2016 POTUS Election Thread

[Smitty]

I'm confused. We acknowledge the rich are paying more than their share of taxes but then bitch about a flat tax? I need an explanation.

 

[Cowboysrock55]

I'm confused. We acknowledge the rich are paying more than their share of taxes but then bitch about a flat tax? I need an explanation.

The funny thing is his plan basically lowers taxes across the bored for individual people while at the same time cutting government fat. People seem to not understand how good this would be for the economy. I think it's because people only understand taxes as a way to redistribute wealth. That's not what they should be used for at all.

 

[Chocolate Lab]

The funny thing is his plan basically lowers taxes across the bored for individual people while at the same time cutting government fat. People seem to not understand how good this would be for the economy. I think it's because people only understand taxes as a way to redistribute wealth. That's not what they should be used for at all.

People don't understand anything about economics, nor do they care to learn. And even if they did care to learn, whoever would be teaching them these days would probably teach them that more government is good and the well-to-do are the real source of our problems. It's a sad situation.

And to answer mschmidt, the rich as a whole definitely pay their fair share. But a flat tax would eliminate the loopholes that the super rich use to pay less in taxes than they should.

But, that's a pipe dream anyway. A flat tax doesn't fit the class warfare agenda, so it would never happen here.

 

[Cowboysrock55]

People don't understand anything about economics, nor do they care to learn. And even if they did care to learn, whoever would be teaching them these days would probably teach them that more government is good and the well-to-do are the real source of our problems. It's a sad situation.

Some of the best classes I took at Iowa were the advanced economics courses. Of course it included a lot of advanced calculus so it wasn't for everyone. It makes it pretty clear what is best for an economy overall but I don't think most politicians would even have a clue what's going on in a class like that.

 

[townsend]

My understanding of the purpose of a tax increasing at at different pay brackets is that wages earned at each bracket are less vital than the previous bracket. The person who makes 22K a year can't spare 1500 dollars as easily as the person making 220K can spare 15,000.

 

[Cowboysrock55]

My understanding of the purpose of a tax increasing at at different pay brackets is that wages earned at each bracket are less vital than the previous bracket. The person who makes 22K a year can't spare 1500 dollars as easily as the person making 220K can spare 15,000.

The problem with that concept is that is makes it less likely for the person making $220,000 to want to earn more money through investments. That essentially leads to less jobs. Less jobs means more people making 22k or less a year. You're essentially shrinking the whole pie by a tax system like that. You're basically reducing the total amount of wealth for everyone for the sake of redistributing the wealth more evenly.

 

[townsend]

The problem with that concept is that is makes it less likely for the person making $220,000 to want to earn more money through investments. That essentially leads to less jobs. Less jobs means more people making 22k or less a year. You're essentially shrinking the whole pie by a tax system like that. You're basically reducing the total amount of wealth for everyone for the sake of redistributing the wealth more evenly.

Isn't capital gains taxed at a much lower rate?
Admittedly, I took time off December of 2013, because I figured it wasn't worth over earning my way into another tax bracket, when I could start fresh in January. Glad I did though. Kept me from burning out.
I do think we give the govt to much credit, when we assume someone earning more needs to give that money away. Before the prohibitionists fucked it for all of us, there wasn't even a national income tax. As long as everyone is paying less, I can get behind that change.

 

[Jiggyfly]

The problem with that concept is that is makes it less likely for the person making $220,000 to want to earn more money through investments. That essentially leads to less jobs. Less jobs means more people making 22k or less a year. You're essentially shrinking the whole pie by a tax system like that. You're basically reducing the total amount of wealth for everyone for the sake of redistributing the wealth more evenly.

Come on man a person making 220 is always more likely to want to earn more money.

Talk about a simplistic way of looking at economics.

And please explain how that essentially leads to less jobs?

 

[Genghis Khan]

I'm confused. We acknowledge the rich are paying more than their share of taxes but then bitch about a flat tax? I need an explanation.

The point is that people were saying one benefit of a flat tax is to eliminate all these loopholes for rich people. That's nonsense, because while that may be, you are also lowering their overall tax burden by an average of 8.5 percent. That's a ton of money.

Simultaneously, you'd be raising the tax burden for some of the lower income people, and eliminating their ways to get tax relief like the earned income tax credit.

That's not a good result. There's nothing wrong with charging more taxes to those who can afford it.

 

[L.T. Fan]

The point is that people were saying one benefit of a flat tax is to eliminate all these loopholes for rich people. That's nonsense, because while that may be, you are also lowering their overall tax burden by an average of 8.5 percent. That's a ton of money.

Simultaneously, you'd be raising the tax burden for some of the lower income people, and eliminating their ways to get tax relief like the earned income tax credit.

That's not a good result. There's nothing wrong with charging more taxes to those who can afford it.

It's still a form of discrimination. Business does not charge less for their products and services because of their customer's income bracket yet it's okay to charge those who make more at a higher tax rate? A parity percentage is still a higher amount.

 

[Smitty]

And to answer mschmidt, the rich as a whole definitely pay their fair share. But a flat tax would eliminate the loopholes that the super rich use to pay less in taxes than they should.

I know, I'm just confused as to why Geng, a conservative, has issues with it despite acknowledging that the rich pay too much. Is his answer a progressive tax with simply lower rates?

 

[Smitty]

The point is that people were saying one benefit of a flat tax is to eliminate all these loopholes for rich people. That's nonsense, because while that may be, you are also lowering their overall tax burden by an average of 8.5 percent. That's a ton of money.

Yeah... and a good thing. Lower taxes is better.

