Why I dont feel sorry for the rich having to pay more taxs

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marshall
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13 Aug 2012, 5:24 pm

Jojoba wrote:
Well, taxes can be raised on the wealthy, but that doesn't mean it will result in greater revenue for the government. The wealthy will look to invest into ideas that are tax free most likely.

That is something France is finding out at the moment. Their new leader Hollande campaigned on the theme that he disliked the rich, and taxing them higher would solve France's serious debt woes. The people of France believed him at the time. Now though they are are finding out what he said wasn't true, and as a result his popularity is plummeting.

"Hollande Falters in France, German Left Likes What It Sees"

http://blogs.the-american-interest.com/ ... t-it-sees/

I thought economist Thomas Sowell had a nice article about how taxes influence behavior.

"You Can’t Tax the Rich, They’ll flee the country before you can."

http://www.nationalreview.com/articles/ ... mas-sowell


Only an international solution can deal with an international crisis like this one. The problem is once the debt crisis spreads virtually everywhere in the developed world there will no longer be any nice places for the rich to run and hide from taxes. At least not while still reaping the benefits of doing business in a decent economic environment. Sure they can go to the third world, but they won't be able to make as much money there.



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13 Aug 2012, 5:46 pm

SilverStar wrote:
marshall wrote:
SilverStar wrote:
I love how everybody fights over taxes. They are a burden on everybody, and nobody wants to pay, but they still want the services that they provide...FOR FREE. The poor want the rich to pay, and the rich want the poor to pay...heck, somebody's gotta pay. :D


The other problem with this country is wealth distribution. I think I read somewhere that the top 20% control 85% of the wealth in this country. Instead of trying to go to the actual sources of the problem (selfishness, greed, poor regulation, uneducated citizens, etc.), many people in our government try to control this by taxing the wealthy more heavily. I don't think that is the right way to do it.


I think that's just the nature of capitalism. Wealth flows uphill and collects at the top just like water flows downhill and collects at the bottom. Ever play monopoly? It's extremely simple. People who own more have greater bargaining leverage than people who own less. Extra bargaining leverage allows them to use their existing wealth to gain an even greater share of wealth. It's an exponential process, like a snowball growing and gaining momentum.


That is true. Greed and selfishness also play a big role in wealth accumulation, as well. Instead of giving back some of the excess money that they make to their workers, or the community, etc., they tend to want to hoarde it all for themselves.


But it's not conscious greed and selfishness. People who accumulate wealth do not believe they are greedy or selfish. They believe they've rightfully earned what wealth they've accumulated and they often contribute to charitable causes. The problem is when they're still not giving back enough to sustain a prosperous society yet refuse to believe it. Also, corporations are not necessarily greedy in the human sense of the word. Management is paid to only act in the best interest of share holders, some of whom may not be wealthy but may merely using their earnings to augment their income so they can have more financial security. Yes, CEO's often pay themselves ridiculous salaries, but that's really only a small part of the problem. Ordinary middle class people participating in the corporate system are as much to blame as the big shot CEO's. The bigger problem is the whole system is imperfect.

Pure socialism/collectivism often leads to inadequate supply of goods as natural motives to produce are interfered with. Pure capitalism/individualism often leads to inadequate distribution of goods to meet people's needs as the motive to share in order to preserve the common good of society is interfered with. The only solution I see is a system that can efficiently mix the two. I don't claim to have the perfect answer, but it frustrates me that the vast majority of people on both the left and the right aren't willing to admit that there's a major problem and the ideological economic theories of the past may not be the answer.



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13 Aug 2012, 9:18 pm

Jojoba wrote:
Well, taxes can be raised on the wealthy, but that doesn't mean it will result in greater revenue for the government. The wealthy will look to invest into ideas that are tax free most likely.

That is something France is finding out at the moment. Their new leader Hollande campaigned on the theme that he disliked the rich, and taxing them higher would solve France's serious debt woes. The people of France believed him at the time. Now though they are are finding out what he said wasn't true, and as a result his popularity is plummeting.

"Hollande Falters in France, German Left Likes What It Sees"

http://blogs.the-american-interest.com/ ... t-it-sees/

I thought economist Thomas Sowell had a nice article about how taxes influence behavior.

"You Can’t Tax the Rich, They’ll flee the country before you can."

http://www.nationalreview.com/articles/ ... mas-sowell


The rich didnt flee under Clinton or Eisenhower. And if some tiny % of the investor class wants to flee over a 3% bump, well, cya. We'll make more rich people and most of them will want to remain in this country. That's what large economies do. Plus Warren Buffet is very familiar with making big money under a variety of tax schemes. According to him tax rates never hindered his interest in pursuing profit.

