Divergent views on wealth distribution

[barfo]

you think making top 1% money is akin to winning the lottery?

In the sense that it is about as unlikely an outcome for any given poor person, yes.

barfo

 

[BrianFromWA]

you can't possibly think that there's a one in 192 million chance that a poor person can become a heart surgeon. Or a small business owner. Or a major-league athlete.

 

[barfo]

you can't possibly think that there's a one in 192 million chance that a poor person can become a heart surgeon. Or a small business owner. Or a major-league athlete.

Well, obviously poor people can become small business owners. That hardly guarantees that they'll be in the top 1%. In fact, it would be interesting to know what percentage of small business owners are in the top 1%. And what percentage of the top 1% are small business owners.

Heart surgeon? Could be. Pro athlete? Could be.

Odds of 192 million:1 in a lottery? That's a suck-ass lottery, unless the payoff is really really huge (much bigger than you'd need to attain 1% status).

barfo

 

[BrianFromWA]

you said "winning the lottery". I just took the odds of winning the Powerball.

 

[BrianFromWA]

more to the point, what is your reasoning for someone like me, who went from not much to "top 20% wealth" just 10 years out of college, having my money taken away to pay someone who might've been born into better circumstances but didn't do as much with it as I did? Or sacrificed as much.

 

[barfo]

more to the point, what is your reasoning for someone like me, who went from not much to "top 20% wealth" just 10 years out of college, having my money taken away to pay someone who might've been born into better circumstances but didn't do as much with it as I did? Or sacrificed as much.

I don't believe I was making an argument for that.

And I'm not sure how it happened (maybe my fault because I mentioned $250K/yr) , but clearly we are misusing the word wealth in this thread. When people talk about concentration of wealth, they are usually talking about concentration of assets, not of income. And that's a much harder problem to overcome than income, actually.

barfo

 

[maxiep]

why is "billionaire" the cutoff for "wealth"?

I know people are probably getting tired of personal anecdotes, but I went from living in the projects across from Liberace on WIC as a kid to being the first in my family to graduate college (followed quickly by my brother and 3 cousins) and make 6 figures. I'd be pretty darn happy (and consider myself pretty well-off) the day my net worth exceeds 1M--which is a pittance for some people I work and interact with. My little girl already has a college fund set up, and I'm hoping that she (and her soon-to-be-born brother) are one of those people 25 years from now who think that 1M is a decent signpost on the road to where their goals are. And so on.

My parents weren't born with a silver spoon, but worked their butts off for me and my brothers, and get a kick out of seeing us succeeding in life and working hard for our kids.

This.

 

[Denny Crane]

Considering you don't believe in and maintaining national borders, I can't tell if you're being sarcastic or not.

I'm not exactly being sarcastic, just trying to figure out where this "we need to redistribute the wealth" logic stops, and why.

 

[Denny Crane]

I thought that was just Minstrel. DC doesn't believe in borders either?

I believe in borders, just that they should be open and free to cross in either direction. At least ours, anyway, since we're supposed to be a free country.

 

[Paine Tablet]

why is "billionaire" the cutoff for "wealth"?

I know people are probably getting tired of personal anecdotes, but I went from living in the projects across from Liberace on WIC as a kid to being the first in my family to graduate college (followed quickly by my brother and 3 cousins) and make 6 figures. I'd be pretty darn happy (and consider myself pretty well-off) the day my net worth exceeds 1M--which is a pittance for some people I work and interact with. My little girl already has a college fund set up, and I'm hoping that she (and her soon-to-be-born brother) are one of those people 25 years from now who think that 1M is a decent signpost on the road to where their goals are. And so on.



My parents weren't born with a silver spoon, but worked their butts off for me and my brothers, and get a kick out of seeing us succeeding in life and working hard for our kids.

Your parents shaped your belief system by providing a good example. Unfortunately, the majority of the impoverished aren't so lucky. Through abusive parent/addict parent/single parent/dead parent/rapist parent manipulation they think differently and they act differently with regard to their place in the world, most often resulting in trends of failure because they don't know no better. How to cope with a terribly rough deal for example?

 

[jlprk]

we are misusing the word wealth in this thread. When people talk about concentration of wealth, they are usually talking about concentration of assets, not of income. And that's a much harder problem to overcome than income, actually.

