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Don't ever complain about progressive taxes again

post #1 of 88
Thread Starter 



Adam Smith said that. Yup, that Adam Smith. The right wingers love to quote him when it comes to Invisible Hands, but what did he say about the practical ways of dealing with poverty? Oh, you know, tax the rich...and tax them more than others. What a novel idea.

He continues...

Quote:
The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life... But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.

And how does government pay for the pains to prevent such a terrible state for the laboring poor?

Quote:
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation.

So, if your response is anything along the lines of "progressive taxation is anti-capitalism" or "taxes are theft," well, shut the fuck up and stay after class. The professor who wrote the goddamn book on capitalism says otherwise.

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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post #2 of 88
It's always better to use a full quote don't you think?

Quote:
Of the Sources of the General or Public Revenue of the Society: In his discussion of taxes in Book Five, Smith wrote:

"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."[18]

Proponents of progressive taxation cite Smith[citation needed] to justify the modern implementation of this idea, the disproportionate taxation of income.

This passage in no fashion declares to charge a different rate on someone simply because of their income level. Rather it notes that different classes will spend their money in different fashions and if a tax on one type of activity disproportionately hits one group, that isn't UNREASONABLE.

If someone is wealthy and they end up paying gas tax, vehicle fee tax, stock dividend tax, property tax, etc. and they are engaged in all those areas while someone less wealthy is not. That isn't unreasonable. That in no form or fashion declares that because two people are engaged in the SAME activity and one makes X dollars and another makes Y dollars that you should treat them completely differently. Smith is talking about taxes beyond revenue.

So, nice try.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #3 of 88
You mean we're not allowed to quote a person out of context??? ... I thought that was the American way!!! It's all we ever hear from FoxNews, CNN, MSNBC, et al.
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post #4 of 88
Quote:
Originally Posted by KingOfSomewhereHot View Post

You mean we're not allowed to quote a person out of context??? ... I thought that was the American way!!! It's all we ever hear from FoxNews, CNN, MSNBC, et al.

One of the most widely used quotes taken out of context is the one beloved by all right wingers:

"Our country, right or wrong".

The full quote:

“I confidently trust that the American people will prove themselves … too wise not to detect the false pride or the dangerous ambitions or the selfish schemes which so often hide themselves under that deceptive cry of mock patriotism: ‘Our country, right or wrong!’ They will not fail to recognize that our dignity, our free institutions and the peace and welfare of this and coming generations of Americans will be secure only as we cling to the watchword of true patriotism: ‘Our country—when right to be kept right; when wrong to be put right.’”

Try informing the likes of mock "patriots" like Bill O'Reilly, Glenn Beck et al with the truth.. and they blow fuses.
"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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post #5 of 88
Quote:
Originally Posted by sammi jo View Post

One of the most widely used quotes taken out of context is the one beloved by all right wingers:

"Our country, right or wrong".

Now let's be fair...some on the left have adopted a similar attitude (if not the exact words) that if you don't like how things are going (taxes, regulation, food nanny-ism, government sticking its fingers into every corner of your life, etc.) then you can move somewhere else.

Quote:
Originally Posted by sammi jo View Post

“I confidently trust that the American people will prove themselves … too wise not to detect the false pride or the dangerous ambitions or the selfish schemes which so often hide themselves under that deceptive cry of mock patriotism: ‘Our country, right or wrong!’ They will not fail to recognize that our dignity, our free institutions and the peace and welfare of this and coming generations of Americans will be secure only as we cling to the watchword of true patriotism: ‘Our country—when right to be kept right; when wrong to be put right.’”

Now that's a statement I can get behind.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #6 of 88
Quote:
Originally Posted by MJ1970 View Post

Now let's be fair...some on the left have adopted a similar attitude (if not the exact words) that if you don't like how things are going (taxes, regulation, food nanny-ism, government sticking its fingers into every corner of your life, etc.) then you can move somewhere else.

True. However...most of my true liberal (and all my libertarian) friends detest the notion of increasing government interference, the onrushing Orwellian state, the paranoia, the fear-mongering, the obsession with "security", the erosion of hard won civil rights, the government's "featherbedding" of the worst serial financial criminals ('banksters") in world history, the take-down of the middle class, the mass hypnosis of Americans to the acceptance of perpetual war as "normalcy"... ad nauseam.

Civilized society is a healthy balance between liberty and laws. Right now, the balance of way off kelter, in the concerted drive to take government from workplace, and introduce it into the home.