Revenue needs to support the policies that our leaders enact. Period. Daddy isnt going to fly in and give us all a pony. It's just not going to happen.



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14 Aug 2012, 9:07 pm

marshall wrote:
SilverStar wrote:
marshall wrote:
SilverStar wrote:
I love how everybody fights over taxes. They are a burden on everybody, and nobody wants to pay, but they still want the services that they provide...FOR FREE. The poor want the rich to pay, and the rich want the poor to pay...heck, somebody's gotta pay. :D


The other problem with this country is wealth distribution. I think I read somewhere that the top 20% control 85% of the wealth in this country. Instead of trying to go to the actual sources of the problem (selfishness, greed, poor regulation, uneducated citizens, etc.), many people in our government try to control this by taxing the wealthy more heavily. I don't think that is the right way to do it.


I think that's just the nature of capitalism. Wealth flows uphill and collects at the top just like water flows downhill and collects at the bottom. Ever play monopoly? It's extremely simple. People who own more have greater bargaining leverage than people who own less. Extra bargaining leverage allows them to use their existing wealth to gain an even greater share of wealth. It's an exponential process, like a snowball growing and gaining momentum.


That is true. Greed and selfishness also play a big role in wealth accumulation, as well. Instead of giving back some of the excess money that they make to their workers, or the community, etc., they tend to want to hoarde it all for themselves.


But it's not conscious greed and selfishness. People who accumulate wealth do not believe they are greedy or selfish. They believe they've rightfully earned what wealth they've accumulated and they often contribute to charitable causes. The problem is when they're still not giving back enough to sustain a prosperous society yet refuse to believe it. Also, corporations are not necessarily greedy in the human sense of the word. Management is paid to only act in the best interest of share holders, some of whom may not be wealthy but may merely using their earnings to augment their income so they can have more financial security. Yes, CEO's often pay themselves ridiculous salaries, but that's really only a small part of the problem. Ordinary middle class people participating in the corporate system are as much to blame as the big shot CEO's. The bigger problem is the whole system is imperfect.

Pure socialism/collectivism often leads to inadequate supply of goods as natural motives to produce are interfered with. Pure capitalism/individualism often leads to inadequate distribution of goods to meet people's needs as the motive to share in order to preserve the common good of society is interfered with. The only solution I see is a system that can efficiently mix the two. I don't claim to have the perfect answer, but it frustrates me that the vast majority of people on both the left and the right aren't willing to admit that there's a major problem and the ideological economic theories of the past may not be the answer.


I don't really like the way corporations are structured. If I was running a company, and there was excess revenue, i would put it back into the company for maintainence, upgrades, and expansion, or I would divide it up between the employees and/or community. There would be no shareholders. My experience working in a corporation has taught me that everybody is out to benefit themselves, and pleasing the shareholders is the numer one priority, and everything else (customers, maintainence, employees) being an after thought.

A hybrid form of Capitalism and Socialism would probably be a better idea than what we have, but I'm not sure how that would work, either. We need some guinea pigs to test our ideas out on. :D



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15 Aug 2012, 11:13 am

SilverStar wrote:
I don't really like the way corporations are structured. If I was running a company, and there was excess revenue, i would put it back into the company for maintainence, upgrades, and expansion, or I would divide it up between the employees and/or community. There would be no shareholders. My experience working in a corporation has taught me that everybody is out to benefit themselves, and pleasing the shareholders is the numer one priority, and everything else (customers, maintainence, employees) being an after thought.

A hybrid form of Capitalism and Socialism would probably be a better idea than what we have, but I'm not sure how that would work, either. We need some guinea pigs to test our ideas out on. :D


But then how would you raise capital? There are, after all, only two ways to get it: debt and equity. Either you borrow from lenders, sell bonds on the open market, or issue share capital. Shareholders invest their money into companies in order to provide companies with the capital with which to do business. They take risk, and they receive a return on their investment as a return for that risk. Bondholders rank higher in priority than shareholders for distribution (they are supposed to be paid whether or not the company earns a profit, and on winding up get their principal back before distribution to shareholders), but they generally get a lower rate of return than shareholders expect. And as for lenders--well no retail bank is interested in you until you are already up and running, which rather eliminates that option as a means of raising initial capital.

