Republicans vote against their own self interests?

Really? I mean now, really? So in your mind you can -- with a completely straight face and no fingers crossed behind your back -- state that and not concede a bit in the slightest that entitlements contributed at all to our debt? I mean, being completely sincere and honest?

Does this not move you in any way:

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???

Now if we analyze this chart we see that safety net programs, Medicaid, Medicare, Social Security, and CHIP account for 55% of federal spending. Throw the 6% for interest payments and you have 61%. In the face of that, you're going to stick to your guns and assert that it was Reagan's tax cuts and W's "handouts" to his buddies and favored corporations and contractors?

Really?

Evidently your accounting was done by the same guy who did voter turnout tabulations for Saddam Hussein...you know that guy who announced that Saddam had 100% voter turnout.

Seriously, now, allow me to present an analogy. Let's say you have a new girlfriend (I'm assuming you're a guy...my apologies if not!) and you see her credit card statement on her kitchen counter. Let's say you get sneaky and curious, so you take a look and see that she has $20,000 in credit card debt. Which would you conclude:

A) She has $20K of debt because she doesn't earn enough
B) She has $20K of debt because she spends too much

Now, be honest and open here. Clearly the answer is B. Same holds true with our debt. Our nation is in debt because we spend way too much.

And now we're throwing health insurance subsidies on top of it all.

Well, what the heck? If you're going broke, you might as well go for the gusto! Bet the farm on black!

Yes, and realized that those people can vote. And then realized that they could pass laws that would force people in upper classes to pay for said votes! Must be nice to be able to buy votes with other people's money.

By all means, if you dropped out of high school, got knocked up at 16, flunked out of college, started snorting coke or Oxy, started an ill-conceived business, became a drunk, borrowed too much money to buy junk, or spent all your money on iPods and XBox games instead of insurance, don't worry! You won't be held accountable for your actions! We'll just stick the people who didn't do those things with the bill!

Just remember to vote in November!

Well, we would if we could. Of course if we did, there wouldn't be any of us left to fund your progressive policies. Then what?

 

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Absolutely.

Social Security has been running a surplus so large the Federal government has been borrowing from it to meet its other obligations, for example.

It moves me to point out that you are getting your pretty pictures from propaganda sites again, as with your "deficit" graph, and appear to be clueless about even simple economic matters in general.

But for Pete's sake, it was just a thread or two back that you discovered, apparently for the first time, that W's deficits were being partly concealed by not including the money borrowed from Social Security's surplus. Did you forget already?

Here's your first clue: look at a regular American wage earners paycheck, and notice that the line for the Federal Income tax withholding is a separate line from SS and Medicare. That's because they are separate programs, not included in the regular Federal budget.

Here's your second: rich people don't pay SS on most of their wage or salary income, and don't pay any of that stuff on their capital gains or investment income. So the rich aren't paying for those entitlements - what the rich pay for is the actual Federal budget, which is where the huge deficit is being run.

And that's mostly been war, service on war debts and other generalized military burdens, bank bailouts Reagan and Bush, service on bailout debts and other financial industry burdens, and so forth.

That's why the debt went way up under the tax cuts of Reagan and W, rather than under big entitlement programs of other Presidents.

Leave, you mean? What's stopping you? Get out from under that oppressive thumb of taxation, quit supporting all those freeloaders.

Except the loss of access to the world's most productive source of wealth, the US economy - which you should have to pay for, of course, at a price set by the US citizenry through its government.

 

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Smokinglizard, what do you say to people who maintain that all taxes are immoral?

 

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Smokinglizard appears to forget that there are two items in a budget. He has zeroed in on the cost side of the budget. But he appears to have forgotten the revenue side of the budget.

Revenue or tax as a percentage of income has been going down. Americans are now taxe at the lowest rates in 50 years. So is the problem one of spending or one of not taxing enough?

http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

The fact is there has been a huge wealth transfer from the middle class to the wealthy over the course of the last few decades. The difference in wealth distribution has not been as skewed towards the weatlhy since the Great Depression.

http://www.businessinsider.com/us-w...nt-been-this-bad-since-the-roaring-twenties-1

And objective analysis would indicate that the weatlhy are not being taxed enough...are not paying their fair share of the tax burden.

 

Agreed, but we're not just talking social security here. Let's not open a debate on the merits/demerits of social security because the thread will run off course.

Really? Damn, dude, thanks for letting me know. I didn't know the CBO was a propaganda website.

Ding! Ding! Ding! Give this gentleman a cigar for the most presumptuous statement of the week! I didn't "discover" anything -- that's your silly attempt at being patronizing. I don't even remember the thread. Perhaps you were debating someone else...or perhaps I just didn't read your post.