The successful imposition of totalitarianism is via baby steps. Lots of them... interspersed with the occasional short sharp shock (and awe) if the process gets bogged down.
"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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post #7 of 88
Quote:
Originally Posted by sammi jo View Post

True. However...most of my true liberal (and all my libertarian) friends detest the notion of increasing government interference, the onrushing Orwellian state, the paranoia, the fear-mongering, the obsession with "security", the erosion of hard won civil rights, the government's "featherbedding" of the worst serial financial criminals ('banksters") in world history, the take-down of the middle class, the mass hypnosis of Americans to the acceptance of perpetual war as "normalcy"... ad nauseam.

Of course they do. And they should. Unfortunately "liberal" in the more modern vernacular (at least in the US) does not really mean liberal, and "progressives" are really about progress.


Quote:
Originally Posted by sammi jo View Post

Civilized society is a healthy balance between liberty and laws.

Agreed, though I'd probably say slightly differently. A civilized society has both liberty and virtue. It is a balance between freedom and morality. The laws are simply an outward, maybe written expression of this balance.


Quote:
Originally Posted by sammi jo View Post

Right now, the balance of way off kelter, in the concerted drive to take government from workplace, and introduce it into the home.

Yes it is. But the government doesn't need to be in the workplace either. Certainly not to the extent that it currently is. Its intrusion here has created a number of problems also. My vision is a society that is free of coercion, certainly the so-called legitimate coercion and force by the state, and based 100% on voluntary arrangements, exchanges, associations and actions.


Quote:
Originally Posted by sammi jo View Post

The successful imposition of totalitarianism is via baby steps. Lots of them... interspersed with the occasional short sharp shock (and awe) if the process gets bogged down.

I agree.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #8 of 88
Thread Starter 
Trumpet fails to understand the concept of proportions. A proportion, in the sense discussed by Adam Smith here, is a fraction. Percents are fractions with denominators of 100. Per cent...for every hundred. Claiming that Adam Smith says nothing of higher percents is incorrect. He clearly does. The rich should pay a greater proportion of their revenue than the poor.

The rest of the context of the quote does not alter the meaning here. Nice try yourself.

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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post #9 of 88
Quote:
Originally Posted by BR View Post

Trumpet fails to understand the concept of proportions. A proportion, in the sense discussed by Adam Smith here, is a fraction. Percents are fractions with denominators of 100. Per cent...for every hundred. Claiming that Adam Smith says nothing of higher percents is incorrect. He clearly does. The rich should pay a greater proportion of their revenue than the poor.

The rest of the context of the quote does not alter the meaning here. Nice try yourself.

OK. Let's assume you're right. So what?

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #10 of 88
Quote:
Originally Posted by BR View Post

Trumpet fails to understand the concept of proportions. A proportion, in the sense discussed by Adam Smith here, is a fraction. Percents are fractions with denominators of 100. Per cent...for every hundred. Claiming that Adam Smith says nothing of higher percents is incorrect. He clearly does. The rich should pay a greater proportion of their revenue than the poor.

The rest of the context of the quote does not alter the meaning here. Nice try yourself.

The IN CONTEXT quote explains itself quite well. You fail to understand the concept of revenue being more than just income. Enjoy spitting at your screen and attempting to further scream at people to agree with you.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #11 of 88
Quote:
Originally Posted by trumptman View Post

The IN CONTEXT quote explains itself quite well. You fail to understand the concept of revenue being more than just income. Enjoy spitting at your screen and attempting to further scream at people to agree with you.

Yet as it stands, the VERY rich pay a much lower proportion of their income in taxes -- inclusive of all taxes paid -- than even the middle class. So your point fails. It would therefore be impossible to argue, based on Adam Smith, that the rich pay their fair share, which is the point of this thread.
post #12 of 88
Quote:
Originally Posted by tonton View Post

Yet as it stands, the VERY rich pay a much lower proportion of their income in taxes -- inclusive of all taxes paid -- than even the middle class. So your point fails. It would therefore be impossible to argue, based on Adam Smith, that the rich pay their fair share, which is the point of this thread.

Wrong. The rich pay a much larger proportion of their income in taxes. Again this shows a profound lack of understanding on your part, literally a profound disconnect with the facts. The point is the rich control money in so many more ways than income and they have it work for them in so many more ways than income as well.

If I have enough money in the bank to receive dividends of a million dollars a year and I am paid a million dollars a year in salary, I will pay more taxes than you. My tax rate will be almost double yours. There is no way around that fact. We currently tax income at levels approaching 40% at the million dollar mark and dividends are taxed at 15%.

Yet one would and should ask the question, didn't the corporation have to pay a tax on the profits in order to declare and pay the dividend. Well yes of course they did but that would mean looking at the whole picture instead of just the narrow slice that can be used to manipulate and demonize someone.

