The search for millions...

dadx · July 11, 2005, 1:47pm

Of course, my point is who chooses how to spend my money or dispose of my property. I prefer it to be me, or those I choose. Frankly, I ought to be able to give all of it away to anyone I choose…after all, it is mine, is it not?? Oh yeah, I understand now…

We can throw up all the false premises that we want, like the one that estates have benefited from some tax sheltering…balderdash. [By the way, if we had left the Reagan tax cuts alone, they had it all correct. Get rid of the deductions and clean up the system. Don’t distinguish between types of income. Now we’re back to the old raise the rates and sell deductions to groups for votes and campaign contributions.]

I don’t understand why I never hear any discussion from the halls of Ivy or elsewhere about the dislocations that arise from this so-called progressive system of taxation. The ability to vote to spend other peoples money in higher proportion than your own is surely a subject of interest in the spending decisions it produces.

Another taboo subject is the discussions of how freedoms might lead to inequality. In all of the handwringing articles from the Times and the WSJ over the past several months about the distributions of income and wealth, I don’t believe I once saw any reference to the effects of the continued growing numbers of women in high income positions. Frankly, I believe a fair study would be likely to find that a very great portion of inequality results from that fact the high income earners tend to marry each other. It may help with “gender equality” but it wreaks havoc on those stats of family income, and infuriates those who think that the primary evidence and only proof of a level playing field is a perpetual tie score.

In any case, kirmun’s earlier point is one I agree with. Both rich and poor people have idiosyncratic qualities that its wise to watch out for. There’s no monopoly on human failings and ambition, and they don’t fade when they appear to be satisfied.

dstark · July 11, 2005, 2:51pm

Dadx, I diasagree with you on your first paragraph. If what you say is true, then why pay any taxes at all? Then why can’t I choose to spend my income anyway I wish? Why do I have to pay income taxes? It’s my money, I earned it.

I love how people complain about the progessive nature of taxes when most taxes are regressive. When you include capital gains taxes and taxes on dividends, even the income tax isn’t very progressive.

As for the balderdash comment, you can say what you want but you are wrong. There is plenty of tax sheltering going on. There are people in my community sitting on untaxed gains in the millions. If Bush 2 gets his way, these gains will never be taxed. NEVER!!!

I liked the Reagan system of the mid-eighties too. Of course the wealthy didn’t like paying a capital gains tax of 28% so that had to go. And of course, we set the tax rates too low and ran deficit after deficit.

ariesathena · July 11, 2005, 3:07pm

Great posts, Kirmum. I imagine that your kids are growing up sane, stable, and caring if that is the attitude you’ve taught them.

timely · August 4, 2005, 2:05pm

Dstark,
I’m loving this discussion. It’s rare to find an online political discussion that is spirited without being mean-spirited!

We do that. Nobody starves in this country. Also, a good bit of the safety net is privately funded by charities. That’s good. With capitalism, the wealthier should give generously to help those less fortunate.

15mbw mentioned that in this country most of the poor have hot water and adequate food. I remember reading a study that most of those under the poverty level in this country also have microwave ovens, t.v.'s, and dvd players.

Maybe it would be helpful in this country to come up with what we would consider a minimum standard of living…enough food to eat, some level of medical care (which might not be CAT scans and heart transplants for everybody), and adequate shelter. I don’t know if it would be possible to do this, though. What if someone doesn’t have adequate shelter, but they buy 2 packs of cigarettes a day or food for their dogs? Too bad we can’t give everybody a smart pill.

When you make health care free, people abuse it. I saw this when my husband was in the military. In the military, soldiers and their dependents have free health care. People took their kids to see a dr. every time they had the sniffles. We would have to wait for hours and hours to see a dr. because people abused the system so much.

I agree that the system we have now is broken. It isn’t helping the wealthy much either, because as health insurance costs keep spiraling up, more and more people are not covered. So the system provides a lot of free care to the uninsured, and they make up for it by charging more and more to those who do pay.

On a related ramble, Texas is often criticized for having one of the largest # of uninsured children in the nation. The media never seems to mention that the reason for that is that there are so many illegal immigrant children here. Do we have to provide health care for them, too? Are the taxpayers in the U.S. responsible to provide health care for all of Latin America?

