Why not make tax rates porportional to the inequality gap.

[Attic]

Alternatives to tax based solutions?

Perhaps the government can do less harm by simply executing law in a more equal and just manner rather than through a two tiered system as it does now.

ie) Laws are for the little people.

That's a sizable disadvantage for the little people vs those who move through the system of laws with less restriction.

Could be a real well intentioned disaster to give an entity that grows more corrupt relative to the power it wields.... to give that entity more power in the hope of somehow sidestepping it's inherent corruption to magically help the little guy. It's not how it works in practice. World as it is always wins out over the world as we'd like it to be.



Does creating a better government come from giving it more power over peoples lives or ?

Generally I think we want equal power between all of us. Government consolidation of power moves this equation significantly towards consolidating power to a few of us.


But yea, so far we (not government, us) are not doing quite the job most of us would like to get things right in the States.

 

[ivwshane]

You just don't get it. You think people will keep working just as hard and long as they do when all jobs pay the same, or get closer to paying the same. You also seem to think people will still be willing to rack up six figure debt to get a PHD or go through all the stress to run a multi-billion dollar corporation or risk millions of their own money when outcomes are equaled out in the name of fairness.

And I never said people as a whole are only motivated by money as you are insinuating, but there are plenty of people who are and whether you like it or not they are major contributors to the economy.

Who the fuck said everyone would be paid the same or even close? What I did say was that you are only capable of seeing things in black and white and this post is further proof of that.

 

[OverVolt]

What does student loans have to do with the statement, "after reducing income inequality it will completely kill any motivation to be successful"?

Our current inequality hasn't always been what it is now and it sure as shit didn't stop people from being motivated to be successful when the gap was smaller.

So I'll stand by my original comment.

Because after you're done fighting the original problem you'll have more problems caused by the fix. Thats just how it works. If anybody can flee the taxes, its the rich. You take wall street and financial investment forgranted because its run amok lately. But without any rich, or investment, it would be impossible to fund big projects, start new companies, etc. Even harder than it is now. Thats how a backwoods country operates like saudi arabia with no usury, and thus no investment. Something like a capital gains tax of 50% would do that. And most of the mega rich get their money from investment. Why invest in the US if its taxed at 50% when everywhere else is cheaper. Poof backwoods hellhole overnight. No investment, no capital, no infrastructure improvements, nothing.

 

[Matt1970]

Who the fuck said everyone would be paid the same or even close? What I did say was that you are only capable of seeing things in black and white and this post is further proof of that.

This whole thread is about using taxes to make up for the wealth gap. Yopu could probably use a little "seeing things in black and white".

 

[realibrad]

I don't think the point of this exercise is to work within the limits of current reality but rather to have a new system that is more fair and more effective.

I think it's better if the tax rate was based on a formula that wasn't easily manipulated by politicians whome seem to have motives based on self interest. Starting from there we can then get into the nitty gritty and address the realities of such a system.

Now if you want to attack the problem of wealth inequality (I assume you agree that that is a problem) differently than how moonbeam is doubt it then by all means, post your solution or at least post the underlying issues.

Inequality is not a problem. Having different amounts of money does not hurt anyone. I think what you mean to say is that the issue happens when the gap becomes what you subjectively call "large". The issue to me, is only making sure that the wealth was gained fairly.

Currently, the tax system in the us benefits the wealthy. It taxes the poor, and may even subsidize the the middle and upper classes. I truly believe that free trade and capitalism will help the poor more than anything else. To me, when you look at how developed economies grow, you see that it slows, and they almost always increase social programs. Now, I am for a safety net. There are people that will run into bad luck. There are some that never developed skills to command higher wages. There are also some that will never be productive enough to survive on their own. So, some income redistribution is desired to me.

So, before we start to try and take the upper income group's money, I believe that we should strip out the system that is benefiting the wealthy. I see there being far more damage being done to the poor by the system, then the rich being rich.

Now, the rich are the ones that influenced the system, so maybe you will say that we need to take the money aka power from the rich. But, the solution I would come up with, is that they only influence what is more productive. The government is so large and powerful, that its most productive for the rich to lobby the government. A smaller (not zero) government would take the advantage away and treat people equal.

People seemed to be worried that the rich have too much power, but nobody seems to be worried that the government has too much power. Instead of taking from one to give to another, how about removing the structure that takes the rights and powers from the poor, and gives it to the rich?

How does that work? I may be biased, but I feel this is far more productive than all the assumptions that Moonie made.

 

[Jhhnn]

Instead of taking from one to give to another, how about removing the structure that takes the rights and powers from the poor, and gives it to the rich?

Amazing. You're unknowingly talking about Capitalism.

