Replace Trickle Down with Middle Class up

[IGBT]

http://www.washingtontimes.com/news...pending-jumps-32-percent-four-years/?page=all


Welfare spending jumps 32% during Obama’s presidency

That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

 

[alcoholbob]

1930s? That's great depression era, try again.

America became the premier economic and industrial power in the globe during the post-war era. WW2 decimated all the other industry across the globe. We became a juggernaut by being the last one standing.

Such golden eras are temporary and fleeting. They are not permanent and such economic conditions should not be idealized as it is not possible to maintain them. You are chasing a dream.

A 90% American tax rate won't bring back the global economy of the 1950s.

Actually the US became the premier economic and industrial power in the globe in 1870 and has remained the most powerful economy in the world in both nominal and real terms until around 2011-2012, which was a 140+ year period. It didn't magically become powerful in the 1950s. By 1921 the British signed the Washington Naval Treaty, implicitly accepting that the U.S. with half-assed effort had easily surpassed the premier navy in the world tasked with defending a global empire.

It became the global political and military power during the post-WW2 era.

 

[Spungo]

Make it 90% on anything earned over 5 million or so and watch how much money goes back into the economy via investment. Thats the point of taxing that much. It certainly isnt so you can fund the gov off of it. Its to keep a small group of people from hoarding all of the money like they do in 3rd world countries.

It would do the exact opposite of what you think it would do. Let's follow the logic here. If I try to expand my business, I could lose 100% of my money if I'm wrong, but I get only a 10% profit if I'm right. I think I would just sit on the money rather than invest it.

Companies in the US have been doing something similar to this for the past few years. It's not due to taxes, but due to overall pessimism about the economy. The US is still in the middle of the second longest depression in our history. US companies don't see any light at the end of the tunnel. Rather than taking on debt to expand the business, they take on debt to return cash to shareholders in the form of stock repurchases. This is exactly what would happen if you raised taxes to 90%. They would borrow as much as possible then financially stripe mine the company.
IBM. In 2014, $4.2b went to capital investment, and $17b went to dividends and stock repurchases. This is what it looks like when executives say "There's no reason to invest. Let's get as much money to shareholders as possible then jump ship."

Remember that a lot of that money is not taxed by the US because the shares are owned by people not located in the US, so strip mining the company like that represents a net flow of wealth out of the US.

 

[nickqt]

http://www.washingtontimes.com/news...pending-jumps-32-percent-four-years/?page=all


Welfare spending jumps 32% during Obama’s presidency

That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

Yes, after the economic meltdown that occurred before Obama became President, more people needed assistance.

Again, your understanding of economics is exemplified pretty well by the fact that you think gas prices of $1.84 under Bush when the economy was taking a shit was a "good" thing.

How much is it where you live, right now? It's a whopping $2.19 here.

More evidence that Obama is destroying the economy!

 

[Sonikku]

Umm the one family that had less than $110 in their checking as their only savings yet spent $70/month on the YMCA and then another $16/month on a charity was interesting, heck I have a bit more than that in checking and would have a hard time spending $70/month on essentially a gym membership...and for the argument its for the kid well we had our daughter take classes there and they are considerably less, granted this is picking nits.

That's retarded. The YMCA is more than just some gym in it for the money. If they had given proof of income they could have got a scholarship that practically GIVES membership away.

 

[MongGrel]

The problem is the middle class load themselves up with debt trying to one up each other in the totempole. Instead of investing.

And the problem with that is when the middle class had been making enough to invest, recent events in the past raped them of a lot of that from banking BS, with bailouts from the government in general.

And the disparity continues to widen.

 

[Genx87]

And the problem with that is when the middle class had been making enough to invest, recent events in the past raped them of a lot of that from banking BS, with bailouts from the government in general.

And the disparity continues to widen.

Raped them if they made the mistake of pulling out of the market while it was tanked.

 

[IGBT]

http://wizbangblog.com/2015/02/04/gallup-polling-org-rips-obamas-fake-recovery-as-jobless/

Jim Clifton, the CEO of the Gallup polling group, recently published a huge slam on Obama’s fake economic recover that he sharply titled, “The Big Lie: 5.6% Unemployment.” In the piece he exposes something that we conservatives have been talking about for years, namely that Obama’s unemployment figures are nothing but lies and that the low, low labor participation rate proves that we have had no increase in jobs.