So the point becomes, as I said before when you participate in more areas of the economy, you are taxed in those areas. That is the type of "progressiveness" Smith was talking about and not different rates. You participate in stocks, you pay a dividend tax and if that hits the rich more than the poor due to the fact that the poor aren't participating in stocks due to the fact that they are buying FOOD, then that was fine with him. It matches the statement if you read it honestly and want to understand rather than manipulate and demonize.

The reality though is most costs associated with taxes are passed on though to the end user and the easiest way to relieve the burden of the poor is to have the government get out of the way in terms of providing services and attempting to reallocate income.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #13 of 88
Quote:
Originally Posted by trumptman View Post

Wrong. The rich pay a much larger proportion of their income in taxes. Again this shows a profound lack of understanding on your part, literally a profound disconnect with the facts. The point is the rich control money in so many more ways than income and they have it work for them in so many more ways than income as well.

If I have enough money in the bank to receive dividends of a million dollars a year and I am paid a million dollars a year in salary, I will pay more taxes than you. My tax rate will be almost double yours. There is no way around that fact. We currently tax income at levels approaching 40% at the million dollar mark and dividends are taxed at 15%.

Yet one would and should ask the question, didn't the corporation have to pay a tax on the profits in order to declare and pay the dividend. Well yes of course they did but that would mean looking at the whole picture instead of just the narrow slice that can be used to manipulate and demonize someone.

So the point becomes, as I said before when you participate in more areas of the economy, you are taxed in those areas. That is the type of "progressiveness" Smith was talking about and not different rates. You participate in stocks, you pay a dividend tax and if that hits the rich more than the poor due to the fact that the poor aren't participating in stocks due to the fact that they are buying FOOD, then that was fine with him. It matches the statement if you read it honestly and want to understand rather than manipulate and demonize.

The reality though is most costs associated with taxes are passed on though to the end user and the easiest way to relieve the burden of the poor is to have the government get out of the way in terms of providing services and attempting to reallocate income.

Do I need to bring up Warren Buffett here? It would appear that you are the one who is misinformed.
post #14 of 88
Quote:
Originally Posted by tonton View Post

Do I need to bring up Warren Buffett here? It would appear that you are the one who is misinformed.

What should we bring up about Warren Buffet?

The fact that all of his wealth is in stock? The fact that he has voluntarily paid himself a paltry ($100K) salary to, at least in part, avoid paying much in the way of income taxes? The fact that now that he has his wealth (and, let's be blunt, is nearer to death than most of the rest of us) he has no problem with the government taxing away other people's wealth? The fact that as one of the wealthiest people in the world he's decided to give it all away, possibly putting a dent into that whole "greedy rich people" theory?

What should we bring up about Warren Buffet?

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #15 of 88
Let me get this straight: BR quotes one man out of context, and that's it? We're not allowed to debate progressive taxation anymore?
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post #16 of 88
Quote:
Originally Posted by SDW2001 View Post

Let me get this straight: BR quotes one man out of context, and that's it? We're not allowed to debate progressive taxation anymore?

Whether it was quote out of context or not, and whether the statement accurately reflects what Adam Smith said and meant or not...the real issue here is that, in this particular instance, Smith's statement is essentially normative. It is basically an opinion. And while we might wish to consider his opinion on this matter, it is certainly not the final word on all things.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #17 of 88
Quote:
Originally Posted by MJ1970 View Post

Whether it was quote out of context or not, and whether the statement accurately reflects what Adam Smith said and meant or not...the real issue here is that, in this particular instance, Smith's statement is essentially normative. It is basically an opinion. And while we might wish to consider his opinion on this matter, it is certainly not the final word on all things.

Well, that is correct until you look at the context of what BR was saying. If you take the gentleman at his word for the "invisible hand" statements and you don't take him at his word on this you are being inconsistent. However, in order for that to fly you have to agree with the interpretation and also agree that all his positions carry equal weight or correctness. Which I believe is the position you jumped to. He begged the question and you did not accept.
NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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post #18 of 88
Quote:
Originally Posted by NoahJ View Post

Well, that is correct until you look at the context of what BR was saying. If you take the gentleman at his word for the "invisible hand" statements and you don't take him at his word on this you are being inconsistent. However, in order for that to fly you have to agree with the interpretation and also agree that all his positions carry equal weight or correctness. Which I believe is the position you jumped to. He begged the question and you did not accept.

You've lost me here a bit.

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post #19 of 88
Warren Buffet, Bill Gates, Steven P. Jobs, Al Gore, George W. Bush, and the rest of them all pay less as a percentage of their income than their secretaries do. What's so hard to understand about that? If you claim this is not the case, than you are lying.
post #20 of 88
Quote:
Originally Posted by MJ1970 View Post

You've lost me here a bit.

