fair and balance in tax reporting

a friend of mine sent me this link to consider: http://finance.yahoo.com/banking-budgeting/article/106769/Do-the-Rich-Really-Deserve-Such-a-Bad-Rap

It actually gave me an opportunity to do a little research on what i think the 'real deal' is. What I mean by that is uncovering just exactly what the super rich people make in relation to how much they pay taxes, so after a little "research" i wrote back this message:

good article, but:

"Approximately one fifth, 20.58%, of all income was earned by the top 2.67%, those households earning more than $200,000 a year." from http://en.wikipedia.org/wiki/Household_income_in_the_United_States

If someone complains that 2.67% of the country pays 20% (or whatever) of the taxes and that's not fair, then they're not giving you all the relevant information to assess the facts. It is said that "there are three types of lies: lies, damn lies and statistics." To be fair and balanced in that statement/complaint, that those 2.67% also make 20% of the money.

The same page also says:

"Roughly one third, 32.5%, of all income in the US was earned by those households with an income over $150,000, approximately the top five percent."

and "The bottom 6.37%, however only earned 0.27% of all income."

I think that's a little more balanced.

***I cut some of the rest of the message out because it was the start of another argument/line of thinking. I didn't even mean to send it to him. Hope he didn't get confused from it.***


for instance, those 400 people they paid 1.77% of all taxes for the year, but i would also like to know what percentage of total income they earned.

Those 400 people made 105 billion total.

It's one thing if you pay 1.77% of taxes, but if you make 5% of the money, then that doesn't "add up"

More on the wealth cap

So, the last post was about a wealth cap. The condition behind this argument is the gaping hole in the wealth between rich and poor people, especially in America. The intent i have in proposing a limit on the amount a person can "be worth" is to equalize the chances of people being able to feed and support their family.

I think i've added an option, here they are so far:
Cap income
I would limit the amount a person could earn in a year. 1 mil is too low. how about 10 million? But that is just for business owners. What if we limited total compensation from a company to 1 mil per year.

This would force down salaries of business execs, and on down the line so that more wealth could be spread

We could also configure it so that the highest paid person in the company can earn no more than some multiple of the lowest paid person. If the lowest paid person earns $30,000, a 30x multiple would get that highest paid person $900,000.

Cap total net worth
We could alternately cap the total amount of money a person was worth. If they earn more money, they have to spend it, which pumps money into the economy. We can cap this at somewhere around 50mil,

Abolish trusts
One of the strategies that the rich use to protect their wealth for future generations is to create trusts. Trusts are tax-shelters enabling people to put their money in an entity and dispense it in such a way to minimize taxes, and to avoid the estate tax. I would abolish them. This line of thinking actually has libertarian roots in that it encourages each individual to work to their maximum, and not ride the coat-tails of generational socialism.

Increase the estate tax(new)
This comes with a little subtly. If the assets to be taxed is a owner-operated business worth less than 10mil, then i would think about abolishing the estate tax. I think this is a good cut-off to insure the financial stability of small businesses in succession agreements.


Okay. So there are no real breakthroughs, i think sometime i'll have to sit down and think each of these through more seriously. keep watch.

What's wrong with the stimulus

So, we've been talking about fiscal policy and wall street bailouts, now let's talk about the Democratic "stimulus" plan.

I'm against it.

Taxcuts
Look, I like the taxcuts for lower income people. Especially when the Bush tax-cuts for the upper income people will expire soon, great i think, balances revenue a bit. The problem with tax cuts is two-fold. The last two tax cuts and rebates that Bush pushed for, went to paying down debt, not stimulating the economy. I actually encourage that. This does put more money in the pocket of the American consumer, but 1. they can't spend it and 2. even if they did, it would only temporarily help the economy.

Most people are forgetting is that consumer debt (non-mortgage) is about 2.5 trillion dollars. For the next two decades we are going to whittle this down. Even if Americans get a 10% pay raise, a lot of that money will go to the Wall Street greed mongers to pay back what we borrowed to buy HDTV's, computers, clothes and other things for the last 10 years. The levels of consumption that we have had for the last 10 years, which was the artificial "growth" of the economy was based on consumers taking on more and more debt. It was not real growth. Present and recent historical levels of consumption are financially unsustainable.

The other sink-hole of American wealth, if lining the pockets of wall-street fat cats and credit-lending institutions wasn't enough, is the national trade deficit. Thanks to the promotion of free-trade and outsourcing both mid-high skill manufacturing and low-skill call center jobs the economy exported 4.5 million jobs to Mexico, China, India, Taiwan and all the countries that now make products that used to be made in the US. That probably doesn't include the jobs that would have been created like the eateries that pop up around places of employment and suppliers for those goods.

So the reason the tax cuts won't stimulate the economy is that smart consumers will pay down debt (like the banks did with bailout money) and if they spend that money, a lot of that money will be exported to other countries (Saudi Arabia, China, etc).

Social Policy
There's a good bit of money going into the coffers of state and local governments that doesn't create jobs, it just stops the hemorrhaging of jobs that would be due to layoffs from decreased government revenue. I don't agree that all this 'stimulus' money should go to pay for healthcare, unemployment benefits and the like. I think it much wiser to fund intelligent infrastructure projects that will be coming soon to a road or utility near you. Instead of padding unemployment, the government should fund training programs specifically for the upcoming greening of America. This can range from short-term weatherization to long-term programs to build the capacities to manufacture high-speed trains domestically. We're decades behind Europe and Japan in this respect, and instead of paying people to look for work, pay them to have the skills necessary for the medium-term and long-term infrastructure projects. That's not spending, that's investment.

Infrastructure
Not big enough. If it was up to me, we'd have tax cuts and infrastructure only. I count training programs for skills needed to build infrastructure as part of infrastructure projects. The infrastructure I'd be looking at building is mass transit, high-speed rail, smart grid electricity, large-scale DC power lines from middle-american wind-farms (vastly different from smart-grid technology) and the like. All of the infrastructure projects would be green projects unless it is for road, bridge, water, swere repair. Building new roads to handle capacity would be replaced by installing mass transit systems. Paying billions of dollars so that people can watch TV (converter boxes)? Really? I mean really?

So I'm against the stimulus plan. Just becasue supposedly we have to 'do something' does not mean that we have to do everything. Obama talked about prioritizing. It seems that his priorities is to create something that's palatable to the Democratic base that got him elected. But i didn't vote for that. I voted for someone who wasn't afraid to make the 'hard decisions'. Instead of spending money on Bush's war, you're now spending it on Obama's society. If he was bold, two-thirds of the bill would be in infrastructure spending.

I think he thinks we'll get to that point sometime. I'm pretty sure that he thinks the move to spend on priorities is a gradual process.

It isn't.

Go green, go now.