What does "99% of the world's wealth is owned by 1% of people" mean?

Not at 5%. Not even 10%. Where's the cutoff and how is that calculated? That would seem hard to nail down, but maybe you have some insight into that.

"Distribution of wealth" sounds like a code word. Ideally taxes would run the programs people want, nothing more, nothing less. I don't believe in mob rule but it's time for the public to grow up and participate, to stop the counterproductive bullshit and get back to work. I'm only half pragmatist. The other half is pure idealist. I don't think there is any better combination, but I admit I biased in that appraisal.

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So you will not hear me preaching doomsday theories and I don't fear social programs like welfare if that's your point about wealth redistribution. Because it's not. You can never get wealthy on welfare. You need opportunity, and that's what welfare redistributes. It can even survive a percentage of fraud and abuse, just like any shop that thrives despite the occasional shoplifter. You don't put picket lines out in front of Piggly Wiggly demanding they shut down because a few vagrants pilfered the shelves.

I'm not sure if this was your drift, so forgive me if I seem like I went into an unprovoked rant. I assure you, I am raging against a different machine.

Here's a statistic I'd like to see: on the horizontal axis, numbered from 1 to 700,000. On the vertical, the number of taxpayers whose tax returns reference that many pages of code. Here's what I think you'd see: A spike, at around maybe 50 or so, then a low amplitude noise waveform, with small random chops and spikes, diminishing exponentially on approach to the 700,000 mark. I have no clue as to what reality would present, it's just a hunch. But from your remarks you seem to have a different plot envisioned. I don't see it. What would that look like, as a density function? Now there's some hypermath I could sink my teeth into!

No I wasn't trying to bash deductions. They're the best invention since sliced bread. But they're not complicated. The forms are not complicated, especially the digital versions that just question you to death until it's over. I know that's not the issue anyway. Tax code complexity burdens businesses with tough decisions, like when to recognize profit. All kinds of hedging creeps into the guy's lemonade stand which was branded on selling sunshine, he gets depressed, and customers go across the street where it's sunnier. It's a serious deterrent. I wasn't even addressing that aspect. I was merely addressing the individual working stiff, since that seemed to be your thrust.

Little people aren't harmed by tax code complexity. if my WAGing was anywhere close to correct, I've already uncovered a glaring problem, that on average, the deductions people are getting, are trivial. I could be wrong, but it remains to be seen. Besides, common deductions aren't show-stoppers for individuals. It doesn't hound them the way it does with businesses.

I'm not sure if home ownership is that bad, it leaves a lot wealth behind (although unfortunately mostly "redistributed" among whites alone) in the form of inheritances. Besides: where would we be economically if some of the construction booms of the last 50 years hadn't been fueled by this. I blame the crash entirely on the junk paper traffickers, and the squirmy little gollums who crept into the woodwork of the industry and laced it with fraud. Anyway, I want what is mine--who doesn't--every man's home is his castle, &etc.

I think you missed the part where taxpayers are only manipulating their share of the budget. Congress still holds the pursestrings over corporate tax revenue so all of that fear is put to bed. By the way, I would be one of the first to assign my tax money to medical research and science and the arts in general. I know that's not your point, just keep in mind I'm talking about bringing taxpayers up by their emotional bootstraps into a participatory role, that is strictly voluntary. By "auto-correct" I also mean that voters are fickle, shit happens and the world changes tomorrow, so there's always another plan down the road, nothing lasts forever. Just death and taxes.

Any publicly funded fiasco or frivolous undertaking would auto-correct. It will go the route of Sarah Palin or Donald Trump. Democracy's not that bad. By bringing the moldy ideas out into the light of day there's a beneficial sterilizing effect. Besides, maybe some folks need to see a God study they can trust. If that cures their insanity, it's cheaper than mental health care, and it keeps us from derailing into religion every time we debate public policy. So I'm not even against that. Give 'em what they want, and they will grow from infants into juveniles who just discovered that they should watch what they ask for, because they just might get it. It's part of maturing to become responsible. I do not blame government, or even corporate behemoths, as much as I blame We the People, who predictably seem to get stupider and stupider, giving idiots the limelight and writing them all blank checks. I was really addressing public participation more than economics anyway, since it's better to be poor and able to cope, than to be a bunch of rich invalids drooling on our flags.

Again, not if the flat tax is at 5%. Not even 10%. There's a cutoff somewhere, but I'm way below it. The rest of the revenue is from corporate earnings.

