Can Taxing The Rich Save The U.S. Economy?

[SubwayGuy]

Sounds like the poster-child for Liberal policy. A lot of these also seem ridiculously unrealistic. This is a global economy and as a superpower the USA can't just withdraw from all things international.

 

Also, I lol'd at withdrawal from NAFTA.

 

 

I'm glad your addled little brain didn't see the fact that removal of property tax and the cutting of business tax to very little was in there. Also nowhere did I say removal from all things international - I said, removal from NAFTA which has been a disaster for both the US and Mexico (and is a big reason why we have so many Mexicans here illegally working on farms) and I also said removal from the UN which has been and continues to be a joke. Diplomacy through NATO, as well as independently, and aid to our allies in NATO continuing where it is justified. There is no reason we should be sending money to piss holes like Pakistan, ever. As well as the complete elimination of taxation on all retirement savings. Hmm, yes, these ideas are highly liberal...it's almost like I said there should be a world peace tax that everyone pays when the whole world isn't at peace...NOT.

 

Everyone who reads your posts on politics and policy can see you are a simpleton without anything to say except snarky misinformed criticisms that are too complex for your confused little head. So, I'll respond in your language and hope you can process this message. I hear the squeeky wheel the hamster in your brain is running on turning slowly, so I'm going to cross my fingers and hope for the best. But from previous experience with your posts, it might just be background noise.

[SubwayGuy]

Really? I actually think it's a mixture of both liberal and conservative policies. The progressive income tax and that sort of thing usually tend to be included in liberal policies, while policies giving states more power than the federal gov't and ending aid to other countries tend to be included in conservative policies.

 

I do agree with you, though, that involvement with other world powers while certainly not decrease, simply because the global economy demands it. And unless people want to get rid modern technology and the internet and send us back a good 60 to 100 years back, then there's no avoiding global and international relationships. I mean, basically, relationships between countries have basically replaced relationships between states.

 

 

We have enough good relationships with countries, and that would continue through NATO, and independently as a nation. I am NOT advocating Monroe Doctrine diplomacy here.

 

What needs to go is the diplomacy where the US is charitably contributing to a country that gives little to nothing back while habitually demanding more, or even openly denounces the US to its citizens yet keeps gladhanding the free money. Also, the diplomacy where the US is a net importer from a country with cheap labor, where the US runs a significant deficit to said country, and allows the foreign country to dictate or even have input into US domestic and foreign policy in ways that is detrimental to the US.

 

The rest can remain. US diplomacy with South Korea is actually a very good example of effective international policy that is outside NATO.

[MTARegional Bus]

Welcome back SubwayGuy, were have you been?

[Tokkemon]

Being a Canadian who reaps the benefits of NAFTA, I suppose I'm biased.

[Phantom909]

How to Fix America in 20 steps:

 

you have some things i agree with and some i dont, but this is an excellent post. here are my thoughts.on the 20 points, actually you have 21 , you have two number 5`s so i will address them as 5a and 5b

 

1. corporate tax rates to 1% of the gross. IMO that would hurt smaller businesses more than bigger corporations. For example, Exxon\Mobil paid the highest pct corporate rate. they paid 42% effective tax rate on $68.3 Billion in net income which comes to $27.3 Billion. Total revenue was $486 Billion your plan would mean they would pay $4.86 billion or only a quarter what they pay now.

2. i you are taking those deductions from the 1% of the gross taxes due, that would lessen what is paid in taxes

3.id like you to clarify what you mean by non cash compensation

4. dont know if thats legal or not since an employee with 4 kids would then get more than someone with no kids. Under the Income Tax Act of 1986, all employees are supposed to get the same benefits, this came up when I was a shop steward during a 1990 contract negotiation and was told that it wasnt legal then, it mightve changed

5a. i can agree with eliminating partnerships and S corporations, but most sole proprieterships dont incorporate now because they file taxes under personal income tax because its lower than a corporate rate in most instances. what should be done is lower the corporate tax rate to a more globally competitive rate of between 20 and 25% of the net income. that would generate enough income to the government and help most businesses.

