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Ah, let me give you an education.
NONE of these are generally under the control of the Presidential administration.
GDP is determined by many things and nobody's really sure.
Unemployment rate is determined by a combination of money-lending policy (Federal Reserve) and taxing-and-spending policy (Congress). (FDR took control of Congress and the Fed, so he did impact it. Other Presidents were not in control.)
Violent crime rate is determined largely by childhood lead exposure 18-21 years earlier -- see the work of Rick Nevin. So you can blame or credit the administration of 18-21 years earlier for whether it allowed toxic lead into the environment or not.
The national debt is a fiction which means nothing. We could print US Notes (cash) to replace it all, national debt would go to zero, nothing would really change either way.
GDP, unemplyment rate, and violent crime rate DO help determine the strength of the economy -- which is NOT under the control of the President -- and unemployment and violent crime rates DO help determine the safety of the country... but again not under the control of the Presdient
Here's my evaluation: Did the bureaucracy, basically, WORK? This is the thing the President has the most power over.
So, we want the government to prevent our food from being full of poisons. Did they actually manage to do that? When we report problems, did they get addressed?
We want them to prevent fraudsters from defrauding us with fake stock manipulation scams. Did they do that?
When we call the Forest Service about a forest fire, do they respond? Do they do something about the fire?
We want the government to clean up toxic waste properly and keep lead out of our water. Did they do that or did they issue fake whitewashes and keep making our kids sick?
Did they make it easier and simpler to deal with governmental offices, with nice clear websites and clear rules, or harder and more incomprehensible, with out of date websites, mysterious closure dates, and requests for forms to be typed in triplicate on legal-sized paper?
The President has a lot of control over foreign wars. Were they stupid? Were we on the wrong side? Did we lose to a bunch of guys in caves? Did we make all the locals hate us?
The President has a lot of control over foreign alliances. Are we allied with trustworthy, nice countries? Democracies? Or maybe with an absolute monarchy which generated more terrorists than any other in the world, some of which attacked us? Or maybe with an apartheid government which puts children in solitary confinement for being "rude to soldiers" who are destroying her home?
Perhaps the most basic: did the President support free and fair elections, where every citizen could vote and the votes were clearly counted, and the person who was most popular won? Or did he support voter suppression and election theft? (This, I apply to ALL politicians. Anyone who fights against free and fair elections wants to destroy democracy and is an enemy of the US.)
Frankly, I think O'Rourke should just run again in Texas. He does seem too prone to falling for right-wing nonsense to be allowed in the Presidency, but as a Senator from Texas, he'd be a vast improvement. He seems to fit Texas.
Printing money is a form of financing, technically, called "seignorage". But if you don't include that, then no, the national debt never needs to be financed...
...unless people stop trusting the currency.
And you may be surprised how much I agree with this...
Modern Monetary Theory professors have written quite a few papers on exactly what causes people to stop trusting the currency. "National debt" has nothing to do with it. They've looked at a lot of cases of "currency revulsion."
Spoiler: This is what causes it.
General failure to function, like the constant government shutdowns; or government agencies not doing their jobs (like Republican sabotage of the EPA).
Untrustworthiness like getting into wars based on lies and then losing the wars; or stealing elections, so everyone knows the guy in power isn't the guy wanted by the majority.
Stuff like THAT is what makes people stop trusting the currency.
Deeply incomplete analysis of Venezuela, by the way. Look at when they stopped putting lead in their gasoline. A couple of years before that was peak lead. They had MUCH MORE lead in their gasoline than the US ever did. Add 20 years to the peak lead date, and you predict the peak violence level. Also, look at the age of Maduro and how much lead he was exposed to as a child; he's a brain-damaged guy.
Rick Nevin actually predicted the collapse of Venezeula into violence based on the lead exposure curve *before* it happened
lolachampcar
Well-Known Member
I separate wealth earned by adding value and that which is not.
I'm not sure I can sign up for the $10M household paying five times more in tax then the $200K household not being good enough. They are paying five times as much and yet that is not enough for some. We need to extract more from them to reduce the deficit? I get that earning more money is a way of reducing your credit card balance but is not spending less also an option?