 

[Moonbeam]

Because after you're done fighting the original problem you'll have more problems caused by the fix. Thats just how it works. If anybody can flee the taxes, its the rich. You take wall street and financial investment forgranted because its run amok lately. But without any rich, or investment, it would be impossible to fund big projects, start new companies, etc. Even harder than it is now. Thats how a backwoods country operates like saudi arabia with no usury, and thus no investment. Something like a capital gains tax of 50% would do that. And most of the mega rich get their money from investment. Why invest in the US if its taxed at 50% when everywhere else is cheaper. Poof backwoods hellhole overnight. No investment, no capital, no infrastructure improvements, nothing.

1. Maybe I am wrong, but I seem to be seeing all kinds of signs that we have moved quite a way toward being a backward hell hole here.

2. The argument that change has unintended consequences is valueless. Change is inevitable. There were consequences to moving out of the cave.

3. Gotta go......later

 

[realibrad]

Amazing. You're unknowingly talking about Capitalism.

What are you talking about? Its perfectly clear that I was talking about and advocating for capitalism. Why would you think I was not or confused?

 

[MagickMan]

When the rich flee the USA (with their money), like they did in France, what then?

 

[Jhhnn]

What are you talking about? Its perfectly clear that I was talking about and advocating for capitalism. Why would you think I was not or confused?

I'm talking about your blind spots. The difference between poor people & rich people is.... capital. Poor people just get to vote for their representatives while rich people get to buy them.

All the smaller govt rigamarole just means fewer bureaucrats to get in rich people's way & fewer to buy. It's more profitable that way.

 

[Jhhnn]

When the rich flee the USA (with their money), like they did in France, what then?

What are you alleging to have happened in France?

Numbers please!

 

[realibrad]

I'm talking about your blind spots. The difference between poor people & rich people is.... capital. Poor people just get to vote for their representatives while rich people get to buy them.

All the smaller govt rigamarole just means fewer bureaucrats to get in rich people's way & fewer to buy. It's more profitable that way.

So a few things.

The is more than just one difference between the rich and poor. Elon Musk got rich because he is way smarter than me. He leveraged his skills and abilities to gain his wealth.

The way that rich people get richer with larger government, is buy influence to change the system. So, they get tax breaks, or subsidized investment ect. Point is, it has to use the government to extract wealth from others. If you take away the government in that situation, how would the wealthy extract wealth? I suppose the wealthy could break the law to do it, but then the government would go after them. The trick is to legitimize the wealth extraction.

It can also be less obvious. Most say that subsidized college education is a good thing. But when you see that the people who typically go to college are middle and upper class people, and all people are taxed, then you see that the poor are paying for the people better off to go to school.

Government can protect, but it can also hurt. It can do it on purpose or it can be misguided. So what is your solution to deal with the incentive to manipulate the government for their benefit?

 

[Moonbeam]

The way that rich people get richer with larger government, is buy influence to change the system. So, they get tax breaks, or subsidized investment ect.
Government can protect, but it can also hurt. It can do it on purpose or it can be misguided. So what is your solution to deal with the incentive to manipulate the government for their benefit?

I would propose a separate tax on income based on the size of the income gap with the funds to be used to stimulate the economy by creating infrastructure that benefits society generally and provided good paying jobs. This will create more wealth at the bottom to trickle up thus creating more to rain down. This would do two things to lessen the threat of the rich buying the government. First off, they would have less money to buy the government with and secondly a much better country to live in, lessening the insecurity that drives people to want money as the only goal in life. Those who aspire to greatness could still function unfettered via application to government for the funding of some great idea, the coming to fruition of which would benefit everybody. We need a society that supports the selfless rather than those only motivated by personal greed, just as we need to keep all the best and the brightest from working on wall street, where nothing of any value but money is made for a small few.

 

[ivwshane]

While I think that's a good question, I think it warrants it's own thread.

However, you will note that moonbeams proposal can have an impact on the issue of influence. By tying the tax rate to wealth inequality we are removing the politician from the equation. I'd go a step further and tie tax rates to standard economic indicators, so that when the economy is doing well, higher taxes are automatic and when the economy is sluggish, taxes are cut.

So a few things.

The is more than just one difference between the rich and poor. Elon Musk got rich because he is way smarter than me. He leveraged his skills and abilities to gain his wealth.

The way that rich people get richer with larger government, is buy influence to change the system. So, they get tax breaks, or subsidized investment ect. Point is, it has to use the government to extract wealth from others. If you take away the government in that situation, how would the wealthy extract wealth? I suppose the wealthy could break the law to do it, but then the government would go after them. The trick is to legitimize the wealth extraction.

