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Post Reply Liberals love Trump's tax plan when told its Bernies tax plan.
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Posted 10/22/17 , edited 10/22/17
That guy's copying "Lie Witness News" with partisan intent. When pressed suddenly, people believe whatever you tell them to try and look intelligent, which backfires royally. Identical results can be gotten left to right and right to left. Especially once you're allowed to edit.

Once you explain effects beyond names people actually start thinking (sometimes).
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sundin13 wrote:
Red: Yes. Decreasing taxes on the rich proportionally increases the amount of taxes paid by the poor, often directly increases taxes paid by the poor (because revenue needs to come from somewhere) or indirectly increases economic burden on the poor (cuts to social programs and side effects of increased federal debt). The argument for eliminating a tax is always an argument to increase the burden elsewhere. To argue for a "fair" tax structure is to argue that the poor aren't doing their part. I'm not sure which obvious solutions I've advocated for which fall under the idea of a fair and equal tax code. I obviously advocate numerous changes in the tax code, but I don't think "fairness" really plays a part in those arguments.

Blue: Yes. I know that. However, if they have a massive amount of land which isn't producing the capital to pay these taxes over a fifteen year span (for this category, this tax equates to an average of less than 6%), chances are, selling off some small fraction of that land is better for the economy and again, a value of around $6.5million is the lowest you can go, so the continuing cost of the estate tax has a clear limit. Now, I am not a business or economics major so I would like you to provide reading stating that incorporation allows you to be bought without your permission. From what I can tell, you would have to go public for that to be the case and incorporation doesn't require that so it seems like a bit of a misleading argument, but I am no expert.

Green: Again, such a small percentage of small businesses fall under the threshold that eliminating the estate tax will do nothing to change the overall flow of the market. You are massively overselling the impact of the estate tax. Again, if you wish to help small businesses, targeting a tax which affects a fraction of a percent of small businesses and whose primary revenue source is individuals who are in the top 10% of earners, you are missing the mark. If you were to propose a change which states that estates associated with farms are exempt from the estate tax, that would be significantly more reasonable than simply nixing the estate tax. Again, you are trying to throw the baby out with the bathwater. It is misleading and disengenuous to use farms to pass this change. Its like those images of Diglett actually being a Lovecraftian horror under the ground, just sticking its cute little face up: http://0.media.dorkly.cvcdn.com/12/17/fe3375ad1f1842edeb5861b8994fc6dd.jpg



Haha I knew you were thinking that way. So #1 can you define rich in your own terms. Secondly couldn't we reduce FBI, CIA, Military, spending assuming we actually lose money getting rid of the estate tax. Third we may be gaining by getting rid of the estate tax:




Not all farms are producing cash crops. Many farms are producing the food that we need to eat and they have a LOT of assets to produce only a little wealth. Not only that but the number of hours these people work is insane (10-16 hours at times. So ripping up family owned farms is good for the economy... Removing the only competition massive corporate farms is a good thing.. Also what if you have a situation where someone dies, they give the farm to their child, that child dies soon after and it then passes into the 3rd generation quickly afterwards. You have so much debt from the estate tax that it can bankrupt you or ruin the whole business and make them sell it just to be out from it that living debt hell. When you incorporate you have share holders. You have to designate who owns the shares. Typically farm families divide it up among their children. A corp comes by and manages to obtain enough shares to have a voting interest in the company then will vote against the interest of the business until they can purchase it up or they just obtain 51% and tell everyone to go fuck off. Theres a whole class worth of other more complicated methods of take overs but you can go to college to learn that.

Its not that hard for a business to fall into the top 10%. According to the World Top Incomes Database, a household income of about $113,000 lands you at the top 10th, while $394,000 makes you a bona fide member of the 1 percent. Whats with you and bathwater babies? Estate taxes doesn't need to exist for businesses if they don't apply to all businesses (corporations). Your literally treating small businesses differently than large corporations and thats part of the problem with our current situation..
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Posted 10/22/17 , edited 10/23/17

FMB-24 wrote:

Republicans love the affordable care act when it's not called Obama care.... Yah nice straw man...