5b Capital Gains cannot be taxed as ordinary income because its already been taxed at the normal federal rate as wages before they are invested. There is a risk of losing every dime of your investment so why would anyone invest any money if the profits are gonna be double taxed, that hurts the economy.

6.we already have a progressive ladder system that is not efficient. make it a flat tax or eliminate the federal tax and install a consumption tax.system of about 15% on all money spent

7.i agree with this if there is a way to make social security solvent which it isnt right now.

8.totally disagree, you are screwing with private property rights guaranteed to all americans in the constitution

9.I agree 100,000% with bringing back glass-steagall

10. hedge funds are much more volatile than a public equity fund, some person with limited resources could be ruined within an hour if they are not careful, i dont like that idea

11.that could be accomplished with the passing of glass-steagall so im ok with that.

12.totally disagree with you here, again any compensation negotiated by an individual with a private corporation is fine, by ending that you again want the government to interfere with private property rights.

13 i totally agree with this

14. i totally agree with this also

15. hat trick, i agree with this

16. disagree with removing all troops, we need a presence there to protect our citizens and interests, i wholeheartedly agree with ending aid to non-nato nations

17. i agree, dump the united nations and send them packing.

18. i have said numerous times that i am willing to pay higher taxes ONLY if it goes to pay off the national debt and nothing else

19. I agree NAFTA has hurt us

20. 35% is too much IMO i would agree to a 15-20% cut

 

again I commend you Subway Guy for an excellent post

 

Joe

[MHV9218]

The UN includes some of the worst dictatorships and worst human rights violators, but no one seems to care. Also when the UN imposes "sanctions" on America - America has to pay money, however small, which is an absolute waste because all of the countries ESPECIALLY China that get "censured" don't get penalized in the same way.

 

It's just a giant charity from the US and the other major ethical super powers like Great Britain, Germany, etc. to spend resources on poorer countries that aren't our allies which frankly we ought to not give a damn about.

 

 

In the scheme of things, sanctions hit the US for pocket change, so that's not really the concern. I agree that it ceases to benefit when it's solely a charity, but on the other hand, these are countries that do need aid -- I'd argue they also need a more radical change than just having money thrown at them, but that's another issue. As a diplomatic tool, it does undeniably help the US maintain a more neutral presence in the world, for whatever that's worth. The UN needs to be rethought, but not abandoned. No superpower has utilized isolationist foreign policy tactics to a success, and jumping out of the UN is a pretty isolationist maneuver. If you're gonna stick to NATO, then that needs to be much more all-encompassing as well. Look, I see your point here and I think we can all agree the UN is critically flawed as is, but a complete withdrawal is just more of a knee-jerk reaction than a politically or socially stable move.

 

 

again I commend you Subway Guy for an excellent post

 

Joe

 

 

What I don't get is how you can look at SubwayGuy's post there, look at the two candidates running, and reach the evaluation that Mitt Romney is the person whose policies are closest to that and thus deserves your vote. I just don't understand that.

[SubwayGuy]

Comments below in red.

 

you have some things i agree with and some i dont, but this is an excellent post. here are my thoughts.on the 20 points, actually you have 21 , you have two number 5`s so i will address them as 5a and 5b

 

1. corporate tax rates to 1% of the gross. IMO that would hurt smaller businesses more than bigger corporations. For example, Exxon\Mobil paid the highest pct corporate rate. they paid 42% effective tax rate on $68.3 Billion in net income which comes to $27.3 Billion. Total revenue was $486 Billion your plan would mean they would pay $4.86 billion or only a quarter what they pay now.

 

It would actually help both, and reduce the costs of doing business in the US, one of the big reasons companies are so desiring of cheap foreign labor. Payroll taxes are another example. A corporation has to pay the employee, who has to pay taxes, then the corporation has to pay taxes on what it pays the employee. A 1% rate on gross that only allows deductions for hiring US workers and a deduction for depreciation of United States productive Property, Plant, and Equipment, will encourage job creation here.

 

2. i you are taking those deductions from the 1% of the gross taxes due, that would lessen what is paid in taxes

 

Correct. The taxation policy I am advocating is that businesses should pay less taxes, but the executives and highly salaried people in those companies should pay significantly more taxes, as should the investors who don't work a day in their lives but profit off business activitiies which they have limited involvement in, and don't contribute to significantly enough to justify the amounts they reap in profits which are taxed as capital gains at 15%.

