Forum Post: Let OWS be the Catalyst for a National Dialogue on Taxes
Posted 13 years ago on Nov. 23, 2011, 11:23 a.m. EST by Toynbee
(656)
from Savannah, GA
This content is user submitted and not an official statement
The nation needs to have a full and complete and honest dialogue about income taxes.
How has wealth and income grown for the top 1% and the middle class and the poor over the past 50 years?
How have Tax Rates -- which are different than Taxes Paid -- changed over the past 50 years?
How have the changes in taxes affected the well-being and wealth of each segment of society over the last 50 years?
How progressive or regressive should our tax system be?
What are the pros and cons of returning to the tax laws and tax rates of 50 years ago when most Americans seemed better off, and the top marginal tax rate was about 90%?
How much did the tax cuts for the rich really "trickle down" to the middle class and the poor like they were advertised?
What are the pros and cons of eliminating the capital-gain tax rates and treating it like ordinary income, so billionaire hedge-fund managers don't pay 15%, while office custodians and clerks pay up to twice that rate?
How can we start a real national dialogue on income taxes, tax rates, and so forth IF -- a big IF -- the members of Congress for the most seem to be part of -- or financed by -- the 1%?
How can we demand action, real dialogue, and honest debate without the powers that be pepper spraying and taking a baton to 84-year-old grandmothers and pregnant girls who are simply seeking redress of grievances?
Just wondering.
Excellent post. Did anyone see Keith Obermann a couple of nights ago, interviewing a Senator about the failure of the Super Committee to reach agreement? What I got out of that discussion was that the failure would push the deadline towards the extreme cuts to military and medicare, which the Republicans did not want. At the time, the Democrats would say "Do you want to talk about the Bush Tax cuts?". The Republicans, who do not want to repeal these tax cuts, would be in a tough position - negotiate the Bush Tax Cuts or suffer the cuts to the military. At this time, the Democrats and the Republicans would hammer out a plan surrounding the Bush Tax Cuts which would allow for some, not all, of the Bush Tax Cuts to remain (Dems happy) and avoid massive cuts to military spending (Repubs happy). Did anyone see that show? Was I getting this strategy wrong? What do you think?
One can have immediate dialogue of all of the above suggestions by getting involved here:
The 99% Declaration https://sites.google.com/site/the99percentdeclaration/
OWS can be anything you want it to be. Look in a mirror. We are all leaders. Solidarity forever!
What about the question of whether or not it is morally right to tax people for doing what they have to do (work) in order to live.
Let me explain the progressive tax system because it seems that people just don't get it. When Karl Marxx proposed it as a way to redistribute income it was based on an important assumption ... that wages were fixed by the government. We have a price system for labor in America to where you negotiate an exchange of your labor for money with an employer. The balance of power in negotiating your wage depends on supply and demand of your skill set. So people that make $250k or more a year make that much because they have the power to demand that high of a wage, employers don't pay that kind of money because that want to. Well that is the flaw in the progressive income tax in this country, if you raise taxes the high wage earners demand raises to compensate for it. That increase in cost is pass on to consumers and other wage earners who don't have the power to demand more. If you're an oncologist and taxes are raised 5% which lowers your net take home pay by $30k, you're just going to ask for a $30k raise ... and the hospital has really no choice because all oncologist will be demanding more, so you have to raise price or cut back on staff.
It was actually Adam Smith that first proposed a progressive tax:
The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
Like the labour theory of value, Marx only borrowed it from Smith.
But you miss my point ... a progressive tax doesn't work in a price system of labour
I said as he proposed it, never said the idea was his ... Also Adam Smith is the economic what Newton was to physics before Einstein, right from his perspective at the time but wrong in the grand scheme of things
He was right but he was wrong, thats an interesting type of logic you have there. Did you make it yourself?
Well they didn't give John Nash and Daniel Kahneman a noble prize for nothing. With the set of assumptions Smith was using his insights were correct, Game theory and Prospect Theory have pretty much undermined all of his assumptions. I scored a 178 on the LSAT, pretty sure I understand logic ...
I scored 180 and went to medical school. How has game theory or prospect theory undermined the notion of a progressive tax structure?
Well you actually know what I'm talking about so I can make this simple ... Game theory is used to predict have market players make choice in relation to their peers, competitor, etc ... this has given us great insights to behavior in oligarchs and monopolistic competition. These hold in labor markets also, if a group has pricing power they can pass any increase in cost on to consumers and market players outside the group. Accountant, Lawyers, Doctors, Executives, A-List Actor or Writers, and most professions that pay $250k or more a year follow this model. So they have the power to counter act an attempts to tax their incomes ...
