Can Income Tax Rate Hikes Close the Deficit? (interesting article)

[russ_watters]

Not the only, not even the majority, but the largest single tax source:

[PLAIN]http://www.taxpolicycenter.org/briefing-book/background/numbers/images/Numbers_Figure-1_What-are-fed-govts-sources-of-revenue_3.gif[/QUOTE]
Thanks for that - I had a misunderstanding of how the deficit was calculated: I thought it excluded entitlements because entitlements are held in a different pot due to the fact that they are essentially government mandated savings plans.

But for the purpose of my first post and my opinion on the situation, it doesn't really change anything. Entitlement spending is a separate problem and should be treated as such. It is taxed separately and the money goes back to the people who funded it (sorta). As such, it is different from the money spent on the day-to-day functioning of the government.

 

[russ_watters]

mhselp's correction to my previous post aside, I had a lot more to say about this that I didn't as I was posting from a blackberry, during a break from work. I saw a lot of people pointed out flaws, but I'd like to add my $.02:

I take issue with the idea that these people are freeloading.

Well, the term is qualatative and so is purely an opinion, so what is important is to make sure we're clear on the facts and whether the facts point to a situation that should be changed (and how).

While these people may not owe any federal income tax, income tax is not the only federal tax. For example:

(source)

The example of using the middle quintile is problematic because it represents the border (roughly) between the "freeloaders" and the rest, not the typical or average "freeloader".

In addition, as I said to mhselp, Social Security and Medicare spending is earmarked to be invested for and returned to those who paid into it (it's a crappy scheme and Madoff is now in jail for something similar, but nevertheless, that's the goal). So it is inapproprate to include those taxes in someone's "contribution". Those taxes don't go toward paying the day-to-day spending of the government: the military, national parks, FAA, border patrol, weather service, NASA, etc. People who don't pay income tax get those things for free.

I'm also not willing to quibble about the couple of percent those people pay in their share of several minor federal taxes. When comparing a couple of percent to the ~20% or so those in the upper levels pay, the difference is vast. More on this later...

This one is a huge factual error (the first phrase), already pointed out by others:

... it is also true that the ability of this group to pay taxes has decreased as well. Indeed, since the 1960s, income inequality has risen in the US.

No. The most objective measure of a group's ability to pay taxes is inflation adjusted income. Ie, an increase in inflation adjusted income means that a person has more money to spend on the things people spend money on: cars, houses, computers, etc. The fact of the matter is, household incomes for all segments of the population have increased since the 1960s. For example, from 1967 to 2008, the household income of the bottom quintile has increased by 30%. http://www.census.gov/hhes/www/income/data/historical/household/h03AR.xls

The logic behind income inequality being an irrelevancy caused by jealousy is easily demonstrated:
Suppose you get a 30% raise. You now have more money to spend on a better car, bigger house house, computer, etc. You have more ability to pay taxes while still improving your standard of living. But your neighbor is already wealthy and he gets an 86% raise (the upper quintile's increase since 1967). Now he can buy a much bigger house, much better car, etc. Getting upset at the inequality despite the fact that your situation has improved is the very definition of envy.

Finally, the high income inequality seems to be an underlying problem contributing to all these issues, and therefore, any policy that wants to be effective in the long term must address this issue.

What issues? You've merely stated that income inequality is an issue - you haven't connected it to other issues.

One thing that everyone knows but numbers are rarely attached to is the fact that in addition to paying more taxes, the poor also get more back from the government than the rich do. A person's net contribution must be the difference between what they pay and what they get back to be meaningful. And as it turns out, even if you include the entitlements linked to income (those that pay back more for the well-off), the discrepancy between the upper and lower brackets is huge. The ratios of total receipts from the government to total contributions by the government (all levels) by bracket are:

First Quintile: 8.21:1
Second Quintile: 2.51:1
Third Quintile: 1.30:1
Fourth Quintile: .77:1
Fifth Quintile: .41:1

Put another way, for every dollar a poor and wealthy person pay in taxes, the poor person gets back 20x more from the government than the wealthy person does. This data is from 1994, so no doubt the discrepancy is much larger today.

http://www.taxfoundation.org/files/wp1.pdf

 

[russ_watters]

No. Because at times like these, you need to get the economy moving - you need to stimulate it, and the only way to do this is to increase spending. Less spending means less jobs and basic economics will tell you this leads to deflation.