Something like 50% of everything in the US is owned by the richest 2% of Americans, and 75% by the richest 10%. That's why it's impossible to solve the deficit problem without taxing them, instead of shortening the life expectancy of the bottom 90% by cutting Social Security or Medicare.

 

[BrianFromWA]

how big should we let SS/M/M overrun? 150% of its intakes? 250%? whatever it takes to give everyone the check that they feel they need to survive? Who gets to make that actuarial decision? The people? A lawyer/Congressman? A committee of staffers in DC?

How are you going to tax "assets"? Wouldn't increasing things like property tax and sales tax (two big parts of "assets") hurt the little guy even more?

Or, you could say that instead of tossing money at things that won't (and haven't) helped, you could, you know, innovate and actually try to improve the service or decrease the cost, and under a tight budget. The military's started doing that. NASA's started doing that. What if, hypothetically speaking, health care reform actually reformed health care by making it better quality and lower cost? Instead of keeping a high cost and passing those increases on to the taxpayer, instead of the user?

If "ObamaCare" had been "we're going to set up X Hospitals, pay to send 100k doctors (or whatever) to school over the next ten years to staff them, and hire a bunch of nurses and janitors and infrastructure support, and set appropriate costs for care, etc....I'd feel a lot better about it than "make everyone get insurance, but the gov't (meaning those 46% of people that pay income taxes) will pay for the higher costs". I don't quite understand why many of you don't, though...b/c it seems like we want the same result (decent-quality health care for everyone)...I just don't want to have the gov't throw my money after a sinking program that doesn't seem to have a high likelihood of either improving care or lowering cost.

 

[MrJayremmie]

Just like playing Monopoly, you start out even, and through good or bad choices or luck, you gain or lose.

Really, just like monopoly?

So you are saying that everyone starts out even, and no one has an inherit disadvantage or advantage?

/c it seems like we want the same result (decent-quality health care for everyone)

Not really.

I want everyone, no matter the income, to be able to afford at least basic health care. If they don't choose to do it, fine. I don't want to pay their bill when they go to the ER and can't afford it, though.

I believe that the more you can pay, the better health care you should get. I also believe that even the least among us should have the option of having health care.

As for taxes, I think our economy seemed to do just fine with the Clinton tax rates.

 

[BrianFromWA]

As for taxes, I think our economy seemed to do just fine with the Clinton tax rates.

I'd submit that we also didn't have a SS/M/M overrun as large as the Dept. of Defense during the Clinton years. At some point, you have to realize that raising taxes isn't the answer we're looking for. To be fair, either is Rep. Ryan's "bold" plan to cut 1/10th of the overrun of the budget over the next decade. Big, hard choices need to be made, and it's not the time to be spending money on "making it 'fair' for everyone" or costly programs that don't project to work.

 

[MrJayremmie]

Big, hard choices need to be made, and it's not the time to be spending money on "making it 'fair' for everyone" or costly programs that don't project to work.

You are right. They do need to be made. But, like most Americans believe, this problem cannot, and will not be tackled with just cutting spending. There needs to be tax increases, and preferably less on the middle and lower class who are already struggling in this economy.

As for the DoD, lets bring home our troops and start by cutting war funding, and slicing our defense budget by 25% (I know you are a military man and don't like that kind of talk... and this is not meant to be bad)

Also, serious question because I don't know: what would pushing back the retirement/benefits age do for social security funding? And how far would it have to go to make a significant difference?

Also, is it correct that women get their benefits like 2 or 3 years before men? Why is that? If we pushed theirs back to like 65 also, would that do anything?

 

[Denny Crane]

You are right. They do need to be made. But, like most Americans believe, this problem cannot, and will not be tackled with just cutting spending. There needs to be tax increases, and preferably less on the middle and lower class who are already struggling in this economy.

As for the DoD, lets bring home our troops and start by cutting war funding, and slicing our defense budget by 25% (I know you are a military man and don't like that kind of talk... and this is not meant to be bad)

Also, serious question because I don't know: what would pushing back the retirement/benefits age do for social security funding? And how far would it have to go to make a significant difference?

Also, is it correct that women get their benefits like 2 or 3 years before men? Why is that? If we pushed theirs back to like 65 also, would that do anything?

How can a "libertarian" ever justify higher taxes or wealth redistribution of any kind. Democrat.

 

[blazerboy30]

You are right. They do need to be made. But, like most Americans believe, this problem cannot, and will not be tackled with just cutting spending. There needs to be tax increases, and preferably less on the middle and lower class who are already struggling in this economy.