Jimmy Kimmel did a part 2 because people still haven't learned even after 3 years lol.
https://www.youtube.com/watch?v=sx2scvIFGjE 2013
https://www.youtube.com/watch?v=N6m7pWEMPlA 2017

Ignorance is universal between both parties.
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Posted 10/22/17 , edited 10/25/17

Rujikin wrote:


sundin13 wrote:
Red: Yes. Decreasing taxes on the rich proportionally increases the amount of taxes paid by the poor, often directly increases taxes paid by the poor (because revenue needs to come from somewhere) or indirectly increases economic burden on the poor (cuts to social programs and side effects of increased federal debt). The argument for eliminating a tax is always an argument to increase the burden elsewhere. To argue for a "fair" tax structure is to argue that the poor aren't doing their part. I'm not sure which obvious solutions I've advocated for which fall under the idea of a fair and equal tax code. I obviously advocate numerous changes in the tax code, but I don't think "fairness" really plays a part in those arguments.

Blue: Yes. I know that. However, if they have a massive amount of land which isn't producing the capital to pay these taxes over a fifteen year span (for this category, this tax equates to an average of less than 6%), chances are, selling off some small fraction of that land is better for the economy and again, a value of around $6.5million is the lowest you can go, so the continuing cost of the estate tax has a clear limit. Now, I am not a business or economics major so I would like you to provide reading stating that incorporation allows you to be bought without your permission. From what I can tell, you would have to go public for that to be the case and incorporation doesn't require that so it seems like a bit of a misleading argument, but I am no expert.

Green: Again, such a small percentage of small businesses fall under the threshold that eliminating the estate tax will do nothing to change the overall flow of the market. You are massively overselling the impact of the estate tax. Again, if you wish to help small businesses, targeting a tax which affects a fraction of a percent of small businesses and whose primary revenue source is individuals who are in the top 10% of earners, you are missing the mark. If you were to propose a change which states that estates associated with farms are exempt from the estate tax, that would be significantly more reasonable than simply nixing the estate tax. Again, you are trying to throw the baby out with the bathwater. It is misleading and disengenuous to use farms to pass this change. Its like those images of Diglett actually being a Lovecraftian horror under the ground, just sticking its cute little face up: http://0.media.dorkly.cvcdn.com/12/17/fe3375ad1f1842edeb5861b8994fc6dd.jpg



Haha I knew you were thinking that way. So #1 can you define rich in your own terms. Secondly couldn't we reduce FBI, CIA, Military, spending assuming we actually lose money getting rid of the estate tax. Third we may be gaining by getting rid of the estate tax:




Not all farms are producing cash crops. Many farms are producing the food that we need to eat and they have a LOT of assets to produce only a little wealth. Not only that but the number of hours these people work is insane (10-16 hours at times. So ripping up family owned farms is good for the economy... Removing the only competition massive corporate farms is a good thing.. Also what if you have a situation where someone dies, they give the farm to their child, that child dies soon after and it then passes into the 3rd generation quickly afterwards. You have so much debt from the estate tax that it can bankrupt you or ruin the whole business and make them sell it just to be out from it that living debt hell. When you incorporate you have share holders. You have to designate who owns the shares. Typically farm families divide it up among their children. A corp comes by and manages to obtain enough shares to have a voting interest in the company then will vote against the interest of the business until they can purchase it up or they just obtain 51% and tell everyone to go fuck off. Theres a whole class worth of other more complicated methods of take overs but you can go to college to learn that.

Its not that hard for a business to fall into the top 10%. According to the World Top Incomes Database, a household income of about $113,000 lands you at the top 10th, while $394,000 makes you a bona fide member of the 1 percent. Whats with you and bathwater babies? Estate taxes doesn't need to exist for businesses if they don't apply to all businesses (corporations). Your literally treating small businesses differently than large corporations and thats part of the problem with our current situation..


Red: Could spending be reduced to lower the need for high tax revenues? Sure. Now, is that going to happen? Judging by the budget bill that was just passed, no. You can try to justify things with hypotheticals, but when reality directly counters those hypotheticals and we actually see a large projected increase in the deficit per year, those justifications don't really hold up. That said, fundamentally the estate tax is a highly progressive tax, so in a way that doesn't apply to standard tax decreases, repealing it centers the burden of taxes more strongly on the poor (more on that later). If you were seeking to replace the estate tax with another means of progressive taxation which was better able to achieve the goals of the tax, I would likely support it, but throwing it out altogether does not achieve that goal.

Now, as for your quote, a big part of the reason the estate tax doesn't bring in a huge portion of revenue is due to how much it has been gutted. That said, just because it doesn't bring in a huge portion of revenue, 1-2% isn't insignificant. If we start cutting all taxes which only contribute a few percent on that basis alone, we will soon find ourselves in a pretty big hole.