 

3.id like you to clarify what you mean by non cash compensation

 

Stock options, etc. Employee pay for anyone would be grouped into 3 categories: hourly, salaried, and bonus. All must be paid in cash or cash equivalents (ie check, direct deposit, etc.) No more stock options. With one exception. Bonus can be paid in STOCK. Physical shares of the company that have a valuation on the date they are issued. Not options with an "estimated" value that the employee can redeem later to purchase shares for cheap. This eliminates market manipulation to profit from options, and forces the amount of the compensation to be recorded up front for the company. Bonus compensation would not be tax deductible for the corp.

 

4. dont know if thats legal or not since an employee with 4 kids would then get more than someone with no kids. Under the Income Tax Act of 1986, all employees are supposed to get the same benefits, this came up when I was a shop steward during a 1990 contract negotiation and was told that it wasnt legal then, it mightve changed

 

This would tie into a larger overhaul of the healthcare system. Insurance as it is, is ridiculous. Why should someone with 1 kid pay the same rate as someone with 7? Clearly, one of the 2 is using more of the system. The idea is the complete privatization of healthcare, which is still sold on a state-by-state basis, but allowing competition. This component forces the employer to increase the employee's pay so that the employee can afford to purchase insurance on their own, without the employer getting involved, instead of allowing the employer to simply pocket their share of the premium (which the employee is never made aware of) as further profit.

 

The question is not about what is legal, these are 20 steps to fix America, not 20 steps that are legal currently with the corrupt system that is on the books as we speak.

 

5a. i can agree with eliminating partnerships and S corporations, but most sole proprieterships dont incorporate now because they file taxes under personal income tax because its lower than a corporate rate in most instances. what should be done is lower the corporate tax rate to a more globally competitive rate of between 20 and 25% of the net income. that would generate enough income to the government and help most businesses.

 

That's the idea behind overhauling the corporate tax setup. Make it more lucrative to set up a corporation. Net income is a terrible basis because as long as there is money in politics, there will continue to be loopholes in the way net income is calculated that allow for 0 corporate liability. SImplifying the code and tying it to gross income actually decreases the amount of expense a business must spend preparing its taxes, and reduces the loopholes for them. A sole proprietorship would continue to exist for very small businesses whose owners don't gross enough to get hit with high personal tax rates.

 

5b Capital Gains cannot be taxed as ordinary income because its already been taxed at the normal federal rate as wages before they are invested. There is a risk of losing every dime of your investment so why would anyone invest any money if the profits are gonna be double taxed, that hurts the economy.

 

This is what rich people who invest all their money say. This is a trade off - if you are investing for your future, then all of the qualifying savings options carry 0 taxation liability ever - present or future - and allow individuals to save tax-free for retirement or their child's education. If you are going to invest money outside of those sources, then you have been made aware of the risks, and you deserve to be made to bear the risk of loss because a completely tax free alternative exists. The reason to do it this way is simple - the average American does not make enough to exceed the tax deductible (under my system, tax exempt) maximum amounts in standard retirement accounts. Therefore, the only people who are really benefitting from investment in "unlimited investment" accounts are the truly rich. Many of these people never work a day in their lives and investment *IS* their work. So why should someone who grabs a shovel and goes to work pay a higher rate than them?

 

Additionally claiming that wages have been taxed before being invested is a chicken or egg case that doesn't hold much merit. Technically investment dollars were used to pay the employee, so which comes first? The idea behind MY principle is to encourage investment by creating tax free options for everyone which have limits so that the very rich can't abuse them and gain unfair advantage. If the very rich want to invest outside of those tax free options, then they can pay the same rate on that income that everyone pays on their own personal income instead of a preferential rate.