There are two problems with this view:

First is the implicit assumption that government spending is free. It isn't. Extra spending now that increases the GDP must be paid back later and will decrease the GDP. The net primary result is a wash. Secondary effects are tougher, but any permanent jobs saved would have to be weighed against interest on the debt.

Second is the implicit assumption that government spending is equivalent to private sector spending. But the reality is that government employees are paid more for less production than their civilian counterparts and government projects are typically more wasteful than private ones (because they aren't required to profit). Most people know these things, but many ignore them.

http://www.downsizinggovernment.org/overpaid-federal-workers

(maybe it would even be possible to get rid of the 10% tax rate too with this arrangement - it's crazy to tax people who are living below the poverty line).

As discussed earlier, there is a full 25% of the population above the poverty line who does not pay federal income tax.

 

[Gokul43201]

There's another aspect to the tax cuts vs. govt spending debate that hasn't been touched upon: whether or not certain forms of govt spending are needed/beneficial in the long term.

Resurfacing a road you drive on (for instance) can reduce your fuel consumption, extend vehicle life and reduce maintenance expenses, reduce commute times and related inefficiencies, reduce hospital visits from accidents, etc. Fixing levees near a hurricane plagued population center, to pick another example, could save tens or hundreds of billions of dollars in emergency relief expenditures. Fixing bridges, installing energy saving improvements, building nuclear power plants, improving public transit systems ... all have plenty of long term benefits that rarely get figured in the "how many jobs did you create this month" or "what was the seasonally adjusted GDP growth over this past quarter" calculations.

My complaint against govt spending is not based on a belief that it is, by definition, inherently harmful to the GDP, (and setting aside the issue of debt widening) but rather, that petty politicking often takes it along directions that are not very helpful.

 

[Ygggdrasil]

But for the purpose of my first post and my opinion on the situation, it doesn't really change anything. Entitlement spending is a separate problem and should be treated as such. It is taxed separately and the money goes back to the people who funded it (sorta). As such, it is different from the money spent on the day-to-day functioning of the government.

In addition, as I said to mhselp, Social Security and Medicare spending is earmarked to be invested for and returned to those who paid into it (it's a crappy scheme and Madoff is now in jail for something similar, but nevertheless, that's the goal). So it is inapproprate to include those taxes in someone's "contribution". Those taxes don't go toward paying the day-to-day spending of the government: the military, national parks, FAA, border patrol, weather service, NASA, etc. People who don't pay income tax get those things for free.

Because this discussion is about the federal budget deficit, you can't ignore social security and medicare spending as a separate issue. It is the issue. In 2007, entitlements (social security and medicare) accounted for 53% of spending in the federal budget (discretionary spending, including defense spending, accounted for 38% of spending and interest payments accounted for the remaining 9% of spending) (1). Because of the demographics of the US (the baby boomer generation is getting ready to retire), the situation will only get much worse. In 2020, entitlements are estimated to account for 57% of spending (1). Indeed, if you examine the trends over time for entitlements (mandatory spending) and discretionary spending, you'll see that discretionary spending has been decreasing while mandatory spending has been increasing (2).

I do concede the points that these people are getting the benefits of discretionary spending for free and that the poor receive more benefits relative to the taxes they pay than the wealthy. Of course, this is an issue of practicality. The poor cannot afford to pay for these services and we, as a society, have decided thorough our tax laws that instead of taxing them further into poverty, the rich will pay higher taxes to compensate. I will note that the the rich indirectly benefit from this scheme because combating poverty helps lower crime, improve their communities, and provides them with a (hopefully) educated workforce.

Furthermore, it is also somewhat problematic to discuss federal tax policy without considering state tax policy. Because sales taxes are a major source of state revenues (3), the federal taxes must necessarily be overly progressive in order to correct for the regressive nature of the sales tax. Indeed, when you take state and federal taxes into account, a family of four earning $50,000 pays exactly the same share of its income (30 percent) on taxes as one earning $150,000 (4, based on 2003 data). Thus, over a fairly broad range of incomes, overall tax rates are fairly flat. Only at the extremes does the progressive nature of the tax system manifest itself.