However, if it is true that the costs outweigh the benefits, I would agree that the estate tax in its current form should be abolished. That said, the link you provided is from a think tank that is pretty centrally anti-tax, so it is good to get different opinions. On the other side you have numerous think-tanks stating opinions contrary to the one you posted. I'll focus on Brookings here as they tend to be pretty centrist, balanced and respected.




https://www.brookings.edu/research/rethinking-the-estate-and-gift-tax/

Here is a pretty comprehensive breakdown of the tax. Theres a lot of stuff in here, but if you want a tl;dr, look to the "proposals for change" section:

"Policymakers have considered numerous changes to the estate tax in recent years. The most radical reform would be to abolish the tax. This removes the existing problems, but may create serious additional issues. It would eliminate what is by far the most progressive tax instrument in the federal tax arsenal, just after an extended period over which the distributions of income and wealth have become far more skewed. It could hurt non-profit organizations. It may not even raise saving, labor supply, or growth, as its advocates hope, and would probably reduce state tax revenues as well. Finally, abolition would expose a gaping loophole with regard to capital gains in the income tax and would open up other possibilities for tax avoidance—and resulting revenue loss—under the income tax."

They conclude by addressing another way of going about things that may help resolve many of the criticisms while keeping the spirit:

"raise the exemption level, close loopholes, and cut rates. Raising the exemption would reduce the number of people paying the tax while still taxing the “truly wealthy,” and chipping away at the concentration of wealth. It would also help smaller family-owned businesses, but without the horizontal equity problems that are involved in giving preferential treatment to business assets. Closing loopholes by treating different assets in a more similar fashion would reduce sheltering opportunities, and thus make the tax simpler and fairer. Modestly reducing rates would reduce the incentive to shelter or change behavior in the first place. In addition to these changes, indexing the effective exemption and the tax brackets for inflation would automatically keep the tax burden at any particular real wealth level constant over time."

They go over a lot of arguments centering around the estate tax and generally find them to be overblown or weak. Effects of changing behavior are poorly supported, tax avoidance doesn't invalidate the tax, the tax can increase charitable donations, etc.

And to directly address the point that administration costs are roughly equal to the gain:

"It is frequently claimed that the costs of administering and avoiding the estate tax are about the same size as the revenue raised (see for example Friedman 2001). It should be noted that there are no facts that support this view. "

https://www.brookings.edu/wp-content/uploads/2016/06/20010522.pdf



Blue: Again, if that is an actual concern, it should be addressed directly, not indirectly. I haven't yet seen the evidence that there is any substantial effects causing these large sell offs in any but the most fringe of cases. It is certainly not shaping the market. Further, the Brookings report posted above also states that the primary driver of estate taxes within small businesses is unrealized capital gains (which would go untaxed were it not for the estate tax), which further demonstrates that the primary burden, even among the already small subset of small businesses and farms, is not largely centered on those farms. Also, if it is a privately held company, how is this large corporation obtaining these shares?

To that point: "two major farm organizations were unable to point to a single family farm that had to be broken up due to the estate tax."

https://www.brookings.edu/opinions/estate-tax-tax-needs-reform-but-repeal-would-be-a-giveaway-to-the-wealthy/

Finale: Again, I would be much more open to exempting some types of businesses like farms than just completely obliterating the tax. Again, when these small businesses and farms pay 0.0015% of the revenue, abolishing it because of them is sort of missing the point.

Also, it seems like I edited my last post too late, but I also added this:

"It might be a bit late, but I want to clarify something. My argument is not that no farm has ever been hurt by the estate tax. My argument is that to repeal the estate tax due to the fact that 0.0015% of the revenue generated comes from small farms/businesses is a bit stupid. If the president were to introduce a measure stating that farms are exempt, I would probably support it. Farms don't really fit the intent of the bill. However, the other 99.9985% of the revenue does fit the intent and should be taxed and I'd support eliminating some loopholes to prevent individuals from avoiding it."