His piece starts somewhat absurdly saying that even “the smartest and most educated among us” don’t know that Obama’s unemployment rate reports are “extremely misleading.”

We can quibble with that because conservatives have been pointing this out since two years after Obama came to office. But, still, it’s good that the rest of the “educated” are catching up and finally starting to understand the lies that Obama is selling as an economic recovery.

 

[werepossum]

That's retarded. The YMCA is more than just some gym in it for the money. If they had given proof of income they could have got a scholarship that practically GIVES membership away.

That is odd, considering that poor people are known for their good judgement.

 

[werepossum]

It would do the exact opposite of what you think it would do. Let's follow the logic here. If I try to expand my business, I could lose 100% of my money if I'm wrong, but I get only a 10% profit if I'm right. I think I would just sit on the money rather than invest it.

Companies in the US have been doing something similar to this for the past few years. It's not due to taxes, but due to overall pessimism about the economy. The US is still in the middle of the second longest depression in our history. US companies don't see any light at the end of the tunnel. Rather than taking on debt to expand the business, they take on debt to return cash to shareholders in the form of stock repurchases. This is exactly what would happen if you raised taxes to 90%. They would borrow as much as possible then financially stripe mine the company.
IBM. In 2014, $4.2b went to capital investment, and $17b went to dividends and stock repurchases. This is what it looks like when executives say "There's no reason to invest. Let's get as much money to shareholders as possible then jump ship."

Remember that a lot of that money is not taxed by the US because the shares are owned by people not located in the US, so strip mining the company like that represents a net flow of wealth out of the US.

Well said, although "think" is an awfully strong word not really supported by his post. A 90% tax rate would cause capital to fly out of the American economy and the resulting crash would make 2007 look like springtime in paradise.

I had an interesting experience with extremely high tax rates. Company I worked for bought the American distribution and manufacturing rights to a Swedish company (Bro Wrecker), supposedly the greatest innovation in our field. They began selling and shipping us "spare parts" which clearly had absolutely no relationship to the product we were to be selling and supporting; they were simply clearing out their obsolete crap and selling it to us at premium prices. Less than a year later the company went bankrupt. We lost metric shit-tons of money and had no product and no supply chain, plus a stockroom full of long-obsolete parts. Fast forward a couple years and I met a man from Sweden. We start talking business and I mention that we bought a Swedish company and lost our asses, and he begins to laugh, telling me that we don't understand the Swedish small business environment. Corporate income taxes are extremely high and very few will ever get legitimately wealthy from having a better idea, so they . . . cheat. They pay themselves truly huge salaries, salaries the company cannot possibly sustain but which leave them lots of money after the confiscatory tax rate. Within a decade the company files for bankruptcy, the owner gets fired by the government and goes off to buy (and gut) another company, the government pays everyone off and makes the business solvent, declares any foreign deals null and void (concentrating on paying off Swedish creditors), and the government auctions the now-solvent company. Rinse and repeat.

From my one experience, I'd rate "Never buy distribution rights from a socialist nation corporation" only slightly behind "Never get involved in a land war in Asia."

 

[JSt0rm]

My 90% was in response to someone saying 100%. Find a good rate that makes sense and keep the money moving around.

 

[MongGrel]

Raped them if they made the mistake of pulling out of the market while it was tanked.

Not really.

I left all mine alone. Bankers/Investment Firms still pulled off rewards from government bailouts in the banking world a lot more than anyone waiting on recovery in personal investments.

It was like being handed a Nobel Prize for screwing people over on their end.

 

[Indus]

 

[dmcowen674]

the US econ is 70% spending and the top 1% don't spend enuf relative to their income.

99.9% in here disagree with you.

 

[Genx87]

Not really.

I left all mine alone. Bankers/Investment Firms still pulled off rewards from government bailouts in the banking world a lot more than anyone waiting on recovery in personal investments.

It was like being handed a Nobel Prize for screwing people over on their end.

What do you mean not really? Week of Oct 8th 2007 the Dow Jones closed at 14,093. Last Friday it closed at 16,314. If people left their investments alone they would be up. That isn't getting raped.

The bailouts are another story. I go back and forth on whether it should have happened at all. But the economic ramifications of not doing so would had hit the middle class even worse. What pisses me off in all of it. I cant figure out how people werent prosecuted for fraud. They were selling toxic debt by labeling it good.

The wealth inequity gap is more a result of liquidity imo. The rich had ample opportunity to buy in when the markets tanked. When the markets recovered they reaped the most rewards. Attempting to take away the ability for the wealthy to do this wont help the middle class imo.