Simultaneously, you'd be raising the tax burden for some of the lower income people, and eliminating their ways to get tax relief like the earned income tax credit.

That's not a good result. There's nothing wrong with charging more taxes to those who can afford it.

Isn't everyone paying the same rate the fairest approach? I've always been confused why "paying your fair share" meant one person pays 40% and another person pays 4%. Then if you lower tax rates, someone screams that the rich aren't paying their fair share anymore, as if they aren't paying significantly more even at the same rate, simply due to larger income.

 

[Cowboysrock55]

Come on man a person making 220 is always more likely to want to earn more money.

Talk about a simplistic way of looking at economics.

And please explain how that essentially leads to less jobs?

What you just posted is why I'm seriously worried about the education system and the general public's understanding of economics. This is like basic introductory economics stuff but I'll go ahead and explain anyway.

If you are a person or a corporation with money you generally like to invest that money. You don't invest that money for free though you do it because you want a return on that money. Hell depending on the risk of the investment you're going to want a very good return. So we will just say that hypothetically an investor won't invest in a startup company unless they project a 6% return or greater on their investment. That's the percentage point that makes the risk worth the investment.

So now increase the taxes on the profits that the investor makes. Suddenly a 6% return wouldn't be good enough because the government is taking a larger portion of that profit. The risk reward point would then get pushed up to say 9%. Now all those businesses that could have opened with a return rate between 6% and 9% will no longer be able to get startup capital and will never open. Those businesses equal jobs. So yeah higher tax rates on the people with money lead to less jobs.

 

[Smitty]

What you just posted is why I'm seriously worried about the education system and the general public's understanding of economics. This is like basic introductory economics stuff but I'll go ahead and explain anyway.

He has a history degree though.

 

[skidadl]

Quote Originally Posted by Cowboysrock55 View Post
What you just posted is why I'm seriously worried about the education system and the general public's understanding of economics. This is like basic introductory economics stuff but I'll go ahead and explain anyway.

It is pretty bad. Another reason why you see more conservative minded people homeschooling. I highly recommend it and private school. Although, my kids are in public school now. They have a good foundation before going and often laugh at their teacher for teaching dumb stuff now.

 

[Jiggyfly]

What you just posted is why I'm seriously worried about the education system and the general public's understanding of economics. This is like basic introductory economics stuff but I'll go ahead and explain anyway.

If you are a person or a corporation with money you generally like to invest that money. You don't invest that money for free though you do it because you want a return on that money. Hell depending on the risk of the investment you're going to want a very good return. So we will just say that hypothetically an investor won't invest in a startup company unless they project a 6% return or greater on their investment. That's the percentage point that makes the risk worth the investment.

So now increase the taxes on the profits that the investor makes. Suddenly a 6% return wouldn't be good enough because the government is taking a larger portion of that profit. The risk reward point would then get pushed up to say 9%. Now all those businesses that could have opened with a return rate between 6% and 9% will no longer be able to get startup capital and will never open. Those businesses equal jobs. So yeah higher tax rates on the people with money lead to less jobs.

I understand economics pretty well and it's not as simplistic as you make it out.

And I was specifically talking about the 200,000 figure you used that has little bearing on job growth, I see now you are using a macro economic view instead.

And even then there are plenty of other variables involved that investors look at along with taxes.

So yeah it's extremely simplistic to only equate tax rates to jobs especially considering how much cash companies are sitting on now.

Taxes are part of the equation not the number one variable.

 

[Cowboysrock55]

And even then there are plenty of other variables involved that investors look at along with taxes.

So yeah it's extremely simplistic to only equate tax rates to jobs especially considering how much cash companies are sitting on now.

No investors really don't. They care about their rate of return and risk. If you hold risk constant and change the rate of return you lower the amount of investment taking place. If you decrease the rate of return you decrease investment. It's simplistic because it's simple.

That's also part of the reason why companies are sitting on their cash...

 

[Clay_Allison]

What you just posted is why I'm seriously worried about the education system and the general public's understanding of economics. This is like basic introductory economics stuff but I'll go ahead and explain anyway.

If you are a person or a corporation with money you generally like to invest that money. You don't invest that money for free though you do it because you want a return on that money. Hell depending on the risk of the investment you're going to want a very good return. So we will just say that hypothetically an investor won't invest in a startup company unless they project a 6% return or greater on their investment. That's the percentage point that makes the risk worth the investment.

So now increase the taxes on the profits that the investor makes. Suddenly a 6% return wouldn't be good enough because the government is taking a larger portion of that profit. The risk reward point would then get pushed up to say 9%. Now all those businesses that could have opened with a return rate between 6% and 9% will no longer be able to get startup capital and will never open. Those businesses equal jobs. So yeah higher tax rates on the people with money lead to less jobs.

Capital gains is still taxed lower than income, though. So your initial response was a non sequitur.

 

[Cowboysrock55]

Capital gains is still taxed lower than income, though. So your initial response was a non sequitur.

You do realize that capital gains are a type of "progressive income tax" which is why the economic model still applies perfectly...

 

[Clay_Allison]

You do realize that capital gains are a type of "progressive income tax" which is why the economic model still applies perfectly...

If you make money off investments it's not taxed as income. You seem to think that people pay income tax and capital gains both. They just pay the capital gains and that's a lower percentage than the top income tax rates. Sure, money from selling stocks or from dividends aren't the only kinds of investments, but the lower tax on those encourages the hell out of that kind of investment. That's why Warren Buffet pointed out that the people who work for him usually pay a higher tax rate than he does.