So, to sum everything up, I support changes in the estate tax which address some of the concerns, however many of those concerns are overblown or unsubstantiated. They certainly do not appear to be at the level in which the "best" course of action is full elimination of the tax. Instead, changes to the tax should be enabled to reduce tax avoidance strategies and loopholes, focusing the tax on the intended market while finding a way to eliminate or reduce taxes on farms. This is just another example of blunt force policy change which seeks to address a small issue with a wrecking ball when a careful consideration of the facts should be used to fix the issues instead of just gutting things and starting from scratch. In a time where government expenditures are ballooning, we need tax revenue. Eliminating tax revenue without the spending cuts (to inefficient programs) to support it, you are burdening the economy with the negative repercussions of a rapidly increasing federal debt which don't make up for the relatively small advantages you gain by reducing these taxes.

That was exhausting. I think I've said all I have to say.
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Posted 10/22/17 , edited 10/23/17

Rujikin wrote:


sundin13 wrote:
Red: Yes. Decreasing taxes on the rich proportionally increases the amount of taxes paid by the poor, often directly increases taxes paid by the poor (because revenue needs to come from somewhere) or indirectly increases economic burden on the poor (cuts to social programs and side effects of increased federal debt). The argument for eliminating a tax is always an argument to increase the burden elsewhere. To argue for a "fair" tax structure is to argue that the poor aren't doing their part. I'm not sure which obvious solutions I've advocated for which fall under the idea of a fair and equal tax code. I obviously advocate numerous changes in the tax code, but I don't think "fairness" really plays a part in those arguments.

Blue: Yes. I know that. However, if they have a massive amount of land which isn't producing the capital to pay these taxes over a fifteen year span (for this category, this tax equates to an average of less than 6%), chances are, selling off some small fraction of that land is better for the economy and again, a value of around $6.5million is the lowest you can go, so the continuing cost of the estate tax has a clear limit. Now, I am not a business or economics major so I would like you to provide reading stating that incorporation allows you to be bought without your permission. From what I can tell, you would have to go public for that to be the case and incorporation doesn't require that so it seems like a bit of a misleading argument, but I am no expert.

Green: Again, such a small percentage of small businesses fall under the threshold that eliminating the estate tax will do nothing to change the overall flow of the market. You are massively overselling the impact of the estate tax. Again, if you wish to help small businesses, targeting a tax which affects a fraction of a percent of small businesses and whose primary revenue source is individuals who are in the top 10% of earners, you are missing the mark. If you were to propose a change which states that estates associated with farms are exempt from the estate tax, that would be significantly more reasonable than simply nixing the estate tax. Again, you are trying to throw the baby out with the bathwater. It is misleading and disengenuous to use farms to pass this change. Its like those images of Diglett actually being a Lovecraftian horror under the ground, just sticking its cute little face up: http://0.media.dorkly.cvcdn.com/12/17/fe3375ad1f1842edeb5861b8994fc6dd.jpg



Haha I knew you were thinking that way. So #1 can you define rich in your own terms. Secondly couldn't we reduce FBI, CIA, Military, spending assuming we actually lose money getting rid of the estate tax. Third we may be gaining by getting rid of the estate tax:




Not all farms are producing cash crops. Many farms are producing the food that we need to eat and they have a LOT of assets to produce only a little wealth. Not only that but the number of hours these people work is insane (10-16 hours at times. So ripping up family owned farms is good for the economy... Removing the only competition massive corporate farms is a good thing.. Also what if you have a situation where someone dies, they give the farm to their child, that child dies soon after and it then passes into the 3rd generation quickly afterwards. You have so much debt from the estate tax that it can bankrupt you or ruin the whole business and make them sell it just to be out from it that living debt hell. When you incorporate you have share holders. You have to designate who owns the shares. Typically farm families divide it up among their children. A corp comes by and manages to obtain enough shares to have a voting interest in the company then will vote against the interest of the business until they can purchase it up or they just obtain 51% and tell everyone to go fuck off. Theres a whole class worth of other more complicated methods of take overs but you can go to college to learn that.

Its not that hard for a business to fall into the top 10%. According to the World Top Incomes Database, a household income of about $113,000 lands you at the top 10th, while $394,000 makes you a bona fide member of the 1 percent. Whats with you and bathwater babies? Estate taxes doesn't need to exist for businesses if they don't apply to all businesses (corporations). Your literally treating small businesses differently than large corporations and thats part of the problem with our current situation..