Hospitals do provide emergency care to anyone, whether they can pay or not. Advocates for immigrants want more preventive and “low-level” care, so that minor illnesses don’t progress to more expensive emergencies. That is understandable, but really, it is easy to understand why immigrants come here illegally. If they can just make it across the border, their kids will receive an education and they’ll receive health care.

There are social problems that make this nearly impossible. There is a lot more crime in the places where those at the bottom go to school. The best teachers often don’t want to work there.

Families have fallen apart in these neighborhoods, and many men feel no sense of responsibility for the children they have fathered. So the moms work and the kids run amok. Yes, the govt. could provide universal day care, too. That works for a few years, but really…is a 14 year old going to stay in day care? I don’t think so. The government can’t fix everything.

Agreed! But the politicians aren’t stupid. They know that the more their constituents are benefiting from government largesse that they voted for, the more likely it is that they will be reelected. It doesn’t matter if it’s a military base or a new community center, people vote to have more money spent on ME.

I think what we need is a benevolent dictatorship. Alas! That would work out about as well as communism or socialism in practice. Absolute power corrupts, and all that…

dstark · August 4, 2005, 4:10pm

timely, I just want to make a couple of points.

Our safety net is under assault. Privatization of social security will undermine the safety net. Under capitalism, you have booms and busts. Social security lessens the downs. It works. Here’s the joke. If we got rid of social security, the economy would eventually go bust and all these people that clamored to get rid of it would go down the tubes too.

There are ways to educate and make life better for those at the bottom. Legalize drugs. Pay teachers more for working in poor areas. Stop treating the poor like they are less than human. Give the poor a stake in the ownership society.

We have no problem subsidizing the rich in this country. Did you see the last energy bill? Maybe, we could help the poor too.

The conservatives on this board are in love with Don Luskin and are proud of this graph.

<a href=“http://www.nationalreview.com/nrof_luskin/luskin200507120940.asp[/url]”>http://www.nationalreview.com/nrof_luskin/luskin200507120940.asp</a>

In 1998, the GDP in the US was $8.5 trillion. In 2004 it was around 11.5 trillion. The GDP is up 3.0 trillion and receipts to the government are flat.

I don’t see anything to be proud of.

I’d like to see taxes raised enough in this country to close the deficit. That way, at least we don’t affect the next generation with our frivolous ways.

kirmum · August 4, 2005, 4:29pm

Dstark, are you a high income earner? Is this you stepping up to the plate and saying you think you should pay more taxes or do you think others should? I find here in California, the vast majority of people in multimillion dollar houses with low incomes want to raise income taxes. They don’t, however, want to raise real estate taxes. The high earners in this Country are paying a higher percentage in income taxes than high earners in most socialist countries. It’s very easy to just take money from those who have it, but it has really been proven not to help the economy or mobility of the lesser earners. It’s just not as simple as going after the top 5%.

dstark · August 4, 2005, 4:47pm

Kirmum, I benefit from the Bush tax cuts. I’m selfish. I don’t want to give all the money back either. I’m willing to give some back. I would like to raise taxes on incomes over $200,000, maybe go back to a 39.6% tax rate. I would like inheritance taxes to be kept in some measure. I’m on the fence on capital gains taxes and dividend taxes. I’d like them raised, but I don’t want to see asset prices drop.

Kirmum, I would like to pay our bills and not pass them on to our kids.

I am more fiscally conservative than the so called “conservatives.”

In the last 30 years, those at the top 10% received 90% of the increase in income.

Let me ask you a few questions. Do you believe we should be having these deficits? If not, how would you close them?

What do you want to do about social security? Should we spend
more money to educate the poor? Do you like the way our government allocates its resources?

Which socialist countries have lower tax rates than we do?

