How Your Income Stacks Up

[Dan J 277]

Here is the "prebate" schedule - I think the amounts are significant, but the tax is still somewhat regressive. One major advantage is that the FairTax would also ensure that illegal immigrants would pay their "fair share'. Also, no more working off the books.

There are still ways to buy stuff that will not result in taxes paid on the transaction. If a consumption tax was the primary tax source, we would see a huge growth in a black market, and increase in person to person sales.

[rebeccajo 14]

I'm glad we were able to keep things civil and not revert to logical fallacies.

I would be interested to know where you think capital comes from to start new businesses and where you think new jobs and economic growth come from if not from new businesses. Note that banks are a form of investment, since you receive a return on your money and your money is being used to promote business growth and home construction.

My point is that no matter how much money you have, if you are investing it, it isn't increasing your standard of living. It doesn't get you anything until you spend it. We should tax people based on what they use.

We should be encouraging people to save money and plan for the future. The pattern of Americans at large that don't plan for the future is what led us to the current economic downturn. The banks can be seen as the enablers, but it was average Americans who spent money they didn't have and purchased houses they couldn't afford. A tax scheme that only taxes when you spend would encourage people to save money and take care of themselves.

As far as thrift stores, I don't know about Alla, but I find it interesting that you seem to think that thrift stores are beneath some people. I make enough money to put me on the upper end of the chart, but my wife and I still shop at thrift stores. They have good stuff and it's a lot cheaper. If someone thinks they deserve to pay less taxes for better services because they don't have enough to get by, I don't think it's unreasonable to expect them to be shopping at thrift stores.

I wasn't speaking to you about Alla. I was speaking to Gary.

Where do you get the insane idea that investing doesn't increase standard of living? Are you trying to imply that having money at your disposal doesn't give one more financial freedom? That I have to SPEND what I have in the bank before my standard of living is better? That's just nonsensical.

Banks - if I put my money in the bank, I get a return on my investment. What do I get - like 2%. Oh wow. In the mid 70's a standard passbook account paid about 5%. That was before Regulation Q and the separation of national banks from the savings and loans - plus a load of other bollox that put bankers in a position where they wanted to compete with insurance markets, etc rather than stick to 'banking'.

And there you go again - blame the recession on people who loosely used credit. Don't blame it on the people/businesses/banks/entities who made the credit available. Don't blame it on the risky investments that made the lines of credit available to people. There they go - stupid US consumers - using a financial product available to them!

I know where capital comes from. Now I want you to tell me why it is that in the last 25 years, as concentration of the wealth in this country has moved from 15% of the population to 5%, why we haven't seen more job creation? Why we haven't seen more investment in business? I mean holy cow - these people have more money than God. They could do a lot for our country if they wanted. Could it possibly be that those who have the wealth would rather put their money into other things than job creation? No, it couldn't be that! That would mean trickle down economics doesn't work!

It was a lot cheaper ... until the rich folk started shopping there and they cranked up the price on everything... now its too pricy for most...

-P

That wasn't the point anyway.

It just slays me that some people apparently think that if you are poor, well hey you have options anyway! And one option is to purchase the cast-offs of the wealthy.

Edited December 29, 2009 by rebeccajo

[SMR 368]

I wasn't speaking to you about Alla. I was speaking to Gary.

Where do you get the insane idea that investing doesn't increase standard of living? Are you trying to imply that having money at your disposal doesn't give one more financial freedom? That I have to SPEND what I have in the bank before my standard of living is better? That's just nonsensical.

Banks - if I put my money in the bank, I get a return on my investment. What do I get - like 2%. Oh wow. In the mid 70's a standard passbook account paid about 5%. That was before Regulation Q and the separation of national banks from the savings and loans - plus a load of other bollox that put bankers in a position where they wanted to compete with insurance markets, etc rather than stick to 'banking'.

And there you go again - blame the recession on people who loosely used credit. Don't blame it on the people/businesses/banks/entities who made the credit available. Don't blame it on the risky investments that made the lines of credit available to people. There they go - stupid US consumers - using a financial product available to them!

