Rick, I'll be answering your posts from oldest to newest, hope that is fine. Sorry for the lateness of my response, as I mentioned over PM, I got side tracked by a thread about dogs and spent too much time there.
Also, woohoo, 750 posts! Each as long as 30 posts!
» First PostWealth and Income TaxFirst off, thank you for the compliments! Never-the-less, I am always worried about causing offense as it's my first fear online, in part because I never want to hurt another unnecessarily and in part because I don't want to cause blocks to a conversation, as insults invariably do. Accidentally insulting someone is something I've done in the past, albeit perhaps sometimes to people who were overly sensitive, but it's something that has stuck with me for years on forums since then.
Plus, I have to be nice! You guys are all reading my stupidly long posts! I can't be mean! Otherwise you'll stop tolerating me!
Let us begin with income tax. I'm well aware that you are not talking about wealth, but the main aim of that post is to demonstrate that there is a lack of capital and a lack of underlying wealth among the group in the bottom 50%. This means that their income already does not allow for aggregation of wealth, improvement of their situation, and so forth, something which is not true about the richest among us. Unlike the bottom 50%, the top 1% have myriad financial supports (such as the land) to fall back upon should their income be reduced by taxation. Income tax on the poor, however, taps into what would already have been spent and directly impact their livelihood -- after all, if they had any excess income to spend, they'd have more wealth than the 1% that they actually hold of all land.
We can draw many conclusions already from wealth, even though it is not what we tax. We can see that there is not enough money available for wealth to form in the lowest income group -- all income for the bottom 50% is
used. We find that the rich are able to support a greater loss of income than the poor. And we know that what money the bottom 50% tends to get is spent. That 1% spread among 50% of the population implies that many are already in debt, trying to rent/own the roof over their heads and their means of transportation. Further taxation down there will only harm their ability to survive.
That is why I directly clash with your comments about the American system not being able to survive without the income from the bottom 50%. The bottom 50% have little of consequence to provide the system from income tax alone, at 13% of all income, income that they need. They are wholly dependent on their annual income. Reducing taxation will invariably introduce harms, something that isn't as true for much of the middle class and most of the very rich.
Keep in mind that I made it very clear that I was not talking about income tax. I even go on to provide such values for income tax to ensure that no confusion is present. What is important about including overall wealth is that it demonstrates that the USA has a massively disenfranchised, underprivileged and disadvantaged bottom 50% who, even though they provide half of all labour into the United States economy, are unable to maintain, aggregate or improve upon their position. I grew up with farmers, many of whom would be in such situations. Very few ever got to leave the farm before the day they died. It's not because they weren't smart -- my grandmother had a business degree and worked as a denturist -- but they never had the capital to make use of any of that. Most of the money they get goes directly into fuel, environmental and property tax. Four generations of contribution later and the family still runs the same damn farm, because options were limited for leaving. If not for my uncle taking over the farm 100%, my mother would never have been able to leave the farm and become one of the world's leading immunologists, or have contributed to papers in
Science,
Nature and
Cell.
These are the kind of limitations that become more prevalent if we push taxes on a group that already does not have the money or the relative freedom of choice that comes with having slight financial leeway. Restricting income in the bottom class further will only damage the well being of 50% of the American working population, their children, and the future of both those people, and the American economy as a whole. Not to mention the various health and income problems I discussed in my previous post. This is why I responded so fervently to the question you posed of "could your country survive if only half the people were paying taxes?" The question for me, is whether or not the American country can survive with the taxes, from sales tax through all the others, that already exist on the American bottom 50%.
As for comparative amounts in Canada, the bottom does pay more in Canada. The bottom 50% pays a little less than 4%, in contrast to 2.25%. The top 5.67% pay 46% of all taxes. The top 5% in America pay more than 58%. For the record, my father is in the top Canadian tax bracket, so if I do have a bias here, it's in that direction. ;D The question of where the cut off is is of higher question. Canada has a larger middle class, however -- and a more well off one at that. The average Canadian is more well off than the average American citizen.
The USA-Canada Tax Comparison (Written While Tired)As for comparing Canada to the USA... I find this to be somewhat divergent from the topic at hand, but I will respond anyways!