I'm obviously on "one side" of this discussion and readily admit so. That being said, the people that I worked with to get where I am did well as well. I was raised to make jobs, not take jobs (my dad's words still ring in my ears fifty years later
). We need to raise better citizens who do the right thing not because we tax them and redistribute their wealth but because they are good people and contribute back to the country that allows people to be successful. Ayn Rand was using a base ball bat to beat people over their head with her point but it really is worth considering what end results from attacking the competent.
adiggs
Well-Known Member
IANAE, so my terminology and ideas will be somewhat imprecise. I'll give it a whirl based on how I think about it (besides the simplistic - "it's where the money's at"
).Our economy isn't "the money" - it's the movement of money that makes the economy. I provide a good or service (service in my personal case) to my employer, who exchanges my service for money. I take that money to the grocery store and exchange it for goods. The grocery store takes my money and exchanges some of it for additional goods to sell, as well as services (from their employees, and others). And of course, a sliver of that money goes to the owner of that business as profit, which for them is income that they in turn take to others to acquire goods and services of value to them.
All the way through this, the money is facilitating the economy - the exchange of goods and services for goods and services. That facilitation being so valuable, it's the difference between us all being hunter / gatherers in a 10M-100M population world, and being citizens in a high tech society with a population of billions. More economic activity.
The level of economic activity falls nearly to Nill in the absence of money as a facilitator. In my case, I'm not sure what my employer would pay me for my services - probably food and clothing would be obvious things to have on the list, but it'd sure be a pain. And if I get paid in food that I don't really want, then maybe the grocery store would take some of my food in exchange for some of their food (more pain). But at some point, the grocery store has enough total food, and needs more of it gone in exchange for other things of value (like say clothing). Which they then swap at the clothing store for .... ?
Anyway, the problem is that money that's sitting isn't facilitating more economic activity. It does represent a claim against economic activity.
Everything else being equal, rich folks have money sitting and middle class / poor folks move their money (poorer you are, the less choice you have about moving out every piece of money you bring in). Bad for somebody living $ to $, but good for the economy as that's value creation being directly exchanged for value creation (well - value creation being exchanged for $, which is then exchanged for value).
You set a higher tax rate on high incomes for two simplistic reasons:
- somebody living $ to $, or paycheck to paycheck, can't afford much in the way of taxes given the social safety net we have in the US. In a nation with a more robust safety net, you can tax the people on the edge at a higher rate (taxing people out of food / shelter / clothing is a fine way to create a violent revolution - not recommended). So you CAN'T effectively tax these people at a high rate. As a point of comparison, somebody making $1M/year could (theoretically) be taxed at 70% (all #'s using US scale economic reality, and made up on the point) as they will be very unhappy forking over $700k in taxes, and will then go live less well on the remaining $300k. They're still living well. (No violent revolution coming out of these folks, but they might buy up enough politicians to get rid of the 70% tax rate).
- Economically, that money held by the extremely rich is static and functionally no longer creating an economy. It's a claim on the economic activity around them, but its not contributing to the economic activity. Taxing it away gets the money moving again, putting it into circulation where it gets involved in lots of exchanges (which brings people out of their caves to do things of value in order to get $, in order to exchange that $ for things / services of value that they need). People coming out of their caves to do things of value is the real point - the amount of money is ultimately irrelevant (as money has no intrinsic value - only extrinsic or value that others place on the money).
Using your examples, the $100k household is less able to afford the 25% tax rate you're using than the $10M household. Though frankly both can afford it, at least in most parts of the US. You realize this in the first place by not applying a 25% tax rate to the $10k or $1k households.
So simplistically, you already understand why different income levels are taxed at different rates. You incorporated that understanding into your example when you created the example
The breakthrough that I've seen a very small number of people talking about, but is the only way that I see very high tax rates coming to the very rich - we need to see more of the very rich talking about the value to them (not just society) of very high tax rates. The very rich need to get behind the idea. Two reasons why the very rich should be in favor of very high tax rates - sort of the carrot and the stick.