I know where capital comes from. Now I want you to tell me why it is that in the last 25 years, as concentration of the wealth in this country has moved from 15% of the population to 5%, why we haven't seen more job creation? Why we haven't seen more investment in business? I mean holy cow - these people have more money than God. They could do a lot for our country if they wanted. Could it possibly be that those who have the wealth would rather put their money into other things than job creation? No, it couldn't be that! That would mean trickle down economics doesn't work!

That wasn't the point anyway.

It just slays me that some people apparently think that if you are poor, well hey you have options anyway! And one option is to purchase the cast-offs of the wealthy.

Investing increases standard of living because you have more money later and then you spend it. You still have to spend it in order for it to get you anything.

You think that money in the bank increases the standard of living? If you had a trillion dollars but couldn't spend it, how would your life be better? Until you spend money, it does nothing for you. It's a piece of paper (or numbers in a computer). Unless you need some kindling or scratch paper, it's really kind of useless if you don't spend it.

Admittedly, having money occasionally means people treat you better because they expect to get a piece of the action. But that doesn't really get you very far unless you back it up by actually spending.

Yes, if you have more money, you also have better investment options. But investments don't affect your standard of living until you cash out and spend them.

Why hasn't investment led to job growth? Because ridiculous labor and tax laws push investment dollars over seas. But if we stopped taxing productivity and instead taxed consumption, a lot of that would go away. And consumption can't be outsourced over seas.

I'm still a little puzzled why you think suggesting the thrift store as a viable option to get by on a tight budget is so ridiculous. I also recommend buying used cars. I think most taxpayers would agree with me that welfare payments shouldn't cover Banana Republic.

Edited December 29, 2009 by SMR

[almaty 19]

[Hilarious Clinton 452]

ah here we go again with "fair share"

how does one determine fair share for taxes, maybe how many times something is used?

- like if one calls the police 3 times a years and someone else calls only once a year, does the first person pay 3 times more for police than the second?

if things were really fair, we'd all pay the same flat rate, wouldn't we?

Soak the rich. Raise their tax rate to 99%.

wait.... will that take away the incentive to produce?

[Dan J 277]

Soak the rich. Raise their tax rate to 99%.

wait.... will that take away the incentive to produce?

I don't think anyone would advocate that. But even with higher tax rates, i dont thing you will find a single rich person who would rather be poor so they had to pay less taxes.

There are alot of things weathly people might invest in, which produce little or no jobs. Example: speculation, real estate and commodities. It does server to transfer more wealth to the upper class while forcing everyone else to put up with higher prices. The new middleman is the investor.

[SMR 368]

I don't think anyone would advocate that. But even with higher tax rates, i dont thing you will find a single rich person who would rather be poor so they had to pay less taxes.

There are alot of things weathly people might invest in, which produce little or no jobs. Example: speculation, real estate and commodities. It does server to transfer more wealth to the upper class while forcing everyone else to put up with higher prices. The new middleman is the investor.

You won't find rich people who want to be poor. But you will find rich people who work less because they don't care to be as rich. This applies not to the really rich but rather upper middle class in the $250k range. These are doctors, lawyers, entrepreneurs, middle level executives. Encouraging them to work less hurts the economy and is a real fact of the current tax structure.

Investment in real estate leads to construction which leads to jobs and economic growth. People who buy and sell commodities without adding an actual service or product (speculators) should be subject to sales taxes. I don't consider that investment.

[Dan J 277]

You won't find rich people who want to be poor. But you will find rich people who work less because they don't care to be as rich. This applies not to the really rich but rather upper middle class in the $250k range. These are doctors, lawyers, entrepreneurs, middle level executives. Encouraging them to work less hurts the economy and is a real fact of the current tax structure.

Why? The only situation i can think of where you might be better off with less money is with the AMT. But in general, taxes are tiered and do not apply at the full rate to the first $x dollars of income, You would still be better off earning more money even if you did have to pay higher taxes on the excess.

Investment in real estate leads to construction which leads to jobs and economic growth. People who buy and sell commodities without adding an actual service or product (speculators) should be subject to sales taxes. I don't consider that investment.