Read the post in full context of the thread. It draws from the entire topic. The basic point being, you are arguing from a differing viewpoint than BR. it likely won't change your argument or how you argue it, but at least take the time to see the argument from where it is coming from before you respond to it. You may be right, you may have a great point, but if nobody wants to hear it and therefore ignores it, does it matter? Take it for what it is worth man. I try to Come along side of a person to help them see my view. It does not mean that I agree with them, but I like to think they are more willing to tolerate my position to at least read it and not be immediately adversarial. I have had some arguments with you and had my positon misunderstood i took the time to clear it up, others here will likely not. My opinion on this thread, similar to what you were saying, but not for the same reasons. Peace.
NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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NoahJ
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post #21 of 88
Quote:
Originally Posted by tonton View Post

Do I need to bring up Warren Buffett here? It would appear that you are the one who is misinformed.

Quote:
Originally Posted by tonton View Post

Warren Buffet, Bill Gates, Steven P. Jobs, Al Gore, George W. Bush, and the rest of them all pay less as a percentage of their income than their secretaries do. What's so hard to understand about that? If you claim this is not the case, than you are lying.


Perhaps you should watch him explain it, and then look at what he suggests.


The reason he pays less is because he does not take salary. He can take his wealth in whatever fashion he desires including an untaxed fashion which he obviously chooses. How ridiculous is it to say, he can choose to follow the system on path a or b, and choose b, but advocates a while choosing b. He could simply choose a himself rather than just advocate it for others. Ask yourself why he doesn't and when he doesn't why he believes others would simply fall in line.

Stop being retarded about this please. Acknowledge that while the pretty right hand is waving and doing fun and interesting things, there is in fact the left hand and it does in fact exist.

Buffet pays so little because he takes his income from stock options and dividends. Now also admit that if he so choose, he could pay all the people working for him in the exact same fashion.

You are aware of that fact, are you not, they could be paid the same way.

So ask yourself why he doesn't pay his secretary in a stock option or dividend. Until you are willing to see what both hands are doing, you're useless in addressing this for you fail to see the full picture. Also realize that in order for the secretary to even hit the effective rate of 30%, she would have to be making roughly 250k-300k dollars to be in the middle of the 28-35% bracket.

Realize she is at that bracket because of progressive taxation, not because she is poor.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #22 of 88
Quote:
Originally Posted by trumptman View Post


Perhaps you should watch him explain it, and then look at what he suggests.


The reason he pays less is because he does not take salary. He can take his wealth in whatever fashion he desires including an untaxed fashion which he obviously chooses. How ridiculous is it to say, he can choose to follow the system on path a or b, and choose b, but advocates a while choosing b. He could simply choose a himself rather than just advocate it for others. Ask yourself why he doesn't and when he doesn't why he believes others would simply fall in line.

Stop being retarded about this please. Acknowledge that while the pretty right hand is waving and doing fun and interesting things, there is in fact the left hand and it does in fact exist.

Buffet pays so little because he takes his income from stock options and dividends. Now also admit that if he so choose, he could pay all the people working for him in the exact same fashion.

You are aware of that fact, are you not, they could be paid the same way.

So ask yourself why he doesn't pay his secretary in a stock option or dividend. Until you are willing to see what both hands are doing, you're useless in addressing this for you fail to see the full picture. Also realize that in order for the secretary to even hit the effective rate of 30%, she would have to be making roughly 250k-300k dollars to be in the middle of the 28-35% bracket.

Realize she is at that bracket because of progressive taxation, not because she is poor.

First of all, you're gender stereotyping. Who said his secretary is a woman?

Secondly, how naive. I suppose you think people can pay for their food and their mortgages with stock options and dividends...

They can't. That's why they need a salary. Duh.

And yes, Buffett can take his income how he wants to take it. Until the secretary has this option -- until we all have this option, the system favors the rich. A system that favors the rich is an unfair system.

What Smith was pointing out is that if the rich, because of their wealth, end up paying more than others as a percentage, it's not unfair. But what we see happening is that the rich are paying LESS than others as a percentage of their total income. This fact is indefensible.
post #23 of 88
Quote:
Originally Posted by tonton View Post

Warren Buffet, Bill Gates, Steven P. Jobs, Al Gore, George W. Bush, and the rest of them all pay less as a percentage of their income than their secretaries do. What's so hard to understand about that? If you claim this is not the case, than you are lying.

If we had a flat tax rate and NO DEDUCTIONS, this would not be the case.
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post #24 of 88
Quote:
Originally Posted by NoahJ View Post

Read the post in full context of the thread. It draws from the entire topic. The basic point being, you are arguing from a differing viewpoint than BR. it likely won't change your argument or how you argue it, but at least take the time to see the argument from where it is coming from before you respond to it.

