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Melissia wrote:

Polonius wrote:That's the beautiful thing about market value: it's by definitiion accurate.

People manipulate and drive up or down prices all the time. The last thing market value is is accurate.

No, it's not precise. It's accurate as hell.

What is something worth? What somebody will pay for it.

biccat wrote:
But almost all economists will agree that the advantage gained by wealth is not proportionate to the amount of wealth gained. Like I said before, person A who makes $300k per year doesn't get 10x the benefit of that wealth as person B who earns $30k per year. Cutting 1% of person A's income would hardly impact him. Cutting 1% of person B's income would hurt him severely. Therefore, the benefit A receives from each dollar of his money is less than the benefit B receives.

So you're basically saying that A can afford to pay more taxes than B ? It is good to see you are finally understanding it.

Polonius wrote:What is something worth? What somebody will pay for it.

What someone will pay for it is a range, not a specific number. And it is something that is easily manipulated, especially in a world with imperfect information.

What would you pay for hamburger A, B, C, or D? Well, what if you knew that hamburger A was tofu? What if you knew hamburger B was high quality steak? And hamburger C was actually breaded chicken breast disguised as a hamburger? And that hamburger D was a few painted pieces of wood?

What if the person left the impression or even outright lied and said that they were all the same, and you had to order only knowing what they told you? Advertising is essentially an art form based off of lies and misleading in ways such as this. Companies lie and cheat and hide the details of their products unless it is absolutely crucial for them to reveal them, or if it's in their benefit.

Just look at the pharmaceutical industry. They're some of the best liars in the country, and that's coming from someone who worked in the industry.

The product being paid for isn't necessarily a physical good, and goods themselves are not necessarily limited to individual things. For example, when you buy coffee at Starbucks you are buying not only their coffee, but the image associated with the coffee by branding. This isn't a distortion of market price per se, though it is an active attempt to manipulate it the same sense as any other attempt to produce a superior product.

biccat wrote:
You may think, as many on the illogical left do, that progressive taxation is fair, but it's not.

Fair doesn't mean equivalent, they aren't even synonyms, which leads one to wonder why so many people believe they are. Fair relates to accordance with rules, codes of conduct, or social standards. If the law, prevailing social climate, or informal codes of conduct denote progressive taxation as legitimate, then it can logically be called fair.

If you're going to refer to a group of people as illogical, then you should probably do your level best to behave in a logical manner yourself, lest you appear to be calling kettles black.

biccat wrote: They will always demand more, because there's no risk to them for doing so.

There's no risk involved in demanding anything unless the act of demanding that thing is not in accordance with the rules governing demands. For example, a group of people demanding a set of benefits might either protest peacefully, or riot. If they protest peacefully, then they have no, or minimal (protests often produce a degree of negative backlash against the protesting group), risk. If they riot, then they have a great deal of risk. The barrier between peaceful protest and riot, at least in this country, is set by law; law being a particular type of rule

biccat wrote:
Given that government treats all people equally, whether they are super rich or not...

That's an awful, awful assumption.

biccat wrote:
This is completely wrong, of course. Especially in a welfare state, the poor need the rich much more than the rich need the poor. I guarantee that without 10,000 of the poorest people, Warren Buffet's life wouldn't change. Eliminate Warren Buffet, and at least 10,000 poor people will see their lives change.

Warren Buffet is irrelevant. Eliminating him does not eliminate the things over which he has property claims. It does eliminate his ability to do labor, just as eliminating 10,000 poor people eliminates their ability to do labor. If we control for relative importance, as defined by the number of property claims said labor affects, the comparison is obviously in favor of Polonius' example.

Of course, that matters little, as you've clearly missed the point. The rich are only rich because they denied the poor property which they could have otherwise acquired. The rich need the poor to remain poor in order to remain rich, but the poor do not need the rich to remain rich in order to remain poor.


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Redbeard wrote: The first is that being taxed is a punishment.

Oh noes, I'm being taxed more heavily than the poor, however will I cope with this punishment. Ah, yes, I'll go enjoy the company of my children, all of whom are well educated, fit, and disciplined!

Or I'll go drive my Lotus really fast, and pay the speeding ticket in cash.


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biccat wrote: Not rioting is a pretty easy thing to do. I didn't riot today, but I didn't get a check from the government.

