Senate Fiscal Cliff Doomsday Countdown Thread

Discussion in 'Archive: The Senate Floor' started by Jabbadabbado, Nov 8, 2012.

  1. Rogue_Ten Chosen One

    Member Since:
    Aug 18, 2002
    star 7
    isnt that just a disincentive tho? why use weasel words like "near" disincentive unless, on some level, you're aware that you're full of ****?

    also i dont know how french tax brackets work, but you don't jump into a higher tax bracket and make less than you were making before in the US tax regime because only income over the lower limit of the bracket is taxed at that rate.

    in simple terms, if i have a tax-free bracket under 5 bux and i now make 6 bux, only that last, sixth buck is going to be taxed. the first five are still tax free.
    Last edited by Rogue_Ten, Nov 14, 2012
  2. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
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  3. Kimball_Kinnison Force Ghost

    Member Since:
    Oct 28, 2001
    star 6
    I've asked this question to people who support high taxes on the rich, and almost never actually gotten an answer:

    Is there a marginal tax rate that you would consider to be immoral? If so, what is it?

    Personally, I think that anything over 50% is outright immoral. At that point, out of every additional dollar you earn, you aren't even getting to keep half of it because the government thinks it has a greater claim to the fruits of your labor than you do. (And I am talking about the cumulative tax rate, including federal, state, and local taxes, not to mention any payroll taxes or other special assessments.)
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  4. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    Trick question, I think capitalism is itself largely immoral.
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  5. Yodaminch Chosen One

    Member Since:
    Mar 6, 2002
    star 6
    I'm fairly certain they have an unlimited supply of gall. They took a beating but they weren't crushed. They will remain the party of NO until 2014 at least
  6. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9

    Only because you don't understand it. :)

    Rogue - The disincentive argument is fairly common and I'm not a top tier tax bracket earner (only 2nd highest, sadfase) so I can't comment but it gets made often.

    http://www.forbes.com/sites/timwors...income-tax-rate-is-going-to-be-so-disastrous/

    Interesting they note something I've found with our US holdings or US clients; you are taxed on citizenship rather than residency. Most if not all countries have a non-residency for tax purposes category.

    That is, you need to reside in a tax jurisdiction for a certain period each year to qualify as a resident of that area for tax purposes.

    So, for example, British millionaries can spend a percentage of the year in Jersey to qualify as a non-resident for tax purposes in the UK. In France's case, millionaries can spend every weekend in a lovely little principality just to the south of France that hosts the best motor race in the world.
  7. Jabba-wocky Chosen One

    Member Since:
    May 4, 2003
    star 8
    To go back to an earlier point, what is this discussion about the "number of times" an asset has been taxed? What does that have to do with anything? Is it a somehow difficult or unfair principle to suggest that that any time an asset leaves the individual and interacts with the broader marketplace, it can be taxed? This would very easily explain the current system. Funds are taxed once when they are received as income. When the individual invests them, then they are taxed a second time, as investments. The person choosing to hand them off a third time, to a relative, is as much deploying the assets back into the marketplace as when he used it as an investment or gave it as a gift (which are also taxed). In each case, the feasibility of the transfer depends on the functioning of the broader society, in the style of the "you didn't build that" argument. Therefore, it is fairly reasonable that it be taxed at each of these points.

    By contrast, I'm pretty deeply perplexed by the notion that there are an arbitrary number of times something can be taxed before it becomes magically immoral. What does this even mean? If you believe corporate taxes are fair, and capital gains taxes are fair, does it magically become immoral if a particular revenue stream results in someone paying both at once? Is what was once just now suddenly a travesty just because they happened in proximity?
  8. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    I was about to respond then I realised Wocky was trolling.
  9. Jabba-wocky Chosen One

    Member Since:
    May 4, 2003
    star 8
    I assure you I'm serious. Counting the number of times someone has paid taxes seems a deeply inferior way to talk about fairness as compared to simply trying to analyze each proposed tax on its own merits of lack thereof.
  10. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Except the fact that the purpose of an estate tax is to ensure funds pay tax (in theory; not in practise which is a naked money grab). IF the funds were untaxed monies, there'd be some merit to an estate tax. Since, however, this isn't the case we start talking about a lack of merit.
  11. Jabba-wocky Chosen One