The carrot is that if the very high tax rates are used in a fashion that only government can support, and that makes society safer and more functional for everybody, then that society will also be more active economically, and that will mean more consumers to buy the very rich people's businesses products. That'll mean more business profit and more income for the very rich. And it'll come from more economic activity and that'll mean more for everybody (where economic activity is shorthand for - people providing things and services of value, in order to get things and services of value that they need). The money ISN'T intrinsically of any value on it's own - it's only of value when it can be used to get things and services of value - it's an intermediary that is essentially to a high level of economic activity.
And the real value for the very rich is an economy that is really busy with people creating things and services of value in exchange for things and services of value.
The things I'm thinking of that only the government can do, are things like a universal basic income, universal health care (whether it's public or private provided - take away the death/bankruptcy dilemma from severe medical problems), universal education (whether college or trade school - under the thinking that a well educated / trained populace is able to perform valuable economic activity and contribute to the economy), etc.. To the extent possible, don't take all of that economic activity the taxes represent and invest it in destroying stuff (military) - there's SOME economic value created there, but its small compared to other paths.
The stick is that when the inequality in claims on the economic activity get extreme enough, history teaches us that the inequality gets corrected. Often via violence. The question is how bad will it get, and how bad will the correction be. Maybe it's different this time - to me the core idea if I were very rich is why would I want to find out, instead of learning from history? Let's not find out if this time in history is different from all the previous times in history.
I thought Musk pays no income tax since he doesn't receive much (any?) income. His billions come from investments in his companies. He's not even taxed for capital gains since he hasn't sold yet. It's easy for the rich to do something similar like Buffet does which is to create a corporation and collect a nominal salary.
Nobody actually does that. Republican politicians like to claim that people believe that but that's just Republican propaganda. Everyone likes people who make more money than they do, unless those people are big jerks with what they do with the money.
Here are five.
(1) Money is power. If someone has enough money to buy half of Congress... often they will. There are always indirect ways to do this. Unless you just make sure that nobody has that much money.
(2) Management of the money supply is important for managing the economy: too much money sloshing around leads to inflation, while too little leads to unemployment, recession, depression. Money socked away by rich people is part of the real economy when and only when they want it to be -- and even if they're well-meaning about it, they're not usually any good at managing the economy. So they make depressions worse and they make inflation worse. The government/central bank needs to have control over more money than the rich people, in order to manage the economy.
(3) It doesn't do the rich people any good. After a certain amount of money, they just waste it distorting the economy by building giant yachts which don't make them that much happier, while people die of preventable diseases. (For this reason, most tax systems which heavily tax rich people do exempt money spent on things which we all agree are good.)
(4) Everyone needs money to fully participate in the economy. The poor cannot participate properly, cannot start the small businesses they would start, cannot buy the goods they want or provide the services they want to provide, without sufficient money. So people who are in this position need to have money transferred by the government to them in order to give them a chance to be full economic participants again. If you do this *without* taxing the money out of the economy somewhere else (e.g. the rich), you really are at risk of creating inflation. So you have to tax the money from somewhere, and the obvious place is the richest.
(5) Most money is created by governments or banks. (Technically, money is anything which other people will accept as money; in practice, if the government accepts it for payment of taxes, it's money.) Rich people use far more of the services provided by government in support of money, and far more of the government money, and should pay more for that. (This is the only "ethical" argument in the entire list -- the other four are totally practical period.)
Ha. Never happened in the history of the planet, but nice communistic "from each according to his abilities" idealism there. I've learned to accept that people just get lucky and unlucky with money and that that's OK...
...as long as you remember to redistribute the money by taxing the ultra rich before they can buy politicans, and distributing money to those who don't have enough capital to start a small business.
No. The government provides one massive resource for rich people: money. You do know the government prints the stuff, right? The rich household consumed a lot more money-related services.
In practice, the government mostly harasses poor people with the police, while mostly protecting rich people with the police... I won't get into that any further though...