What does being in the top 10% of earners have to do with the estate tax?
https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
After deductions you need in excess of $5,490,000 before a single cent is taxed. Family owned farms get a $1,120,000 deduction in addition to any other deductions they qualify for. Of course, as was already said you can just incorporate your farm, or *gasp* sell the land to your children before you die in order to avoid the estate tax. As far as an evil corporation buying up the seats held by the family members, there are two things to consider. First and foremost, if the children want to sell their stake in the farm, they would do it with it incorporated or not, and secondly even if you own 51% of a corporation you can't intentionally damage the value of said corporation without facing a lawsuit that can and will strip you of any voting rights on the shares you own.

Btw, I was pretty sure the United States of America, exists in large part due to the founding fathers wanting to get away from monarchies, which is exactly what you are stumping for. You know, power & wealth inherited from birth, not individual merit.
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Posted 10/22/17 , edited 10/23/17

MadBovine wrote:
What does being in the top 10% of earners have to do with the estate tax?
https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
After deductions you need in excess of $5,490,000 before a single cent is taxed. Family owned farms get a $1,120,000 deduction in addition to any other deductions they qualify for. Of course, as was already said you can just incorporate your farm, or *gasp* sell the land to your children before you die in order to avoid the estate tax. As far as an evil corporation buying up the seats held by the family members, there are two things to consider. First and foremost, if the children want to sell their stake in the farm, they would do it with it incorporated or not, and secondly even if you own 51% of a corporation you can't intentionally damage the value of said corporation without facing a lawsuit that can and will strip you of any voting rights on the shares you own.

Btw, I was pretty sure the United States of America, exists in large part due to the founding fathers wanting to get away from monarchies, which is exactly what you are stumping for. You know, power & wealth inherited from birth, not individual merit.


Being in the top 10% was something I brought up. Something like "the top 10% of earners make up almost 90% of taxable estates". It was a way of demonstrating that the primary burden does not fall on small businesses and farms.

As for the rest, thank you for the clarification. Like I said a while ago, I'm not a business expert so I wasn't completely sure all of the details of incorporation. Your clarification seems to answer my question that simply incorporating does not allow for takeovers without the consent of the parties involved (which sort of invalidates the whole point in my opinion).
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Have you ever met a rich kid who has never been told "no" because their family can buy whatever the kid asks for? that kid is a scum human. you are telling me that letting people like this who never worked a day in their life deserve all the money their parents leave them when they die? be realistic here you said yourself this program makes more than it costs to run it so i guess its a profitable government endeavor.
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Posted 10/22/17 , edited 10/23/17

Rujikin wrote:


sundin13 wrote:
Red: Yes. Decreasing taxes on the rich proportionally increases the amount of taxes paid by the poor, often directly increases taxes paid by the poor (because revenue needs to come from somewhere) or indirectly increases economic burden on the poor (cuts to social programs and side effects of increased federal debt). The argument for eliminating a tax is always an argument to increase the burden elsewhere. To argue for a "fair" tax structure is to argue that the poor aren't doing their part. I'm not sure which obvious solutions I've advocated for which fall under the idea of a fair and equal tax code. I obviously advocate numerous changes in the tax code, but I don't think "fairness" really plays a part in those arguments.

Blue: Yes. I know that. However, if they have a massive amount of land which isn't producing the capital to pay these taxes over a fifteen year span (for this category, this tax equates to an average of less than 6%), chances are, selling off some small fraction of that land is better for the economy and again, a value of around $6.5million is the lowest you can go, so the continuing cost of the estate tax has a clear limit. Now, I am not a business or economics major so I would like you to provide reading stating that incorporation allows you to be bought without your permission. From what I can tell, you would have to go public for that to be the case and incorporation doesn't require that so it seems like a bit of a misleading argument, but I am no expert.

Green: Again, such a small percentage of small businesses fall under the threshold that eliminating the estate tax will do nothing to change the overall flow of the market. You are massively overselling the impact of the estate tax. Again, if you wish to help small businesses, targeting a tax which affects a fraction of a percent of small businesses and whose primary revenue source is individuals who are in the top 10% of earners, you are missing the mark. If you were to propose a change which states that estates associated with farms are exempt from the estate tax, that would be significantly more reasonable than simply nixing the estate tax. Again, you are trying to throw the baby out with the bathwater. It is misleading and disengenuous to use farms to pass this change. Its like those images of Diglett actually being a Lovecraftian horror under the ground, just sticking its cute little face up: http://0.media.dorkly.cvcdn.com/12/17/fe3375ad1f1842edeb5861b8994fc6dd.jpg