That's not the investment I'm talking about. I'm talking about buying properties to artificially restrict supply, and then reselling it when the prices rise. Same thing happened with oil. No improvement to the property is needed.

Edited December 29, 2009 by Dan + Gemvita

[SMR 368]

Why? The only situation i can think of where you might be better off with less money is with the AMT. But in general, taxes are tiered and do not apply at the full rate to the first $x dollars of income, You would still be better off earning more money even if you did have to pay higher taxes on the excess.

That's not the investment I'm talking about. I'm talking about buying properties to artificially restrict supply, and then reselling it when the prices rise. Same thing happened with oil. No improvement to the property is needed.

Well, I agree that speculation should be taxed, as I said. I don't really consider it a form of investment.

As far as working less, it's not that they would get less after tax money for working longer. It's just that the extra money is so little it's not worth it. They work a shorter work week or go home early.

[rebeccajo 14]

Investing increases standard of living because you have more money later and then you spend it. You still have to spend it in order for it to get you anything.

You think that money in the bank increases the standard of living? If you had a trillion dollars but couldn't spend it, how would your life be better? Until you spend money, it does nothing for you. It's a piece of paper (or numbers in a computer). Unless you need some kindling or scratch paper, it's really kind of useless if you don't spend it.

Admittedly, having money occasionally means people treat you better because they expect to get a piece of the action. But that doesn't really get you very far unless you back it up by actually spending.

Yes, if you have more money, you also have better investment options. But investments don't affect your standard of living until you cash out and spend them.

Why hasn't investment led to job growth? Because ridiculous labor and tax laws push investment dollars over seas. But if we stopped taxing productivity and instead taxed consumption, a lot of that would go away. And consumption can't be outsourced over seas.

I'm still a little puzzled why you think suggesting the thrift store as a viable option to get by on a tight budget is so ridiculous. I also recommend buying used cars. I think most taxpayers would agree with me that welfare payments shouldn't cover Banana Republic.

Show me a situation where if I had a trillion dollars, I wouldn't be able to spend it.

[SMR 368]

Show me a situation where if I had a trillion dollars, I wouldn't be able to spend it.

You're completely missing the point. If you have a trillion dollars, you have two choices: spend it and pay the associated tax or don't spend it, pay no taxes, and receive no benefit from it. Unless a rich person spends more money and thus pays more sales tax, he might as well not be rich for all the good his money does him.

[Dan J 277]

Well, I agree that speculation should be taxed, as I said. I don't really consider it a form of investment.

As far as working less, it's not that they would get less after tax money for working longer. It's just that the extra money is so little it's not worth it. They work a shorter work week or go home early.

That's not necessarily a bad thing, there is more to life than work and producing a greater GDP.

[SMR 368]

That's not necessarily a bad thing, there is more to life than work and producing a greater GDP.

That's definitely true on an individual level. If someone wants to make the choice on their own to take more days off, I support that. But I don't agree with a tax system that penalizes working more.

[rebeccajo 14]

You're completely missing the point. If you have a trillion dollars, you have two choices: spend it and pay the associated tax or don't spend it, pay no taxes, and receive no benefit from it. Unless a rich person spends more money and thus pays more sales tax, he might as well not be rich for all the good his money does him.

Oh FFS.

Firstly, if you have a trillion dollars you are probably paying tax on the associated investment income. Unless it's stuffed in a mattress your comments make no sense. I can't imagine the thrifty trillionaire lying awake in bed at night wondering where he's going to get the money for the mortgage next month. If not having to worry about money isn't a benefit, then I don't know what a financial benefit is.

I don't get this idea that you have to spend money to have a better quality of life. Sounds like a keeping up with the Joneses mindset. Which is what you were bellyaching about earlier when you declared it was the people who unwisely used credit were the ones who ruined the economy. Consumer spending shouldn't drive an economy. Whether it's money spent by trillionaires or the poor.

[rebeccajo 14]

That's definitely true on an individual level. If someone wants to make the choice on their own to take more days off, I support that. But I don't agree with a tax system that penalizes working more.

I pay income tax on my wages.

Is there something wrong with that? Or is your problem only with taxation of trillionaires?