You also made, and ate, breakfast using food that was stored in your refrigerator; or so I imagine.


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Redbeard wrote:] Probably not, but time and again, most Americans have proven incapable of responsibly planning for their own futures.

This is something that often goes unsaid, except in the sense of "Liberals think you are incompetent!"

No one likes being called incompetent, of course, but the truth is that most of us are incompetent at most things, and planning for the future, even your own future, is a "thing". Because people that do not plan for their future are a liability, and because people seem to have an aversion to allowing those that do not do so to die, we take it upon ourselves to develop social programs which counteract this reality. Are these social programs the most efficient way of contending with the issue at hand? Maybe not, but it should always be noted that most people who criticize things from efficiency do not accept human behavioral tendencies as a given variable.

Well, I was taught in tax that a good working definition of fair market value is: "what a willing buyer would pay to a willing seller, with neither being under a compulsion to buy or sell, and both having knowledge and appreciation of all material facts."

If you have a fundamental problem with free market economics, that's fine. But market price is as close to the "true" value of a good or service as you can hope.




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biccat wrote:

Polonius wrote:But the rich need the poor more than the poor need the rich.

This is completely wrong, of course. Especially in a welfare state, the poor need the rich much more than the rich need the poor. I guarantee that without 10,000 of the poorest people, Warren Buffet's life wouldn't change. Eliminate Warren Buffet, and at least 10,000 poor people will see their lives change.

You're shifting the goal posts. Sure, you can wipe out the homeless and the upper 1% wont' care.

But the rich wouldn't be rich without the bottom 80%, which are by any relative measure, simply poor compared to the upper 1%.

Which is my point. Warren Buffet can only make money if people are making products, buying products, shipping products, etc. You could wipe out the top 10% of income earners in this country, and a few quick hiccups aside (primarily in health care), we'll be back in business in no time.

You still seem fixated on the idea that individuals create wealth. That Buffet, simply by working hard and being talented, is creating his wealth as if from the forehead of zues. I don't even he'd agree with that statement. Some individuals are better than others, and drive and talent (and luck) determine which people make wealth, but I'd argue that in a system that allows for free enterprise, wealth will be created by somebody.

biccat wrote:So, essentially, you're saying soak the rich, damn the consequences?

No, I didn't suggest anything of the sort, that's a cheap, crappy debate technique you've followed - "when you can't actually debate the substance of someone's argument, invent a wild, fantastical conclusion".

Once we realise that tax is just another part of the system, just as integral as, say, property laws, then the question becomes 'what is the best system of taxation?'. Adam Smith's great treatise on classical economics (you know, the kind the right wing pretends to follow) laid out four basic canons that are needed to form a good tax system, and first among them was the Canon of Equity.

Smith stated the system should provide economic and social justice, that is, people should pay according to their ability to pay. He observed that the rich should pay higher taxes to the government because it is due to government (through property laws, contracts laws and so on) they have been able to build their wealth. He then went on to argue that taxes should be measured by income alone.

Nothing there stated that society should 'soak the rich', just that the rich should pay proportionately more. Exactly how much more is a function of the need to cover the spending of the state, and the relative levels of income through society.

In case you're wondering, the other canons are transperancy/certainty, ease of payment (timing payments to match income), and economy (low cost of administration).


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biccat wrote:And my point is: how much of their success is attributable to their own efforts and how much is attributable to government benefits?

Your point is nonsense. The two are inseperable. This is obvious, because as I've pointed out to you many, many times now, the rich man could not actually build his own Mercedes, no matter how smart and hard working he might be. It'd be like asking how much of a rich man's success is due to property laws, and how much is due to his own moxie.

Instead you just need to stop looking at tax as being seperate to the whole rest of the economic system. Your term there 'government benefits' just shows how much you really just do not fething get it, and belies how little effort you've spent in trying to get it.

It isn't about 'government benefits'. It's about property laws, enforcement of contracts, enforcement of labour laws, and all the rest of the system. Without government there is no capitalist system, there is in fact, no system at all. To pick one piece of the system, even though it was built by the same government, and enforced through the same mechanisms as every other part of the system, and then act like it alone and distinct to all the rest is completely wrong.

Given that government treats all people equally, whether they are super rich or not, it's hard to say that person A who makes $300k per year is getting more of a benefit than person B who makes $30k per year. They are both afforded the same access to courts, the same police protection, access to the same roads, the same defense against foreign threats, etc.