To think that tax increases are going to make any significant dent in the problem is silly.

The federal revenue from individual income tax in 2009 was ~ $1Trillion. The federal budget deficit is project to be over $2Trillion. We could double people's income tax rates and still not pay for our government.

 

[MrJayremmie]

How can a "libertarian" ever justify higher taxes or wealth redistribution of any kind. Democrat.

IM NOT A LIBERTARIAN! Never claimed to be, Jesus.

But I'm certainly not a Dem.

To think that tax increases are going to make any significant dent in the problem is silly.

The federal revenue from individual income tax in 2009 was ~ $1Trillion. The federal budget deficit is project to be over $2Trillion. We could double people's income tax rates and still not pay for our government.

You are saying that tax increases will not help with this deficit shortfall? Personally myself, and many Americans, think it is silly to try and cut this clusterfuck of a deficit/debt with just spending cuts.

 

[BLAZER PROPHET]

I have to rep BrianFromWA. He's soundly whipped the 'distribution of wealth' posters badly and left them with no logical argument- just the usual ass-whupped nips from barfo.

Brian, your logic and debate was nearly flawless. You took on all comers and thrashed them soundly. Well done.

Rep'd!

 

[Denny Crane]

IM NOT A LIBERTARIAN! Never claimed to be, Jesus.

But I'm certainly not a Dem.

Walks like a duck, quacks like a duck...

You are saying that tax increases will not help with this deficit shortfall? Personally myself, and many Americans, think it is silly to try and cut this clusterfuck of a deficit/debt with just spending cuts.

it's silly to give these overspenders even more money. There's zero indication that if we tripled EVERYONE's taxes so the govt. took in $4t that they wouldn't spend $8t.

 

[blazerboy30]

You are saying that tax increases will not help with this deficit shortfall?

Any realistic tax increases won't make any "significant dent" in the deficit.

Personally myself, and many Americans, think it is silly to try and cut this clusterfuck of a deficit/debt with just spending cuts.

Then clearly you and "many Americans" can't do simple and logical math.

 

[maxiep]

I'm not as interested in overall tax rates as I am overall revenue. Taxes aren't a simple calculation; everything that you tax, you get less of. An opposite example is when Bill Clinton lowered the capital gains tax rate and capital gains tax revenue increased.

The answer to the government raising more tax revenue may actually be to reduce some taxes.

 

[Klinky]

I'm not as interested in overall tax rates as I am overall revenue. Taxes aren't a simple calculation; everything that you tax, you get less of.

Not always true.

An opposite example is when Bill Clinton lowered the capital gains tax rate and capital gains tax revenue increased.

Clinton lowered them right when the dot com bubble was starting. If we use our noggin' one might think that a stock market bubble might have a big effect on capital gains revenue.

The answer to the government raising more tax revenue may actually be to reduce some taxes.

Like when Bush lowered the capital gains tax even further & capital gains revenue actually went down.

 

[maxiep]

http://www.econlib.org/library/Enc/CapitalGainsTaxes.html

 

[MrJayremmie]

Any realistic tax increases won't make any "significant dent" in the deficit.

Well the Bush tax cuts was 2 trillion over 10 years in revenue (from 01 to 10).

Are you saying that by lowering taxes, we increase hiring, and therefore increase revenue?

Walks like a duck, quacks like a duck...

That's funny coming from you.

 

[Klinky]

http://www.econlib.org/library/Enc/CapitalGainsTaxes.html

You're backing yourself up with an article written by an editor of the Wall Street Journal on a website funded by a Libertarian foundation. My! How unbiased of you.

The stock market boomed in the 1980s after the 1981 capital gains tax cut; it boomed to new heights in the late 1990s after the Clinton capital gains rate cut, and then again in 2003 after George W. Bush signed his capital gains tax cut into law.

Why does he consider bubble markets to be "booming markets"? Seriously. He barely mentions in passing the losses in revenue after stock market crashes. He seems to give too much credit to reduction in capital gains taxes spurring the economy to new heights, ignoring that almost everytime we've lowered taxes was right before our economy bubbled into a crash or crisis.