I doubt it. Invariably any federal system involves some redistribution of wealth among states. The change I would like to see is a complete shutdown of all lobbies and everything that smacks of it. This would cure some of what you are worried about. States are indeed complicit, but as far as I know it's done on the cool mostly though lobbies. So I would nix that.

Social changes? Not sure what you mean. And I rely on other people's math less than I do on evidence. Although I think you're one of the ones who could out-calculate me in a heartbeat. I wouldn't assume that you couldn't! I am curious though about some of your statements which seem to draw back from the kinds of things a math guy would jump on first, like what data do I have, how reliable is it, and how the hell can I make sense of it. All kinds of modeling would seem to come down from this, feature extraction, looking for correlation and repeatability. Do you entertain those kinds of thoughts much? Wouldn't it be cool to have the model that ends all models? Here...I've already got a name for it: Monetization Optimization Non-negating Egalitarized Yield. It's sufficiently stupid to pass the branding strategy of a snake oil salesman!

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Really, I'm trying to keep up with you, this is way out of my league. I will give it a shot to see if I can come to grips with what you are saying.

 

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Yes I have more than insight into that. I have a math proof. The existence of a "cut off" and your idea that the flat tax would not concentrate wealth if the rate is only 5 or 10% is based only on your false opinion, which mathematics shows is false.

The math model, which proves this concentration assumes only that the taxes paid are fI where I is the income and f is the non-progressive tax rate. You obviously have not even read the model so I quote that part for you:
"With taxes on each assumed to be fI, where f << 1." Note the results remains true even if f is nearly unity. - I used the << only to avoid seeming to make an unrealistic assumption. Because of this and several other simplifying assumes (that also slow the rate of concentration) the model is quite easy to follow. Try to and you will see you easily can. It is really just an algebraic statement of the well know fact that it takes money to make money.

The model does not even need to reflect the fact that the rich pay lower rates. If it did, that would causes the wealth of the society to concentrate even faster than the model's assumption (for simplicity) that the rich don't get lower tax rate. BTW, Mit Romney released his tax rate to day (15%) on his more than multi-million dollar income and like Warren Buffett, admitted it was half the rate of what the mainly salaried upper middle class pays.

Perhaps to some, but as I used it, no. It only means how ownership of the societies wealth is divided up.

The right wing fundamental Christians would put 100% of their taxes on things much of the rest of the population opposes but they strongly support under your "ear mark what your taxes fund" system. Probably huge waste would also be the result. For example, too many would ear mark their taxes for cancer and heart disease research, but those funds could not be efficiently spent as too few qualified researchers, etc. Sort of like you cannot pay 9 women a million dollars each to make a baby in one month. Somethings cannot be speeded up much as money is NOT what is limiting the rate of progress.

I did not envision any such graph, but think your guess is about right for your graph, but sort of pointless as it is not the number of tax payers, but the taxes avoided that is important.

For example on your graph there would be less than a dozen tiny tick marks on the X-axis corresponding to the depletion allowance pages that a few oil companies enjoy, but that would represent more than a billion dollars other tax payers need to make up by paying higher taxes (or having the debt burden on their children increase).

Perhaps a graph showing how much money the rich and their corporation are avoiding - NOT paying - due to certain specific sections of the tax code is a good idea. - It might better focus attention on how badly Joe Taxpayer is being abused, but a few tiny tick marks on your graph would not. They would be lost in the noise as you said. Perhaps with the version I am suggesting, showing the money not collected due to specific pages, Joe Tax payer could demand of Congress that tax code section on pages 347,281 to 347, 289 which grant oil companies 7.4 billion dollars in tax relief need to be torn out and tossed in the trash can. etc (I'm just making up number to be more clear).

Yes they are. In just given example with made up numbers, the hurt is 7.4 billion dollars.

I never said it was good or bad. What I said was that I don't want the central planning government distorting the market place, making either home owning or renting falsely more economical with subsidies or tax relief for doing what the government wants / thinks is best. I think you too are for each making his own free decisions, without pressure of the government to chose A over alternative B, are you not OR do you like government to put some "central planning" pressure on your decisions?

Did I miss something? I thought you were advocating letting the people decide DIRECTLY what got tax support rather than elect representatives to make those decisions in Congress.

I referred to the social effects of a Flat Tax (if no other form with progress effect to compensate) causing wealth to be come very concentrated with destruction of both the middle class and the efficient mass production system they support with their consumption. - A return to more of a "monetary king and his court" society with production by craftsmen, as in the middle ages when wealth was very concentrated.

