Be Prepared for the F-Bomb!

[heironymouspasparagus]

Our accounting for poverty is wrong!  It is based on income only. As I've mentioned before, my parents are living in poverty, because the distribution they take from their retirement is about equal to their mortgage plus the minimum they can get by with, without additional tax penalties. In fact, most of the members of my father's country club would probably qualify as well under the poverty line, because they spend far more than their income.

There aren't even 10 million of those around.  Let alone half the population.

[heironymouspasparagus]

And 1 out of 2 is closer to 50% than 25%.

[Conan71]

And 1 out of 2 is closer to 50% than 25%.

Great what solutions do you have for that other than higher taxes on the 1% which would do absolutely nothing to change the poverty line, nor the number of people living below it.

[heironymouspasparagus]

Great what solutions do you have for that other than higher taxes on the 1% which would do absolutely nothing to change the poverty line, nor the number of people living below it.

For a start - buy "Made in USA".

And for a finish - I have repeated it over and over and over and over again.  To asked questions just like this one, and also as unsolicited commentary.  Gonna listen this time? 

I repeat - again;

Fixing the mess of our fiscal voyeurism will require both cuts (as in spending less) AND increased taxes (as increased revenue).  And I have ALSO stated over and over and over and over again, that as much as I hate increasing taxes, I will take that hit for the sake of my kids, grandkids, and now great grandkids, AND the future of this country.

[Conan71]

I repeat - again;

Fixing the mess of our fiscal voyeurism will require both cuts (as in spending less) AND increased taxes (as increased revenue).  And I have ALSO stated over and over and over and over again, that as much as I hate increasing taxes, I will take that hit for the sake of my kids, grandkids, and now great grandkids, AND the future of this country.

I'm sorry.  How exactly does that fix the income disparity gap?

Oh, and I agree with your first sentence.  We need to spend less and I have no problem paying more in taxes to right the ship so long as there are commensurate spending cuts.  But it still does nothing to narrow the dreaded income gap, all it does is move us toward getting out of debt.  And in case you aren't a good student of John Maynard Keynes' work, cutting government spending is NOT a solution to decreasing the income gap.

[heironymouspasparagus]

I'm sorry.  How exactly does that fix the income disparity gap?

Oh, and I agree with your first sentence.  We need to spend less and I have no problem paying more in taxes to right the ship so long as there are commensurate spending cuts.  But it still does nothing to narrow the dreaded income gap, all it does is move us toward getting out of debt.  And in case you aren't a good student of John Maynard Keynes' work, cutting government spending is NOT a solution to decreasing the income gap.

Fix income disparity - well first, stop making the rest of the taxpayers subsidize the 1%ers.  When Abercrombie and Fitch CEO gets $125,000,000 income by ISO, that means he pays $15,000,000 instead of about $33,000,000.  Leaving $18,000,000 in taxes to be paid by everyone else.  You.  And me.  

Add to that the fact that A & F gets a tax deduction for that ridiculous money paid to a guy who was in charge when they reported income of $250,000 for the year - it means they dodged paying taxes on what would have been and should have been income of $125,000,000.  Meaning an additional tax loss to be made up by you and me to the tune of about another $35,000,000.

So we get stuck with paying that extra 18 + 35 =  $53,000,000.

So, eliminate the corporate deduction for all ISO plans.  That way, even if A & F CEO gets to keep the obscene 15% tax rate, the corporate tax will at least be paid on income it makes, so we don't have to subsidize quite so much of that guys raping and pillaging of the economy.

[Conan71]

Fix income disparity - well first, stop making the rest of the taxpayers subsidize the 1%ers.  When Abercrombie and Fitch CEO gets $125,000,000 income by ISO, that means he pays $15,000,000 instead of about $33,000,000.  Leaving $18,000,000 in taxes to be paid by everyone else.  You.  And me.  

Add to that the fact that A & F gets a tax deduction for that ridiculous money paid to a guy who was in charge when they reported income of $250,000 for the year - it means they dodged paying taxes on what would have been and should have been income of $125,000,000.  Meaning an additional tax loss to be made up by you and me to the tune of about another $35,000,000.

So we get stuck with paying that extra 18 + 35 =  $53,000,000.

So, eliminate the corporate deduction for all ISO plans.  That way, even if A & F CEO gets to keep the obscene 15% tax rate, the corporate tax will at least be paid on income it makes, so we don't have to subsidize quite so much of that guys raping and pillaging of the economy.

Sorry, that still doesn't change the income condition of the poor.  They pay no income tax to start with so they aren't subsidizing the wealthy and the corporations.

[heironymouspasparagus]

Sorry, that still doesn't change the income condition of the poor.  They pay no income tax to start with so they aren't subsidizing the wealthy and the corporations.

Absolutely it would - makes the economy work so all those little boats will rise with the tide.