But there you are, not getting it again. It isn't about one person 'earning' $300k off his own bat, completely in isolation of the rest of the system, and seeing that $300k as a measure of his talent and hard work and nothing else, while another person's talent and hard work 'earned' them $30k, and then acting like the very first time government has come into the system is when it taxed them.

It is from being part of the system that the first guy was capable of earning $300k, just as it was from being part of the system that the second guy was capable of earning $30k. You just look at the last part, how much they're taxed, and see it entirely in terms of someone being punished for 'earning' more money. Instead, allow yourself to actually think about this, and begin to consider that the system is actually giving one guy $200k for being a lawyer, and another guy $28k for being a gardener.

The only thing that actually matters is net salary. If the net salary is enough to justify the hard work of highly gifted people to become lawyers, then society is operating just fine - whether we have a system that pays $220k and taxes $20k, or whether the system pays $300k and taxes $100k.

Taxing A at 10x times the amount of B is the best-case scenario. Anything beyond that is punitive.

Only if we think the person generated $300k in wealth because of their own personal attributes, entirely unrelated to the system. Which we don't, because that's stupid.


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biccat wrote:The part I don't understand is how do you explain people earning money in the first place? Plenty of wealthy people started with nothing, are they simply products of random luck, or are they more talented, harder workers, or have rarer talents than those who don't earn as much? Shouldn't someone who works hard, is better at their job, or more in demand earn more money?

No-one is saying that no personal attributes play a part in generating income. Obviously, intelligence, hard work and all kinds of other features play an important part. The point, simply, is that there alone do not determine your income, the rules and conditions of society play an enormous part.

Otherwise, every smart, hardworking Somalian would be making their first million as quick as every smart, hardworking American.


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biccat wrote:Like I said before, person A who makes $300k per year doesn't get 10x the benefit of that wealth as person B who earns $30k per year.

Yes, he does. Without the system, he'd have, at best, a log cabin and enough food to last the winter. With the system, he has $300k worth of whatever material goods he likes. So without a system, he'd be $300k - log cabin - hunting meat worse off, or just about $300k worse off.

His benefit from the system is pretty much bang on 10x as great as the guy earning $30k. Because without the system, that guy would be $30k - log cabin - hunting meat worse off, or just about $30k worse off.

Once again, you really, really need to stop looking at tax as some imposed, alien mechanic, because the rest of the system is just as much an invention of government.


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Polonius wrote:No, it's not precise. It's accurate as hell.

What is something worth? What somebody will pay for it.

Sort of. I mean, it certainly gives an answer, and it gives that answer in the fastest form, and the best form we have for allocating resources (ie giving incentive to people to enter one job over another).

But to call it the most accurate is remove all possible value judgements we can make.

It is possible to argue that the nurse getting half the pay of the sales rep is actually a problem in the market, even though there's not much we can, or should, do about it.

Hmm, good point. I should say that market price is the most accurate way to ascertain the financial value of something.

Polonius wrote:Well, I was taught in tax that a good working definition of fair market value is: "what a willing buyer would pay to a willing seller, with neither being under a compulsion to buy or sell, and both having knowledge and appreciation of all material facts."

If you have a fundamental problem with free market economics, that's fine. But market price is as close to the "true" value of a good or service as you can hope.

The market mechanism is great, and along with modern science is basically the cornerstone of wealth creation in the modern world.

But it is mistake to confuse efficiency with fairness or accuracy.

For instance, there is a noted discount for moral jobs, and a noted premium for immoral jobs. That is, if take a base line of necessary skills and amount of hard word needed for a job, you get a pretty good predictor of how much a certain job will pay. Ie a job requiring three years of tertiary education will typically pay so much, a job requiring three years of tertiary education that is also physically demanding will pay that much more.

You can plot all these out, and then look at what they actually pay, and start to notice some really interesting variations. Two really interesting variations are jobs that pay less because they are directly helping people, and jobs that pay more because they're morally dubious. That is, nurses are paid notably less than a job requiring that level of education and that amount of hard work, than would otherwise be the case. Meanwhile, collections agents are paid more, because it's a miserable line of work, so there must be a premium to get them to do it.

Now, the market for labour has far too many benefits for us to chuck it out, but I'm certainly not willing to call a system that penalises people for wanting to a job that helps people, but rewards others for taking anti-social jobs.