Anyway, my main point is that one explanation for the fact that the lower segment of the economy seem to contribute a lower share of tax revenue than before is the fact that the lower segments of the economy receive a lower share of the total income than before. While you seem to suggest that the tax burden (which I'll define as share of taxes paid/share of income earned) of the poor has decreased since the 1970's, I argue that this is not the case. As I mentioned in my previous post: in 1960 the top 0.1% of earners earned ~3% of the total income and accounted for ~8% of taxes paid. In 2004, the top 0.1% of earners more than doubled their share to the total income to ~7% but accounted for only ~11% of taxes paid (5).

As for my point on income inequality, I think it is problematic because the US economy is currently dependent on domestic consumption. An economic system where most of the profits go to a few at the top but depends heavily on spending by the many in the bottom and middle seems unsustainable. Is it fair that the few at the top get most of the profits? Yes. Market forces have largely dictates this shift as most of the economic growth in the past few decades has been in areas that require significant education and highly skilled workers. However, are we willing to make a trade-off between fairness and increased economic efficiency (which I believe would result from lesser economic inequality, although others may believe otherwise)? This is, of course, a value judgment, but I believe we would be wise to make that trade-off (how to achieve such a trade-off, however, is a complicated issue).

References:
1. Congressional Budget Office. 2010. http://cbo.gov/ftpdocs/108xx/doc10879/MandatorySpending5-12-10.pdf
2. Hale Stewart. 2010. "An In-Depth Look At the Federal Budget." http://www.fivethirtyeight.com/2010/02/in-depth-look-at-federal-budget.html
3. Roberton Williams. 2008. http://www.taxpolicycenter.org/briefing-book/state-local/revenues/state_revenue.cfm
4. Kevin A. Hassett. 2007. American Enterprise Institute. http://www.aei.org/issue/26125
5. Piketty and Saez. 2007 "How Progressive is the U.S. Federal Tax System? A Historical and Intenational Perspective." Journal of Economic Perspectives 21: 3-24. http://elsa.berkeley.edu/~saez/piketty-saezJEP07taxprog.pdf

 

[CRGreathouse]

While [russ_watters seems] to suggest that the tax burden (which I'll define as share of taxes paid/share of income earned) of the poor has decreased since the 1970's, I argue that this is not the case. As I mentioned in my previous post: in 1960 the top 0.1% of earners earned ~3% of the total income and accounted for ~8% of taxes paid. In 2004, the top 0.1% of earners more than doubled their share to the total income to ~7% but accounted for only ~11% of taxes paid (5).

I'm curious as to how well-off the poor are, tax-wise, in absolute rather than relative terms. (I might prefer a narrower definition of poor as well -- bottom 50%, say, rather than bottom 99.9%.) What do they pay for entitlement programs (FICA, etc.), what do they receive in entitlement (SS, EIC, etc.), and what do they pay in general (non-entitlement) taxes.

Consider comparing pre-Social Security to today. The poor pay much more, but that's all in entitlement (transfer payments) that should not have a net effect on their well-being -- ostensibly, it improves it. It's not clear to me how much we've moved in that direction compared to having the 'poor' shoulder a larger burden of nontransfer payments.

 

[russ_watters]

Furthermore, it is also somewhat problematic to discuss federal tax policy without considering state tax policy. Because sales taxes are a major source of state revenues (3), the federal taxes must necessarily be overly progressive in order to correct for the regressive nature of the sales tax. Indeed, when you take state and federal taxes into account, a family of four earning $50,000 pays exactly the same share of its income (30 percent) on taxes as one earning $150,000 (4, based on 2003 data). Thus, over a fairly broad range of incomes, overall tax rates are fairly flat. Only at the extremes does the progressive nature of the tax system manifest itself.