The structure that you are suggesting is essentially a co-operative--which is a legitimate business structure to be sure--but one which is generally stymied by limited access to capital.


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15 Aug 2012, 12:20 pm

visagrunt wrote:
SilverStar wrote:
I don't really like the way corporations are structured. If I was running a company, and there was excess revenue, i would put it back into the company for maintainence, upgrades, and expansion, or I would divide it up between the employees and/or community. There would be no shareholders. My experience working in a corporation has taught me that everybody is out to benefit themselves, and pleasing the shareholders is the numer one priority, and everything else (customers, maintainence, employees) being an after thought.

A hybrid form of Capitalism and Socialism would probably be a better idea than what we have, but I'm not sure how that would work, either. We need some guinea pigs to test our ideas out on. :D


But then how would you raise capital? There are, after all, only two ways to get it: debt and equity. Either you borrow from lenders, sell bonds on the open market, or issue share capital. Shareholders invest their money into companies in order to provide companies with the capital with which to do business. They take risk, and they receive a return on their investment as a return for that risk. Bondholders rank higher in priority than shareholders for distribution (they are supposed to be paid whether or not the company earns a profit, and on winding up get their principal back before distribution to shareholders), but they generally get a lower rate of return than shareholders expect. And as for lenders--well no retail bank is interested in you until you are already up and running, which rather eliminates that option as a means of raising initial capital.

The structure that you are suggesting is essentially a co-operative--which is a legitimate business structure to be sure--but one which is generally stymied by limited access to capital.


I didn't think most company start-ups go public immediately. They would have to get their equity money from private investors. I imagine a lot of private investment firms would tend to specialize more and be much more involved with the companies they partner/invest with. That situation is a little different from huge multinationals that are simply seen as ever-expanding money-making machines with little involvement or ethical consideration from the masses who own shares mainly as an income supplement.



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15 Aug 2012, 12:29 pm

shareholders should share the ethical and criminal responsibility directly, that would probably prompt some better constructed contracts.


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16 Aug 2012, 3:25 pm

JWC wrote:
jagatai wrote:
In the year 1950 for example, if you made $200,000 or more, your tax rate was 91% Frankly I wouldn't mind seeing taxes go back to that rate. Even adjusted for inflation.


If you make $200,000 a year and are taxed at a rate of 91%, that will leave you with $18,000. Why even bother working?


It's called a marginal tax rate. That is, the tax is on the first $200,001st dollar and above. One thing it helps do is dissuade people who can set their own salaries effectively from taking too much for themselves. Right now, the lack of such a high marginal tax rate means that those controlling businesses are milking their enterprises for all it's worth.



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16 Aug 2012, 8:01 pm

SilverStar wrote:

That is true. Greed and selfishness also play a big role in wealth accumulation, as well. Instead of giving back some of the excess money that they make to their workers, or the community, etc., they tend to want to hoarde it all for themselves.


What is excess? It is someone's opinion of Enough and Fair Share. A purely subjective notion. If you want to be strict about it any income that exceeds what it takes to feed a person 2000 calories a day and buy a single set of clothes is excess. If you limited people to that income, nothing would be produced. Nothing.

ruveyn



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16 Aug 2012, 11:23 pm

ruveyn wrote:
SilverStar wrote:

That is true. Greed and selfishness also play a big role in wealth accumulation, as well. Instead of giving back some of the excess money that they make to their workers, or the community, etc., they tend to want to hoarde it all for themselves.


What is excess? It is someone's opinion of Enough and Fair Share. A purely subjective notion. If you want to be strict about it any income that exceeds what it takes to feed a person 2000 calories a day and buy a single set of clothes is excess. If you limited people to that income, nothing would be produced. Nothing.

ruveyn


You cannot treat human ethics like physics or math where there are universal laws that act like hard lines in the sand. "Fairness" may not be easily defined with a simple mathematical formula, but science has shown that even chimps understand what it is.



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19 Aug 2012, 10:15 pm

marshall wrote:
ruveyn wrote:
SilverStar wrote:

That is true. Greed and selfishness also play a big role in wealth accumulation, as well. Instead of giving back some of the excess money that they make to their workers, or the community, etc., they tend to want to hoarde it all for themselves.


What is excess? It is someone's opinion of Enough and Fair Share. A purely subjective notion. If you want to be strict about it any income that exceeds what it takes to feed a person 2000 calories a day and buy a single set of clothes is excess. If you limited people to that income, nothing would be produced. Nothing.

ruveyn


You cannot treat human ethics like physics or math where there are universal laws that act like hard lines in the sand. "Fairness" may not be easily defined with a simple mathematical formula, but science has shown that even chimps understand what it is.