 

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This central planning - big brother telling you what to buy, etc. is getting worse:
"... six Members of Congress, led by Rep. Dennis Kucinich (D-Ohio), introduced the "Gas Price Spike Act." With concerns over the likelihood of higher gas prices this summer, the bill and its sponsors propose the creation of a "Reasonable Profits Board" that would control the profits of oil and gas companies.

Under the bill, this board - made up of unelected bureaucrats - could apply a "windfall profit tax" on the sale of oil and gas at rates of 50% to 100%. These taxes would take aim at corporate profits that the board feels are "unreasonable" or "unfair."

Congress would then appropriate the money raised to subsidize electric vehicles and mass transit. ..."
Billy T comment God save us from governments who think they are smarter / know more than the people do, what is best.

 

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Five examples of how the super rich pick the pockets of Joe American - the Middle Class which pays most of the cost of these special benefits given mainly to the very rich – The cost of this “welfare for the rich“ is a benefit of nearly $100,000 each for the top 1% built into the current tax code (which their lobbyist helped corporations write)

(1) “According to a study by The Wharton School at the University of Pennsylvania, mortgage interest deductions for households with incomes between $40,000 and $75,000 average just $523, while households with incomes above $250,000 enjoy an average write-off of $5,459, or more than 10 times as much. You must itemize on IRS Form 1040 Schedule A to claim the deduction. If you do, you can also deduct the interest paid on a second home. The rich do both, but most of the middle class does neither….”

Billy T comment: As significantly less than half of Joe Americans even file IRS form Schedule A so the home deduction gives Joe on average less than 4% of what it gives Daddy Big Bucks. I.e. the home mortgage deduction has same effect as expenditure, but few call it “welfare for the rich” That, however, is not the main reason why there is no home deduction in my tax plan. The home deduction is “central planning” with the objective of discouraging renting. Another example of Big Brother knows what is best – not the individual acting in an unbiased economic market place deciding what is best for him.

(2) “…The preferential tax treatment of capital gains is widely viewed as regressive because the rich, who derive a disproportionate share of their income from capital gains, pay less than half of the tax rate on that income compared to middle-class wage earners.

"Capital gains are highly concentrated," says Rebecca Wilkins, senior counsel for Citizens for Tax Justice. "Most of the capital gains are earned by folks in the top 10 percent, … In fact, Americans with an annual income of $1 million or more, or 0.3 percent of all taxpayers, enjoy 70 percent of the capital gains benefit … The favorable capital gains rate is expected to save the wealthy (and cost Uncle Sam) $38.5 billion for fiscal 2012, according to the Office of Management and Budget. … ”

Billy T comment: i.e. 0.3% getting 70% of this benefit pay 15% instead of 35% of their income to IRS. While the rich pay more, relative to their ability to pay it is less than half the burden placed on Joe American.

Lets put this on a per individual basis: 0.3% of 333,000,000 people is 1,000,000 very rich guys dividing up $38,500,000,000 x 0.7 or a individual benefit on average of $28,000 which basically comes from Joe´s pocket as there are so many Joes (the middle class) that most of what Uncle Sam spend, the Middle Class pays for.

(3) “…Step-up in cost basis on death allows the wealthy to pass along assets that have grown in value to their heirs without ever paying a dime of taxes on it. Step-up in basis is expected to save the wealthy (and cost Uncle Sam) $61.5 billion for fiscal 2012, according to the Office of Management and Budget.

"Not surprisingly, this tax expenditure overwhelmingly benefits those who inherit from large estates because it allows gains to escape capital gains taxes if held until death …"

Billy T comment: That benefit for the rich part of the tax code helps some in the upper middle class (the near rich). I.e. you don´t need to be very rich to benefit at Joe´s expnse. My net worth is less than 3 million dollars, but many of my stocks were bought more than a decade ago. For example SBS is the ADR of Sao Paulo´s water company. It still pays about a 5% dividend despite having appreciated 420% for me. I am in late seventies so to be economically efficient for my heirs, I can´t sell it. I must die holding my 3700 shares of SBS (by edit: currently at 64.90/sh but was still below $12/sh when I first told you to buy it and other Brazilain ADRs.). Thus not only will my heir enjoy huge saving (at typical Joe´s expense as Joe must make up cost of these tax breaks as they are government expenditures for the rich) but also the cost basis step up, reduces the liquidity of SBS etc. in the market place, making life easier for stock manipulator, insiders etc..