In Canada, the bottom 50% are more well off -- not only does the state cover more costs, like health care and so forth, but the wealth cut off is ~42,000 dollars. They control 22.5% of the income. They are
able to pay more. Keep in mind, these are
household wages in Canada, so your 70,000 example doesn't even include them in that sampling. The top 5% in Canada begins at 121,000. In the USA? 154,000. In Canada, the top 1% begins at around 250,000. In the USA, it's closer to 350,000 (344,000). Our top pays less, but also earns
significantly less. Our bottom pays more, but also earns more. The Canadian system, which has been far healthier in recent years, falls more in line with what I have advocated in my post. The rich should pay a higher proportion if they earn so much more. The bottom should not have to pay as much for their ability to contribute, and in Canada, we still have them contributing more to reflect their better off economic status. Indeed, our bottom 50% is so much more better off, we can squeeze almost double our proportion of taxes out of them as the Americans can theirs without incurring the same social costs. Are such costs still problems in Canada? Yes, but not to the same extent. Tax shortfalls CAN be made up by such a paradigm.
If Americans had a tax system which did improve the well being of their bottom 50%, they might be able to effectively tax the bottom 50% in a decade or so. Right now, the bottom 50% is giving all they can give right now.
Comparing yourself to two people make 35,000 is off base (they are both above the bottom 50% in the USA ftr), and I think you are missing a few points in there as well. It's not the fault of the two people who are taxpayers and are making 35,000 that they are making the best out of the money they have. If your household has one person making 60,000, that isn't their fault. If two room mates are making 35,000 each, we don't charge them more because they are room mates. I already mentioned that that family example of yours wouldn't be in the bottom 50% of income in any case. They would be part of the middle class. Charge them all you want, you can save money. In Canada, talking about the bottom 50% means households making 2/3s of what you make now for a household. ;D
For the record, you have to keep in mind that married people filing pay a different rate. In the USA, for example, they would pay a higher rate for two 35,000 income people filing jointly. In Canada, we report our spouses income as well, even though we FILE separately. This means that you are actually viable for tax relief if you were married and your wife does not work -- tax relief the two people making 35,000 who are married would not get. The Canadian system presumes that people work for a living, and if not, are on something like maternity leave or something similar. Punishing people who work because some do not makes no sense to me. It is also based on the idea that we don't know the status of these people -- many people making 35k or less are not in such situations. That's why we have tax credits, for those situations where the tax code doesn't make up for the needs of people in different situations.
So your example DOES pay income taxes and IS included in the overall taxation pool regardless of the bottom 50% cut off (as they are above it). In Canada, our bottom pays more, but that's because they actually have more money -- our bottom 50% includes people making 10k more, so some of them can afford to pay taxes more readily. However, Canada could still survive off of households making less than 42k aggregate not paying taxes, as we would lose 4% of tax revenue -- an amount easily made up by a slight increase in GST, or raising taxes on other brackets. The necessity of it isn't there in Canada terms, but in American terms, the difference between income and tax levels are far more stark. Indeed, if you want to compare the systems, you have to keep in mind that our top 1%, top 5%, and top 10% have a far higher effective tax rate than anyone in those brackets in the USA.
As for the GST bit, sure. Americans would probably fight against it. Keep in mind, though, that this means that income tax makes up an even MORE important part of your taxes, and income tax revenues have been hit hard by the economic downturn and tax cuts for years now. Perhaps it's time to ramp up the income a bit by asking the group with the most cushioning to share a bit of their cushions?
I'm finishing this section at 7:20 in the morning, so I hope it makes sense.
Gini and GeniesCuba has never been ranked high on any well documented gini list, so it sounds like one where some site administrator took a Cuban government "estimate" and tried to make it fit on the list. Most gini indexes used by economists these days depend on third body corroboration, typically major bodies like a UN department and so forth. Some nations avoid providing information to the UN in part because of the embarrassment it would have on regimes in charge -- many "communist" regimes thus far have refused to give it credence because they would necessarily not rank well, given the structures found in many such countries.
Mind, neither has America. When your 50% cut off is 32,000 and your top 1% of earners make 11.5 times more than that, it does mean there is a fair bit of inequality. It's also possible the difference was pre- and post-tax. A pre-tax gini index has America at 0.49, well behind the pack. Post-tax, however, has America at 0.38. Better than modern Cuba. However, that is still well behind most developed nations... and into the territory of some less than reputable ones.
As for immigrants, yes, many try to come to America, but keep in mind where many are coming from. Wouldn't you want to leave the third world and come to the first had you the ability to? Saying that people want to come to your country is no hard feat -- it's true of the entire first world. Every first world country in the world now actually would not be growing in population if not for immigrants, and this has been true for some time. Most of our countries have millions of people willing to enter at any given time, and many come to the USA because you have parts of the country where you never get snow -- something unique to the USA and Australia among first world countries (the other immigration hotspot of the world).