Again, it is misleading to include FICA in that. FICA is capped at $106,000, so if someone in an upper bracket wants to save a similar fraction of their earnings, they have to do it themselves. And that is indeed the biggest difference between the two pictures: those with a $50,000 income tend to save nothing while those with a $150,000 income tend to save about 8%.

Anyway, my main point is that one explanation for the fact that the lower segment of the economy seem to contribute a lower share of tax revenue than before is the fact that the lower segments of the economy receive a lower share of the total income than before. While you seem to suggest that the tax burden (which I'll define as share of taxes paid/share of income earned) of the poor has decreased since the 1970's, I argue that this is not the case. As I mentioned in my previous post: in 1960 the top 0.1% of earners earned ~3% of the total income and accounted for ~8% of taxes paid. In 2004, the top 0.1% of earners more than doubled their share to the total income to ~7% but accounted for only ~11% of taxes paid (5).

It isn't very useful to talk about such a tiny fraction of the population (the top .1%). What has the share for the 5 quintiles done? Your link is broken... And note, again, that SS taxes and benefits are capped, which skews the statistics or the upper groups in a misleading way when it is included in the states. And also, think about those numbers for a sec: someone in the top .1% pays 8% of the taxes. Put another way, those people are paying eighty times their share of the taxes. Imagine going to a movie theater and being charged $800 while the person next to you is charged $10 for the same ticket. That's the situation we have.

In any case, this represents a dangerous situaion (implied by someone above), where you have a small minority of the population paying most of the taxes and a large majority paying none and able to vote to continue that. It's an untenable situation.

 

[Gokul43201]

And also, think about those numbers for a sec: someone in the top .1% pays 8% of the taxes. Put another way, those people are paying eighty times their share of the taxes. Imagine going to a movie theater and being charged $800 while the person next to you is charged $10 for the same ticket.

Russ, that sounds completely wrong (unless I've misread some of your earlier posts) - perhaps one should spend a little more than a second thinking about the numbers! Or are you suggesting that a flat tax would also be unfair, and that everyone should pay the same dollar amount in taxes, irrespective of income? In any case, it's hardly obvious that we all buy the "same ticket" (all consume the same share of Federal resources, irrespective of our lifestyles).

 

[SonyAD]

As usual, everyone harpers on social programs but wilfully ignores the elephant in the sitting room.

"Defence" budget and spending, corporate welfare, handouts and bailouts, etc.

Poignant also how the right wing sees pension plans and similar schemes as generational theft, pyramid schemes, etc. Unless they're private sector.

 

[mheslep]

As usual, everyone harpers on social programs but wilfully ignores the elephant in the sitting room.

"Defence" budget and spending, corporate welfare, handouts and bailouts, etc.

Poignant also how the right wing sees pension plans and similar schemes as generational theft, pyramid schemes, etc. Unless they're private sector.

Please see the guidelines for P&WA:
https://www.physicsforums.com/showthread.php?t=113181

2) Citations of sources for any factual claims (primary sources should be used whenever possible).

 

[russ_watters]

Russ, that sounds completely wrong (unless I've misread some of your earlier posts) - perhaps one should spend a little more than a second thinking about the numbers! Or are you suggesting that a flat tax would also be unfair, and that everyone should pay the same dollar amount in taxes, irrespective of income? In any case, it's hardly obvious that we all buy the "same ticket" (all consume the same share of Federal resources, irrespective of our lifestyles).

No, I'm not suggesting a perfectly flat tax. What I have argued so far is just that the system we have now is too progressive. What I advocate is a system where those who are truly in need (mostly the truly poor and children) receive assistance and those who are not truly in need pay taxes. For those who pay taxes, the system should still be progressive, but not too much. What "too much" is is a lot tougher to define, but IMO, the bigger problem is the ~25% of people who are not under the poverty line who don't pay federal income taxes. I don't have the stats to back it up, but it is my beleif that the reason the $50-$150k groups are so flat is because the elimination of taxes for the <$50k crowd has required a heavier burden for the middle class.

Regarding the "ticket", let's examine a more real-world example: roads.