It can also be less obvious. Most say that subsidized college education is a good thing. But when you see that the people who typically go to college are middle and upper class people, and all people are taxed, then you see that the poor are paying for the people better off to go to school.

Government can protect, but it can also hurt. It can do it on purpose or it can be misguided. So what is your solution to deal with the incentive to manipulate the government for their benefit?

 

[realibrad]

While I think that's a good question, I think it warrants it's own thread.

However, you will note that moonbeams proposal can have an impact on the issue of influence. By tying the tax rate to wealth inequality we are removing the politician from the equation. I'd go a step further and tie tax rates to standard economic indicators, so that when the economy is doing well, higher taxes are automatic and when the economy is sluggish, taxes are cut.

But, you are missing the part about hiding wealth. The middle and below do not have the resources to offshore their tax burden. What I am saying is that if your goal is to redistribute wealth, you are not going to be as effective as you believe. Its pretty clear that I am not for the general idea for what was purposed.

The 2 main ways you would get the wealth from the rich would be taxes on income and or capital gains. The first one is pretty easy relative to the other. The 2nd one is the real problem. I would imagine you would get a lot of non profit companies that pop up to own land to hide taxes. There are many other ways to hide things too. Its going to get very expensive to pay the government to try and track those assets. The government gets paid through taxes, and that means the amount you collect is effectively lower.

I understand the ideal of trying to take from those who have excess, and give it to those who do not. It just is not that simple though. You can say this is what you would want for an ideal world, but it seems to be that you are coming up with ideas for the real world.

It seems far more productive to try and remove the crap that is holding back the non rich, rather than trying to promote the poor at the rich expense.

 

[ivwshane]

I asked this already and it was ignored so I'll ask again; are you saying there is no way to address the issue of people hiding money offshore?

I don't believe we are so incompetent that we can't find a solution. Quite frankly, it's a red herring, it's the equivalent of saying gun laws are useless because criminals will still break the law.

But, you are missing the part about hiding wealth. The middle and below do not have the resources to offshore their tax burden. What I am saying is that if your goal is to redistribute wealth, you are not going to be as effective as you believe. Its pretty clear that I am not for the general idea for what was purposed.

The 2 main ways you would get the wealth from the rich would be taxes on income and or capital gains. The first one is pretty easy relative to the other. The 2nd one is the real problem. I would imagine you would get a lot of non profit companies that pop up to own land to hide taxes. There are many other ways to hide things too. Its going to get very expensive to pay the government to try and track those assets. The government gets paid through taxes, and that means the amount you collect is effectively lower.

I understand the ideal of trying to take from those who have excess, and give it to those who do not. It just is not that simple though. You can say this is what you would want for an ideal world, but it seems to be that you are coming up with ideas for the real world.

It seems far more productive to try and remove the crap that is holding back the non rich, rather than trying to promote the poor at the rich expense.

 

[OverVolt]

I asked this already and it was ignored so I'll ask again; are you saying there is no way to address the issue of people hiding money offshore?

I don't believe we are so incompetent that we can't find a solution. Quite frankly, it's a red herring, it's the equivalent of saying gun laws are useless because criminals will still break the law.

Black markets always appear just like the war on drugs. You don't use your brain.

 

[Knowing]

Amazing. You're unknowingly talking about Capitalism.

Capitalism requires the rule of law, because without the rule of law contracts cannot be enforced. The DOJ spent ~140 days determining whether or not Officer Wilson trampled Brown's civil rights. Eric Holder directed them to spend 90 days seeing if they can prosecute anyone over 2007/2008. Now you could make the argument that Brown was shot, and that's valid to a point. The point being that millions of people lost livelihoods and considered or executed suicide as a result. I've heard people say "You can't get that rich without breaking a few laws." and maybe that's true, but the number of billionaires has doubled since the recession.

It's also worth noting that huge gains at the top skew the median.

 

[ivwshane]

Black markets always appear just like the war on drugs. You don't use your brain.

Drug use is down significantly (excluding marijuana)

 

[ttown]

moonbeam... can you explain why you think an inequality gap is a bad thing?

So far you've described it as eventually leading to "the disaster" -- but it's unclear what "the disaster" actually is -- and how come an inequality gap is responsible for it.

thanks in advance

 

[Moonbeam]

moonbeam... can you explain why you think an inequality gap is a bad thing?

So far you've described it as eventually leading to "the disaster" -- but it's unclear what "the disaster" actually is -- and how come an inequality gap is responsible for it.

thanks in advance

Read this:

http://ideas.ted.com/the-4-biggest-reasons-why-inequality-is-bad-for-society/

With particular attention to this:

But the objections to inequality that I have listed rest on a different moral relation. It’s the relation between individuals who are participants in a cooperative scheme. Those who are related to us in this way matter morally in a further sense: they are fellow participants to whom the terms of our cooperation must be justifiable.