I am not so sure about this graph. From what I've researched Clinton didn't lower the CGT until 1997, so why does this chart show it dropping in 1995? The Effective Capital Gains Tax Rate in 1995 appears to have been 24.6% with 18% higher revenue than 1994. The next year, 1996, the ECGTR was even higher at 25.5% which was the highest effective rate of the 90s. Yet 1996 still had even higher revenue gains at 33% more than 1995. This was all leading into a catastrophic bubble later in the decade.

 

[maxiep]

You're backing yourself up with an article written by an editor of the Wall Street Journal on a website funded by a Libertarian foundation. My! How unbiased of you.

Why does he consider bubble markets to be "booming markets"? Seriously. He barely mentions in passing the losses in revenue after stock market crashes. He seems to give too much credit to reduction in capital gains taxes spurring the economy to new heights, ignoring that almost everytime we've lowered taxes was right before our economy bubbled into a crash or crisis.

I am not so sure about this graph. From what I've researched Clinton didn't lower the CGT until 1997, so why does this chart show it dropping in 1995? The Effective Capital Gains Tax Rate in 1995 appears to have been 24.6% with 18% higher revenue than 1994. The next year, 1996, the ECGTR was even higher at 25.5% which was the highest effective rate of the 90s. Yet 1996 still had even higher revenue gains at 33% more than 1995. This was all leading into a catastrophic bubble later in the decade.

It was the first article that showed the general conclusion that is generally accepted in the economic community: That there's a point where raising the capital gains tax results in diminishing returns in revenue. It's sweet and all that you can arrive at specific circumstances in a Skinner Box where rates were lowered and revenues didn't go up, but people a lot smarter than you and me have studied this phenomenon accounting for all the exogenous variables and they all arrive at roughly the same conclusion. In the world of economic research, that kind of general consensus is rare.

Personally, I think capital gains shouldn't be taxed at all. First, it's a one way street. If the Government is there with their hand out when I make money on an investement demanding their cut, can I go to them when I lose money on an investment? Second, it's money that's already been taxed. To have money to invest, you have to have made it. That income has been taxed as ordinary income. It's taxing money twice, which in my opinion is wrong. Third, it's a tax that can be avoided if you wish it, so you're going to base much of your investment decision on tax implications. Just like the real estate tax shelters that were disallowed in the 1986 tax reform law, it creates an environment that encourages suboptimal investing. We're all better off when people are able to enter and exit an investment at the optimal time for them as an investment, not to minimize their tax bill.

 

[blazerboy30]

Well the Bush tax cuts was 2 trillion over 10 years in revenue (from 01 to 10).

Are you saying that by lowering taxes, we increase hiring, and therefore increase revenue?

You're kind of proving my point.

These Bush tax cuts are being blamed for our huge deficits, yet if your 2 Trillion over 10 years is correct, that is 0.2 Trillion per year. We have a deficit of $1.6 Trillion this year. So the Bush Tax cuts, which democrats and people like you blame for our deficits, would help with a very small portion of the deficit... ie: "not significant".

Like I said, the problem won't be fixed by tax increases. You can't start doubling peoples' tax rates, and even then it wouldn't cover our deficit.

It has to start with spending cuts, massive spending cuts.

 

[Denny Crane]

It was the first article that showed the general conclusion that is generally accepted in the economic community: That there's a point where raising the capital gains tax results in diminishing returns in revenue. It's sweet and all that you can arrive at specific circumstances in a Skinner Box where rates were lowered and revenues didn't go up, but people a lot smarter than you and me have studied this phenomenon accounting for all the exogenous variables and they all arrive at roughly the same conclusion. In the world of economic research, that kind of general consensus is rare.

Personally, I think capital gains shouldn't be taxed at all. First, it's a one way street. If the Government is there with their hand out when I make money on an investement demanding their cut, can I go to them when I lose money on an investment? Second, it's money that's already been taxed. To have money to invest, you have to have made it. That income has been taxed as ordinary income. It's taxing money twice, which in my opinion is wrong. Third, it's a tax that can be avoided if you wish it, so you're going to base much of your investment decision on tax implications. Just like the real estate tax shelters that were disallowed in the 1986 tax reform law, it creates an environment that encourages suboptimal investing. We're all better off when people are able to enter and exit an investment at the optimal time for them as an investment, not to minimize their tax bill.

You can roll capital losses forward into future tax years and count them against gains in those years.

But it sucks if you lose, period.

 

[maxiep]

You can roll capital losses forward into future tax years and count them against gains in those years.

But it sucks if you lose, period.

I'm aware of that fact, but on a present value basis, you're still short.