[nathanm]

Sorry, that still doesn't change the income condition of the poor.  They pay no income tax to start with so they aren't subsidizing the wealthy and the corporations.

An improved economy does more to fix the situation for the poor than just about anything we can do short of fixing the education system and helping to stabilize poor kids' home life. (when you're worried about your next meal or the violence in the streets outside or you're taking care of your three siblings, you're not going to have much time to concentrate on your school work) IMO, welfare isn't so much about helping out the parents, although that's a great thing to do, but it helps out the kids. If the playing field were level, an average-performing poor black kid from the inner city would have the same chance of skating through life as an average-performing middle or upper class white kid. Generational poverty can only be attacked by providing opportunity for poor kids instead of providing the warehousing (in the form of schools and prisons) we are today.

Of course, to make that sort of program effective, we also need jobs. Jobs (and profits) come from investment (real investment, not speculation), which we're seeing little of right now.

All that said, our deficit spending on food stamps and other assistance programs is keeping some 30 million people out of poverty at the moment. (that's a vague recollection, the exact number may be different, but I don't have time to look it up right now) It's a band-aid, but it's better than nothing.

I've come to realize we can either spend money on education and support or we can spend it on prisons, but it's getting spent either way.

[swake]

Our accounting for poverty is wrong!  It is based on income only. As I've mentioned before, my parents are living in poverty, because the distribution they take from their retirement is about equal to their mortgage plus the minimum they can get by with, without additional tax penalties. In fact, most of the members of my father's country club would probably qualify as well under the poverty line, because they spend far more than their income.

Ok, how about this, 20% of children live in poverty. Not including low income, Poverty.

[Conan71]

Absolutely it would - makes the economy work so all those little boats will rise with the tide.

Please explain the steps of how this works.

By your notion, you take more money from the wealthy and corporations in the form of higher taxes.  That is money they can no longer spend on a new yacht, improvements on their home in the Hamptons or penthouse on Manhattan, or a corporate jet a company cannot buy or jobs a company cannot make payroll for... all things which necessarily create jobs for others in the economy.

As well, you said the government would spend less money.  So I'm to assume the higher taxes on the wealthy and corporations will do little more than cut deficit spending so we don't have to borrow as much for the government to operate or physically pay down debt.  Neither thing increases the average income of middle class America.

So, you've taken money away from those who could spend in the economy and instead used it to pay down debt.  That doesn't create a single job nor raise wages for everyone else.

I'm not trying to be obstinate, based on simple math, your premise doesn't create a single job nor raise wages.

If I'm missing something, please explain the economic and mathematical gymnastics because it's not readily apparent to me.

[Conan71]

An improved economy does more to fix the situation for the poor than just about anything we can do short of fixing the education system and helping to stabilize poor kids' home life. (when you're worried about your next meal or the violence in the streets outside or you're taking care of your three siblings, you're not going to have much time to concentrate on your school work) IMO, welfare isn't so much about helping out the parents, although that's a great thing to do, but it helps out the kids. If the playing field were level, an average-performing poor black kid from the inner city would have the same chance of skating through life as an average-performing middle or upper class white kid. Generational poverty can only be attacked by providing opportunity for poor kids instead of providing the warehousing (in the form of schools and prisons) we are today.

Of course, to make that sort of program effective, we also need jobs. Jobs (and profits) come from investment (real investment, not speculation), which we're seeing little of right now.

All that said, our deficit spending on food stamps and other assistance programs is keeping some 30 million people out of poverty at the moment. (that's a vague recollection, the exact number may be different, but I don't have time to look it up right now) It's a band-aid, but it's better than nothing.

I've come to realize we can either spend money on education and support or we can spend it on prisons, but it's getting spent either way.

I think you are on the right track.  Even at 4.5% unemployment though, there's still a large income disparity and always will be.  Keeping in mind the premise I was replying to that you quoted was from heironymous' idea that the government would spend less and the wealthy and corporations would pay more in taxes. There's simply no way more money circulates in the economy under that scenario.

Now, borrowing on your premise of real investment vs. speculation, if higher taxes created a better incentive for companies and wealthy executives to create more jobs to try and avoid as much tax as possible then taxes can (in a roundabout way) serve to create more jobs.

[Townsend]

Please explain the steps of how this works.

By your notion, you take more money from the wealthy and corporations in the form of higher taxes.  That is money they can no longer spend on a new yacht, improvements on their home in the Hamptons or penthouse on Manhattan, or a corporate jet a company cannot buy or jobs a company cannot make payroll for... all things which necessarily create jobs for others in the economy.

As well, you said the government would spend less money.  So I'm to assume the higher taxes on the wealthy and corporations will do little more than cut deficit spending so we don't have to borrow as much for the government to operate or physically pay down debt.  Neither thing increases the average income of middle class America.