Buffett has said that the most important aspect of a business that he looks at is "pricing power." But, very few individuals and professionals actually have true pricing power. I can assure you that Doctors have NO pricing power and the actual increases in medical costs are vastly weighted to pharmaceuticals, medical appliances, and overall improvements in care. Doctors, in real dollars and per individual patient contact, make drastically less then they did in the 1980's. But, I digress.
I would suggest that game theory is not applicable when you have no idea of the variables or of the circumscribed players. Economic crises, panics, and manias tend to look more like chaotic system with no underlying fractal order. Nobody knows what will spook the market tomorrow. Nobody knows why Roosevelt's 1932 bank bill worked. And, labor markets, more closely resemble a commodity trading model than any specific game diagram. We're currently in a deflationary cycle and business will try to cut costs first by cutting back on hours and the number of employees. Continued unemployment will result in an eventual drop in wages. While that drop will not be equal across all sectors of the economy, wages will drop for us all.
Doctors have no pricing power, tell that to my college roommate that just got a 23% raise as his hospital cut 3 nurses to cover the difference ... he's a vascular surgeon. Most doctor lack pricing power because of HMO and most states wont allow them to unionize. But I did my research, in every year were there was a tax increase in the last 40 years, in the 3 proceeding years the made it up with increases beyond the normal rate of growth ... like Accountants, the avg annual increase is 5% a year, proceeding a tax hike 9%, 9%, 6% then back to 5% ... this happened in all professions with pricing power ... go to the Dept of Labor site and check yourself.
Your friend is employed by a hospital system who probably needs a vascular surgeon and he played hardball. Go tell your friend to go into true private practice and tell an insurance company that he has pricing power. Get real.
Game theory works well with defined scenarios. If you believe that economies, stock markets, and the resultant effects upon employment and wages can be modeled with nonlinear equations and magic, then I have some investments I'd like to steer you towards. You need to understand what a "fat tail" is in statistics.....read about the investment strategy of a guy named Nassim Nicholas Taleb. His most famous work is called, "The Black Swan," and outlines his very instructive thoughts in a very laborious manner. But, it's still a good read.
Actually my favorite book ... Taleb made a convert out of me, make me want to got back to UF and demand my money back.
With all due respect, you're spewing misinformation and gobbledygook.
We have a REGRESSIVE tax system when the billionaire hedge-fund manager pays 15% on his income because is called a "capital gain" -- which is just one of zillions of types of income -- and the custodian or bookkeeper in the office of the hedge fund manager pays nearly double that income rate!!
Wake up. You're pimping for the wrong side.
with all do respect, where am I wrong? Also that called "carried interest" and that available to anyone with a LLP.
Let me ask you about a billionaire writer named J.K. Rowling, she only paid 15% taxes on the capital gains of her book? I don't see people Occupying Barnes and Nobles protesting the profit she made off Harry Potter.
When over 50% of people in this country pay 0% in federal income tax, that rate really wakes me up .... the top 10% of income earners pay 70% of all income taxes, and your screaming about how its so unfair ...
Keep pimping for the richest 1%
GOOD post!!!
Taxes are theft. The Federal Reserve is contracted by the gov't to print money out of thin air and charge interest on the face value which we pay for with our taxes. It is the most lucrative scam of all time. Read "The Creature from Jekyll Island" by G. Edward Griffin to learn the history.
Perhaps you should move to a sovereign nation where you wouldn't have to worry about taxes. Maybe only token payments to the tribal warlords.
Duh!
involuntary taxes are theft, voluntary taxes are the cost we pay for participation ... I am all for raising taxes on the rich, just do it through a consumption tax
it is wrong to take property from individuals without their consent
Uhhhh, what do you mean by "take property??"
The government takes my "property" every time I pay a gas tax when I fill up my automobile, so they can build and maintain a national highway system . . . even when I don't use many of the roads.
Although the Constitution allows Congress to set and collect taxes, the expansion of government into ares that go far beyond their original Constitutionally limited intent have merely continued to feed and grow the many-tentacled monster it has become.
So, you don't want the federal government to:
(1) regulate the produce we eat to make sure it doesn't contain things like Samonella?
(2) regulate the savings we have in banks to insure that we don't have things like the Savings & Loan debacle -- promulgated by Geo. Bush's brother.
(3) regulate the pharmaceutical products we consume to insure that they are not harmful and will help with the diseases and ailments we have.
(4) regulate the stock market so we don't have the corrupt insider trading and scamming of consumers like we just experienced
(5) provide for national parks and national forests, but instead let the private sector develop it into condos and Disney theme parks
You get the idea?
Really..
Actually the federal government endangers us by giving the Agribusiness complex immunity from lawsuits when there is a Samonella outbreak
Hmm, so without the government no one would insure and oversee the banks ... its called SPIC, they do what the FDIC does privately. Funny how when they went to investigate Bernie Madoff, the SEC told them to back off.