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Polonius wrote:Hmm, good point. I should say that market price is the most accurate way to ascertain the financial value of something.

Yes, definitely. Sorry, I wrote a longer answer after your post, that went into a lot of probably unecessary detail, but it was fun to remember my uni readings if nothing else

Polonius wrote:Well, I was taught in tax that a good working definition of fair market value is: "what a willing buyer would pay to a willing seller, with neither being under a compulsion to buy or sell, and both having knowledge and appreciation of all material facts."

The other catch here being the "both having knowledge and appreciation of all material facts" part, a point the importance of which we've recently had some rather brutal demonstrations. For example, in the housing loan market, with people getting in way over their heads out of ignorance and trust toward sales and lending organizations who abused that trust. Or in organizations like Standard and Poors rating certain incredibly dubious securities AAA, to the near-ruin of half the world's economy.

I removed the impolite and trolling comments from your post. Hope you don't mind.

sebster wrote:Smith stated the system should provide economic and social justice, that is, people should pay according to their ability to pay. He observed that the rich should pay higher taxes to the government because it is due to government (through property laws, contracts laws and so on) they have been able to build their wealth. He then went on to argue that taxes should be measured by income alone.

The quote that I believe you're looking for is the following:

The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state

(emphasis added) Taxation in proportion to revenue is not progressive taxation, it's proportional taxation.

There's no reason for the "rich" to pay a higher percentage of their earnings than the poor. The argument here seems to be simply "they can afford to pay more, so they should." That's not a defense of fairness, it's actually an argument in favor of unfairness. Further, there's no limit on how much a "richer" should be forced to pay in taxes if the argument is "he can afford it." The wealthy will always be able to afford to pay more in taxes, because they, not surprisingly, will always have more money.

sebster wrote:Nothing there stated that society should 'soak the rich', just that the rich should pay proportionately more. Exactly how much more is a function of the need to cover the spending of the state, and the relative levels of income through society.

Except you're missing a very fundamental and important step: who determines the size of the state and the expense? The wealthy will by definition always be less numerous than the non-wealthy, and so the non-wealthy will always demand more concessions from the wealthy, even to the point of insolvency.

So, again, your defense of progressive taxation boils down to "soak the rich."

sebster wrote:Your point is nonsense. The two are inseperable. This is obvious, because as I've pointed out to you many, many times now, the rich man could not actually build his own Mercedes, no matter how smart and hard working he might be. It'd be like asking how much of a rich man's success is due to property laws, and how much is due to his own moxie.

I think that's a very good question. As you said, a person can't build his own Mercedes, but without Karl Benz, there wouldn't be any Mercedes on the road. Therefore, we should ask the question: to what extent is the production of a Mercedes automobile the product of Mr. Benz's innovation and to what extent is it due to society making it possible for Mr. Benz to produce automobiles?

You seem to be of the opinion that production (and presumably consumption) happens in a vacuum and the rich are there simply to soak up the profits and screw the working man. As if the people at the head of these companies, or the capitalists who make them able to continue to produce vehicles, add no value whatsoever to the economy.

At this point, it becomes difficult to separate the personal insults and trolling from your actual arguments, so I'll cut out the rest. Ta.

biccat wrote:
There's no reason for the "rich" to pay a higher percentage of their earnings than the poor. The argument here seems to be simply "they can afford to pay more, so they should." That's not a defense of fairness, it's actually an argument in favor of unfairness. Further, there's no limit on how much a "richer" should be forced to pay in taxes if the argument is "he can afford it." The wealthy will always be able to afford to pay more in taxes, because they, not surprisingly, will always have more money.

Don't confuse "no reason you find compelling" for "no reason." I can't think of any compelling reason to pierce my lip, but people clearly seem to have them.

Basically the best minds have more or less agreed that the moral and philisophical reasons for progressive taxation essentiall wash out. What doesn't is that it is, without hyperbole, the only way to run a modern tax code. (any flat tax will have an exemption, making it at least somewhat progressive).

As for fairness? I thought the underlying understanding of life as seen by the right is "life isn't fair." It's not fair to tax rich people at a higher rate. It's also not fair that some people are born with borderline intelligence and can never be productive.