SBmom · August 4, 2005, 7:42pm

dstark, I am a high wage earner, and I agree with you.

dstark · August 4, 2005, 8:22pm

SBmom, if the country votes against their economic interests again, then the heck with it. Let’s just enjoy ourselves :)

garland · August 4, 2005, 9:09pm

We just stopped being high wage earners, but the whole time, I was, and remain, in favor of raising taxes on high wage earners. It’s morally right. And you’re right, Dstark, we’re the fiscal conservatives.

dstark · August 4, 2005, 9:27pm

Garland, we know the truth.

timely · August 5, 2005, 11:13am

dstark,

Yes, but it’s not sustainable. What would you do about that? You’ll be pleased to know that I think there shouldn’t be a cap on Social Security income. We make enough that we’re over the cap, so it would mean more SS taxes for us, but I think that is the only manageable way to do it. I think partial privatization could help too, though. It would allow lower income people to have something to pass down to their heirs…and that’s something they don’t tend to have.

It doesn’t work. I found the following at: <a href=“http://www.educationreport.org/pubs/mer/article.asp?ID=1681[/url]”>Teacher Pay and Teacher Quality: How Do They Relate? – Michigan Education Report (1999-02) – Mackinac Center;

“Was this money well spent? Did teacher quality improve? This is the question raised in Teacher Pay and Teacher Quality, which begins with an empirical analysis of the effect that salary changes in the 1980’s had on teacher recruitment. The surprising finding: there was virtually no relationship. The states in which teacher salaries rose little relative to other occupations experienced just about the same change in teacher qualifications as states that made a substantial effort to boost teacher pay.”

I don’t disagree with you about this. The last energy bill is way over my head, but I know that corporations aren’t paying their fair share.

I’m concerned about the next generation, too. The national debt is staggering. But past history would indicate that raising taxes will just result in more frivolous spending. It’s like when we were running a budget surplus. Instead of using that to pay down the debt, lawmakers found more stuff to spend it on! I think we have got to find ways to cut spending.

And here is my concern about cracking down on corporations. My husband and I are starting a Christmas tree farm. My husband also has a day job (for the federal government, in fact!). We are not a corporation, but a sole proprietorship. Last Christmas we sold trees for the first time. Our gross sales were $15K. Part of that was sales tax that had to be sent to the state (6.25%). We spent $2K or so on employees (+ their social security taxes), $3k or so on inventory (cut trees, tree stands, gifts, etc.), $3k on a sales bldg., $2k on a parking area, lots on chemicals, tractor maintenance, etc…you get the picture. Not much was left when all was said and done. Anything that was left was taxed at 30% or so on our personal income taxes (I don’t know exactly what tax bracket we fall into).

Now our profit margin will get better with time. Some of those expenses were one time things (sales bldg and parking lot). But, I worry that new regulations to make sure that business get adequately taxed will mean that we lose legitimate deductions or that somehow small businesses like ours are the ones that will suffer.

Oh, a little aside since this is College Confidential. The purpose of the Christmas tree farm was to fund the kids’ education, but we ended up 2 years behind schedule on selling and now our first child is entering college. We need those trees to start making us some money! :-)

dstark · August 5, 2005, 11:47am

timely, we have paid more into social security in the last 20 years than we have taken out. It doesn’t bother me if we have to tap into general funds to pay social security.

The federal government is projecting real growth in the economy over the next 50 years that is about a third less than the last 50 years. If this becomes true, then there will be a social security shortfall. If this becomes true, then the return from stocks will also be much lower. Returns from privatization will be much lower than the historical returns the republicans like to use to make their arguments.

Privatization is a way to slowly dismantle the sytem. Poor people are not really going to put enough money into privatization to make a difference. The people who want privatization don’t give a rat’s a** about poor people. They want to make money for themselves. Who really benefits from privatization? Wall Street, and wealthier taxpayers.

In the poor area near me, teachers’ pay starts around $35,000 a year. Twenty miles away in the rich area, starting pay is around $52,000 a year. Guess which area has the shortage of good teachers?

The spending issue… This is one of my biggest disappointments with the republican party. They campaign on the idea of fiscal responsibililty.
They get in power and what happens? They spend money. They just spend the money in different places than the democrats. Who benefits from their spending? The rich. We don’t tax and spend. (I don’t like tax and spend). As George Will says, we borrow and spend. What we do is worse. I’d like to cut spending too. Let’s start by dismantling the energy bill we just passed.

That’s great that you are doing the Christmas tree business. I’m sure your business will only do better over time.

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