# US Income Tax

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Where's the other 600 billion?

mheslep
Gold Member
Where's the other 600 billion?
What's your point? Those cuts are well over $1T, and with the economy improving a bit the US federal government will see a few more percent in revenue in 2011. Cut the deficit that much and the US can carry it for a few years, while the US continues to exit Iraq and Afghanistan starts to unwind. What's your point? Those cuts are well over$1T, and with the economy improving a bit the US federal government will see a few more percent in revenue in 2011. Cut the deficit that much and the US can carry it for a few years, while the US continues to exit Iraq and Afghanistan starts to unwind.
Oh look, moving goalposts. How quaint.

mheslep
Gold Member
Oh look, moving goalposts. How quaint.
Don't be silly. I didn't move my goal posts. Besides, if you have no point that you can state, what do you care?

Don't be silly. I didn't move my goal posts. Besides, if you have no point that you can state, what do you care?
First, you said spending cuts alone can solve the problem.

Now, it's spending cuts PLUS a growing economy can solve the problem. Moving goalpost.

mheslep
Gold Member
First, you said spending cuts alone can solve the problem.

Now, it's spending cuts PLUS a growing economy can solve the problem. Moving goalpost.
Spending cuts alone can "solve the problem", which to my mind is getting the US government on a sustainable financial path with no federal tax rate increases. Then you asked for a zero deficit ("Wheres the other ...."), I assume meaning in this coming year. Ok, the spending cuts I listed plus a growing economy (and assuming no more than current growth) would likely zero the deficit.

Yes they can.
All I'm saying is we need incentives for reinvestment into our manufacturing segment. If we're going to increase exports, we need to build - something.

Gold Member
Are you making an argument, or are you just disagreeing because you're sure there's another reason, you just don't know what it is?

In reality, the poor are on average richer too. The gap has just widened between the richest and the poorest. But like I said, poor fiscal practices will tend to perpetuate poor economic position. You don't see payday and car title loans making a killing on the rich, do you?
Maybe I missed your point here, which was "it isn't the job of taxes to narrow the income disparity in the country", yes? My point is totally off topic and shouldn't be pursued in this thread, basic common sense tells me that cannot be the only cause for the poor getting poorer, other possible causes being poor education, ghettoisation of poor communities, crime, poor welfare, and so on. I don't understand what you mean in the last sentence.

Maybe I missed your point here, which was "it isn't the job of taxes to narrow the income disparity in the country", yes? My point is totally off topic and shouldn't be pursued in this thread, basic common sense tells me that cannot be the only cause for the poor getting poorer, other possible causes being poor education, ghettoisation of poor communities, crime, poor welfare, and so on. I don't understand what you mean in the last sentence.
The payday loan stores and pawn shops typically target people living paycheck to paycheck.

When people get upset about well-to-do people not paying their "fair share" -- aside from missing the obvious fact that they carry the vast majority of the tax burden, they miss the whole point of the role of high income in a Capitalistic Free Enterprize System.

People have an emotional reaction to the big houses, fancy cars, and other material perks of the wealthy. That stuff is peanuts. If you took all of that stuff away and redistributed the proceeds from the sales, it would be just a drop in the bucket toward satisfying the goals of progressive tax proponents.

The real money is that which they invest. The major point missed is that the wealth of the well-to-do is a key cog in the engine of our econmony--including job creation. The vast majority of the assets of the well-to-do are actually already "donated" -- given to others. Even when they get interest back on their wealth allocations, they just give it away again (keeping just a small percentage for personal perks).

They aren't putting their money in a mattress. They are literally giving it to others who start up new companies, expand existing companies, build hospitals, fund municiple projects, build libraries, provide capital for construction companies so they have the front-end capital to take on construction of buildings, bridges, highways, etc.

And their money is also provided to funds from which lower income people borrow to buy cars and houses. And it's done much more efficiently than the government mode of redistribution of income.

That's what Capitalism and Free Enterprize is all about. Now, the proponents of high corporate taxes as well as excessive personal income taxes for the wealthy would unwittingly induce the unintended consequences of choking of this whole process (some progressives, socialsts and Marxists would choke intentionally). This is the process by which this country developed its technology and high standard of life over generations. Socialist countries actually benefitted from the creativity that evolved naturally in the Free Enterprize environment of the U.S. The U.S. Capitalists put up the seed Capital. Sure, Canada may have low cost medicine, reaping the fruits of R&D investment capital in the U.S.

If the government would get out of the way and quit the ever increasing confiscation of wealth, we could continue on an established path of success and excellence. The government's redistribution of wealth is no where near as successful in resolving the problems of the poor as the the wealthy are by investing the vast majority of their wealth in projects leading to job creation.

And the thousands of investors of discretionary money make far better decisions about where money should be directed as compared to government beauracracy. People like Bill Gates manage their money much better--to take away another couple of billion of his wealth is to simply penalize all of those who would have benefitted. And if you don't like Bill's allocation of his wealth, at least there are many many more institutions taking varieties of approaches. Free Enterprize takes the best of the myriad of approches and sustains the ones that work.