 

[Genx87]

This is really lame.

 

[Rakehellion]

All the middle class needs to do is stop spending.

No more perpetual auto leases or 100 dollar monthly iPhone bills,etc..

The problem is the middle class load themselves up with debt trying to one up each other in the totempole. Instead of investing.

If you don't earn money, you can't invest money. Being poor is expensive.

 

[Spungo]

My 90% was in response to someone saying 100%. Find a good rate that makes sense and keep the money moving around.

Corporate tax rate should be zero. We want people to invest in this country. We can have laws for things like minimum wage and maternity leave, but it should still be very profitable to be in the US. There should be a reason to move offices and factories here and create jobs with good wages.

Right now, we're attacking this thing from the wrong end. Republicans are saying the middle class will do better with personal income tax cuts. What good are tax cuts if your job is delivering pizzas? I think I would rather pay 40% tax as an auto worker than pay 20% tax as a pizza delivery person. The democrats think the solution is higher taxes on corporations, which is just as silly. If companies are fleeing the country when tax rates are 40%, wouldn't they run faster if taxes were 45% or 50%?
Corporate tax rate in Mexico is about 30%. If we had our rate at 0%, companies would be moving from Mexico to the US even though the wages are higher here. There was a time when the US had the highest wages in the world, and we still dominated global manufacturing because it was still the best place to be located. People would brag about having imported stuff because imports were more expensive. That has slowly flipped around over the years. Now things made in the US are outrageously expensive because you need to get a permit from the city just to remove a tree from your own yard.

How to sell yogurt (hint: Don't bother trying to start a business. It's easier to just get a job at McDonalds or something.)

 

[1prophet]

Who is calling for a 100% tax on millionaires?

Make it 90% on anything earned over 5 million or so and watch how much money goes back into the economy via investment. Thats the point of taxing that much. It certainly isnt so you can fund the gov off of it. Its to keep a small group of people from hoarding all of the money like they do in 3rd world countries.

that 90% tax rate was a farce in the 60's and a farce now because of the almighty loophole.

A predecessor "minimum tax" was enacted by the Tax Reform Act of 1969[16] and went into effect in 1970. Treasury Secretary Joseph Barr prompted the enactment action with an announcement that 155 high-income households had not paid a dime of federal income taxes.[17] The households had taken advantage of so many tax benefits and deductions that they had reduced their tax liabilities to zero.[18] Congress responded by creating an add-on tax on high-income households, equal to 10% of the sum of tax preferences in excess of $30,000 plus the taxpayer's regular tax liability.[19]


The explanation of the 1969 Act prepared by Congress's Staff of the Joint Committee on Internal Revenue Taxation described the reason for the AMT as follows:

"The prior treatment imposed no limit on the amount of income which an individual or corporation could exclude from tax as the result of various tax preferences.



As a result, there were large variations in the tax burdens placed on individuals or corporations with similar economic incomes, depending upon the size of their preference income.



In general, those individual or corporate taxpayers who received the bulk of their income from personal services or manufacturing were taxed at relatively higher tax rates than others.


On the other hand, individuals or corporations which received the bulk of their income from such sources as capital gains or were in a position to benefit from net lease arrangements, from accelerated depreciation on real estate, from percentage depletion, or from other tax-preferred activities tended to pay relatively low rates of tax.


In fact, many individuals with high incomes who could benefit from these provisions paid lower effective rates of tax than many individuals with modest incomes.


In extreme cases, individuals enjoyed large economic incomes without paying any tax at all. This was true for example in the case of 154 returns in 1966 with adjusted gross incomes of $200,000 a year (apart from those with income exclusions which do not show on the returns filed).


Similarly, a number of large corporations paid either no tax at all or taxes which represented very low effective rates."[20]​

 

[BoberFett]

The middle class stops spending and the economy crashes and they're just as fucked, only with less stuff.

And so you think perpetuating the consumption economy is sustainable?

 

[Spungo]

And so you think perpetuating the consumption economy is sustainable?

The fed seems to think it is. The stated goal of QE was to raise asset prices. That means more expensive stocks (lower dividends for pensioners), more expensive bonds (smaller coupons for pensioners), more expensive houses (and thus lowest home ownership in 40+ years). The idea is that people will leverage their assets, spend the money on consumables, and then sell the house to pay the money back. It's intended to lower the rate of home ownership.