Nothing you said is not true of Europe or Canada. In fact, hundreds of thousands of people have died trying to reach Europe from Asia in the past few years, some trying to cross to a new continent on driftwood. The fact is, though, if you want to come to a place where you can succeed, America has continued to fall behind -- social mobility, as I mentioned previously, is at an all time low. Rarely before have so many children of the poor not been able to rise up and the children of the rich never had to worry about falling down. Nor did I state we wanted perfect equality -- I even have an entire section of my post dedicated to state perfect equality is not what we want. I don't support free-rides, but I do support giving people more options to support America. People like my mother.
However, not coming to America for equality? These people left countries that have NO equality. Who are at the bottom of the gini index list. None of these people coming on cargo containers are coming from places that rank higher than the USA on the gini index. They are coming here because there is more equality, because equality is what gives you opportunity. Equality in getting jobs, equality in getting involved in the political process, equality in treating your fellow man, and equality in dealing with people who disagree with the government. America is among the top countries because it
has equality. The problem is that America isn't being helped by gaining MORE inequality. By wandering down the path towards where these people fled from. Where political say is limited and where the ability to get jobs is limited (from university costs through relocation costs). By being told your ability to eat any food is less important than the ability of someone else to buy a fine dinner in a fine French restaurant. That is where this discussion lies.
People still want to come to America because there are worse places to live. Being able to say you aren't the worst doesn't mean you should stop striving for the best. Being the best also doesn't stop you from striving to be better. You said it yourself that Americans don't want to settle, and millions of Americans don't want America to settle for the way things are today. I think that's following the message more poignantly than anything else. They want to make America the best and keep it the best where it is the best. And sometimes, that means change.
My Millings on Malden MillsNotice first, that the gentlemen from Malden Mills did the majority of his good work from one place -- behind his desk. The decisions he made were not tied to income tax, but rather to the livability of his company. We're not talking about corporate tax or that sort of thing, but rather whether or not the gentlemen running the company of Malden Mills would have been able to pay more in his taxes.
And your know what, I think he could have. And I think he would have been willing to, by the way you described him. His ability to work behind a desk is not stopped because an extra 2% of his income was given over to helping workers across America, exactly like the ones he helped on his floor. Nor would it have stopped him from helping the people on the floor either.
Notice that this entire example is exogenous to the topic of income taxes. The guy could have paid NO income taxes and his company STILL would have gone under. This guy didn't create more jobs either way, he lost them. In fact, this example is poignant in exactly one way -- it shows just how little income taxes had to do with job creation. The plant was screwed either way -- your own post shows he wasn't competitive as long as he was using North American workers. Unless you want to suggest that he could afford to hire them all on as an army of gardeners, I don't see it's relevance.
If the plant had stayed on, he still could have paid more in taxes. Taxes that would have improved the roads these people drove on, paid for the schooling of the kids so they could aspire to more than making shirts, defended the country in a post-WW2 cold war world, or supported the agricultural sector he relied on for raw resources, providing him money by subsidies and a healthy supply of what he needed in return.
People like to bitch about the rich because today isn't full of Malden Mills. The modern rich is rife with people who send money overseas, escape paying taxes, and "send jobs to China." These are the people you are defending. Not Malden Mills, but the people who put Malden Mills under. The ones who use sweat shop labour that people demand tax credits for. That is where the modern debate lies. We won't be taxing Malden Mills anymore. We won't even be taxing the companies more. We're talking about the ones you despise in that story -- the ones who put such a nice CEO out of business. Those who aren't like those people probably don't have a problem supporting their country, on which the foundations of their companies, consumers, and employees lay their lives on.
» Second PostSpending Time on the VideoI disliked that video, to be honest. I found a few problems with it.
The first was that Americans pay 3 times more tax today, and how that is horrible. Not only is America suffering an aging population, but we introduced stuff like Medicare and Medicaid which makes up a large portion of the budget, shortly thereafter. Military spending has also been rising (pretending we could survive on a third when considering military spending alone is already a farce), a larger portion of the bill is now paid by interest, the schooling system is now far more robust, and so forth. He then creates a strawman, where he uses all that spending and, somehow, compares it to medical spending rates (of course, avoiding the inclusion of insurance, which is what makes health care so expensive in the USA). Most of the spending also takes place in areas beyond the discretion of the government -- over half of all spending is automatic in some form or another. Half!