But now on to your point, the irony of the situation is, you're trying to be haughty by flinging churlish liberal talking points that are intentially misleading. Yes, President Bush borrowed against Social Security. Bad on him for that. However, he most certainly did not start that practice! It's been going on for over 20 years by both parties. Here's a really nicely written article that discusses the matter:

http://www.gazette.com/articles/security-95673-borrow-social.html

You know, I'm a big NFL fan. And one oddity I've found is that when you have a guy who's a jackass -- say he's a dirty player and a loudmouth -- if he's on the opposing team people always say things like, "Oh, I hate that guy! I hope someone knocks his block off." But if he's on their team, they look away or even praise him as a "bad ass."

Unfortunately we as Americans have evidently learned how to deal with relationships from the prism of team sports. People quickly point out the wrongdoings of the opposing side, but always fail to recognize that their side did it, too.

Partisanship -- especially as a team sport -- really, really sucks.

Again, you're blurring the issue by focusing on social security and not any of the other entitlement programs.

Made up urban legend. "Rich" people pay social security. Just ask my sister-in-law.

You do mean the bank bailouts that President Obama supported, right?

Touche'! Except for the fact that this is my country as much as it is yours.

There is the old story about the goose that laid the golden eggs. May I suggest you contemplate the moral of that story?

 

You know, I thought I responded to this post but now I don't see it. Maybe I goofed and didn't click SUBMIT.

Anyway, at first blush your Business Insider article looked interesting, but then I realized the source graphs were from leftist magazine "The Nation." That's not much for objective analysis, Joe.

 

I have given (in this thread and others) Mathematical proof that without some form of wealth redistribution the wealth of the society will steadily become more concentrated in the hands of the fewer and fewer people. Calling a math proof “algebraic puffery” or “foot stomping or fist clenching” is NOT the way to show that a mathematically demonstrated conclusion is false. It is more of an admission you cannot disprove the math’s conclusion.

I stand by my assertion or conclusion that this math fact (continuing concentration of wealth) will lead to social instability if not reversed.

You have distorted / misrepresented my assertion. I agree the rich can get richer, and have done so for several 100 years in the US, without the collapse of society. I spoke not of the rich getting richer as you misrepresent me as saying. I spoke of the fact that steady and un-reversed CONCENTRATION of wealth ALWAYS results in social instability and gave the French Revolution as one example.

Below is a graph showing how wealth is not only becoming concentrated in the US but is doing so at an accelerating rate. If this continues for several years more the “middle class” will essentially disappear.

Most of their wealth was in their home, but for many that “wealth” has turned negative. Recently more than half of the total wealth embodied in homes has become the property of the banks. I.e. the middle class in the USA is already being reduced, especially after the GWB tax reductions on the very wealthy, there has been inadequate redistribution of wealth to prevent the accelerating concentration of wealth you can see in this graph.

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From http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

If you do not think this graph, which is seven years old, does not imply eventual social instability, what do you expect to happen?

I note that China plus India will soon be buying more oil than the US does for their rapidly growing fleets of cars. The price of gasoline, in constant dollar terms will soon double. The price of food is at a 26 year high and rapidly increasing with the wheat shortage. Even Joe American’s clothes now cost more in constant dollars as cotton is setting all time highs in price. Thus, even if Joe were not getting a smaller and smaller share of the nation’s wealth, his living standard would and is declining. (Food stamps also now at all time high, etc.) Where do you think these trends end, in if not in social instability? (Same question as already asked.)

I answered the question I am asking you some years ago in posts. Namely IMHO we are only a few years away from riots for food, looting in the suburbs by armed mobs, etc. Remember also most Joes are already well armed.

 

We're not. We're debating the merits of your assertion that Social Security is an important contributor to the current big federal debt, bs which you attempted to support by posting another one of your bs picture graphs.

The problem is not the borrowing by W. The problem is the dishonest bookkeeping you presented, in which that borrowing was omitted from W's debt accumulation, and false conclusions drawn about the sources of the US federal debt.

The fact you are trying to conceal is this: The current federal debt is mostly from Reagan's and W's Republican tax cuts for the rich, combined with their huge boosts in military spending and the consequences of their administrative incompetence - bank bailouts, etc. Almost none of it is from non-military "entitlements" (which have been pretty much paid for up to now - by taxing the middle and lower economic classes).

I was responding to your graph, and you quoted my post in your subsequent replies.