God bless the rich, the entrepreneurs, and the innovators. May liberals, progressives, socialists, and Marxists be unsuccessful in their attempts to hijack the process.

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turbo
Gold Member
The payday loan stores and pawn shops typically target people living paycheck to paycheck.
Have you ever been to cities that are dominated by military facilities? If so, you will know that that these business are established to suck money out of out of our military personnel. You will also see (in the deep south, especially, IME) a preponderance of "title-pawn" companies that are set up to steal the assets of people who might have to ditch things of value to provide for their families before they are deployed overseas. There is a whole industry built around exploiting the members of our armed services. Do you not know this?

Al68
You will also see (in the deep south, especially, IME) a preponderance of "title-pawn" companies that are set up to steal the assets of people who might have to ditch things of value to provide for their families before they are deployed overseas. There is a whole industry built around exploiting the members of our armed services. Do you not know this?
Can you substantiate your assertion that a preponderance of "title-pawn" companies are set up to steal assets of people? Should be easy, since you're so shocked that someone could "not know" that.

Have you ever been to cities that are dominated by military facilities? If so, you will know that that these business are established to suck money out of out of our military personnel. You will also see (in the deep south, especially, IME) a preponderance of "title-pawn" companies that are set up to steal the assets of people who might have to ditch things of value to provide for their families before they are deployed overseas. There is a whole industry built around exploiting the members of our armed services. Do you not know this?
Are they not also living paycheck to paycheck - as I indicated?

The (nationwide) business model is not designed specifically to prey on military personnel - they are thriving in non-military areas. However, I am aware of the activities you've described.

I am aware of the activities you've described.
The paycheck loans and pawn shops are 2 completely different business models. While both are banking alteratives, they are regulated differently.

The paycheck shops typically advance funds (either at a discount or for a fee) against a verifiable income stream or a single check. These shops routinely offer bill pay services, discount money orders, and possibly pre-paid cards.

The pawn shops are typically regulated on a municipal level and monitored closely by law enforcement. The pawn shop normally offers 2 options 1.) loan against an asset, or 2.) purchase the asset. When a loan is desired, they asset must be valued (gold is weighed, diamonds verified, computers, electronics, tools, bicycles, sporting equipment (items with out titles) are compared to free market trading prices. This process can be time conssuming and has potential risk. Pawn shops want repe3 business on the exact same items and try to loan smaller amounts (weekly or monthly) on the items. Fees include the state mandated interest rate plus transaction fees - a $10 loan on a$150 watch might cost $13.50 to reclaim. If the item goes unclaimed (varies by area) 6 months - the shop is permitted to follow an approved protocol to sell the items - typically via auction. When a pawn shop purchases an asset in the initial transaction (rules vary by location) they typically offer more than they would for a loan - perhaps 3 to 4 times as much. However, it is common practice for local rules to stipulate the items be held for a specific time (and items reviewed by law enforcement) before being resold. Assets with a title (cars, motorcycles, boats, and airplanes) may require additional licenses. turbo Gold Member Can you substantiate your assertion that a preponderance of "title-pawn" companies are set up to steal assets of people? Should be easy, since you're so shocked that someone could "not know" that. I have not seen a single title-pawn establishment that is not near a military base, and didn't know that such establishments even existed until I saw an array of signs near a military base and asked my project manager (ex-Navy) about them. That doesn't mean that they don't exist in areas away from military bases, and they probably do, but they are very heavily concentrated around large bases. They are perfectly situated to confiscate assets on the titles that they hold when military personnel are transferred or deployed on short notice, and don't have the time or resources to repay the pawn and recover their titles. Judging from the concentration of title-pawn shops near some large bases, it must be a very profitable business-model. They are VERY prevalent in Georgia, which allows them to charge up to 300% APR. http://www.georgiawatch.org/2009/05/20/title-pawn-loans/#more-207 [Broken] Last edited by a moderator: mheslep Gold Member The recent restrictions placed on lenders by the Financial Reform Act last July have made credit cards more difficult to obtain, http://chicagobreakingbusiness.com/2010/08/credit-card-rates-hit-highest-level-in-9-years.html", and are of course partly responsible for the increasing use of pay day and pawn shop credit as the logical next step to supply demand. Make no mistake, the US government has made this happen. Next maybe we'll see the cries of "exploitation" about them also leading to similar restrictions, to likewise "protect the consumer", bringing back the days of the loan shark and their %1000APR and more interesting collection methods. Last edited by a moderator: Judging from the concentration of title-pawn shops near some large bases, it must be a very profitable business-model. They are VERY prevalent in Georgia, which allows them to charge up to 300% APR. In the 1990's, I managed a consulting project analyzing the potential for, and logistics of, consolidation in the pawn industry. My clients were looking for a franchise vehicle and needed a comprehensive evaluation for their business plan. At the time, we determined that well established pawn shops were very successful. The model was more complicated than just loaning money (most small shops kept a minimum of$250,000 on the street) - and turned it every 10 to 20 days.. The business model also included purchasing "scrap" jewelry. There is no such thing as "new" gold or diamonds (newly mined yes- new no). For example, a pawn shop might purchase a worn gold ring with a diamond setting. They purchase based on a slight discount of the current wholesale scrap rate (2 to 10 percent) and remove the diamond. The gold is accumulated and sold to a smelter/re-manufacturer of (new) jewelry. The diamonds are sorted and made available to the diamond market - or placed in "new" pieces and sold as new - by everyone from discounters to the finest shops. The retail mark-up (mall) is about 1,000 percent.