Pharma companies fear trial lawyers, not the FDA. The FDA use to regulate the safety of drugs, now they have gone to far when they and not doctors determine who can use what drugs and for what. You never care about the people that die wait for DC to push a drug through.
Genius ... they were regulating the market and this disaster still happened, so that pretty much takes care of that. The people that rum the SEC, CFTC, FDIC, etc are the C students, the A students run the banks ... hows that working out.
Yes, because I want the people running it to make sure the park is take care of or there are consequences. Get you head out the sand and notice its to bureaucrats benefit to do a bad job. If a TSA agent screw up here in ATL and let a terrorist on a plane who crashed it in the Ga Dome ... would their budget be cut or increased in the aftermath ....wake up
I get the idea that your understanding of how government has contributed to all of those problems is lacking.
1- Government regulations have done nothing to eliminate multiple salmonella and e. coli outbreaks. If current regulations are ineffective, why do you think throwing money at the problem will solve it? Industries should self-regulate and be completely liable for damages or deaths caused by them.
2- We already have anti-fraud consumer protections in place so if people are ripped off by banks, they can sue, but the real issue is our corrupt banking system that colludes with government and the Federal Reserve system.
3- Apparently, more people are killed by pharmaceuticals each year than are saved, so this one is way off base.
4- The stock market should be unregulated. Again, anti-fraud laws already address most concerns and the fact is only ethical businesses would survive in a free market style stock market. If every company simply had it in mind to steal your money you would not invest. As it is now, you have the illusion of safety because government says they have X number of investor laws.
5- New York has private parks as well as private buildings, parking lots, etc. Did you know that the profit motive has driven paper companies to create some of the best maintained forests in the world? I see no reason why private companies could not maintain forests and parks as good or better than the forest service, and they could charge communities or the states to do it in an environmentally sensitive way.
Thanks for your bit of shilling but your argument fails to make a case against having a federal government.
I'm not making a case against a federal government. I'm making a case for a smaller government that fulfills the requirements enumerated in the Constitution, nothing more or less.
I agree with you to a point ... I think we need more but accountable and intelligent government going forward. The markets can self regulate and self correct, but not at the current size of the market ... not anymore. Do some research on complexity theory, it shows you the fundamental of free market capitalism fall apart as the system get bigger. A prime example is redundancy, as supply chains become more global and competition increases the cost pressures are pushing companies to have whats called JIT, just-in-time inventory ... where you have the exact amount of inventory, and it works like clockwork ... until you have a shock, then it can have a domino effect that take down an entire industrial sector. Take circuit boards for electronics, there are 3 companies in the entire world that make all of them ... if one of them were crippled by a typhoon or earthquake, the other couldn't make up the marketshare bringing the system to a grinding halt ... we need some global management, i don't know how to do it or keep it from becoming the Empire, but we need something.
Again, these complexities are best solved by businesses, not by government legislation impeding competition or protecting political donors. Competition will always create an optimal solution because a businesses survival depends on efficiency.
Someone needs to explain the Macro/Micro paradox of economic ... a decision that benefits you may damage the entire system and conversely a decision that may benefit the entire system may damage you. Lack of redundancy benefits the producer in the form of lower cost ... but it also increases the fragility of the system as a whole.
No disrespect but you have an extremely platonic view of economics, that what you get from academics ... the flaw in any free market analysis is to make everything work out all nice and clean with the theories you have to ignore the effects of time. In theory an apple farmer should be able to switch to another crop when the price drops below cost and jump back in when it goes back up right? ... No, it takes 6 years to start an orchard, so you can't just switch back and forth. Some say the government shouldn't price control agriculture, well economic theory falls apart because guess what corn, soybeans, wheat is only harvested once per hemishpere and all at the same time ... so all the product hits the market at the same time, without futures markets and minimum price protection farmers would get screwed ... which is why farmers have been peasants since time began.
As long as the news media continue to lie about taxation you can never have a real dialogue. Take Cain's 9-9-9 plan for example. Two things that are never mentioned in the vilification of the plan is that 1) all embedded taxes will be removed and 2) all people particularly poor people will be given a prebate up to the poverty limit so they will not have a tax increase. Just about everything you have heard about 9 9 9 has been a lie. Taxes would not go up on the poor, and in fact the price of goods would go down and they would save money.
Actually, in many cases taxes would go up, because Cain's plan does not affect state taxes, which would be additional.
Doubtful. The embedded taxes you pay would be eliminated thus dropping prices. When the additional tax is calculated it will be on the lower value and thus not make up the difference. Look at your phone bill, or utility bills. See all those taxes and fees? they would all go away. There are similar taxes in the price of most goods that you never see itemized like that.
Cain's tax plan has no effect on local and state taxes. His tax plan consultant is basically repackaging the "flat tax" idea that has been making the rounds for decades. It was successfully implemented in the Russian Federation.
http://en.wikipedia.org/wiki/Flat_tax