Actually, I think I know exactly where he's coming from.

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post #25 of 88
Quote:
Originally Posted by MJ1970 View Post

Whether it was quote out of context or not, and whether the statement accurately reflects what Adam Smith said and meant or not...the real issue here is that, in this particular instance, Smith's statement is essentially normative. It is basically an opinion. And while we might wish to consider his opinion on this matter, it is certainly not the final word on all things.

Put much better than I. This is worthy debate. What I find so objectionable about the tone of debate here lately though is that it's more about gotcha and urinating contests than discussion of real issues. Happy to say that you and I don't get into that despite any disagreements we might have!
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post #26 of 88
Quote:
Originally Posted by SDW2001 View Post

This is worthy debate. What I find so objectionable about the tone of debate here lately though is that it's more about gotcha and urinating contests than discussion of real issues. Happy to say that you and I don't get into that despite any disagreements we might have!

Agreed on all three counts.

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post #27 of 88
Quote:
Originally Posted by tonton View Post

First of all, you're gender stereotyping. Who said his secretary is a woman?

Secondly, how naive. I suppose you think people can pay for their food and their mortgages with stock options and dividends...

They can't. That's why they need a salary. Duh.

And yes, Buffett can take his income how he wants to take it. Until the secretary has this option -- until we all have this option, the system favors the rich. A system that favors the rich is an unfair system.

What Smith was pointing out is that if the rich, because of their wealth, end up paying more than others as a percentage, it's not unfair. But what we see happening is that the rich are paying LESS than others as a percentage of their total income. This fact is indefensible.

Dude...gender stereotyping? Come on. He uses "she" as the pronoun for secretary, and you jump all over him "gender stereotyping." This is exactly what's wrong with debate here as of late.

Now, as for the issue itself: I see two facets here. One is that progressive taxation clearly punishes financial success. It discourages that success by taking more money as one earns more. This is a serious problem for those in the lower-middle to upper-middle to even "normally rich" classes. It encourages evasion and discourages hard work. How many working couples out there find one spouse working just to pay the government? Too many, I think.

The other facet is the fact that a pure flat tax would take more of the lower classes' incomes and less from those who can afford to pay more.

I suppose a third facet would be the complexity of the tax code. This, too, encourages and enables cheating/evasion.

Beyond these, the other squabbles are really not important. Yes, the rich pay a great portion of the taxes in the country. This is without dispute. The poor and lower-middle classes pay far less of the total tax "bill." This is also without dispute. I propose we put those arguments away and focus on the facets above.

I think there are a couple of solutions here. If one is committed to keeping an income tax (I'm not), then we could devise a hybrid-progressive system (liberals LOVE hybrids, right ) Everyone would pay 5% off the top with no deductions. From there, progressive rates would come into play. The entire code would be burned and we'd replace with a simple, reasonable bracketed system that limits deductions to a minimum. After the poverty line plus, say, 20%, one would pay on an escalating scale in addition to the flat 5%.

Of course, I think the real answer to replace the income tax with a consumption tax. This tax cannot be avoided. Exceptions would apply for housing, food and clothing...the necessities of life. From time to time, the government could stimulate sectors of the economy by adjusting the rate. This makes cheating impossible. It doesn't punish success. God knows we're doing that now.
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post #28 of 88
Quote:
Originally Posted by tonton View Post

First of all, you're gender stereotyping. Who said his secretary is a woman?

The video I linked to showed HER and also spoke to HER. Obviously you didn't click on it or watch it.

Quote:
Secondly, how naive. I suppose you think people can pay for their food and their mortgages with stock options and dividends...

Are you high? Do you not think Buffet eats or uses cash? Stock options and dividends are converted to cash. That cash is just taxed at 15% instead of the higher rate of income from salary.

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They can't. That's why they need a salary. Duh.

Please, please go do some reading. I'm sure you've filled out a tax form. I'm sure you've gotten 1099's with different forms of income on them, at a minimum interest paid from a savings account. That income is added to your overall income but it is not taxed at the same rate. Buffet chooses to have his income paid to him in stock sales and dividends that are taxed at a lower rate than salary. He could choose this option for all his employees as well.

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And yes, Buffett can take his income how he wants to take it. Until the secretary has this option -- until we all have this option, the system favors the rich. A system that favors the rich is an unfair system.