Major roads are funded primarily by user fees tied to usage (tolls, gasoline taxes, etc), so the more you drive, the more you pay. Rich people tend to drive more than poor people, so they pay more in tolls. What the exact ratio is, I'm not certain, but let's say for the sake of argument it is 2:1. So a rich person would pay twice as much, but get twice the benefit. Overall, the payment is exactly a 2:2 (reduces to 1:1) ratio of payment to usage.

But what about the federal stimulus-based fundinig? Those signs you see that tell you a specific project was funded by the ARRA. These are funded from the general federal tax fund, ie. by general federal tax revenue: the federal income tax (again, the Social Security portion is not a part of this). So in the example someone else provided earlier where a family with a $50k income pays nothing in federal income taxes, they ride that new bridge or enjoy the benefit of that repaved road for free. That would be a 0:.5 ratio of payment to usage (assuming they ride half as much as a very wealthy person). At the same time, a person who is part of the .1% group that pays 8% pays 80x a single share. Since they ride twice as much as aveage, that's an 80:2 or 40:1 ratio of payment to usage.

Now how can the government operate on such vastly different principles of operation at the same time? Consider that the next time the government wants to spend money on something that isn't really a government function (for example, building a stadium for a privately owned professional sports team), that's a redistribution of wealth from rich to poor on a vast scale.

 

[mheslep]

[...] In any case, it's hardly obvious that we all buy the "same ticket" (all consume the same share of Federal resources, irrespective of our lifestyles).

I like to point out when this point comes up from time to time, especially in this student laden forum, that higher education is far and away the most egregious example of regressive taking via (state) taxes from the less fortunate, those on their way to becoming mechanics and working construction, and giving to the middle and upper classes who score better and take advantage of the large share of the education funding. I doubt any other part of government funding and revenue collection even comes close to be so regressive.

 

[mheslep]

The pie has gotten larger, but most of the growth in wealth has gone to the more wealthy:
(source)
​

Careful there. That NYT source references income quintiles, a statistical construction, not people. People can, http://www.forbes.com/2007/06/22/billionaires-gates-winfrey-biz-cz_ts_0626rags2riches.html" , move in and out of statistical groups over time. In the US, the lowest quintile is constantly being infused with immigrants per my reading.​

 

[CAC1001]

Tax policy is a fascinating subject when you think about it.

 

[mheslep]

And stats show that genuine wealth has stagnated despite steady GDP rise.

http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm

The 'stats'? 'Genuine'?

 

[Ygggdrasil]

Again, it is misleading to include FICA in that. FICA is capped at $106,000, so if someone in an upper bracket wants to save a similar fraction of their earnings, they have to do it themselves. And that is indeed the biggest difference between the two pictures: those with a $50,000 income tend to save nothing while those with a $150,000 income tend to save about 8%.

You seem to portray payroll taxes as equivalent to contributions to a government run retirement fund. I don't see this as the case. Payments from individuals working today pay for the benefits of retirees today. People do this with the promise that future generations will pay for their retirement benefits. The upcoming budget crunch comes in a large part because FICA payments from workers today will not be sufficient to pay for the benefits of the retiring baby boomer generation. The bottom line is, FICA payments help to offset one of the biggest sources of government spending. Also, the fact that payroll taxes are capped makes them fairly regressive (see figure from my first post). Finally, in this discussion, I don't think you can equate putting one's own money into a personal savings account with paying taxes!

It isn't very useful to talk about such a tiny fraction of the population (the top .1%). What has the share for the 5 quintiles done? Your link is broken... And note, again, that SS taxes and benefits are capped, which skews the statistics or the upper groups in a misleading way when it is included in the states. And also, think about those numbers for a sec: someone in the top .1% pays 8% of the taxes. Put another way, those people are paying eighty times their share of the taxes. Imagine going to a movie theater and being charged $800 while the person next to you is charged $10 for the same ticket. That's the situation we have.

The top 0.1% of earners are paying 80 times their share of taxes if you believe everyone should pay an equal amount of money for taxes, a fairly extreme and impractical view for a society as diverse as the US. In the case of a flat tax (where everybody pays the same percentage of their income), the top 0.1% pay 1.6 times their share (they earn 11% of the income and account for 7% of tax revenue). Perhaps a better analogy is that you go to the grocery store and pay $100 for groceries for the week, while the billionaire behind you buys $160 worth of groceries.