I don't know about you guys, but I also would not want to live in the USA in the 1950s considering the life I am able to live now, a life with access to everything from the internet on through modern education where we actually do chemistry experiments of some complexity. Nor did the government support such a wide array of discovery, ranging from massive programs like NASA through the billions in grants given to millions of researchers working on everything from cancer research through building better designed homes that resist fire. Plus, the questions are, have we seen a change in America's economy because we spent more? The average person has been producing more thanks to advances supported by the American economy. Life expectancy has exploded. When not in a recession, the deficit spending has consistently been within 1 to 2% of the economy, not rising endlessly. Obama's spending, and Mr. Bush's, actually wandered fairly significantly from historic norms. In other words, spending has kept pace with economic growth... but always slightly outpacing it.
What needs to change is the only conclusion that is right in the video (aside from the ending of my last paragraph). Americans need to begin running surpluses. And soon, unfortunately. Without debt payments, you guys already would be in a far better position. But it can't be met purely by shutting down services and spending, services that are an essential part of what keeps America competitive in a world that is very different from 1950 -- to keep some of what has turned America into something the people of 1950 would be in awe of, there isn't enough that needs to be cut. I really question any argument that predicates 1950 America as being better than 1995, 2000, or 2010 America.
Cutting taxes endlessly over the past few years, and suggesting even MORE in the upcoming election, is highly questionable at the least. When you are already running a deficit, the answer is not to take actions to make it worst. You need to cover as much of that gap ASAP, which means everything should be geared towards making that possible. Reduce spending, but be more reasonable with taxation!
As said, I think spending could be dropped. America, for example, does not need to spend more than the next 20 (19 allies included) on the list to maintain a necessary level of military spending, for example. But I don't view this situation as binary. Nor do I view the current taxation rates as
fair. Spending can (and should) be dropped in some areas in addition to what I am encouraging. Keep in mind that typically you don't want to stop spending in a recession until you are booming again, so even this runs contrary to what I'd really like, but the USA has kind of painted itself into a corner in that regard.
Impoverished PoliticsIf most of them are below the poverty level and hence likely are in a poverty trap, why wouldn't they support such ideals? They certainly can't fund the changes if they are impoverished. If spending isn't going towards anything that is helping them, I would not be surprised if a third of people being below the poverty level does bring about demands for change, and a demands for increased spending for them so they can finally become members of America society that you want them to be.
For the record, "throwing money at it" holds about as much water for me and stating "religious people are stupid." Both are empty statements that massively misrepresent the actual situation. Are all religious people stupid? No. My aforementioned mother is religious. Are we "throwing money" at paving roads and having a police force and so forth? No. There are successful social programs out there that reduce crime and improve people's lives. The idea that it isn't possible makes no sense for me.
For the record, note that these people who you say are enriching themselves is one of the problems with American society, from my point of view. Why pay tax? Clearly I can do more with it if I keep it, as I am rich. Hell, I really have to wonder if, if it's as bad as you say, with corrupt leaders and so forth, if any initiative has been undertaken? Would it be undertaken if a Republican was there instead, and if crime in that office is such a problem, who says it is limited to democrats?
I could also find a number of shit-ridden hellholes that always vote Republican and try for libertarian ideologies. I'm sure the democrats there would be no better, because there tend to be a kind of people willing to take on those positions, unfortunately. There are shitholes in every country, and every country has places that are politically polarized. I live in Alberta, but I could smell a cow fart in space before we went NDP, even if some people agree with some of their policies. Not that there aren't people who disagree, or that the entire province is better off for it -- it's just how we vote as a whole, typically.
The other posters have covered this in more detail.
» Third PostPoverty Not Paying Its Fair ShareI'd like to point out first that it seems entirely fair that people who have problem putting food on the table not pay income taxes? What are they going to do, put their crusts in the tax income basket? This is the problem with flat taxes and the ideal that everyone must pay -- because not everyone is in the same situation, we end up with ones like this, where you have people who don't have the money to even feed themselves being told "get the money to move out of there if you want to live a life."
If Newark is on the down then you'd assume some company would move in to take advantage of the cheap labour, but notice that the private industry has done nothing here. If there's crime here, then maybe money needs to be spent to catch those people. If money is not spent on programs to educate people about cigs or drugs, people get caught up with a large amount of their income going towards that. There are benefits to putting money into areas like this. These people are American. How do we proceed in a city full of our country-men?
This opens a lot of questions. What do we do with towns like Detroit, or small-town Mississippi, or numerous other regions of the USA that are constantly on the down, Republican or Democrat? This moves beyond taxes into questions of what to do with towns, or even cities, when their economic benefit disappears. Do we just let them fall into disrepair? Do we try to support them? How do we stop them from being bastions of crime? Is doing nothing even an option? Won't it just become worse?
The only point I have here, instead of delving into dozens of paragraphs of barely related ranting on my part, is that to
do something, the government
needs something.
And that's money.
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