So, you've taken money away from those who could spend in the economy and instead used it to pay down debt.  That doesn't create a single job nor raise wages for everyone else.

I'm not trying to be obstinate, based on simple math, your premise doesn't create a single job nor raise wages.

If I'm missing something, please explain the economic and mathematical gymnastics because it's not readily apparent to me.

If the wealthy were taxed more they might use their power and connections to tell their political friends to stop spending so much of their money on stupid crap.  Thus dropping waste and saving money.


Obviously a theory just like anyone else's.

[Gaspar]

Ok, how about this, 20% of children live in poverty. Not including low income, Poverty.

Any % of children living in poverty is certainly a motivating factor to change the mechanism that keeps them there.  Because the culture of poverty, if left alone, is self perpetuating, the escape from poverty is difficult.  Our best tool against poverty, as always, is education and a strong growing economy that offers access to opportunity.  Again, poverty is not a static state of being unless a culture that perpetuates it exists.

Building dependency programs only serves to create more dependents.

I would also want to establish that a poverty of a child on the streets of Calcutta is very different than the poverty of a child in Tulsa, as are the opportunities to escape that poverty.  Many of the countries we are measured against offer a very static economic strata.  People in this country move economically.

[heironymouspasparagus]

By your notion, you take more money from the wealthy and corporations in the form of higher taxes.  That is money they can no longer spend on a new yacht, improvements on their home in the Hamptons or penthouse on Manhattan, or a corporate jet a company cannot buy or jobs a company cannot make payroll for... all things which necessarily create jobs for others in the economy.

As well, you said the government would spend less money.  So I'm to assume the higher taxes on the wealthy and corporations will do little more than cut deficit spending so we don't have to borrow as much for the government to operate or physically pay down debt.  Neither thing increases the average income of middle class America.

So, you've taken money away from those who could spend in the economy and instead used it to pay down debt.  That doesn't create a single job nor raise wages for everyone else.

I'm not trying to be obstinate, based on simple math, your premise doesn't create a single job nor raise wages.

If I'm missing something, please explain the economic and mathematical gymnastics because it's not readily apparent to me.

Fixing the economy is what will create jobs AND raise wages.  This has been done in EVERY cycle we have had - except the latest - for the last 70 years or so, and has been proven to work in every cycle for the last 80 years, as you know.

Your two statements advancing the idea that the rich just won't buy another yacht or mansion is a complete and total misdirection as well as being false.  It is the fallacy that if there are more taxes, they will just shut down and stop "being rich".  Which we also know has not happened in previous cycles for the last 70 years or so.  Even when taxes were at 50%, 70%, and 90%, there were more than enough loopholes so that they still got to keep enough to live the lifestyle they wanted to live.  As is shown by the fact that the Reagan boom of the 80s, which is dragged out at intervals as the prime example of "good times" was a time when the incremental tax rate was 75% for 3/4 of his term.  By the arguments of the Reagan fans, we don't need to raise taxes by the measly expiration of the Bush cuts to 36%, we should raise them to 75%!  We would have "explosive" growth just from that one factor alone, according to Reaganites.

Not to mention the fact of the intentional holding back of investment by banks, insurance companies, and corporate America until the next election.  Hoping against hope that Blowbama will be put out the door.  Trillions of dollars in profits financed by you and me that are being withheld in the name of "uncertainty".  You do know better than that.  As many more people in the country are starting to figure out.

As for you glib dismissal of "little more than cut deficit spending", that cut of deficit spending is actually a huge thing.  It would instantly relieve the 'hidden' inflation that, by definition, accompanies deficit spending, which is above and beyond the 'official' government number that is spewed by both parties today so they can say it looks good.  (This is how we supposedly went from 15% under Carter, to 6% inflation under Reagan, 3 weeks later...)  Change the way you measure inflation, making sure to keep the deficit out of it.  And both sides do it.

Relief from that hidden inflation would be a big step in helping the poor, since they get none of the raises that the richest enjoy.  They get a change in minimum wage about every 5 or 6 years.  While you know who gets 5 or 6 a year.  (Yeah, I know - slight exaggeration for effect.)

Real financial markets would benefit from the cut/tax program - not these computer day trading markets, who would actually likely be hurt by removal of the extreme moves up and down that account for huge "profits" from their computer trading.  But the other 99% would benefit.

Financial stability due to the fact the "full faith and credit" of the US might actually mean something again.  Rather than just another speculative binge event.  Would absolutely help world markets, too, as a pleasant little side effect.

In addition, cutting deficits does not actually have to mean a cut in spending if the tax policy is set accordingly.  Which means even higher taxes, which is even more distasteful than the cut/tax pair.

These things would bring a stability to the US and world markets that would create jobs, and if tax loopholes were corrected (which I do realize will never happen) wages would increase due to supply and demand from an increasing economy.