No, I'm not suggesting a perfectly flat tax. What I have argued so far is just that the system we have now is too progressive. What I advocate is a system where those who are truly in need (mostly the truly poor and children) receive assistance and those who are not truly in need pay taxes. For those who pay taxes, the system should still be progressive, but not too much. What "too much" is is a lot tougher to define, but IMO, the bigger problem is the ~25% of people who are not under the poverty line who don't pay federal income taxes. I don't have the stats to back it up, but it is my beleif that the reason the $50-$150k groups are so flat is because the elimination of taxes for the <$50k crowd has required a heavier burden for the middle class.

Regarding the "ticket", let's examine a more real-world example: roads.

Major roads are funded primarily by user fees tied to usage (tolls, gasoline taxes, etc), so the more you drive, the more you pay. Rich people tend to drive more than poor people, so they pay more in tolls. What the exact ratio is, I'm not certain, but let's say for the sake of argument it is 2:1. So a rich person would pay twice as much, but get twice the benefit. Overall, the payment is exactly a 2:2 (reduces to 1:1) ratio of payment to usage.

But what about the federal stimulus-based fundinig? Those signs you see that tell you a specific project was funded by the ARRA. These are funded from the general federal tax fund, ie. by general federal tax revenue: the federal income tax (again, the Social Security portion is not a part of this). So in the example someone else provided earlier where a family with a $50k income pays nothing in federal income taxes, they ride that new bridge or enjoy the benefit of that repaved road for free. That would be a 0:.5 ratio of payment to usage (assuming they ride half as much as a very wealthy person). At the same time, a person who is part of the .1% group that pays 8% pays 80x a single share. Since they ride twice as much as aveage, that's an 80:2 or 40:1 ratio of payment to usage.

It is somewhat extreme and unpractical to expect the amount of taxes paid to match the amount of benefits received from the government. For example, consider the gas tax, which is supposed to pay for maintaining the transportation infrastructure. The gas tax is nowhere near as high as it needs to be to pay for everything it is supposed to support. This is one reason why stimulus funds have been targeted toward this area. Now why don't we increase the gas tax to the proper levels to support all of the road construction and maintenance that needs to be done? One reason is that a high gas tax would, in practice, prevent many people from driving. The same goes with public transportation. While public transportation is funded by user fees (fares), it also receives much funding from state and local governments in order to keep fares reasonable. Here society has decided it is much more practical to trading-off fairness for allowing most people to be able to drive, ride public transportation, and perform other tasks necessary for an economy and society to function efficiently and effectively. Therefore, the government has to perform some redistribution of wealth in order for society to function properly.

 

[russ_watters]

You seem to portray payroll taxes as equivalent to contributions to a government run retirement fund. I don't see this as the case. Payments from individuals working today pay for the benefits of retirees today. People do this with the promise that future generations will pay for their retirement benefits.

Again, that just makes it a crappy retirement fund, but it is still a retirement investment fund. It is a classic pyramid scheme type of investment:

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

http://en.wikipedia.org/wiki/Ponzi_scheme

The upcoming budget crunch comes in a large part because FICA payments from workers today will not be sufficient to pay for the benefits of the retiring baby boomer generation.

Yes: a Ponzi scheme can go on indefinitely as long as the number of new investors adding money is greater than the number taking money out. That worked well when SS was created because population growth ensured the pyramid shape of the SS system. Now that population growth is flattening, the pyramid is getting narrower and the fund will soon not be able to support itself.

The top 0.1% of earners are paying 80 times their share of taxes if you believe everyone should pay an equal amount of money for taxes, a fairly extreme and impractical view for a society as diverse as the US.

Don't get hung up on the word "share". I didn't know what else to call it - it is a ratio of payments to receipts.

 

[apeiron]

The 'stats'? 'Genuine'?

Yes? What??! Ehh!?

 

[mheslep]

Yes? What??! Ehh!?

I was drawing attention to your claim that these are 'the' stats, that these are the 'genuine' stats. Just posting a link to some numbers doesn't make them a) 'genuine', much less b) explain how or in what sense they are genuine.