Except you're missing a very fundamental and important step: who determines the size of the state and the expense? The wealthy will by definition always be less numerous than the non-wealthy, and so the non-wealthy will always demand more concessions from the wealthy, even to the point of insolvency.

Anytime you start painting the wealthy as a persecuted class, your arguments start breaking down. The wealthy have influence outside their numbers. If the average American voted for a tax code that benefitted them, the personal exemptoin would be about $60,000 and the upper 1% would pay 50% in taxes.

Luckily for the wealthy, they guys writing the laws are, well, wealthy.

So, again, your defense of progressive taxation boils down to "soak the rich."

Saying that is roughly equivilent to summing up the flat tax by saying it boils down to "taking food out of the mouths of the poor."

I think that's a very good question. As you said, a person can't build his own Mercedes, but without Karl Benz, there wouldn't be any Mercedes on the road. Therefore, we should ask the question: to what extent is the production of a Mercedes automobile the product of Mr. Benz's innovation and to what extent is it due to society making it possible for Mr. Benz to produce automobiles?

Far less than you think. The automobile was independently developed in multiple places, and while Benz was slightly better than the others, if died in childhood, there would still be luxury cars on the road.

You seem to be of the opinion that production (and presumably consumption) happens in a vacuum and the rich are there simply to soak up the profits and screw the working man. As if the people at the head of these companies, or the capitalists who make them able to continue to produce vehicles, add no value whatsoever to the economy.

I doubt that is his opinion. Of course CEOs and engineers add value to the economy. It's why they are paid well. They are not, however, unique talents. People will always move up into higher roles, and often succeed reasonably well, as long as the process is meritocratic.

But these guys aren't demi-gods, strolling the face of the earth and reshaping it with will and brawn. They're marginally more talented guys that are maybe 5% better than the guys they beat for the job.

biccat wrote:I removed the impolite and trolling comments from your post. Hope you don't mind.

At no point have I trolled you. I've certainly been impolite, though, because it is not polite to tell someone directly how poorly they're doing in something. It is, however necessary, because you continue to fail to read my posts, and instead respond to strawmen arguments.

Failing to read people's posts and arguing with the strawmen you wish they'd claimed is also impolite, by the way.

The quote that I believe you're looking for is the following:

The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state

(emphasis added) Taxation in proportion to revenue is not progressive taxation, it's proportional taxation.

You've assumed the word 'direct' into Smith's quote. Spoken of in such a general sense, you cannot assume proportion means directly so, but merely with one in regards to the other. Especially when you're only reading Smith's summary in the middle of an internet debate, and never actually bothered to read the book.

If you'd ever bothered to read the whole of the text, then you'd see how inappropriate your assumption above is. Smith's thoughts on taxation of income have little in common with yours. He doesn't actually consider it right to charge income tax on the wages of the ordinary working man at all, and that income tax should only be levied on particularly large incomes- Smith calls them incomes of "some public envy" or something similar.

Seriously, you need to read the book.

There's no reason for the "rich" to pay a higher percentage of their earnings than the poor. The argument here seems to be simply "they can afford to pay more, so they should."

This is ridiculous. I've explained my argument to you four or five times now, and you still haven't even realised it exists, and are still pretending I'm making some kind of claim about "rich people should pay more".

All I'm trying to explain to you here, is that a person's income is a product of being part of the system. As such, their income, whether high or low, should be considered a benefit of being part of the system, just as their tax payments should be . From there we can discuss exactly what the rates should be (and their are times when the impact of the top marginal rate on incomes is too great, as in Australia in the mid-90s) but we can never just look at tax in isolation.

That's it. Just read that argument, and if you want to debate it, debate the actual argument presented, and stop trying to debate this bizarre liberal strawman thing in your head that just wants to tax the rich more.

Except you're missing a very fundamental and important step: who determines the size of the state and the expense? The wealthy will by definition always be less numerous than the non-wealthy, and so the non-wealthy will always demand more concessions from the wealthy, even to the point of insolvency.

So, again, your defense of progressive taxation boils down to "soak the rich."

If the wealthy were truly the victims of cruel and greedy middle and working classes, then they wouldn't be maintaining so much wealth. Your argument, by definition, is utter nonsense.

"Oh, I am such a victim of society that my take home after tax income is just $832,914!"