Haha I knew you were thinking that way. So #1 can you define rich in your own terms. Secondly couldn't we reduce FBI, CIA, Military, spending assuming we actually lose money getting rid of the estate tax. Third we may be gaining by getting rid of the estate tax:




Not all farms are producing cash crops. Many farms are producing the food that we need to eat and they have a LOT of assets to produce only a little wealth. Not only that but the number of hours these people work is insane (10-16 hours at times. So ripping up family owned farms is good for the economy... Removing the only competition massive corporate farms is a good thing.. Also what if you have a situation where someone dies, they give the farm to their child, that child dies soon after and it then passes into the 3rd generation quickly afterwards. You have so much debt from the estate tax that it can bankrupt you or ruin the whole business and make them sell it just to be out from it that living debt hell. When you incorporate you have share holders. You have to designate who owns the shares. Typically farm families divide it up among their children. A corp comes by and manages to obtain enough shares to have a voting interest in the company then will vote against the interest of the business until they can purchase it up or they just obtain 51% and tell everyone to go fuck off. Theres a whole class worth of other more complicated methods of take overs but you can go to college to learn that.

Its not that hard for a business to fall into the top 10%. According to the World Top Incomes Database, a household income of about $113,000 lands you at the top 10th, while $394,000 makes you a bona fide member of the 1 percent. Whats with you and bathwater babies? Estate taxes doesn't need to exist for businesses if they don't apply to all businesses (corporations). Your literally treating small businesses differently than large corporations and thats part of the problem with our current situation..



the majority of humans live on less than minimum wage in the usa of course making 6 figures is going to make you rich on the global spectrum. 6 figures means you will never struggle if you are not cavalier with your money and don't have an ungodly number of kids.
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Posted 10/22/17 , edited 10/23/17

Calmaressurgebat wrote:

Have you ever met a rich kid who has never been told "no" because their family can buy whatever the kid asks for? that kid is a scum human. you are telling me that letting people like this who never worked a day in their life deserve all the money their parents leave them when they die? be realistic here you said yourself this program makes more than it costs to run it so i guess its a profitable government endeavor.


These rich kids end up blowing their money like crazy buying useless shit that creates jobs. There is literally whole industries devoted to helping these people blow their money.

I also read something that did mention that there is more to look at than just direct net income and it was right.
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Posted 10/23/17 , edited 10/23/17

Rujikin wrote:


Calmaressurgebat wrote:

Have you ever met a rich kid who has never been told "no" because their family can buy whatever the kid asks for? that kid is a scum human. you are telling me that letting people like this who never worked a day in their life deserve all the money their parents leave them when they die? be realistic here you said yourself this program makes more than it costs to run it so i guess its a profitable government endeavor.


These rich kids end up blowing their money like crazy buying useless shit that creates jobs. There is literally whole industries devoted to helping these people blow their money.

I also read something that did mention that there is more to look at than just direct net income and it was right.


While the rich do spend money, they tend to spend much less efficiently than the poor. The rich tend to spend around 60% of their income while the poor spend up to 170%. You rapidly see declining returns as income rises. Because of this ( and other factors), the rich are much worse at stimulating demand per dollar.
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Posted 10/23/17 , edited 10/23/17
This video just illustrates the dictum that, when arguing with liberals, talk principles not people. The Left tends to demonize and make pariahs out of people. Anything which comes out of these pariahs' mouths is evil by default.

But, when one just argues policies and principles without reference to politicians and thinkers, liberals tend to be more reasonable.
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Posted 10/23/17 , edited 10/23/17

sundin13 wrote:

While the rich do spend money, they tend to spend much less efficiently than the poor. The rich tend to spend around 60% of their income while the poor spend up to 170%. You rapidly see declining returns as income rises. Because of this ( and other factors), the rich are much worse at stimulating demand per dollar.


60% of $50,000 is a lot less than 170% of $10,000,000. What are these percentages anyway? Percentages of how much of yearly income is spent over a lifetime? It couldn't be that, since people spend far more that that amount. Percentage of income earned over a lifetime that is spent over their lifetime? If it is that, then 170% means the person was an overall drain on the economy, and borrowed 70% that they never paid back. It also means someone, who hopefully wasn't using a wholly unsustainable model of managing finances, had to have provided them the funding to do so. Percentage of yearly income spent over a year? 170% would be completely unsustainable and would quickly result in financial ruin, costing those who are lending this person money to take a financial loss.