 

[apeiron]

I was drawing attention to your claim that these are 'the' stats, that these are the 'genuine' stats. Just posting a link to some numbers doesn't make them a) 'genuine', much less b) explain how or in what sense they are genuine.

? Those were "genuine progress" stats. It is a technical term in ecological economics.

 

[OmCheeto]

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million.

Excellent! How long have the dead not been paying taxes? Freeloaders...

That's an incredibly long list of tax credits that site http://www.jct.gov/publications.htm...k=8f8641e5b19f1204c99596fa309002bb&no_html=1" No wonder we're broke.

It looks like the only thing you couldn't get a tax credit for over the last 10 years was for taking a dump.

Oh wait. This one might have qualified that, with the proper equipment of course:

8. Credit for electricity produced at open-loop biomass facilities placed in service before October 22, 2004
(sec. 45(b)(4)(B)(ii))

Oh, and this one is just going to piss off middle class america:

4. Three-year depreciation for race horses two years old or younger
(sec.168(e)(3)(a)(i)(I))

 

[mheslep]

? Those were "genuine progress" stats. It is a technical term in ecological economics.

In other words, there's no factual base for calling these the 'right' stats without qualification as in your post #29, or 'genuine' wealth, but in reality is just one groups opinion of what's important - the ecological sustainability viewpoint.

 

[apeiron]

In other words, there's no factual base for calling these the 'right' stats without qualification as in your post #29, or 'genuine' wealth, but in reality is just one groups opinion of what's important - the ecological sustainability viewpoint.

Err, some problem with an academic base to this kind of discussion?

It is pretty widely agreed these days that wealth is not really measured in terms of GDP (gross profit). You at least need a net profit figure that accounts for the three aspects of wealth - social capital, environmental capital and physical capital.

When I say widely, I don't include the US of course. I mean Canada, France, Norway, etc.

The Stiglitz report is worth a peruse. A report by two nobellists commissioned by a right of centre president.

http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf

 

[mheslep]

Err, some problem with an academic base to this kind of discussion?

No problem at all, but #29 was not that, despite the link. I read that Stiglitz et al paper (thanks), and much other material by him.

 

[apeiron]

No problem at all, but #29 was not that, despite the link. I read that Stiglitz et al paper (thanks), and much other material by him.

Sorry to be hard of understanding but how were the two sources cited not academic?

And now that you have read Stiglitz and Sen, what exactly do you dispute?

The OP was about a narrowly-based enthusiasm for defence spending as the best way to stimulate an economy - massive public subsidies for private enterprise. I in fact provided a reference that shows there is a weak truth in this for the US perhaps, if not many other countries.

But I then pointed out that there is widespread agreement these days that economic analyses have to look wider than simple GDP measures.

You have not responded with any argument against that point, just huffed about these thing being a matter of people's opinions.

I would rather you now give the evidence that defense spending as a public purse stimulus will build environmental and social capital as well as physical.

It has already been said it does build social capital in the sense of preserving good jobs. But a massive investment in alternative energy infrastructure, for example, would build both social and environmental capital.

Try to explain to me now why a dollar invested in humvees does more for the US (or any other nation) than a dollar spent on wind turbines - when valued in the way Stiglitz and Sen recommend.

 

[Evo]

From deleted website containing intentionally misleading and incorrect information

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million.

Excellent! How long have the dead not been paying taxes? Freeloaders...

Here is the actual information.

footnote 1 on page 127 of the President's budget. That note reads: "The estate tax is maintained at its 2009 parameters.

Under the Obama plan detailed during the campaign, the estate tax would be locked in permanently at the rate and exemption levels that took effect this year. That would exempt estates of $3.5 million -- $7 million for couples -- from any taxation. The value of estates above that would be taxed at 45%.

http://online.wsj.com/article/SB123172020818472279.html

So the first $3.5 million isn't taxed. AND inheritances passed on to a spouse are exempt AND there are always ways to get around it.