His secretary has this option as well. One of the reason health plans are so expensive as an example is they can be purchased with pretax dollars and thus are a form of compensation that becomes tax free. So if you work wanted to pay you $50k which which you bought your own $10k health plan in after tax dollars or they bought it for you with pre-tax dollars, they would get to buy it for you as a "perk" tax free. This is one of the reasons we have employer provided health insurance instead of people walking around and purchasing it on their own. Pre versus after tax dollars and the value of the plan relative to each. His secretary could have that option, but Buffet does not offer it to HER (hint, go watch the video). Most people don't want to be paid in stock options because they would have to exercise that option immediately anyway, they don't want their check going up and down like the stock market, and lastly, they don't make enough to get above the effective 15% tax rate for income after using their deductions.

The average household income is $50k. You take away personal deductions, add in a couple kids with their tax credits, mortgage interest paid, etc and they pay 15% or less. This is why most people haven't gone the route of Buffet and asked to be compensated in forms other than straight salary. However the higher up you go, the more it happens to avoid taxes.
Quote:
What Smith was pointing out is that if the rich, because of their wealth, end up paying more than others as a percentage, it's not unfair. But what we see happening is that the rich are paying LESS than others as a percentage of their total income. This fact is indefensible.

What's indefensible is you completely ignoring facts and picking at made up offenses based on your own unwillingness to even look at information given. (Like the secretary in the video being female and presuming sexism instead.) It is also indefensible that Democrats and Obama wanted to further RAISE income taxes on folks like that secretary which as I mentioned to get to the 30% bracket of income would have to be earning about $250-300k because they are RICH per them.

Buffet advocated a progressive consumption tax. The common example mentioned here and other places is a flat sales tax with the first X of dollars rebated back to everyone to insure that you don't get taxed on life's necessities. This is pretty much exactly what Huckabee endorsed in 2008 if I recall correctly.

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post #29 of 88
Quote:
Originally Posted by MJ1970 View Post

Actually, I think I know exactly where he's coming from.

Do you, or are you simply responding to the charicature of him you have built in your head. Did you ask any clarifying questions or did you just assume what he meant and run with it?
NoahJ
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post #30 of 88
Quote:
Originally Posted by NoahJ View Post

Do you, or are you simply responding to the charicature of him you have built in your head. Did you ask any clarifying questions or did you just assume what he meant and run with it?

These are fair questions. I believe I'm dealing with the words written vs. assumed intentions. Besides BR has stopped responding to my reasonable questions. But, in the end, I think his intent and meaning is fairly clear from the opening post.

The basic claim hear is that some group of people ("the right wing") hold up Adam Smith (and, in particular, his "invisible hand" thoughts) as almost "holy writ" for support of capitalism...and then Adam Smith said this other thing also, and so since you revere Smith on stuff like the "invisible hand" you must also accept Smith's statements as presented in this thread.

Several things are happening here by BR:

1. The assumption that Adam Smith is held as an unimpeachable source on all things capitalism by some group. It might be so...but very likely a very small group. Smith made some very good and important observations but he was also wrong on some critical things. Assuming that some vaguely defined group ("the right wing") holds up Smith as some kind of demi-god and his writing as, essentially, holy writ is begging the question.

2. That what Smith says on one thing is the same and should have the same value as another thing. Smith made some descriptive observational statements (e.g., "invisible hand" stuff) but also some speculative statements about how he thought some things would unfold and then some normative value statements (such as the one referenced in this thread.) These statement do not necessarily deserve the same ranking. If you accept one you don't necessarily need to accept the other. Assuming so is begging the question.

Regardless of #1, #2 is what I was addressing. He's trying to create an equivalence between two different kinds of statements. And then imply a hypocrisy if you accept one but not the other. And then call the debate over.

In particular this statement:

Quote:
Originally Posted by BR

So, if your response is anything along the lines of "progressive taxation is anti-capitalism" or "taxes are theft," well, shut the fuck up and stay after class. The professor who wrote the goddamn book on capitalism says otherwise.

Clearly indicates BR's meaning in his post. He's basically claiming that because Adam Smith said it's ok (according to his interpretation) that a) it is not anti-capitalism, b) it is not theft, c) anyone who says differently should just shut up. These are fallacies of a different sort. Finally there's the question begging in the statement "the professor who wrote the goddamn book on capitalism."

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post #31 of 88
Quote:
Originally Posted by MJ1970 View Post

These are fair questions. I believe I'm dealing with the words written vs. assumed intentions. Besides BR has stopped responding to my reasonable questions. But, in the end, I think his intent and meaning is fairly clear from the opening post.

The basic claim hear is that some group of people ("the right wing") hold up Adam Smith (and, in particular, his "invisible hand" thoughts) as almost "holy writ" for support of capitalism...and then Adam Smith said this other thing also, and so since you revere Smith on stuff like the "invisible hand" you must also accept Smith's statements as presented in this thread.