I don't think the estate tax should be abolished, though it might need some adjustment. I haven't really looked to far into the estate tax. The tax would not apply to me anyway, as I don't have rich relatives that would be passing me money when they died. My parents probably wouldn't be passing any money to me when then die, which hopefully would not occur for a long time anyway.

Edit:
Removed the budget comments. I'll put them in the budget thread.
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Posted 10/23/17 , edited 10/23/17

ishe5555 wrote:


sundin13 wrote:

While the rich do spend money, they tend to spend much less efficiently than the poor. The rich tend to spend around 60% of their income while the poor spend up to 170%. You rapidly see declining returns as income rises. Because of this ( and other factors), the rich are much worse at stimulating demand per dollar.


60% of $50,000 is a lot less than 170% of $10,000,000. What are these percentages anyway? Percentages of how much of yearly income is spent over a lifetime? It couldn't be that, since people spend far more that that amount. Percentage of income earned over a lifetime that is spent over their lifetime? If it is that, then 170% means the person was an overall drain on the economy, and borrowed 70% that they never paid back. It also means someone, who hopefully wasn't using a wholly unsustainable model of managing finances, had to have provided them the funding to do so. Percentage of yearly income spent over a year? 170% would be completely unsustainable and would quickly result in financial ruin, costing those who are lending this person money to take a financial loss.

I don't think the estate tax should be abolished, though it might need some adjustment. I haven't really looked to far into the estate tax. The tax would not apply to me anyway, as I don't have rich relatives that would be passing me money when they died. My parents probably wouldn't be passing any money to me when then die, which hopefully would not occur for a long time anyway.

Edit:
Removed the budget comments. I'll put them in the budget thread.


Okay, so the percentages speak to average yearly income vs yearly expenses.

The 170% figure for the low income bracket doesn't really speak to people making $50,000, it speaks to people who are typically below the poverty line and require government assistance, be it for housing or food. Perhaps a better way to show the gradation of spending "efficiency" would be to speak about individuals who make around $54,000. For them, that number drops to about 90%.

Now, as for what I was speaking about in terms of efficiency, when you give a poor person $100, they spend $100, putting that money onto the market and generating demand. When you give that money to a middle income individual, they spend $90 and put $10 in savings. When you give that money to a rich person, they only spend $60, meaning that they generate 60% of the demand that a poor person would generate with that money.

That is one of the reasons for a few tax related things. First of all, it is one of the reasons why reducing taxes on the poor generates more demand and injects more money into the market than reducing taxes on the rich (assuming an equal raw value of tax reduction spread over total demographic groups) which demonstrates one of the pros of progressive taxation. Second (and a bit off topic for this point) it is one of the reasons why things like sales taxes and consumption taxes are considered to disproportionately affect the poor.
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Posted 10/23/17 , edited 10/23/17

sundin13 wrote:

Okay, so the percentages speak to average yearly income vs yearly expenses.

The 170% figure for the low income bracket doesn't really speak to people making $50,000, it speaks to people who are typically below the poverty line and require government assistance, be it for housing or food. Perhaps a better way to show the gradation of spending "efficiency" would be to speak about individuals who make around $54,000. For them, that number drops to about 90%.

Now, as for what I was speaking about in terms of efficiency, when you give a poor person $100, they spend $100, putting that money onto the market and generating demand. When you give that money to a middle income individual, they spend $90 and put $10 in savings. When you give that money to a rich person, they only spend $60, meaning that they generate 60% of the demand that a poor person would generate with that money.

That is one of the reasons for a few tax related things. First of all, it is one of the reasons why reducing taxes on the poor generates more demand and injects more money into the market than reducing taxes on the rich (assuming an equal raw value of tax reduction spread over total demographic groups) which demonstrates one of the pros of progressive taxation. Second (and a bit off topic for this point) it is one of the reasons why things like sales taxes and consumption taxes are considered to disproportionately affect the poor.


The poor already don't pay taxes, they get money out of the tax system. If they are spending 170% of their annual income each year, then they operating on a 70% annual deficit each year. Someone actually needs to be footing that bill. In order for them to be borrowing 70% of their income each year, someone with money would have to be lending it to them. Eventually, that means they are also going to default on a lot of that debt, so someone is going to be left holding the bag.

I understand what you are saying, but just because someone is spending a larger portion of their income doesn't mean that taking more money from someone rich, routing it through the corrupt bureaucracy where the money is split in good and bad ways, to send a portion of it to poor people that can't manage their money properly and spend more than they take in is going to stimulate the economy. Especially, since even with that portion of money routed them, they continue to borrow from the rich to spend more money then they take in.

