You continue to be amusing. Now that we have established that no form of socialism is acceptable to thinking people, lets address the subject of the thread. I do not believe a negative income tax is a good idea because it transfers wealth in the form of money; and their are many people who cannot manage money. Therefore I believe that the best form of assistance is still "in kind." That would include food stamps or other food assistance, public housing/assistance (Section 8 ET AL) and a clothing allowance which can be used only to purchase clothing.
So much for discussing the merits or faults with a negative tax proposal that is about how revenue is raised and not about how it is spent. Any tax proposal that is valid has to fund government expenditures regardless of what they are. Assumptions that Congress will in anyway change what it spends money on are a completely different discussion and are probably based upon false hopes to begin with.
In my opinion, this "off topic" situation is a waste of my time. I intend to post what I want no matter which thread I am in. If and when politicalforum.com starts being picky about off topic posts I will likely go elsewhere.
In my opinion how it is spent is very relevant to the issue of a negative tax proposal. It would be easy to engineer a simple way to give money back to people who earn very little and need more income to live with dignity, so believe that "how the revenue is raised" is not the important part of the thread. How it is managed by those who would receive it is more important because many of those who need financial help don't know how to manage money. IE, in many cases it is that poor management which puts them in the status of needy rather than how much money they receive. My wife and I choose to live on $18K to $20K spent every year and we give away more than we spend because we learned as a young couple to use our money to our advantage. I was drafted with 4 children during the Berlin Crisis, and even with the pitiful income the military paid young soldiers we managed to stay out of debt and we lived on our military income. I don't trust Congress to every spend within our budget. - - - Updated - - - I agree with you that deleting posts for being off topic is a waste of a good moderator's time.
That is the problem with arbitrary tax rates because Congress will always run deficits whenever it feels like it. That's the reason I removed an arbitrary tax rate from my proposal on taxation. The tax rate (above my exemption level) is based upon the flat rate required to fund the authorized expenditures of Congress. No matter how much they spend or how little they spend it is always funded because the tax rate changes to pay for the expenditures. http://www.politicalforum.com/showthread.php?t=306610 The first rule, and perhaps the only real rule, of fiscal conservatism is to PAY THE BILLS. For that reason alone the Democrats, the Republicans, and even the Tea Party Republicans are NOT Fiscal conservatives because none of them are willing to pay the authorized expenditures of Congress. I'm the only person I know that proposes a tax code that balances the US budget the very first year that it's implemented because I am fiscally conservative.
My problem with that is, there is nothing to restrain excessive spending. Giving congress an open check book encourages spending.
Actually my proposal would dramatically inhibit Congressional spending because it would rise or fall based upon that spending. Imagine the headline when the single "tax rate" is based upon the spending if it went from 25% to 30% in a year. FEDERAL TAXES TO INCREASE 20% FOR NEXT YEAR Even if this occurred over several years the news headlines would be the same because they would, in big bold print, sensationalize the tax increases. No one really cares that much about spending increases today because no one is paying for them. That would change dramatically if the spending increases actually drove the necessary tax increases. This brings be back to the "negative tax" that would impose an arbitrary tax rate unrelated to spending authorizations. If the people don't have to pay for the spending then they really don't seem to care enough to stop it. About 50% of our military budget, for example, is funded by borrowing but how many are complaining about it? Very few.
I understand your point, and it would eliminate all of the "budget debt ceiling" haranguing we have seen of late, but I still don't see congress possessing enough intellectual honesty to be concerned about telling folks, we need to raise your taxes 20% or 30% next year." That would still leave the left wing controllers of the (my) political party.
Look at it from another perspective. The people that fund the election and re-election campaigns are the one's being taxed and they're going to object if the tax rates go too high. The distrust is deserved and my response is really that there is going to be a lot more political opposition to spending if the taxpayers are required to pay for the spending than if they're not required to pay for the spending.
I would like to see that come about. But what the hey, we are nitpicking each other as I think we are more alike than different on this subject. We both want the same thing even if we have different ideas how to do it best.
I believe there are only two legitimate ways to reduce government spending. 1) Address necessary spending by working to resolve the problems that cause the necessity for the spending. For example, to reduce welfare spending we need to reduce poverty which makes the spending to mitigate the effects of poverty necessary. "The problem isn't the welfare spending" but instead "the problem is the poverty" that necessitates the spending. Address the problem because that reduces or eliminates the necessity for the spending. 2) Bring public pressure on Congress to eliminate unnecessary spending by those paying for the spending and that can only happen if the spending is actually being paid for. Do we really require 13 carrier fleets to patrol every wet part of the planet to defend the United States from any foreign invasion or attack? Could we do that with 12 carrier fleets? How about just 8 carrier fleets? How many carrier fleets do we really need when no other nation even has one carrier fleet to match a US carrier fleet?