 

[OmCheeto]

From deleted website containing intentionally misleading and incorrect information

Here is the actual information.

http://online.wsj.com/article/SB123172020818472279.html

So the first $3.5 million isn't taxed. AND inheritances passed on to a spouse are exempt AND there are always ways to get around it.

Thank you.

That's an interesting little article.

The campaign seemed to have succeeded in 2001 when, with huge projected budget surpluses, Mr. Bush pushed and Congress approved an estate-tax repeal.

But to win the necessary votes for the larger, $1.35 trillion tax cut of which it was part, Republican leaders used legislative tactics that mandated the entire tax package expire in a decade. To lower the 10-year cost, the estate tax didn't begin dropping significantly until the end of the window and wouldn't disappear until 2010.

A $1.35 trillion tax cut over ten years?

Seems like almost a joke in hindsight, given we'll have increased the http://en.wikipedia.org/wiki/United_States_public_debt" ¹ by nearly $10 trillion in those ten years.

ref 1:
2001...$5,769,900,000,000
2011 (est.)...$15,673,900,000,000

 

[CAC1001]

Deleted

 

[CAC1001]

From deleted website containing intentionally misleading and incorrect information

Sorry, didn't realize that link was so misleading.

Here is the actual information.

So the first $3.5 million isn't taxed. AND inheritances passed on to a spouse are exempt AND there are always ways to get around it.

Thank you for the correction. Was the rest of the information in the link incorrect, or that particular part? (I know President Obama has said he will not expire the Bush tax cuts on those earning under $250K a year, so for example the 25% rate would not return to the 28% rate as an example? will the child tax credits go back to $500?).

 

[OmCheeto]

Sorry, didn't realize that link was so misleading.

Thank you for the correction. Was the rest of the information in the link incorrect, or that particular part? (I know President Obama has said he will not expire the Bush tax cuts on those earning under $250K a year, so for example the 25% rate would not return to the 28% rate as an example? will the child tax credits go back to $500?).

In addition to closing loopholes that allow wealthy investment managers to not pay income taxes on their earnings and ending subsidies for big oil, gas, and coal companies, the Budget eliminates the Bush tax cuts for those making more than $250,000 a year and devotes those resources instead to reducing the deficit. Our Nation could not afford these tax cuts when they passed, and it cannot afford them now.

Page 4
http://www.gpoaccess.gov/usbudget/fy11/index.html"
Fiscal Year 2011

I expect the tax form I fill out next year will be no different than this years.

 

[mheslep]

Sorry to be hard of understanding but how were the two sources cited not academic?...

I'm not talking about Stiglitz et al, but your #29 comments (and the agenda site). It's an unfortunate but not uncommon practice: link to some source that may indeed have a valid, supported, alternative point of view and then introduce it with unsupportable and sweeping commentary, as if it were the only One True point of view.

But I then pointed out that there is widespread agreement these days that economic analyses have to look wider than simple GDP measures.

Now here, except for 'widespread agreement' which may be true but is unsupported, I agree you have a reasonable thesis, unlike #26 (now). Moving on ...

 

[Evo]

Sorry to be hard of understanding but how were the two sources cited not academic?

That first link was not a valid source. If i had seen it when it was first posted, it would have been deleted. For that matter, a number of links in this thread are not valid sources, I have not spent enough time in here.

 

[OmCheeto]

That first link was not a valid source. If i had seen it when it was first posted, it would have been deleted. For that matter, a number of links in this thread are not valid sources, I have not spent enough time in here.

Should we PM you when we see such links? Or should we just push the "Report" button? I feel like such a tattle tale when I do that.

ps. And you may want to change the wording in the "Report" window:

Note: This is ONLY to be used to report spam, advertising messages, problematic (harassment, fighting, or rude) and unappropriated posts.

It says nothing about "trash talk" web sites.

 

[mheslep]

It says nothing about "trash talk" web sites.

"Trash talk" web sites are inappropriate, per the PF guidelines.

 

[Evo]

Should we PM you when we see such links? Or should we just push the "Report" button? I feel like such a tattle tale when I do that.

ps. And you may want to change the wording in the "Report" window:



It says nothing about "trash talk" web sites.

Hit the report button. The wording on the report button is very misleading.