I'm not even rich, but I spend less than 50% of what I take in each year, and over half of that is going to the mortgage for a house I bought a couple years ago that was over 3x my yearly income (so, higher than I probably should have bought). Even 60% is excessive.

Really, what should be done, is increasing the standard exemption, decreasing rates across the board, and gutting itemized deductions and credits (possibly getting rid of them all together). Increasing the capital gains rate. Decreasing the death tax, but still retaining it. Decreasing the corporate rate to at least somewhat competitive levels. That should help to prevent people making a lot of money from utilizing loop holes (deductions) to pay less than people making less money. It would get the tax system out of the business of providing supplemental welfare (if welfare needs to be increased as a result, then do it). We accomplish nothing good by obfuscating what we are actually doing with our tax system.
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Posted 10/23/17 , edited 10/23/17

ishe5555 wrote:


sundin13 wrote:

Okay, so the percentages speak to average yearly income vs yearly expenses.

The 170% figure for the low income bracket doesn't really speak to people making $50,000, it speaks to people who are typically below the poverty line and require government assistance, be it for housing or food. Perhaps a better way to show the gradation of spending "efficiency" would be to speak about individuals who make around $54,000. For them, that number drops to about 90%.

Now, as for what I was speaking about in terms of efficiency, when you give a poor person $100, they spend $100, putting that money onto the market and generating demand. When you give that money to a middle income individual, they spend $90 and put $10 in savings. When you give that money to a rich person, they only spend $60, meaning that they generate 60% of the demand that a poor person would generate with that money.

That is one of the reasons for a few tax related things. First of all, it is one of the reasons why reducing taxes on the poor generates more demand and injects more money into the market than reducing taxes on the rich (assuming an equal raw value of tax reduction spread over total demographic groups) which demonstrates one of the pros of progressive taxation. Second (and a bit off topic for this point) it is one of the reasons why things like sales taxes and consumption taxes are considered to disproportionately affect the poor.


The poor already don't pay taxes, they get money out of the tax system. If they are spending 170% of their annual income each year, then they operating on a 70% annual deficit each year. Someone actually needs to be footing that bill. In order for them to be borrowing 70% of their income each year, someone with money would have to be lending it to them. Eventually, that means they are also going to default on a lot of that debt, so someone is going to be left holding the bag.

I understand what you are saying, but just because someone is spending a larger portion of their income doesn't mean that taking more money from someone rich, routing it through the corrupt bureaucracy where the money is split in good and bad ways, to send a portion of it to poor people that can't manage their money properly and spend more than they take in is going to stimulate the economy. Especially, since even with that portion of money routed them, they continue to borrow from the rich to spend more money then they take in.

I'm not even rich, but I spend less than 50% of what I take in each year, and over half of that is going to the mortgage for a house I bought a couple years ago that was over 3x my yearly income (so, higher than I probably should have bought). Even 60% is excessive.

Really, what should be done, is increasing the standard exemption, decreasing rates across the board, and gutting itemized deductions and credits (possibly getting rid of them all together). Increasing the capital gains rate. Decreasing the death tax, but still retaining it. Decreasing the corporate rate to at least somewhat competitive levels. That should help to prevent people making a lot of money from utilizing loop holes (deductions) to pay less than people making less money. It would get the tax system out of the business of providing supplemental welfare (if welfare needs to be increased as a result, then do it). We accomplish nothing good by obfuscating what we are actually doing with our tax system.


First of all, the poor do pay taxes. To say they don't is just dead wrong. Some of it is sales tax, some of it gas tax, some of it is state and local tax, some of it is payroll tax. Even if you fall below the federal income tax threshold, that doesn't mean you pay zero taxes. In fact, the lowest 20% of earners pay about 20% of their income into taxes.

Second of all, the money that they pay over their income typically comes from the government (as I've already stated). This money is not loaned. It is primarily money for necessities such as food and housing that they need assistance with.

But again since you seem to be missing the point and misunderstanding that people below poverty often need government assistance to live, ignore the very poor and just look to the middle class (which was largely the point of my last post). Money that goes to the lower income brackets more efficiently gets transferred back into the economy. That is the point. Its not about how great you personally are at saving, it is about the differences in how giving money to the poor vs giving money to the rich affects the demand side of the economy.
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