That would certainly be the ideal. But is it possible? I think it is possible to eliminate the poverty of those who choose to work, want to work, providing we create an economic condition conducive to the relief of poverty, at least to the point that most poverty is relative poverty, ie only in reference to those who earn more. I personally believe we could take the bottom quintile today, and elevate their earnings to that of the 4th quintile; but within a relative short period of time that ame group will again experience the poverty from which they were lifted. There will also always be a group which for some reason or another cannot work, based on disability. We need to continue to assist them to have dignity in their lifestyle. I also see the probability of a small group who choose not to work, and I believe that group will always be with us. I don't know how many carrier fleets we need, but I believe it is a top priority to maintain a strong defense. Since we are the only ones with such power militarily, we have the responsibility to stop oppression where ever it occurs.
I disagree completely. First of all I don't ascribe to the belief in "relative poverty" as I believe that everyone in a society can live outside the effects of poverty. Poverty is related to not being able to provide the necessities of life and not about everyone owning a new Ferrari. There is more than enough wealth being produced in the United States so that no one that is working full time should ever be living in poverty. This isn't about "Robbing Peter to Pay Paul" but instead its about ensuring to the best of our ability that Paul is compensated for the labor they expend in producing the wealth of America. There is this gross misconception that the wealthy elitists create the wealth of America when it fact it's the low paid worker digging the ditch, harvesting the apples, or working at a boring assembly job putting together products that are used by other that are physically creating the wealth of America. Investing $100 million in the purchase of stocks that are owned by someone else doesn't, in and of itself, produce a dime of wealth for America. Hammering a 16-penny nail into a stud in the construction of a home produces more actual wealth that the trading in the ownership of corporates does because simply swapping ownership in a corporation produces not wealth at all. I don't believe in government mandated "wealth redistribution" but I also oppose government favoritism related to how the People are treated under the law. The United States produces about $13 trillion in income annually as I recall and that would average about $86,000 per working person in the United States. I don't advocate equally dividing that income but obviously it could be divided more fairly based upon the contributions of the individuals that are producing the wealth of America. With a more "fair" distribution it would increase consumption because it's the lower income workers that spend the highest percentage of income on consumption that drives the economy. Agreed. I disagree because my lifetime experiences in manufacturing has shown me that these "people" don't really exists. Every American wants to work and succeed. They do require the opportunity, training, encouragement, and empowerment to succeed but when those are provided I've never met an American that didn't want to work and succeed in life. I have met many that have been discouraged because they've been denied the opportunity, training, encouragement and empowerment to succeed though. I have what I'd call the "Dirty Dozen" philosophy that a person can be considered completely worthless but that is because of their past where they were denied the opportunity, training, encouragement, and empowerment to succeed will willingly jump at an opportunity so succeed given those for key necessities. People don't want to be a failure but they often succumb to failure if they are not allowed to succeed. They accept their "fate" as opposed to being able to rise above it. Nothing is worse when it comes to discouraging a group from succeeding than invidious discrimination against the group by society. If a person, as a member of a group, is not given equality of opportunity to succeed the very first necessity for success is lost. A quick anecdotal story. I'm a WASP male and "WASP males" are the only group in the history of the United States that have never been discriminated against. Being "creative" that didn't prevent me from experiencing "economic discrimination" first hand though. I was a "long-haired hippie freak" in the late 1960's and early 1970's and the "economic establishment" didn't believe that a "long-haired hippie freak" could do the job so I wasn't hired for many jobs because of my appearance. It had nothing to do with my ability, knowledge, experience, or motivation to succeed because it was all about what I looked like. So, unlike a black man, a Hispanic, or a woman I simply cut my hair and put on a suit and instantly the discrimination ended and I was allowed to succeed. Think about those that can't simply "change how they look" to end the economic discrimination against them. It is invidious discrimination and it slowly destroys the motivation to become successful in far to many cases. You can give me the most "worthless" person you can find and I can motivate them to succeed by providing them with the opportunity, training, encouragement and empowerment to succeed because I know that that's what they really want to do. We have many times over the military capabilities to defend the United States from any attack or invasion by any nation even if there was a nation that wanted to attack or invade us which their isn't. I would also point out the flawed logic of using the military to stop oppression because nothing is more oppressive than the use of military force. Stopping oppression with military force is like trying to put out a campfire by burning down the forest. War, in the history of mankind, has never lead to the end of oppression. Only knowledge predominately spread by example ultimately end oppression. I'm a US Army veteran and I almost laugh when