Since I and my heirs will effectively receive from Joe American several hundred thousand dollars due to the current tax code, you might wonder why I want it drastically changed. (My suggested code* fits on a 3 by 5 index card, not 70,000 volumes of lobbyist written special reductions. It has: No deductions; All income taxed on the same progressive schedule; Zero corporate taxes, but they must distribute all profits within10 years to human tax payers, most of whom will be paying the highest marginal rates. Thus corporation will be more competitive internationally, make more jobs for Joe and yet the IRS will collect more – probably enough to balance the budget.)

The reason why I want the current tax law in the trash can is my expectation of what is soon in store for the US, where all my heirs live. I.e. I would rather they inherit only half as much and have a non-collapsing economy with with sound dollar, not hungry, well armed mobs looking for food in suburban basements, etc. When the 1%´s abuse of the 99% becomes too extreme, civil society collapses into chaos as history shows because the elite think their hired police can control the food riots. Greece will probably have its “Bastille Day” food riots in less than 5 years and the US with in a decade with permanent military Martial Law replacing democracy in both countries.

(4) “…In 2011, Americans will save (and Uncle Sam will lose) $142 billion in taxes by sheltering their personal income in 401(k) plans, pension plans and individual retirement accounts, according to the U.S. budget. Since the wealthy have more to save, they tend to reap more of the tax benefits of saving for retirement.

According to the Tax Policy Center, the top 20 percent of income earners enjoy 80 percent of the tax write-offs for retirement saving while the bottom 60 percent take advantage of a whopping 7 percent of the tax savings. Which is understandable considering that the higher your income, the more likely you are to own a 401(k) plan with generous employer contributions. Nearly half of all Americans do not have access to a retirement plan at work, and those who do can't afford to take full advantage of the tax incentive. …”

Billy T comment: JHU/APL where I worked 30 years matched what you put into the Lab´s tax shelter plan, up to $3,000. One well paid man in my group commented at lunch that he wished he could take advantage of that $3000 annual gain, but as his new wife had four kids and he had five from first wife, he just could not afford to participate. I told him he could as you could borrow from the plan. I.e. during the year put $3000 in and get $6000 increase in plan assets but borrow back your $3000 as you need it. The interest the plan charged you for borrowing your own money was less than the capital gains they made on investing your money. I.e. at end of the first year, even after borrowing back $3000 during the year, he would have net gain of more than $3000.

Most Joes are not so fortunate, have no tax deferred plan, and if do have one it has less generous matching and like him before my suggestion, they can´t afford to significantly participate.

(5)… Charitable deductions, but I´m not quoting link´s text - just making a Billy T comment: Even more than the home mortgage deduction this is almost exclusively a benefit for the super rich. Further more it is easily abused. For example, your friendly art appraiser will (for an unreasonably large fee, or be honest and call it a bribe) certify the painting you bought a few years ago for $10,000 is now worth 1.5 million dollars as your generous gift to the local art museum. Etc. After a few years, the art museum may sell it for $50,000 and some other super rich man will then give to (appraside at 2.5 million) to some other art museum, etc. The super rich make a lot of money buying and giving away art.

Quotes from: http://finance.yahoo.com/news/5-tax-deductions-help-rich-080036333.html

* See details of my tax plan and three pages of discussion / clarifications of it at: http://www.sciforums.com/showpost.php?p=1792841&postcount=1

 

Here's an easier solution, get rid of corporate personhood.

 

Yes that is now needed as Surpreme Court about a year ago said that corportations, being legal persons, have the right of free speech. The new "Super Pacs" (Political action committees) now often get multi-million dollar plus donations from "legal individuals" exercising their "free speech."

They can not "coordinate" their TV adds with the candiate they support, but most have been staffed by the candiate´s former campaign people, so that is a legal fine distinction of zero importance. - Super pacs are the new way around the law´s limits on individual contribution to politicians. They are just vehicle for exercise of free speech by legal persons! (No limit on corporate campain contributions any more)

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However the corportration´s profits should be taxed.* My point is do so at the typically higher marginal rates for most stock owners, to help balance the budget, not at the low (often a zero rate like GE pays) achieved by corportation´s lawyers, using special sections of the 70,000 volumes of tax code their lobbysts wrote. US corportations paying zero taxes should be able to bring back to the US some of the jobs the "trickle down" tax relief moved off shore.

With super pacs, the cost of drugs etc. in the US will soon be three, not just two times higher than the same drug in Canada.

* For taxation it makes no difference whether or not the corporation is a "person" or not.