The title-pawns were relatively new in the 90's. The most successful were in FL - where the APR was about 360 percent - NY by comparison only about 30 percent plus roughly 10 percent handling charge at time of initial transaction.

The low end title-pawn model was in direct competition with small car dealers. The high end/exotic cars, boats, airplanes were very lucrative.

Staff Emeritus
The argument that "I see payday loans near military bases, and therefore there is a correlation" is exactly the same argument Halton Arp makes about quasars being near local galaxies. With exactly the same problems.

Indeed, at least some companies are leaving that market.

First Cash Financial Services said:
For example, during 2006, the United States Congress enacted legislation that capped the annual percentage rate charged on short-term/payday advance loans made to active military personnel at 36%; this legislation became effective in October 2007. The Company does not have, nor does it intend to develop, any short-term/payday loan or credit services products bearing an effective interest and fee rate of 36% per annum or less, as the Company believes the losses and servicing costs associated with lending to the Company’s traditional customer base would exceed the revenue produced at that rate. As a result, the Company does not have a loan product to offer active military personnel.
This is actually a sore point, as military families who used to rely on payday loans are now "relying" on overdraft fees. This is even more financially burdensome. Despite what seems to be the view of these regulators, people are not stupid. They are selecting the least bad of a number of bad options. When that one is removed for them, they have to move to one that is worse.

I looked at Advance America's 10-K (you know, I am surprised at how few people look at them. People talk about how much corporations 'must be making' and the information is right there to be had on the internet. Last year, their average fee was $55 on a$339 loan. Their average profit (a different thing than mark-up) per loan was \$5. So if they are regulated to charging smaller fees by 9%, they can no longer make money and will either leave the market (see aove) or go bankrupt. One reason these loans are risky is that they have a default rate of over 4%.

turbo
Gold Member
The argument that "I see payday loans near military bases, and therefore there is a correlation" is exactly the same argument Halton Arp makes about quasars being near local galaxies. With exactly the same problems.
There is a BIG difference. When high-interest loan business ring practically every military base, it's hard to argue "chance projection". The military recognizes this as a problem and warns service-people and veterans about avoiding them.

http://www.fortbraggmwr.com/acs/privorgs/Solicitation%20Information%20for%20Website/Military%20Scams.pdf [Broken]

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mheslep
Gold Member
There is a BIG difference. When high-interest loan business ring practically every military base, it's hard to argue "chance projection". The military recognizes this as a problem and warns service-people and veterans about avoiding them.

http://www.fortbraggmwr.com/acs/privorgs/Solicitation%20Information%20for%20Website/Military%20Scams.pdf [Broken]
The problem is a government that makes these lendors the last resort.

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Staff Emeritus
I am 40 miles from the nearest military base. According to Google Maps, there are 9 payday loan places within 7 miles of me, with the nearest one being 1.3 miles away. There are also 9 payday loan places within 7 miles of the nearest base, with the nearest one being 1.4 miles away.

The same mistake as Halton Arp. If you look only near galaxies, you only find QSO's near galaxies.

turbo
Gold Member
Just google on "predatory lending" and "military". You'll get so many hits, it will take days to read them. It's a real problem.

(3). Predatory lenders market to the military through their ubiquitous presence
around military installations
and/or through the use of terms to affiliate
themselves with the military. Increasingly the Internet is used to promote loans
to Service members.
http://www.defense.gov/pubs/pdfs/report_to_congress_final.pdf

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jtbell
Mentor
I have not seen a single title-pawn establishment that is not near a military base
Title- and paycheck-loan shops are ubiquitous here in South Carolina, including my small rural city which is 60+ miles from the nearest military base (Fort Jackson outside Columbia). Like most other rural towns in SC, we have a lot of people who live from paycheck to paycheck and sometimes come up short. The local TV stations run lots of commercials for these companies, especially late at night (e.g. the reruns of "Star Trek: The Next Generation" which I automatically record at 2 AM to watch the next day).

[added: Google shows three hits for "payday loan" in my town of 10,000. I walked past two of them yesterday, a block apart, and I remember the other one which is in a different part of town.]

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