I still maintain that Bernanke and Yellen are actually Chinese spies. It would explain almost everything, including the plot to change America from an ownership society to a renter society. Who are the owners? Chinese investors!

Home ownership is lowest since 1967

 

[realibrad]

Actually the US became the premier economic and industrial power in the globe in 1870 and has remained the most powerful economy in the world in both nominal and real terms until around 2011-2012, which was a 140+ year period. It didn't magically become powerful in the 1950s. By 1921 the British signed the Washington Naval Treaty, implicitly accepting that the U.S. with half-assed effort had easily surpassed the premier navy in the world tasked with defending a global empire.

It became the global political and military power during the post-WW2 era.

The US became the leader in terms of GDP some time after 1870. We dont know what year, but it was around that time that the GDP of the US is assumed to pass the UK. It was likely a few years after that, but we cant be sure.

The US Navy was not more powerful in 1921. I dont know where you got that from, but its not true. The US at that time planed a 6-6 production if new ships, where as the UK was 4-4 and Japan had 8-8, so it planed to build more.

The treaty was supposed to limit a Navy arms race. The UK was still trying to rebuild after WWI and the US with its larger economy could easily outpace the UK building efforts. Japan's navy was much smaller but it too could afford to ramp up production. This treaty was an attempt to not lose the military power they long controlled.

 

[Mai72]

1930s? That's great depression era, try again.

America became the premier economic and industrial power in the globe during the post-war era. WW2 decimated all the other industry across the globe. We became a juggernaut by being the last one standing.

Such golden eras are temporary and fleeting. They are not permanent and such economic conditions should not be idealized as it is not possible to maintain them. You are chasing a dream.

A 90% American tax rate won't bring back the global economy of the 1950s.

Exactly. So many older Americans are stuck in the past. How things used to be. We need a new way of thinking. Not a 1950's mentality.

The sad fact is many Americans just don't make enough money. You don't make enough money, you don't have enough money to invest. Period! IMO, people are still stuck on going to college, and buying a home and having 2 cars. Then they spend money on new things like big screen TVs, cable, backyard pool, etc. The result is they have little money after it's over. Then they keep spending, and spending, and spending on sh*t that they don't need.

I know this is controversial but I believe that buying a home is a HUGE drain on resources. Who says you need a home with $2000 (and more) a month mortgage? Why not invest in apartments first, so you can increase your passive income? Why not invest in other things first so the money starts trickling in? Then, when you're making a lot of money from those investments, you can then buy a home. Not the other way around.

 

[realibrad]

Exactly. So many older Americans are stuck in the past. How things used to be. We need a new way of thinking. Not a 1950's mentality.

The sad fact is many Americans just don't make enough money. You don't make enough money, you don't have enough money to invest. Period! IMO, people are still stuck on going to college, and buying a home and having 2 cars. Then they spend money on new things like big screen TVs, cable, backyard pool, etc. The result is they have little money after it's over. Then they keep spending, and spending, and spending on sh*t that they don't need.

I know this is controversial but I believe that buying a home is a HUGE drain on resources. Who says you need a home with $2000 (and more) a month mortgage? Why not invest in apartments first, so you can increase your passive income? Why not invest in other things first so the money starts trickling in? Then, when you're making a lot of money from those investments, you can then buy a home. Not the other way around.

Americans make lots of money. They make more than enough to invest. The problem is lifestyle.

Look at the average home size today, vs 50 years ago for the same amount of rooms. The biggest problem is that we live above our means for very little gain.

If you look at the lifestyle we had in 1960 and compare it to today, you will see the problem. We as a society just expect more.

 

[Mai72]

Americans make lots of money. They make more than enough to invest. The problem is lifestyle.

Look at the average home size today, vs 50 years ago for the same amount of rooms. The biggest problem is that we live above our means for very little gain.

If you look at the lifestyle we had in 1960 and compare it to today, you will see the problem. We as a society just expect more.

What's a lot of money? $60k a year? I live in NJ and that's not much money for a family of 4. The average salary in America is $50,500 That's net, not gross. IMO, that's not enough. Even when both parents are working.

There is a book I'm currently reading called "The 10X Rule" by Grant Cardone. He says that most Americans seriously underestimate their financial situation. So, if you're making $60k you need to think much larger, because that's what you're going to need to be financially secure. So, 10X the $60k into $600,000K. Think larger. Many middle class Americans don't so they are forever trapped fighting for scraps.