spending … and got out of the red and into the black.

Actually spending went down. Clinton and the republican controlled congress put in several spending cuts that were a larger factor in reducing the deficit than the increase in marginal rates (you also forget that Clinton lowered the capital gains tax.. and that there was a tech boom that increased revenue)... Federal spending DECREASED from around 22% of GDP to 18 percent of GDP. That's was due to both spending cuts in defense.. spending cuts in medicare, and changes in welfare.. (advent of TANF) and other decreases in domestic spending.

Speaking of black, Mr. Obama seems to have dramatically reduced deficits, raising taxes on the wealthy back up to Clinton-era levels while holding spending more or less flat.

Bingo... taxes on the wealthy have increased back up, while taxes on the poor and middle class have gone down.. making our tax system MORE progressive. Meanwhile.. spending as a portion of GDP have gone up. Particularly spending on social programs.. remember the millions of people that are now subsidized for healthcare.. not to mention the increases in Medicaid..
So.. taxes on the wealthy has increased.. social spending has increased... and yet inequity has increased and social mobility has decreased.
You just proved my point.

Boy, when you get an idea in yer head, you sure are reluctant to let it go. I can offer you 100% assurance that I have ZERO interest in "punishing the rich." You should be reasonable and accept. What reason could you have for thinking that I do?

Your posts.. Oh I am sure you don't think that you don't want to "punish the rich".. just as I am sure that Donald Trump doesn't think his remarks about people coming from mexico are racist. But we have your posts and the reality is that your premise centers around increasing taxes on the rich. And yet you concede that taxing me more.. doesn't help my employees,,, that other ways to get revenue would work, that what matters more is what wages my employees get rather than the inequity or fairness.
And yet.. its still all about taxing the rich for you. Now.. with all the other workable alternatives and points... you focus on taxing rich more. Any reasonable person would conclude that its because you are focused on making the rich pay more.. simply to pay more.

I'm convinced that we'd be in a position to grow the economy more rapidly with a distribution more like the one I prefer. And that's a big part of why I prefer it. I also think a 7% share for the bottom 20% (about an extra $350 billion) will provide resources to not only create more opportunity for social mobility but also take some of the edge off being poor.

And taxing the rich more.. does nothing to change that.

 

[Absentglare]

forcing the redistribution through taxes and services is NOT a viable solution.. its been tried.. its failed. As has already been proven. We have made our income tax system more progressive.. and we have increased spending on services/..and we have MORE inequity.. not less.
.

It is NOT proven.

Your case that the tax code is increasingly progressive is far-fetched. It completely ignores what has happened to the super wealthy (capital gains/dividend tax rates, increasing number of tax deductions), or that almost 1,500 millionaires pay zero taxes. That's why we have more inequity. The inequity is consolidated in precisely the income group that you filter out of your cursory analysis.

So, if it's not conclusion-seeking, or clouding of ideology, then it must be simply a fundamental lack of understanding.

 

[Absentglare]

I didn't abandon nothing. I have always understood that tax increases can increase revenue.. tax increases can also decrease revenue depending on how you tax.

that's funny about "what I make should not be a function of my employers salary?"... Really? Come now. You really are an ideologue. Holy crap batman... So I suppose that your employer should take all the risks of starting, owning, and operating a business.. simply to pay you what you want regardless of any profit or loss he/she makes? WOW.

You completely abandoned your claim that you can't increase taxes to reduce budget deficits. That's good, because it was false by definition.

What i make should not be a simple function of my employers wages. What do you not like about that answer? That you painted me as your "liberal" piñata and i disappointed you by not acting like one? A janitor and an engineer shouldn't make the same amount because they're both employed by the same company. Don't oversimplify, jump to RIDICULOUS conclusions, then act like that automagically proves me wrong.

All the risks of starting a business...? What are you rambling about now? You think the CEO of comcast assumes a lot of "risk" or are you just trolling me?

 

[jaeger19]

You completely abandoned your claim that you can't increase taxes to reduce budget deficits. That's good, because it was false by definition.

What i make should not be a simple function of my employers wages. What do you not like about that answer? That you painted me as your "liberal" piñata and i disappointed you by not acting like one? A janitor and an engineer shouldn't make the same amount because they're both employed by the same company. Don't oversimplify, jump to RIDICULOUS conclusions, then act like that automagically proves me wrong.

All the risks of starting a business...? What are you rambling about now? You think the CEO of comcast assumes a lot of "risk" or are you just trolling me?

Nope.. I didn't abandon my claim.. I stated that you can't tax your way out of deficits.. and I stand by that... you have to control spending AND control revenue... which is what you liberals constantly forget... mention spending to liberals and the increase in spending during the bush years and Obama the first three years.. and its "we didn't spend enough that's why it didn't work!"..
What you make HAS to be a function of an employers wages.. the only reason you have a job is because you make someone else money.. and the more money you make them.. the more money that's available for your salary.

All the risks of starting a business...? What are you rambling about now? You think the CEO of comcast assumes a lot of "risk" or are you just trolling me?

The investors that started Comcast took a lot of risk.. and the reason that the employees of Comcast including the CEO make the salary they do is because those investors were willing to take that risk and that investment pays off. If they aren't getting paid.. then the employees aren't getting paid.. whether a CEO or a toilet cleaner.


Wait a minute.. I think I understand your confusion.. .. you do realize that the CEO is not your employer unless he is owner of the company.