In our current environment of growing inequality, can such a justification be given? No one has reason to accept a scheme of cooperation that places their lives under the control of others, that deprives them of meaningful political participation, that deprives their children of the opportunity to qualify for better jobs, and that deprives them of a share in the wealth they help to produce.

These are not just objections to inequality and its consequences: they are at the same time challenges to the legitimacy of the system itself. The holdings of the rich are not legitimate if they are acquired through competition from which others are excluded, and made possible by laws that are shaped by the rich for the benefit of the rich. In these ways, economic inequality can undermine the conditions of its own legitimacy.

As Singer shows, the possibility of improving the lot of the poor is a powerful reason for redistribution. But it is important to see that the case for equality is powerful in a different way.

 

[realibrad]

I asked this already and it was ignored so I'll ask again; are you saying there is no way to address the issue of people hiding money offshore?

I don't believe we are so incompetent that we can't find a solution. Quite frankly, it's a red herring, it's the equivalent of saying gun laws are useless because criminals will still break the law.

I tried to address your question in post 46, but perhaps I was not clear enough. Instead of trying to go after more money, try to change the tax code to make it less expensive to pay taxes. Right now, there is a huge industry built around trying to figure out taxes. People get paid a lot of money to try and help people pay taxes. So, instead of making a tax code so complicated that only those with money can afford to work around, we simply change the tax code.

Obviously changing the tax code is not simple. It was made the way it is through a very complex set of incentives. I really like Milton Friedman's idea of a flat tax, with a negative income tax for those who make below x amount. Its still a redistribution of wealth, but it seems far better than the horrific system we have now.

So, a simple way to answer your question of "can we stop or minimize money moved off shore?", then answer is a little yes.

 

[ivwshane]

Dp

 

[ivwshane]

moonbeam... can you explain why you think an inequality gap is a bad thing?

So far you've described it as eventually leading to "the disaster" -- but it's unclear what "the disaster" actually is -- and how come an inequality gap is responsible for it.

thanks in advance

Good question. I'll give a simple answer and then explain.

Wealth inequality is bad for the same reasons why trickle down economics doesn't work.

A larger wealth gap means more money is being concentrated into fewer peoples hands. The rich may buy more goods and spend more money individually but as a whole, rich people don't spend anywhere near as much as everyone below them, as a whole. That translates into a weaker/slow economy. Less people buying goods and services either means higher prices, inferior goods and services, or a reduction in production costs. Costs can be reduced in many ways but they typically are reduced either by reducing labor costs (paying people less or using less people or having people work harder for the same pay). That in turn only exacerbates the problem.
There is a reason why companies release new products in countries like the US and similar countries, because we have a population that can afford them. Weaken the consumers ability to pay and guess what the result would be.

There are other factors as well that have a negative impact, not only on the economy but also on human progress. A concentration of wealth also produces a smaller pool of ideas in the same way that a concentration of wealth produces a smaller consumer base who purchase less widgets. Sure wealthy people have ideas and invent new things but there are more people with ideas and inventions that don't come to fruition because they don't have the financial freedom or the free time to pursue their ideas.

So not only does the economy stagnate or slow down but so do ideas and human progress.

But so what? Well, what happens when people don't have financial freedom? The market starts to break down and a race to the bottom ensues because people can no longer bring their ideas to market let alone buy other peoples ideas. What happens when people are all racing to the bottom? Things get worse and people start relying on government for things like welfare or healthcare, people who should be retired start working longer which in turn means less teenagers are able to find entry level jobs.

I could go on but hopefully you get the point.

 

[ivwshane]

Of course the tax code should be simpler, there is no reason why it couldn't be.

If we are to take this threads exercise and expand on it I see no reason why we wouldn't address even more issues. That's all besides the point.

I tried to address your question in post 46, but perhaps I was not clear enough. Instead of trying to go after more money, try to change the tax code to make it less expensive to pay taxes. Right now, there is a huge industry built around trying to figure out taxes. People get paid a lot of money to try and help people pay taxes. So, instead of making a tax code so complicated that only those with money can afford to work around, we simply change the tax code.

Obviously changing the tax code is not simple. It was made the way it is through a very complex set of incentives. I really like Milton Friedman's idea of a flat tax, with a negative income tax for those who make below x amount. Its still a redistribution of wealth, but it seems far better than the horrific system we have now.

So, a simple way to answer your question of "can we stop or minimize money moved off shore?", then answer is a little yes.