most Americans refer to terrorism. There is no weapon that instills more fear and terror than an M1-A1 Abrams tank coming down the street with it's gun pointed at you. The US military is the greatest "terrorist" weapon in the world today and as a veteran I support that but possessing a weapon of terrorism and using it are two different matters completely. The United States has been involved in numerous over wars (excluding even more CIA covert wars) that have resulted in the deaths of somewhere between 6 and 10 million innocent people. If involvement is wars that result in the deaths of that many millions of people isn't considered "oppression" then I don't know what is. If we include the deaths of innocent people by the tyrannical regimes we've supported around the world that death toll of the innocents is much higher. We're a nation actually established based upon the belief of the Inalienable Rights of the Person and yet in the history of the United States we've never conquered oppression in our own country. If we want to end oppression in the world we need to start by ending it here at home first. If we can end the oppression in the United States then we can teach other people in other nations how to end oppression in their own nations by showing them an example of how it's done.
My point is, there is very little actual poverty in the US. most of the poverty is relative to the next higher earning group. I agree that poverty is related to not being able to provide the necessities of life and not about everyone owning a new car of any kind. There are very few who live in the US who meet that description of poverty, so at issue between you and I would be in what the "necessities" of life would be; adequate food, clothing, and shelter and the means to pursue work. I agree up to the point of, what comes first, the chicken or the egg. Entrepreneurship comes first. From the wealthy? maybe, maybe not. I agree, unless buying that stock gives the company sufficient funds to produce their goods or services. I agree with that statement, but only to a point, since the wealthy do not keep the less wealthy from increasing their wealth. However, there are different values in different efforts among workers. I think that wage science should better divide our country's wealth, but there will always be some jobs worth more than others. I do believe it is demand that maintains our prosperity, and it is supply giving demand the funds to buy that supply which completes the economic cycle. And my life experiences prove to me that there are some like that. Not a large % of our citizens, but their are some. I would change that to, all want to succeed, not all want to work to accomplish it. Yes! I have! When I completed the academic work for my EdS in Psychology and counseling I did an internship with the State of Alabama Rehabilitation services, dealing with disabled folks who needed help/accommodation to survive. Most wanted to work, but there was a core number who were malingers who only wanted a free ride. They were a minority. I have also encountered the same situation. True MOST of the time. I agree! A reasonable story, and yes all of it is true, unfortunately. True! I don't agree that would work with all of them. There were about 5 % of my clients in rehab services who came to me to help them get declared disabled just so they could get on the dole. The existing family prompted them to do that, and it had nothing to do with race. I buy that, but I believe we have more of a responsibility than just the US; not just in military defense, but also in fighting poverty, real poverty, the kind that is made up of people who have to scrounge for food, have only the clothes on their back and a spot on the pavement or under a tree to sleep. I am a social liberal but unlike many, I have no borders. I see the need to feed the staving man on the street in Nigeria or India as important as elevating a relatively poor person in the US to a higher standard of living. The biggest issue I have with many of out more "progressive" people in the US today is their preference to not concern themselves beyond our borders. Third world countries must have the jobs first before their labor revolutions can take place which help them to eliminate sweat shops, child labor and poor safety requirements in the work place. To me the picture of poverty is a little old lady squatting on the side of the road with a hammer hitting big rocks to make smaller ones for paving. I obviously disagree! Even in China when the military quelled the rioting in Tiananmen Square it started a movement which has led to more favorable conditions. Does it work all the time? No! But neither does if fail every time. I think the Arab spring has helped some of those countries in their quest for better government. Our efforts in WWII are a perfect example of how military might suppresses oppression such that even our enemies become our friends. Only if you include those killed by the Nazis and other enemies. That figure is tremendously exaggerated even by our MSM. Even in Vietnam, the US was not involved in most of the killing though collateral killing is an awful thing. .If involvement is wars that result in the deaths of that many millions of people isn't considered "oppression" then I don't know what is. If we include the deaths of innocent people by the tyrannical regimes we've supported around the world that death toll of the innocents is much higher. We're a nation actually established based upon the belief of the Inalienable Rights of the Person and yet in the history of the United States we've never conquered oppression in our own country. [/quote]Not completely but we have come a long way in the right direction. I don't buy that. We can't wait in our quest to stop oppression or hunger (and what is more oppressive than hunger? Certainly not an M1A1 Abrams. I don't think it is that easy and likely our reluctance to help will cause millions of more people dying. We can't save them all, and sometimes our efforts are counter productive, but should we ever stop trying we could not look in the mirror and think of ourselves as being good people.