Several things are happening here by BR:

1. The assumption that Adam Smith is held as an unimpeachable source on all things capitalism by some group. It might be so...but very likely a very small group. Smith made some very good and important observations but he was also wrong on some critical things. Assuming that some vaguely defined group ("the right wing") holds up Smith as some kind of demi-god and his writing as, essentially, holy writ is begging the question.

2. That what Smith says on one thing is the same and should have the same value as another thing. Smith made some descriptive observational statements (e.g., "invisible hand" stuff) but also some speculative statements about how he thought some things would unfold and then some normative value statements (such as the one referenced in this thread.) These statement do not necessarily deserve the same ranking. If you accept one you don't necessarily need to accept the other. Assuming so is begging the question.

Regardless of #1, #2 is what I was addressing. He's trying to create an equivalence between two different kinds of statements. And then imply a hypocrisy if you accept one but not the other. And then call the debate over.

In particular this statement:



Clearly indicates BR's meaning in his post. He's basically claiming that because Adam Smith said it's ok (according to his interpretation) that a) it is not anti-capitalism, b) it is not theft, c) anyone who says differently should just shut up. These are fallacies of a different sort. Finally there's the question begging in the statement "the professor who wrote the goddamn book on capitalism."

So you basically just said what I said, but with many more words.
NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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post #32 of 88
Quote:
Originally Posted by noahj View Post

so you basically just said what i said, but with many more words.

ok

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post #33 of 88
Quote:
Originally Posted by tonton View Post

First of all, you're gender stereotyping. Who said his secretary is a woman?

Quote:
Originally Posted by trumptman View Post

The video I linked to showed HER and also spoke to HER. Obviously you didn't click on it or watch it.

Oh, really? REALLY?

I'll tell you what... you show me where in the video he either refers to his secretary, receptionist, or anyone using a pronoun, or where it is identified which of the employees being profiled is his secretary or receptionist and not only will I leave these boards forever, but I'll send you a $25 iTunes gift certificate.

You're wrong about this. Just like you're wrong about the issue.

Trumpy, do you have any experience in investment? If you did (and yes I know you do) and if you weren't lying, you would admit that you can't simply convert small amounts of stock equity into cash to pay your basic living expenses without incurring brokerage charges and capital gains taxes. Plus there is the time and effort involved in carrying out the transaction. You're talking like I could take my $2500 monthly salary in stock options and dividends... lol... And then like I could take those dividends and pay my bills and my rent, by simply 'converting them to cash', just as though there are no differences between my financial options and those of Warren Buffett. Again, there is no other response except 'how naive' or 'how dishonest'!

And you do know how stock options work, right? You don't actually earn any money unless you hold them and your company's stock goes up. Have you ever had stock options, Nick? You can't just turn around and sell them.
post #34 of 88
Quote:
Originally Posted by tonton View Post

Oh, really? REALLY?

Yes, really really.

Quote:
I'll tell you what... you show me where in the video he either refers to his secretary, receptionist, or anyone using a pronoun, or where it is identified which of the employees being profiled is his secretary or receptionist and not only will I leave these boards forever, but I'll send you a $25 iTunes gift certificate.

They do not label anyone in the piece. They do show clearly show the receptionist and her desk is set up in the appropriate manner for the job. If sexist implications revealed through language discredit someone then discredit yourself and Buffet because you refer to him and he refers to speaking for "cleaning ladies." So don't be a hypocrite and slap yourself around for a while for giving value to such a sexist source per your own reasoning.

As for leaving and the cash, feel free to stay and feel free to keep your cash, as bad as your understanding of finance is, you'll need it.

Quote:
You're wrong about this. Just like you're wrong about the issue.

This is a funny statement.

Quote:
Trumpy, do you have any experience in investment? If you did (and yes I know you do) and if you weren't lying, you would admit that you can't simply convert small amounts of stock equity into cash to pay your basic living expenses without incurring brokerage charges and capital gains taxes.

Actually in the internet age, it is ridiculously easy to do this. I bought my last laptop with money I made day trading while camping during the summer. I'd wake up, go wander up to the free wifi by 6:30 am, make my trades, cash out by 8:30-9:00 and go have breakfast and enjoy the day. When I had $2,000 worth of gains, I went and bought my new laptop.

In this day and age, as long as you don't need advice, you can self-serve and do whatever you want with stocks for a ridiculously low amount of money. My brokerage account is through my bank and my first 100 trades each year are free. As for incurring capital gains, that is precisely the point of the entire discussion. If your employer decided to pay you with a stock grant rather than in salary, you'd be charged 15% capital gains tax rather than the 33% rate it is clear most of the people in Buffet's office are paying by making between $172k-374k. Holy crap, it is almost like you are beginning to grasp the whole point here. Buffet doesn't pay himself a huge salary. He grants himself stock instead and that is how as a billionaire, he manages such a low stock rate by paying capital gains instead of income tax.