In actual practice, the effect of the 1950s tax rates was that money was *kept in the corporations* and used for R&D rather than being used to buy yachts. Like I said.
Rich people these days get the money out of the corporations and buy the yachts. Documented.
BTW, my chart actually describes history. Regardless of marginal rates, total effective rates don't budge much beyond 20%. Any thoughts on that?
An irrelevance, as I already explained. The high rates act as a *deterrent* to pulling the money out of productive companies and using it to build gold statues or buy yachts.
I can agree that higher marginal rates will change behavior in a positive direction. But I doubt it will generate the revenue that is needed to finance the proposed new spending.
This and other posts well argue the need for higher marginal rates on the very well off. Another reason why they should pay more is that steps to equalize income buys off the potential pitchfork set and in the case of international investments their heavier (sometimes exclusive) use of the military to protect their wealth—the Navy in particular. As Oliver Wendell Holmes said, "Taxes are what we pay for a civilized society." It's also a protection racket with the poor and they make money on their consumption of goods and services that otherwise would not be bought. If you accept moral arguments, it's the Abrahamic religions' way to go and I suspect others as well but don't know them.
lolachampcar
Well-Known Member
neroden,
I read your lengthly post as conflating money with corruption. We need to ban money in politics; full stop. One voice one vote. The rule of law applies to everyone.
I have a hard time believing government can make a better decision about what to do with money then the person that earned it provided they added value in the process (read - actually earned it).
Lastly, money is put to work and generates a return. There is a natural return over inflation for money. There is a good argument for a greater return where the risk of loss is greater. The street and the market is rigged gambling and has long since departed the two previously mentioned concepts but do not think that anyone's savings are sitting idle and are of no value.
Oh, and that huge yacht was built by people and costs a bunch to maintain (also by people). The frivolous spending actually puts more money in the hands of others than the investment activity.
and yes, I do believe in a threshold below which there is no taxation. I believe in a social safety net as well but I want everyone that has to pay for it to join in a circle and agree on the size of that net THEN pull out their check books and pay for it. This idea of doing stuff only to have my kids or their kids pay for it is absolute insanity.
I read your lengthly post as conflating money with corruption. We need to ban money in politics; full stop. One voice one vote. The rule of law applies to everyone.
I have a hard time believing government can make a better decision about what to do with money then the person that earned it provided they added value in the process (read - actually earned it).
Lastly, money is put to work and generates a return. There is a natural return over inflation for money. There is a good argument for a greater return where the risk of loss is greater. The street and the market is rigged gambling and has long since departed the two previously mentioned concepts but do not think that anyone's savings are sitting idle and are of no value.
Oh, and that huge yacht was built by people and costs a bunch to maintain (also by people). The frivolous spending actually puts more money in the hands of others than the investment activity.
and yes, I do believe in a threshold below which there is no taxation. I believe in a social safety net as well but I want everyone that has to pay for it to join in a circle and agree on the size of that net THEN pull out their check books and pay for it. This idea of doing stuff only to have my kids or their kids pay for it is absolute insanity.
Some, trivial, are in the Constitution. 1) Over 35; 2) Native born. Two Republicans are exceptions to #2: McCaine and Cruz. I know the arguments for exception, I'm just a strict constructionist on this point.
lolachampcar
Well-Known Member
The rich need to behave better, no doubt. I'm just not sure government is the right way to get them to do so. Perhaps we need to raise better people.
You are right. If the wealthy continue to game the system they will either be politely asked to leave (ala Cuba kinda) or more positively dealt with (ala Khmer Rouge).
Heartily agree and, like Zorba the Greek, participated in the human tragedy of procreation: two sons, four grandchildren, and four great grands. Some worked out, some have not and perhaps will not. The youngest are at greatest risk of consequences of global warming.
We also need to elect better people. Help is now on the way.
JRP3
Hyperactive Member
You assume the rich became so by being competent. That is not necessarily the case. Current POTUS a prime example.
lolachampcar
Well-Known Member
Everything I post about money and wealth only applies to earned value added accomplishment. Everything else is a boat anchor on the human condition.
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