Less than 1% of all capital gains investments provide funds to enterprise (corporations) to provide funds for the production of goods and services. Virtually all stock purchases, for example, are the purchase of the stock from an existing stockholder and all of the purchasing funds go to the stockholder and not to the corporation. A corporation only receives funding from direct stock issues (e.g. IPOs) and while that does happen it is very rare when compared to the overall the stock market. A perfect example is that Mitt Romney made a fortune with Bain Capital and Bain Capital never invested a single dollar of it's own money in capitalizing any corporation it invested in. It merely purchased the corporations in corporate take-overs from the existing stockholders and none of that money went to the corporation itself. Expansion of an enterprise is overwhelmingly driven by consumption that generates profits and cash flow and not by external investment capital.
I stipulated to the exception, thus that % what ever it is does not assist production, but no matter how you cut it, investment gets to production one way or another, whether in the form of wages to the employees, through the money that is spent and its positive multiplier effect. That money doesn't disappear, it hits the economy. If not by the person buying the stock from the people selling the stock and getting the money. So when Bain spent the money on stock, those who sold the stock invested it elsewhere, or spent it or created another business.
Did those that sold stock to Bain actually spend it on consumption or did they just re-invest it again which doesn't add to "consumption" and it is "consumption" that fuels economic growth? This is a problem that I've looked at and the fact is that the higher the income the lower the percentage of income is spent on consumption. Sure, very wealthy individuals unquestionably spend money. For example Bill Gates built a half-billion estate from scratch on Mercer Island near Seattle, arguably his largest single expenditure on "consumption" and yet that only represented about 1.8% of his personal wealth and it took him several years to spend it. Bill Gates has an estimated net worth of $28 billion and even at a dismal 5% return on investment his annual income would be about $1.4 billion/yr and it would be literally impossible for him to spend that amount of income on consumption. Of course Bill Gates is at the extreme end of the "wealth and income" spectrum and I only use him as an example that those with high incomes spend a smaller percentage of income on consumption than the lowest paid worker in American that spends 100% of their disposable income on consumption. If all of those earning less than $30,000/yr suddenly had 10% more wages all of that additional disposable income would be spent on consumption and it would have the "multiplier" effect on the economy. If Bill Gates had a 10% increase in income then none of it would be spent on consumption because he already has far more income than he can spend now. There is a wide range of those in-between the lowest paid workers and the highest income individuals of course but it's a sliding scale where there comes a point where a person simply can't spend all that the income they have and no matter how much more money the receive in income none of it is used for consumption that grows the economy. This is not an "attack on the rich" but simply a statement of fact related to the effects of income on the growth of the economy. The lower the income level the greater the effect of an increase in disposable income benefits the economy. When I look at statistics related to personal wealth accumulation (i.e. money not spent on consumption) and see that the "average American" only has about $100,000 in retirement assets when they turn 65 it means that they spent virtually all of their income during their entire life on consumption because they have very little left over at age 65. It is based upon this knowledge that lead me to understand that increasing the disposable income of those with the lowest income has the most positive effect on growing the economy. As I've also noted I don't like the principle of "Rob Peter to Pay Paul" which is what the "tax credit" does under the Negative Tax proposal. I advocate "Allow Paul to keep more of the income he earns" as opposed to a tax credit that takes tax money collected (robs Peter) and then redistributes it (to pay Paul) which is what a Negative Tax does.