I think that's a very good question. As you said, a person can't build his own Mercedes, but without Karl Benz, there wouldn't be any Mercedes on the road. Therefore, we should ask the question: to what extent is the production of a Mercedes automobile the product of Mr. Benz's innovation and to what extent is it due to society making it possible for Mr. Benz to produce automobiles?

Even Mr Benz, in and of himself, needed society to get his factory up and running. He needed a banking sector to fund him. He needed corporations law to provide limited liability so that people were willing to invest. He needed a mining sector to extract raw materials to build his plant, and to build his cars. And, of course, he needed labour to build and operate his factory.

You seem to be of the opinion that production (and presumably consumption) happens in a vacuum

That's a simply an absurd conclusion. My point, which I've repeated to you so many times in this thread, is that production doesn't happen in a vacuum. Production comes about from interaction of all of society. You cannot pick out one part of that society, such as income tax, and treat it as standing outside all of the rest, an unfair impost with no relation to any other part of that society.

and the rich are there simply to soak up the profits and screw the working man. As if the people at the head of these companies, or the capitalists who make them able to continue to produce vehicles, add no value whatsoever to the economy.

They most certainly have a value. They have great value, and the people who manage to bring a product to market and sell it at profit deserve substantial reward, because it is a hard and risky thing to do. My point is simply that it's silly to assume that their pay is their inherent, absolute, completely fair income, to which any income tax is an intervention, somehow the first and only place government involves itself in the process.

At this point, it becomes difficult to separate the personal insults and trolling from your actual arguments, so I'll cut out the rest. Ta.

Here's the thing, I've spoken at length, quite often, about the real failings of state planned economies (either what happened to the USSR or what will happen to China) being the lack of innovation from the absence of a capital market. I've spoken, very often, about the strength of the US economy and how much of that strength draws from the value of its venture capital system. You can't read those things, and plenty of other stuff that I've written, actually take the time to consider them, and then turn around in another thread and act like I don't place any value on company management.

You've been in these threads, and generally been arguing against me, and it's becoming increasingly clear you have as little idea of my views now as when you came to this forum. You're still just making the same crude assumptions about what I must believe now, as you were. Has it been a year that you've been here? Have we been arguing stuff for a year, and in all that time you've not absorbed even one little thing about how I see the world?

It's incredible, really. All that time you've spent posting, but you've read nothing and thought about it even less.

biccat wrote:
The argument here seems to be simply "they can afford to pay more, so they should." That's not a defense of fairness, it's actually an argument in favor of unfairness.

No, actually that is an argument from fairness, as all arguments from propriety are. Perhaps you meant to use the concept "equal" instead of the concept "fair".

biccat wrote:
Except you're missing a very fundamental and important step: who determines the size of the state and the expense? The wealthy will by definition always be less numerous than the non-wealthy, and so the non-wealthy will always demand more concessions from the wealthy, even to the point of insolvency.

So, again, your defense of progressive taxation boils down to "soak the rich."

So...much..equivocation...

Anyway, sorry, but you've not made an argument which indicates that the less wealthy will have universally superior influence to the more wealthy. Honestly, you didn't even explain why the less wealthy will always demand more from the wealthy than the wealthy demand from the less wealthy.

biccat wrote:
At this point, it becomes difficult to separate the personal insults and trolling from your actual arguments, so I'll cut out the rest. Ta.

A comment which is, in and of itself, trolling.



To sum up the rest of biccat's posts in this thread:





Hint: this is also a strawman.

dogma wrote:

biccat wrote:
Given that government treats all people equally, whether they are super rich or not...

That's an awful, awful assumption.

seems fair to me! <- Note, NSFW language

Hey Biccat, here's a good article for you to read.

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=2

It's written by Warren Buffet - one of the richest men on the planet - and he's pointing out exactly how he, being the richest person in his office, actually pays the lowest taxes, percent-wise of the people there.

It's one thing to argue against taxing the rich more than everyone else, but could you at least agree that perhaps we should tax them as much?

Buffet, one of the smartest financial guys on the planet, says:

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

Redbeard wrote:Hey Biccat, here's a good article for you to read.

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=2

Excellent article. Few people that are wadded have this guys integrity it seems.

Although, maybe you need that much money to have integrity. I might be tighter if i only had a few million in the bank as opposed to a few billion.

Redbeard wrote:Hey Biccat, here's a good article for you to read.

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=2

It's written by Warren Buffet - one of the richest men on the planet - and he's pointing out exactly how he, being the richest person in his office, actually pays the lowest taxes, percent-wise of the people there.