So this makes the second time, at least, you have been presented with this. We do not expect to see any more false assertions about Social Security or Medicare or "entitlements" in the Federal budget which turn out to be Social Security and Medicare, from you in these threads. From now on you will demonstrate at least this minimal familiarity with the Federal budget, and its tax support: Agreed?

 

1. price of tea in china? what are you talking about?
2. The chart shows that NOBODY, including Bush II, Reagan, and others taxed appropriately. (well first of all, its not enough to just look at the president its congress too but whatever) Please notice how I am critical of BOTH sides. It won't stop you from calling me a beck worshipping nutjob though because that is what you call anyone who disagrees with you.

But I think it shows that the larger takeaway is that regardless of who is in office, what the tax rate is, what the overall economy is like, tax revenues have remained nearly flat as a % of gdp. This is a widely recognized phenomenon
http://en.wikipedia.org/wiki/Hauser's_Law

(The end of the page gets into the point about raising taxes actually decreasing revenue, which i think really only happens at extreme levels, but still that the marginal increases in revenue from increases in taxes does decline at a point. I'll discuss this later)

It seems to me as though taxing approapriately has just become too difficult given the increase in spending. I do not think that we could productively tax at a level to sustain our spending. Instead of making that tax revenue curve go up, we should me making the spending curve go down.

3. what would i cut? Defense is the best place to start because not only is the vast majority of defense spending unneccessary, its downright counter productive to out well-being. No nation building, no bases around the world, no pre-emptive wars, no getting involved in other country's affairs. The next thing to cut/modify has got to be social security. It worked when there were more young people for each old person, people didnt live as long, and before all the politicians stole all the money from SS and turned it from a fully funded system to a "pay as you go" system (both republicans and democrats, but you can even pretend it was just republicans i don't even care). It is unsustainable in its current state and is only getting more expensive by teh day. After that I think so much could be saved just streamlining things - there are so many overlapping departments and agencies and the whole bureaucracy is pretty inefficient. Obviously I have more in mind but I think that's a good start.

4. For the whole tax revenues decreasing when tax rate is increased, that is the general premise behind the laffer curve.
http://en.wikipedia.org/wiki/Laffer_curve
While I think the point at which revenues would actually decline is probably very high, I still think that there the marginal effectiveness of tax hikes drops as you continue to raise it. point being, raising taxes becomes an increasingly worse way to close the budget gap as you raise it more, and cutting spending is a more viable option - or maybe both together need to be used, we are in pretty deep after all. It's like trying to travel at the speed of light - the faster you go, the more energy you have to put in to increase your speed further.

5. As to whether high taxes move money and business elsewhere, you need only to look at the myriad of tax havens like the cayman islands. Maybe we could get some of that tax revenue back or less companies would go through the trouble of holding their assets there if the rate wasn't so high here. Obviously I can't prove this hypothetical, but the very existence of tax havens shows that high tax rates can force capital out of the country into more favorable tax environments.

6. Finally on the LLCs, I think you are right on that - my mistake tax laws are confusing.

I do think this is correct though - Owners of an LLC pay personal income tax on all profits of the company, even if they remain in the company's bank account, so if your small business pulls in $250,000 in profit, but you only pay yourself a $50,000 salary and keep the rest in the business as retained earnings, you still have to record the 250,000 on your tax return and so would be in the highest tax bracket, despite only taking home 50,000 for your salary

http://articles.bplans.com/growing-a-business/how-limited-liability-companies-llcs-are-taxed/138
From the article: The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS.
As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. Even if you leave profits in the company’s bank account at the end of the year — for instance, to cover future expenses or expand the business — you must pay taxes on that money

What it all boils down too is really not too controversial I don't think - that spending has increased dramatically (from both sides) while taxation has remained relatively flat, despite increases and decreases in the tax rate. I think the more effective way to close the budget gap is to decrease spending rather than raise taxes, though both will probably have to happen.

I hate to derail the conversation and go back in time a week but I'm too busy to keep up with this too much.

 

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But the gdp has not remained flat in its distribution of wealth - all of the increase since Reagan has gone to the rich.

So tax revenues have increased as a burden on the bottom 4/5, while being reduced as a burden on the upper 1/5.

This topheavy structuring has reduced the growth of the "real" taxable gdp (minus the empty stuff like the housing bubble), so the appearance of an increase in spending relative to gdp is partly created by an effective, or real world, drop in relative gdp (as well as by the launching of two wars, and bailing out the moneylenders).

 

Assuming your data is correct, it really doesn't matter because there is no natural or other law that saws Federal income has be be a fixed percentage of GDP. And doing a quick analysis it appears there are problems with Hausers Law as the numbers don't add up.