    Member Since:
    May 4, 2003
    star 8
    There are multiple rationales for an estate tax. There's no real reason for you to elevate one single one as supreme and controlling above all others. The only thing your analysis implies is that people should be convinced that the alternative rationales are good ones if they continue to support the policy.
  12. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    There are a multitude of reasons, Wocky. Of course we recognise this. However, most of the reasons fail to account or consider that the funds themselves have been taxed already. One argument in favour relies upon the "disincentive" concept (which I'm not wholly convinced of) by suggesting this is more efficient form of revenue. If the CGT liability is absolved at death - I am assuming you have a similar mechanism to Australia whereby a change in beneficial ownership would have the net effect of reducing the cost base to 0, wiping out unrealised gains and losses - then why not treat death as a CGT trigger and tax the then-realised gains/losses accordingly. That way the estate ends up receiving a nil cost base for each asset but the correct and fair tax is levied. Any concerns that the timing around crystalisation might be unduly harsh can be addressed through exemption clauses etc but that strikes me as a fairer and more practical regime.
  13. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    Oh, I understand it. It's really just that our moral compasses are divergent :)
  14. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Well you can think capitalism is ripe for exploitation but ultimately it is the most moral and equitable of all the economics models out there. So calling it immoral is idiotic and subjective, but also implicitly a condemnation of the other economic models we have out there, right?
  15. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    Well it's not so much that I can think that capitalism is ripe for exploitation, it's that capitalism is rife with exploitation, and if you're correct in your assumption that its the most moral and equitable of all the economic models out there (which is probably debatable) I'd argue that its not moral enough.

    Buuuuuuuuuuut, when you call a casually stated opinion idiotic that's kind of a near-disincentive for me to discuss the topic further with you so let's just call it day on the subject. :)
  16. Rogue_Ten Chosen One

    Member Since:
    Aug 18, 2002
    star 7
    no see i think ive figured out that "near-disincentive" doesnt mean you actually stop doing the thing, you just pout a lot about it in ****** terse magazine editorials and over tea at the golf course



    maybe you should try to understand the arguments you're fielding instead of assuming your newsstand publications are doing a sterling job of making them for you?
    Last edited by Rogue_Ten, Nov 15, 2012
  17. Vaderize03 Manager Emeritus

    Member Since:
    Oct 25, 1999
    star 5
    Yes, actually, I don't think total taxes should exceed 20% of one's income.

    In other words, Americans should have the right to keep 80% of what they earn, and have it taxed only once. I would allow a temporary increase of this in times of war or national emergency, but only provided that the increases are legally sunsetted when the war/crisis passed, to avoid things like the estate tax, which has now become a permanent part of the code.

    I couldn't agree with you more on the disincentivization of higher taxes. If you're simply working to pay Uncle Sam (or wherever you live), what's the point? I would rather work a little less to lower my marginal rate if it meant that I would actually end up with more disposable income.

    I know that may shock some people around here, but the idea that you can solve societal issues by soaking the rich is very much a discredit one, IMHO. Even if the US taxed the "wealthy" at 100% of their income, we wouldn't solve the deficit issue, for example. I think taxation should be fair, and I understand my viewpoint is unrealistic, so I would settle on a total tax rate of 30% for high-earners ($1 million/year), but that's the limit. Anything higher chases away capital (and to be honest, I think 20% is more pro-growth).

    Peace

    V-03
  18. Fire_Ice_Death Chosen One

    Member Since:
    Feb 15, 2001
    star 7
    Wasn't the tax rate on the rich at 90% at one point? If you're using a moral/immoral divide to make fiscal policy then you've already failed. There's no point that's moral or immoral. Only financially sustainable or not. I'm not saying that we should aim for ever higher amounts from the past, but let's get some perspective about it. Every bit of squeezing on the middle class on this country could be directly attributed to how much policies cater to the wealthy.

    Tax cuts, loopholes, incentives to leave this country, etc. all give anyone with any amount of money to hoard it and to shift around to places that have an even lower rate than they have here (which is already fairly low to begin with). It also doesn't help that we've had a society that we've spent years upon years telling these schmucks that they're exceptional people for making such obscene amount of money while they screw us by taking their jobs overseas, avoid paying their taxes, and then cannibalizing other businesses. Or, if you're like that guy that injects his own politics into his business decisions like laying off workers--at least lying about his reasoning.

    So yeah, I don't think these are exceptional people for making large sums of money and treating their country like dirt. At 70% I think that would be equitable. At least until they cause the next financial debacle. I think when you leave the US in such a state that there's more decay than growth, more uneven distribution of wealth, and more people are out of work due to your actions then I think they should be taxed as heavily as possible. Especially since this whole 'meltdown' happened as a result of their greed to begin with.
  19. Kimball_Kinnison Force Ghost

    Member Since:
    Oct 28, 2001
    star 6
    Except that there has to be a point at which it's immoral.

    Consider the case of a 100% cumulative tax rate (which you would get in some places with a 90% federal rate). At that point, everything you earn is claimed by the government. How is that not functionally indistinguishable from either Communism or slavery? (After all, in slavery, the fruits of one person's labor are completely claimed by another person. In Communism, all labor is owned by the state, with no private ownership.) I don't see how that principle would change if you instead set a trigger income for such a tax rate.