 

6.we already have a progressive ladder system that is not efficient. make it a flat tax or eliminate the federal tax and install a consumption tax.system of about 15% on all money spent

 

What we have is not a true ladder system. We have a bracket system. A ladder system imposes taxes fairly on all according to their means and doesn't have a "tax cliff" at each bracket like ours does. Consumption tax is poor because it discourages spending. Flat tax is poor because it carries disproportionate benefits for the rich. Capitalism is by nature a "trickle up" system where everyone higher up in the food chain ensures they make more than the person below them which in time will concentrate all the wealth at the top. A progressive income tax and high estate taxes are the only way to recover these assets and make them available for future generations to earn. By taxing with percentages, a rich person benefits significantly more from a 2% tax cut than a poor person. Therefore the rates must be progressive for proper effect.

 

7.i agree with this if there is a way to make social security solvent which it isnt right now.

 

Making social security solvent is very simple - DONT BORROW AGAINST IT TO FUND OTHER PROGRAMS. Had the government never done this (the way SS was set up), it wouldn't be in the pickle it's in right now.

 

8.totally disagree, you are screwing with private property rights guaranteed to all americans in the constitution

 

No I'm not. I'm allowing people to hold property without paying taxes on it. Reduces the cost of living everywhere in America. People already have to pay school taxes, municipal, and federal taxes...as well as sales tax (which is a consumption tax), vehicle tax, and fees to government organizations to register vehicles, firearms, hunting permits, etc. Why should someone buy a house and pay full freight generating profit for the builder of the new construction, realtor, closing lawyer, and the financing bank, all of which are taxed by the government, and THEN have to pay taxes on it equivalent to a rent for the entire time they own it?

 

9.I agree 100,000% with bringing back glass-steagall

10. hedge funds are much more volatile than a public equity fund, some person with limited resources could be ruined within an hour if they are not careful, i dont like that idea

 

Simple as a warning about the volatility, same as any other investment. However, they did very well during certain points of this nation's history and the average investor was not able to benefit because they didn't have a $100,000 minimum to invest. Besides, can you really claim it's any more or less volatile than certain private-equity, publicly traded common stock, or equity based mutual fund?

 

11.that could be accomplished with the passing of glass-steagall so im ok with that.

12.totally disagree with you here, again any compensation negotiated by an individual with a private corporation is fine, by ending that you again want the government to interfere with private property rights.

 

Except a golden parachute is something that a very select few people can get. The average employee at will at a private company cannot negotiate one. They exist as a benefit only for the very rich which it was never intended to be - it was intended to be a poison pill defense mechanism against a hostile takeover - so that the acquiring company could not afford to simply lay off all the old employees. By forcing that pay to be directed elsewhere, you protect the employee's job but avoid some of the chicanery among the rich that allows for such ridiculous executive compensation packages.

 

13 i totally agree with this

14. i totally agree with this also

15. hat trick, i agree with this

16. disagree with removing all troops, we need a presence there to protect our citizens and interests, i wholeheartedly agree with ending aid to non-nato nations

 

But we are not protecting our citizens. We are engendering resentment because we have troops present risking their lives in countries who don't want us there, but are willing to put up with it (with the occasional violent push back attributed to random militants that are never caught or sought with any particular effort by the foreign government) as long as we keep sending over that cash.

 

We can protect oil interests by drilling domestically more to reduce energy dependence on foreign nations and especially OPEC.

 

17. i agree, dump the united nations and send them packing.

18. i have said numerous times that i am willing to pay higher taxes ONLY if it goes to pay off the national debt and nothing else

 

Primarily in the beginning, the significantly higher taxes on the wealthy (and similar to present taxes for middle class) would go towards that. Over time it would transition towards proper maintenance of the nation's infrastructure as well as national modernization projects, and would also go to pay off domestic debts so that banks are not getting rich off the citizens due to government incompetence. Future surpluses would be saved to cover costs during economic downturns rather than being spent immediately. Other minor improvements would be made to social programs so that only those who really need them, get them. I would also revise public housing to state that anyone with multiple felony convictions cannot live in public housing, to reduce the crime havens they have become in most major cities.

 

19. I agree NAFTA has hurt us

20. 35% is too much IMO i would agree to a 15-20% cut

 

I'm fine with 15-20% to start with. I chose the 35% cut based on removal of troops from certain undesirable areas of the world.

 

again I commend you Subway Guy for an excellent post

 

Thanks.

 

Joe