You are right, it only happens at extreme levels. And we are no where near those levels.

I agree that in order to get out of the hole we are in we are going to need spending cuts and revenue increases (higher taxes). The only reason taxing appropriately is a problem is because the limbaugh's, hannities, becks, et al have too much political power and playing the victim card (class warfare) - leading the lemmings off the cliff.

I think we have opportunities to save in the defense budget. I don't think we need or should be nation building around the globe. But we do need to take care of all of our citizens, that includes our elderly as well as the young and infirm.

I don't know how much you are going to get by streamlining departments. But I don't think it will be signficiant. The biggest federal expense if healthcare. Obama and the Democrats tried to restrain those costs with healthcare reform. But we need to go a lot further. We need to streamline the medical education process so we produce more physicians. And we need to break up the health insurance trusts. And we need to make the drug markets more competitive (e.g. opening up drug procurement from other countries) or a single payer system here in the states similar to what is done in other countries who pay less than half what we pay and get superior results.

See previous comment on Laffer.

I will give you an example. I have parternship investments in oil and gas producing properties here in the US. The are giving me a 10% tax free return on my investment - at this rate the will be tax free for 7 years. And eventually when I do start paying taxes on the income I will be paying the capital gains tax rate - currently 15%.

Now compare that to the average wage earner paying 25% marginal tax rate. And paying another 7.5 percent in pay roll taxes. And I don't have to go look for offshore accounts. It is all legal right here in the states.

Yes, spending has gone up and revenues have not. That is a problem. The government needs to increase taxes to pay its expenses and cut down on the debt.

The rich or wealthy are best able to do that. The poor smuck working from pay check to paycheck is tapped out. The wealthy do not have that excuse. Because they are far from being tapped out.

 

By all means!

- I will yield to your banter and rhetoric just because you say so!
- I will agree with your unsubstantiated claims because you insisted!
- I will concede that charts sourced by the nonpartisan Congressional Budget Office are misleading simply because you say they are "propaganda."
- I will give in to your silly attempts to be haughty and condescending, like the one above.
- I will throw in the towel when confronted with your unsophisticated debate tactics.

Just a bit of unsolicited advice -- any time a debater attempts to be haughty, indignant, or condescending, it's a clear sign he's losing the debate.

 

Libertarians argue that all taxation (not just progressive income taxes) is theft, and therefore immoral:

http://www.spinnaker.com/WCLF/wcl/wcl16-3.html

Are they correct? How does one decide? Aren't regressive taxes also "robbing peter to pay Paul"? What objective source of ethics can guide us? Looking to what is acceptable to the majority apparently cannot, because it's dismissed as an appeal to popularity fallacy.

 

All right, Billy. You are evidently trying to win the debate by attrition, so you're going to force me to look at your mathematical "proof" in depth. I was hoping you'd just let it go, as this is going to be a lengthy post, but since you insist, let's look at it.

First, for folks joining the thread late, let's rehash what you originally posted:

All right, there's a lot going on here, so let's take it point-by-point. First, let's look at your mathematical "model" by plugging some numbers into it.

OK, let's start with I. Let's say, just for the sake of keeping the math clear, that I = $50,000. So the poor family has a total income of $50K and the rich family as a total annual income of $5,000,000. That's five million dollars, folks. Already, we're seeing the blantant shortcoming of Billy's model, as he has arbitrarily picked out of the sky a factor of 100I to represent the income of the "rich." But as we know from President Obama's tax proposals, the current Administration defines "wealthy" as an income of $250,000 or more.

But let's go with it.

OK, for the sake of the discussion, let's accept that. Reasonable enough. So X is the amount of money the poor family needs to survive, and 5X is the amount the rich family needs to survive.

OK, I'll buy that for a dollar. So Billy's simply saying that 80% of the poor family's income goes toward paying for the essentials of life. So 80% of $50,000 is $40,000. So the poor family is left with $10,000 to do with as the will -- save, buy mutual funds, buy cigarettes, XBox games, or whatever.

So now we have defined X: X = $40,000. According to Billy's model, the rich need 5 times that amount, so that's $200,000.

Conclusion: The poor family has $10,000 left over and the rich family has $3.8 million left over.

And?!?

All you've "proven" is that wealthy people have more disposable income. Well, duh! I've already conceded that many, many times as it's simply a fact of life. Tall, fast wide receivers are going to catch more touchdowns than short, slow receivers.

Your algebra did nothing to advance your point -- and no offense -- but I'm not sure why you were so insistent and proud of it. It's not very sophisticated or illuminating. It's puffery.