    Worse, a 90% federal rate today would cause some people to have cumulative tax rates above 100%. For example, the maximum individual rate in California is 12.3%. Combine that with a 90% federal rate, and a person would owe at least 102.3% of every additional dollar that they earned. At that point, it becomes like the situation of a coal miner in a company town. No matter how much they work and earn, they always owe more.
  20. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    Meanwhile, no one in reality is talking about a marginal tax rate high than the mid 30s.
  21. Fire_Ice_Death Chosen One

    Member Since:
    Feb 15, 2001
    star 7
    No, it wouldn't be. While I don't really believe we should have obscenely high tax rates for wealth I don't think morality comes into play with financial decisions. Specifically because it opens things up for abuse. You could, theoretically, claim that anything can be moral or immoral. That's why prosperity gospel works for some people. It releases their inner-greed and justifies it by saying it's moral.

    The extra-comfort comes into play when you insert a deity. (This really would work for any ideology.) It's how most people justify being greedy in the first place. Why didn't you help the homeless man? Well, he'd buy booze for it or drugs or maybe he'd spend it on a prostitute. And really? All of that's immoral. So it's better that I just keep my money. After all, I'd put it to good use.

    So I don't think that morality should come into play with financial decisions. It's what areas of society could benefit the most with more funding. And if you want to claim that that in itself is a moral choice, I would argue that it isn't. Specifically because you don't need morality to see someone suffering. In my opinion the morality on the use of money is a problem because a person's morals are too flexible to decide what's moral and what isn't.
    Last edited by Fire_Ice_Death, Nov 15, 2012
  22. Kimball_Kinnison Force Ghost

    Member Since:
    Oct 28, 2001
    star 6
    That's a little disingenuous.

    First of all, when the statistic about how 47% of tax filers pay $0 (or less, in the case of refundable credits) in income tax, the response is always to talk about payroll taxes (Social Security, Medicare, etc). If we are talking about a federal marginal income tax rate in the high 30s, to be consistent you still have to add the payroll taxes (7.65%, or 15.30% if self employed, and some people have suggested getting rid of the cap on those taxes), not to mention state taxes (such as the 12.3% top rate in California). Add all of those up and you get higher than a 50% cumulative tax rate. That means that a person is spending more than half of their time working to pay the bills for government, rather than for their own benefit. As I said before, I consider anything above a 50% cumulative tax rate to be outright immoral, for that very reason. A person should be able to enjoy the fruits of their labors, not have more than half of them taken away at gunpoint.

    Tell you what. Why don't you answer the question I posed above. Is there a cumulative tax rate that you would consider immoral? If so, what is it. If not, why not?
  23. Kimball_Kinnison Force Ghost

    Member Since:
    Oct 28, 2001
    star 6
    By your reasoning, is slavery moral, immoral, or amoral? Because a rate like I described above (where a person is taxed everything they earn, or even more than they earn) is effectively slavery, just as much as the old "company store" model was. How is that not a moral issue?

    The most fundamental freedom is the ability to own yourself and your labor. Everything else derives from that freedom. Excessive taxation denies that freedom by having someone else lay claim to the fruits of your labor.
  24. Jabbadabbado Manager Emeritus

    Member Since:
    Mar 19, 1999
    star 7
    I've made this argument before, and we can ask NY Jedi about this, but it seems to me that New Yorkers pay a pretty high tax rate. Property owners in Manhattan with, say, incomes of $500k are likely paying at or near 50% of their income in taxes, with property taxes, city personal income tax, plus a relatively high state income tax, plus federal. And yet the rich flock to Manhattan. Why is that? I think it's because "the fruits of your labor" are complex. The cost of maintaining an infrastructure that can support tens of thousands of people earning top 1% salaries are high. There's a reason why doctors and lawyers don't want to go practice in rural North Dakota. Manhattan in reality is the opposite of Escape from New York. It's an extremely expensive island fortress for the super-rich.

    The U.S. as a whole is a lot like that too. It's an extremely expensive island fortress for the well-off, relative to the 3 or 4 billion poorest people in the world. Alone the expense of maintaining our vast networks of concentration camps for incarcerating our poorly educated and less employable ethnic minorities and otherwise quarantining and isolating our own poor so they don't get in the way of our making money is worth a high marginal tax rate.
    Last edited by Jabbadabbado, Nov 15, 2012
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  25. Vaderize03 Manager Emeritus

    Member Since:
    Oct 25, 1999
    star 5
    The payroll tax is a great example. I have a full-time job, but if I do extra shifts at the hospital, it's 1099 income, and I am assessed the full payroll rate. Needless to say, I tend to limit how much overtime I put in, unless I really need the cash (okay, to be fair, it's not just finances, I really don't like doing in-house nights).

    Peace,

    V-03