Let's put it this way Shiva, money spent to buy stock does not disappear into a bottomless pit. Whether the individual who sold the stock spends it, or reinvests it, the money eventually gets into the economy thus improving the economy directly or indirectly. Now as to negative income tax, I don't like it, because it will not necessarily lead to the poor improving their lifestyle. Many are poor because they can't manage money, thus in kind air would be more practical for them. I do agree with your assertion that the least wealthy do tend to spend all their money, but I don't agree that the money paid to the rich stagnates in a lock box. Based on the specific multiplier effect at any given time, what the rich spend on investments or luxury items does hit the street at some future time. Also, corporations do not always ultimately pay the taxes levied against them. Tax incidence studies show that depending on the elasticity of the price of supply and/or demand some of that tax money may be paid by the consumer or the labor force. If the corporate capital is mobile labor tends to suffer the tax.
Not really, for the most part money that enters the capital markets becomes almost permanently sequestered there. Less than 0.0001% of the money that exchanges hands on the capital markets is withdrawn to pay for consumption on any given day. While individual markets have their ups and downs and inflows and outflows fluctuate wildly, the overall trend is that far more money flows into capital markets than flows out. This is the how and why of market growth during widespread economic stagnation. In fact a faltering economy tends to increase the flow of money into the markets, fuelling their growth and attracting even more money as more and more savers seek a return on their money. Unfortunately, due to all that money flooding into the markets, the market grows while rest of the economy becomes starved for cash. Wider economic growth becomes ever more problematic. There seem to be some belief that investment in the markets creates good for the entire economy but that is a false belief because for every dollar that enters the markets less than ten cents ever comes out and every dollar "invested' in the markets deprives the local economy of savings that would otherwise be reinvested locally. Small business owners who invest their savings with their broker should not be lamenting why the local bank cannot loan them the money they need for expansion, but they do because they are ignorant of how money flows in the economy. They have been led to believe that it does not matter, that all the money that flows into the markets also flows out. It does not. One way to change the balance of money flows into and out of the markets so that the businessman's understanding is realized is to tax market profits heavily. This redirects some market profits directly into consumption through government spending and makes investment in business growth a less risky path to increased income than stock market gambling for many business owners. A low capital gains tax encourages savers to invest their money in speculative market gambling because it is a low risk proposition compared to using that same money to buy a business or invest in your own business to grow it.
But your opinion, in terms of the definition of poverty, is really unimportant. Its not up to you to determine whether someone is poor or not after all! The consensus poverty methodology demonstrates that people reject the idea that needs are necessarily fixed. Indeed, the methodology tends to just confirm that relative poverty is a reasonable good measure of poverty intensity
Poverty is relative to the economic costs but not relative to income specifically. If the "cost of living" is higher then obviously to poverty level is related to the cost of living but "poverty" per se only relates to the necessities of life such as basic energy, food, shelter, clothing, medical, and other minimum requirements of life. It doesn't relate to whether a person can afford a new Mercedes or new Ferrari as neither of those are necessities. Transportation can be a "necessity" but it doesn't have to be provided for with either a Mercedes or a Ferrari. Poverty is not determined by how much one person might have but instead by how little someone else has when it comes to the necessities of life. It's really a question of "necessities" as opposed to "luxuries" as only the inability to provide for the necessities of life can be defined as establishing what is and what is not poverty in society. I don't believe we have very good criteria being used in actually defining poverty and tend to underestimate it in most cases because the politicians really don't want the people to know how bad the poverty really is. Just my opinion of course but it does have many supporting logical arguments.
There is very little true poverty in the US. Most of the poverty in the IS is relative poverty. True poverty is the lack of sufficient food, some minimal level of shelter, sufficient clothing to protect oneself from the weather. True poverty can be better described rather than defined specifically. Destitution to me is the man laying on the street, having to rummage through garbage to eat and owning only the clothes on his back. Persons who can get the food and shelter and clothing are not truly poor. They simply are less wealthy that those who earn more. Even without medical insurance a person can get medical care at country health units or the emergency room. Obviously there are exceptions, but the best way to determine poverty is to look at how even our least wealthy here in the US have much more superior living standard than do the poor in the third world. We have a marvelous safety net in the US to take care of our less wealthy, and the social programs that make up that safety net elevate our less wealthy such that they are only relatively poor, ie have less wealth that those who have more. The unfortunate issue is, there are some people who slip through our safety nets who can be considered really poor and we need to find ways to care for them. Regardless, if a person gets public housing, food stamps, WIC, and the other things he needs to survive (not with color TVs in their home or other luxuries most of our citizens have) he is poor only in relation to those who have more wealth.
No disagreement here. The capital gains tax used to have some merit when the money saved trickled down some. Now that money is being used to fuel the next bubble or invested off-shore, and we're just subsidizing the investment class bastards.