You committed two classic logic fallacies -- Square logic and a very weak attempt at a Proof by Intimidation.

Square logic: http://en.wikipedia.org/wiki/Square_logic

Proof by Intimidation: http://en.wikipedia.org/wiki/Proof_by_verbosity

Further, one can infer that you make two flawed assumptions -- one, as MadAnthonyWayne pointed out, is the assumption that the poor family's income is necessarily a constant; it's not. Second, your whole "concentration of wealth" assertion assumes that wealth is a constant. That isn't true, either.

 

They have come equipped with links and evidence and common observations and simple argument. I'm not sure what you think is missing.

If you could be specific about one or two of my actual claims (probably best to quote) you think is without evidence, I will be happy to bury you in further links, etc - nothing I've said here is arcane, hidden, or difficult to see for oneself.

That's not anywhere near poor. That's solidly middle class.

The rich actually need less income to survive, not more - they can invest, buy better quality stuff that doesn't wear out or break, for example. They own fertile land, and tools. They can homeschool, and don't need to go to work or buy clothes, etc, for their jobs.

You forgot the compound interest part - the main, central point.

The basic wingnut approach: arrogantly and purposefully oblivious to even simple aspects of the real world.

That's why reality has such a dramatic liberal bias, these days - which wasn't always true, in the pre-Reagan eras.

I've been trying to coin an acronym or shorthand term for convenient reference to this deafness to irony so remarkably characteristic of the modern righty in the US - almost an identifying trait: anyone have anything better than IRDF?

 

Oh, the irony:

http://www.gallup.com/poll/121403/special-report-ideologically-moving.aspx

The irony!

Ice, you better be careful -- folks around here are going to suspect you're a plant, throwing me these softballs on purpose!

Ha ha, just kidding...I apologize if I've come across as a jackass in previous posts.

 

? Bizarre.

We need a term for this obliviousness, this utter inability to recognize irony and complete lack of awareness of the lack, so strikingly demarcated by ideology.

 

Not a good idea to replace general algebraic proof with one specific numerical case, but if you do so:
(1) be self-consistent
AND
(2) Don't refer to your numbers as if they were mine.

If you are going to take $250,000 as the income of the "rich" then my 100 to 1 income ratio implies that the poor's income is $25,000, not the $50,000 you inconsistently assume.

No. both these value are false, very wrong, due to your lack of consistency in your, not my numerical model.
The correct numbers in your numerical model for the after essentials funds remaining are: The poor have $5000 and rich have $250,000 - 5X = 250,000 -100,000 = $150,000 as X is 20,000 as I will now show):
Recall that X = 0.8 I in my model. Done correctly in your numerical model, the poor with 100 times less than the rich’s income of $250,000 have income I = $25,000 (not your erroneous $50,000) if you had done your own numerical example correctly (instead of inconsistently). Thus X = 0.08x25,000 = $20,000 Where you pulled the rich with $3,8 million left after essential expenditures from I have no idea; and it is impossible if they only had income of $250,000 to start with.

No that is not even close to what my math proves. (and it requires no proof that the rich have more disposable income than the poor –that is sort of the definition of rich and poor).You must be incrediable dense, dim-witted as I clear stated that I am proving that with more to invest after essential expenses, the rich can ADD to the wealth 480 times more than the poor do. I said nothing about their about their disposable income, but will now add that if they spend it all on fast cars and show girls instead of investing it then they may add less that the poor do to their wealth. I have focused on the fact that the rich can invest and grow their wealth much faster than the poor. This is why and how wealth tends to concentrate if there is no compensating redistribution of wealth. As I said earlier:

Redistribution of income is NOT some social program, but a mathematical necessity for a stable society.

The redistribution of income in the US has been, and currently is, inadequate. As a result the middle class is shrinking as a percent of the population in almost any way you want to define “middle class”

For example, for first time in US history the banks now own more than half of all the homes in the US (When your initially $150,000 home is security for a $75,000 mortgage the bank owned half the day you bought it. If now it is worth $100,000 and the mortgage has been paid down to $67,000 the bank owns 2/3 of your house.) This typically increasing percentage owner ship by the bank, combined with the negative equity home owners (“under water” mortgages) combined with the large number of 100% bank owned homes (the foreclosures) has resulted in the middle class no longer being the majority owner of their homes. Like wise the middle class can no longer adequately save for their old age, not send their kids to college as easily as their parents did them.

SUMMARY: the middle class is already contracting in the USA because the redistribution of income has been inadequate for more than a decade. I am sorry if you can not understand simple algebra or understand my proven point.