It's one thing to argue against taxing the rich more than everyone else, but could you at least agree that perhaps we should tax them as much?

Sounds fair. Will you argue that we should tax them as much?

Also, if Mr. Buffet is so concerned about his tax burden compared to other people in his office, the question we should be asking is not how he manages such a low rate of taxation, but why he continues to pay such a low rate and, more importantly, why he wants to increase taxes.

The government is happy to take Mr. Buffett's money if he wants to pay more taxes.

The fact is, Mr. Buffett doesn't want to pay more taxes, he wants other people to pay more taxes. He loves high government spending because it makes him money. Of course he's going to support "increased revenue" over "reduced spending," because otherwise, his business won't be as successful.

Oh, and if you increased Mr. Buffett's tax burden from 17% to 40%, that would be an extra $10 million. Take that from the 400 highest earners and you've got an extra $4 billion. Or approximately 0.3% of the 2010 budget deficit. Where do you propose getting the other 99.7%?

Mr. Buffett has some handy suggestions:

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

So lets take $1 million from those 236,883 households making over $1 million, that's another $236 billion. And $10 million each from the 8,274 making over $10 million. That's another $80 billion.

Now we're up to some real numbers, about $323 billion (counting the $10 million from each of the top 400, we'll tax them twice, what the hell). That pays for...23% of the 2010 budget deficit.

Even if you agree that soaking the rich is a sound plan, it doesn't pay for much.

Although, if you took all of the income earned by the top 1% of Americans, you could pay off the deficit for 2010. I'm sure that taxing people at 100% (absolute, not marginal rate) won't have any impact on their decision to work next year.

Because saying more means 100%.

You know, you're obviously much smarter than everyone else in the room, and everyone with actual economic experience. Clearly your understanding of this issue so far exceeds anyone else's that we're just not getting it. Further discussion with you on this topic seems like a waste of time.

Polonius wrote:Well, I was taught in tax that a good working definition of fair market value is: "what a willing buyer would pay to a willing seller, with neither being under a compulsion to buy or sell, and both having knowledge and appreciation of all material facts."

The problem is, rarely are all these requirements actually met.

biccat wrote:Oh, and if you increased Mr. Buffett's tax burden from 17% to 40%, that would be an extra $10 million. Take that from the 400 highest earners and you've got an extra $4 billion. Or approximately 0.3% of the 2010 budget deficit. Where do you propose getting the other 99.7%?

This is what's known as a Nirvana fallacy. There are many different measures to reduce the deficit, and none of them are invalid simply due to their inability to eliminate it entirely in one fell swoop.

biccat wrote:Even if you agree that soaking the rich is a sound plan, it doesn't pay for much.

Although, if you took all of the income earned by the top 1% of Americans, you could pay off the deficit for 2010. I'm sure that taxing people at 100% (absolute, not marginal rate) won't have any impact on their decision to work next year.

This is what's known as a Straw-man fallacy. You're arguing against the merits of a position no one has adopted, to whit, no one suggested raising taxes on the wealthy (or anyone else) to 100%, so arguments as to why that is unworkable is irrelevant at best.

Redbeard wrote:Because saying more means 100%.

Yeah bic, Ive been pretty much just reading with amusement the many long back and forths between you seb,dogma,rb et al without chirping much in. But its getting annoying that you strawman constantly. I mean, I do it sometimes as well, but its just getting ridiculous when every post is filled with them.

You should try and stop because its getting confusing.

............


So don't say that I demanded that you stop forever because Im always confused about everything.

Redbeard wrote:Because saying more means 100%.

No, I was demonstrating that even if you took everything the "rich" earn (top 1% is around $400k/year), you would still only just cover the deficit. And would barely touch the rest of the budget.

Our national budget is huge. Almost incomprehensibly huge.

"Taxing the rich" won't begin to cover the deficit problem, despite those who think otherwise. If you want to keep spending at the rate we are, taxes must be increased (at least) on the middle class.

Which is one reason Obama's plan included lots of cuts, and increased taxes on the upper 5%.

So, again, you've demonstrated that something nobody is arguing is wrong. Congrats.

Ouze wrote:This is what's known as a Nirvana fallacy. There are many different measures to reduce the deficit, and none of them are invalid simply due to their inability to eliminate it entirely in one fell swoop.