 

[Absentglare]

Nope.. I didn't abandon my claim.. I stated that you can't tax your way out of deficits.. and I stand by that... you have to control spending AND control revenue... which is what you liberals constantly forget... mention spending to liberals and the increase in spending during the bush years and Obama the first three years.. and its "we didn't spend enough that's why it didn't work!"..
What you make HAS to be a function of an employers wages.. the only reason you have a job is because you make someone else money.. and the more money you make them.. the more money that's available for your salary.



The investors that started Comcast took a lot of risk.. and the reason that the employees of Comcast including the CEO make the salary they do is because those investors were willing to take that risk and that investment pays off. If they aren't getting paid.. then the employees aren't getting paid.. whether a CEO or a toilet cleaner.


Wait a minute.. I think I understand your confusion.. .. you do realize that the CEO is not your employer unless he is owner of the company.

Okay so now your claim is that the United States, right now, can't tax its way out of deficits?? Is that your claim ?? Because the generic statement that you couldn't say, spend $1/year and collect 0$/year, then fix that budget deficit by, say, collecting $1/year in taxes is laughably false- and that is what your abandoned, and now re-acquired, absurd claim states. It's trivially false.

It is not a function of employers wages... It's not even a pure function of profits... Look at seasonal industries, they might post losses for several quarters, that doesn't mean employees don't get paid. Employees often get an employment contract. The pay rate is often determined by HR using qualifications and duties.

You're right. The current CEO of comcast didn't take any risk. Why is he so ridiculously well paid for a corrupt organization that has phenomenally awful customer service? How can they gouge their customers with a 97% profit margin ? Where's the competition ?

Believe it or not, the CEO represents the employer. Do you think the board of directors looked at my resume and decided to hire me ...?

 

[Neomalthusian]

Maybe he has a better handle on the data. I see numbers (from reliable sources) for unfunded liabilities that range from $1 trillion to $4.7 trillion.

>>Because I am in the generation that has to pay for them.

But you don't. Screw 'em. Like you say, they gambled and lost.

Gotta convince lawmakers to think that way, which is difficult when 75% of seniors vote and everyone under 40 is too busy updating their Twitter and Facebook profiles. Tyranny of the majority.

 

[Neomalthusian]

That requires a complicated actuarial answer that depends upon future returns, future contributions and future payouts. But what isn't needed is to have all the money available right now, as some pension hysterics suggest.

The only reason it "isn't needed" is because our laws just make non-pensioners produce the money.

 

[Absentglare]

The only reason it "isn't needed" is because our laws just make non-pensioners produce the money.

No, the reason it "isn't needed" is because immediate payment is not required. Future payments are required. In the future, the pension fund may be in a better position to make those payments.

 

[Neomalthusian]

No, the reason it "isn't needed" is because immediate payment is not required. Future payments are required.

And who pays in the future? Pensioners, or non-pensioners? People who will receive a similar level of benefit from pensions? Or people who will receive a reduced benefit?

It's like you guys are trying desperately to not understand the problem with pensions.

 

[Absentglare]

And who pays in the future? Pensioners, or non-pensioners? People who will receive a similar level of benefit from pensions? Or people who will receive a reduced benefit?

It's like you guys are trying desperately to not understand the problem with pensions.

Well, if i'd have to be a pretty terrible investor to take a big pile of cash that i don't need to spend anytime soon and just let it sit somewhere, collecting dust.

 

[Neomalthusian]

Well, if i'd have to be a pretty terrible investor to take a big pile of cash that i don't need to spend anytime soon and just let it sit somewhere, collecting dust.

Pensions and other PAYGO schemes are not piles of cash that are invested. You're not going to be able to justify pensions by pretending they're something else.

And why didn't you answer the question in the previous post?

 

[MTAtech]

Pensions and other PAYGO schemes are not piles of cash that are invested. You're not going to be able to justify pensions by pretending they're something else.

And why didn't you answer the question in the previous post?

Well, if they are invested, we presume a rate-of-return. What that rate-of-return generates is really important to determine how much money is needed now to fund future pension payouts.

Actuaries compute how much the public needs to contribute to the pension funds, how much the employee need to contribute, plus investment gains are needed to be sufficient to meet the needs of future payouts. The problem arises when today's politicians under-fund the pensions to use the money for something else -- then claim that the fund is insufficient and blame the public employees for having a too generous pension.

 

[Neomalthusian]

Well, if they are invested, we presume a rate-of-return. What that rate-of-return generates is really important to determine how much money is needed now to fund future pension payouts.

Actuaries compute how much the public needs to contribute to the pension funds, how much the employee need to contribute, plus investment gains are needed to be sufficient to meet the needs of future payouts. The problem arises when today's politicians under-fund the pensions to use the money for something else

Or when any number of other things happen that cause the actuarial predictions to not come true.

then claim that the fund is insufficient

Well it is.

and blame the public employees for having a too generous pension.

I don't blame public employees. I blame anyone and everyone that thinks negative pension externalities are good policy, i.e., thinks non-pensioners should pay the vast majority of pension liabilities that originated before they could vote.

It doesn't matter what any actuary thinks or computes, the person getting a future defined benefit based on predictions should be the same person taking on the risk that those prediction doesn't come true. When you invest your own money, you likewise absorb the risk of any losses. When you get a pension, you get the benefit and someone else (who can't object) gets the risk. That is an externality by definition, and it shouldn't be legal.