Again he is completely free to do this for his employees. This is always a choice of the company. There aren't any massive fees associated with stock sales in this day and age. Perhaps there was a generation ago but not in this day and age.

Quote:
Plus there is the time and effort involved in carrying out the transaction. You're talking like I could take my $2500 monthly salary in stock options and dividends... lol... And then like I could take those dividends and pay my bills and my rent, by simply 'converting them to cash', just as though there are no differences between my financial options and those of Warren Buffett. Again, there is no other response except 'how naive' or 'how dishonest'!

You absolutely could do this. It is easy. Your tone and understanding on this are ridiculous and you sound like someone mocking another person for not understanding how they could do something as "complicated" as paying all their bills online. Your tone amounts to mockingly asking who would lick all the stamps. You sound like someone wondering where the cassette goes on their iPod.

You can take money from your brokerage account and transfer it to your checking account with the click of a mouse through a web browser. I'm not sure if anyone else wants to chime in on this but honestly, it is ridiculously easy. My brokerage account is listed right along side my various checking and savings accounts. You can not only do exactly what you mock, but have it done in an automated manner. You could say when X stock pays me Y dividend on the 5th of each month, I would like an automatic transfer of cash from my brokerage account to my checking account in the typical amount of that dividend to occur on the 8th of each month. You can also set up an automatic DRIP whereby the dividend automatically repurchases stock in the company paying the dividend thus growing your future dividend amount. It will do it to the cent. It will buy a fraction of a stock to match the dividend amount. These things aren't hard at all. You can automate deposits or withdraws to and from accounts with no problem.

Quote:
And you do know how stock options work, right? You don't actually earn any money unless you hold them and your company's stock goes up. Have you ever had stock options, Nick? You can't just turn around and sell them.

I would really suggest you again, do some reading here. The vesting period, option period etc are all determined by the employer. They could easily choose to let the option be exercised immediately at the at a less than market price equal to salary. The reality is that companies pay the taxes on stock options and employees pay the taxes on income. Buffet knows this and understands this is why he takes his own money in one fashion while paying his employees in another. I've asked you to look into this but you refuse. You'd clearly rather play games. So enjoy your games. You've had it explained to you in an elementary manner and any third party reading the thread will clearly see this so I'm done with it for now. Enjoy whatever last word you care to have on the matter.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #35 of 88
Seriously, what percentage of middle and working class folks do you think work for a company that is traded?
post #36 of 88
Quote:
Originally Posted by tonton View Post

Seriously, what percentage of middle and working class folks do you think work for a company that is traded?

You mean companies that are traded like GM, Ford, Daimler AG, Target, Apple, Winco Foods, Microsoft and such. Or are you talking about a different kind of traded?

I would guess about 30% in the US.
NoahJ
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NoahJ
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post #37 of 88
Quote:
Originally Posted by NoahJ View Post

You mean companies that are traded like GM, Ford, Daimler AG, Target, Apple, Winco Foods, Microsoft and such. Or are you talking about a different kind of traded?

I would guess about 30% in the US.

I Googled around. In the US about 16% of the US workforce works for the government. About another 16-20% work just for the Fortune 500. I don't know if there are good reliable stats on privately held vs. publicly traded employment. BLS might have something. There are about 15,000 publicly-traded companies in the US. Apparently there are a few thousand more that trade stock in a "gray market" way.

Some additional numbers:

Quote:
Some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. By contrast, 47.7 million Americans work for firms with 500 or more employees.

One could make an educated guess that those smaller companies (<100 employees) are probably not publicly traded in most cases...comprise about 38 million employees so maybe 25-30% of the workforce. Those >100 employees it's probably less certain.

Rough guess:
15% government
20% Fortune 500 (almost all publicly traded)
30% small business (likely not publicly traded)
35% Unclear. I'd guess at least half of these work for publicly traded companies.

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post #38 of 88
For those who think their taxes are too low:

Gifts to the United States Government

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post #39 of 88
Despite the fact that workers who don't work for traded companies (the huge majority of workers) can't get paid in options and dividends, as Trumptman suggests, isn't it funny how we got from the point that "it's unfair that the rich have the power to pay less taxes" to "the reason that the rich pay less taxes is because the rich don't choose to pay their workers in a way that would let their workers pay less taxes"?
post #40 of 88
Quote:
Originally Posted by tonton View Post

...workers who don't work for traded companies (the huge majority of workers)...

Do you have some numbers to share here?

I ask because from the quick search I did, of private sector workers (government workers don't really count here) it looks like it's about 50/50.

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