I'm not saying that "taxing the rich" is invalid simply because it can't eliminate it entirely. I'm saying that "taxing the rich", unless it's done at a confiscatory level, is largely irrelevant. And it's a waste of time.

Can we reduce the federal deficit by replacing forks and spoons in the Congressional Cafeteria with sporks? Yes. Does it make sense to address a $1 trillion problem by looking at ways to save $5 thousand? No.

So you know what, I'm going to go ahead and jump on the "hang the richers" bandwagon. What the hell, lets substantially increase their tax burden and reduce the deficit by 1%. But please stop pretending that there won't be economic consequences to doing so.

Ouze wrote:This is what's known as a Straw-man fallacy. You're arguing against the merits of a position no one has adopted, to whit, no one suggested raising taxes on the wealthy (or anyone else) to 100%, so arguments as to why that is unworkable is irrelevant at best.

Damn, you mean Warren Buffet didn't make the argument that "taxing the rich" would save money in the article linked above? I guess I totally misread it.

The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

biccat wrote: I'm saying that "taxing the rich", unless it's done at a confiscatory level, is largely irrelevant. And it's a waste of time.

Financially, or politically? Financially it might be a waste of time, though, as many conservatives remind me, "every dollar counts". But politically? If the plebes want a thing and that thing can be served up silver-platter-style it probably should be.

biccat wrote:
Can we reduce the federal deficit by replacing forks and spoons in the Congressional Cafeteria with sporks? Yes. Does it make sense to address a $1 trillion problem by looking at ways to save $5 thousand? No.

Says the guy dropping bombs about bridges to nowhere.

biccat wrote:
So you know what, I'm going to go ahead and jump on the "hang the richers" bandwagon. What the hell, lets substantially increase their tax burden and reduce the deficit by 1%. But please stop pretending that there won't be economic consequences to doing so.

Yes, jump on the bandwagon you created, its the free market way.

How can one claim that the richest control so little of the wealth in our society that taxing them more heavily will not significantly redress the budget deficit and at the same time claim that taxing the richest more heavily will have a significant negative effect on our economic recovery? Which is it: do the richest control significant wealth or not?

Manchu wrote:How can one claim that the richest control so little of the wealth in our society that taxing them more heavily will not significantly redress the budget deficit and at the same time claim that taxing the richest more heavily will have a significant negative effect on our economic recovery? Which is it: do the richest control significant wealth or not?

The difference is that despite having a large amount of wealth, their proportion of income is small compared to the rest of the economy. However, because they have a lot of wealth, their economic activities have a substantial effect on the economy.

For example, if an investor has a million dollars and can get a 4% gain by investing in a small business or a 3% gain by purchasing municipal bonds, he will generally try to invest in the small business since it has a higher yield (assume that 4% gain accounts for the investment risk as well). But if you tax his income at more than 25%, it becomes better for him to invest in municipal bonds (which are exempt from federal income taxes) to gain a higher return.

The economic consequences of investing in government versus a private business should at least be reasonably apparent.

biccat wrote:The difference is that despite having a large amount of wealth, their proportion of income is small compared to the rest of the economy. However, because they have a lot of wealth, their economic activities have a substantial effect on the economy.

So what you're saying is, is that it's the incompetence, corruption, and stupidity of rich people that has caused our current economic slump?

Melissia wrote:

biccat wrote:The difference is that despite having a large amount of wealth, their proportion of income is small compared to the rest of the economy. However, because they have a lot of wealth, their economic activities have a substantial effect on the economy.

So what you're saying is, is that it's the incompetence, corruption, and stupidity of rich people that has caused our current economic slump?

Exactly.

Assuming that by "rich people" you mean politicians.

biccat wrote:

Melissia wrote:

biccat wrote:The difference is that despite having a large amount of wealth, their proportion of income is small compared to the rest of the economy. However, because they have a lot of wealth, their economic activities have a substantial effect on the economy.

So what you're saying is, is that it's the incompetence, corruption, and stupidity of rich people that has caused our current economic slump?

Exactly.

Assuming that by "rich people" you mean politicians.

No, I meant the people who control the majority of wealth in this country. The top one percent in terms of wealth in this country has, in your own words, a substantial effect on the economy.


And they fethed up. Does not great responsibility come with great power, or is that only for poor people?