There are no written rules on how much excess is too much, but ideally speaking, everyone should make the same amount. The further the gap between the lowest earner and the highest earner, the more excess (or income inequality) there is. For example, if a company executive was making $100 million per year, and the employees were only making minimum wage, then I would like to think that the executive was making excessive amounts of money, and not sharing.



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19 Aug 2012, 10:31 pm

visagrunt wrote:
SilverStar wrote:
I don't really like the way corporations are structured. If I was running a company, and there was excess revenue, i would put it back into the company for maintainence, upgrades, and expansion, or I would divide it up between the employees and/or community. There would be no shareholders. My experience working in a corporation has taught me that everybody is out to benefit themselves, and pleasing the shareholders is the numer one priority, and everything else (customers, maintainence, employees) being an after thought.

A hybrid form of Capitalism and Socialism would probably be a better idea than what we have, but I'm not sure how that would work, either. We need some guinea pigs to test our ideas out on. :D


But then how would you raise capital? There are, after all, only two ways to get it: debt and equity. Either you borrow from lenders, sell bonds on the open market, or issue share capital. Shareholders invest their money into companies in order to provide companies with the capital with which to do business. They take risk, and they receive a return on their investment as a return for that risk. Bondholders rank higher in priority than shareholders for distribution (they are supposed to be paid whether or not the company earns a profit, and on winding up get their principal back before distribution to shareholders), but they generally get a lower rate of return than shareholders expect. And as for lenders--well no retail bank is interested in you until you are already up and running, which rather eliminates that option as a means of raising initial capital.

The structure that you are suggesting is essentially a co-operative--which is a legitimate business structure to be sure--but one which is generally stymied by limited access to capital.



A co-operative would be nice, but like you said, they are usually limited to capital. I was mainly referring to the way companies are created and operated. The initial start-up could be financed by the owner(s), a private investor, or even a bank. Start out small, and grow, if and when the customer base, and money is there.



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20 Aug 2012, 2:40 am

The answer is simple to me - the rich have the financial means of paying higher taxes and not feel any pain because of it. The rest of us could hardly get away without getting kicked in the crotch from taxation. The rich who b***h and moan about their tax burden just come off sounding whiny and greedy.

-Bill, otherwise known as Kraichgauer



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21 Aug 2012, 10:13 pm

1) The truly rich don't pay taxes. Not only can income be hidden in various tax havens, only the rich can buy foreign assets to avoid the inflation tax (which is how we're *really* paying for this deficit).

2) Most taxes can and are passed down via increased prices. A lot of these costs aren't accounted for in GDP because they occur in higher order goods (which is why we import so much these days). Taxes are ultimately paid by those who are lesser equipped to evade them. Higher taxes for one group will have a greater effect of distorting what economic deals can be made given the tax regulatory structure rather than higher revenue for bureaus.

3) Increasing taxes may make you feel better, but does it make you better off? Does increasing the number of bureaucrats increase the average man's income? Does reducing the overall burden make you cry because rich people are being disproportionately unburdened?

Tax politics has more to do with envy than economics.



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21 Aug 2012, 10:24 pm

anarkhos wrote:
1) The truly rich don't pay taxes. Not only can income be hidden in various tax havens, only the rich can buy foreign assets to avoid the inflation tax (which is how we're *really* paying for this deficit).

2) Most taxes can and are passed down via increased prices. A lot of these costs aren't accounted for in GDP because they occur in higher order goods (which is why we import so much these days). Taxes are ultimately paid by those who are lesser equipped to evade them. Higher taxes for one group will have a greater effect of distorting what economic deals can be made given the tax regulatory structure rather than higher revenue for bureaus.

3) Increasing taxes may make you feel better, but does it make you better off? Does increasing the number of bureaucrats increase the average man's income? Does reducing the overall burden make you cry because rich people are being disproportionately unburdened?

Tax politics has more to do with envy than economics.


It's not envy. It's only common sense that the Bush tax cuts that benefit only the wealthy few - and theoretically give the rest of us a few crumbs - are unsustainable, and will send the country into the shitter.

-Bill, otherwise known as Kraichgauer



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22 Aug 2012, 2:46 am

Oh, so I suppose since it's "common sense" you don't have to address anything I said with any specificity.

Bush baaad, Obama goood