9/11 Report

[haggis]

RC,
I'm not advocating cutting anything except the payroll tax, the FUTA contributions.

I was just using the example of social security to define a "regressive" versus a "progressive" versus a "flat" tax.

I'm smack dab in the middle of the "boomers" and I recently received a summary of how much I've contributed to SS since I started working in 1965.

At the current rate of "entitlements" (Only the federal government can take your money for 40 years and then when they give some of it back to you they call it an “entitlement” Sheesh!) If I wait until I'm 62 and take a partial entitlement I will empty out that “shoebox” of money paid in by my employers and me in 9 years. And trust me, I plan to live much longer than 71!!

Of course, there are no projections of interest that initial amount whould have earned even in a boring savings account.

When Social Security was established in 1935, the average life span among Americans was 63. Today the average lifespan is more than 76 years, according to the National Center for Health Statistics.

So, if anything, you can blame the future strain on SS to modern medicines, stop smoking campaigns and other preventative health care programs that have dramatically extended the life span of the average American citizen since 1935.

On average, Social Security benefits currently represent approximately 38% of the typical retiree's income, according to the U.S. Treasury Department. For future generations of retirees, Social Security may represent a much smaller percentage of retirement income.

So, RC and all you other kids, get to work!

[The Great Carouser]

While we're on the subject of taxes, redistribution of wealth et al, I thought I'd add theis to the soup.....

Corporate Tax Shelters

[Shapley]

GC,

So it seems that corporations were paying a higher percentage of taxes during the term of Ronaldus Maximus than during former president Clinton's term.

And you thought Reaganomics didn't work!

V/R
Shapley

[RC]

GC,
about the article in your link; I get the impression the author(s) try as best as possilbe to put it in laymans terms and we are getting, in that single page, only a portion of the study.

It was still difficult to analyze thoroughly (tee hee, I'm an accountant

[Serenity]

Bass terds! Did you google Individual Tax Avoidance?

[The Great Carouser]

Just a quick reply before you leave and I wake up . RC I haven't read the full report yet and your analysis of the press release seems cogent. Shap, I'll get into some of the history of corporate tax relief later. To give Ronnie his due, his admin gave the most foreign aid to Africa according to my sources. Have a great day all. Saw the 'Toid and her parents yesterday, she's even prettier in person.

[OperaTenor]

Can you say, "flat tax"?

:p

[haggis]

RC asked or posited earlier if the rich were getting richer and the poor, poorer.

To me, perceptually, the rich are getting richer and the poor are getting richer

I "Googled" a bit and found the following opinion piece.

I can't attest to the accuracy of the figures other than those taken from the U.S. Government; Census and BLS, etc.

But here again, it is my sense that consumerism is a valid yardstick to use for comparison.

In 1982, I bought, on credit, my first VCR. It was $475.

I haven't worked out the math but $475 in 1982 was a heck of a lot more than $475 in 2004.

The last time I even found a VCR for sale (a combo DVD+VCR) it costs $145.

I bought a SOTA DVD/CD six pack player last Christmas for $325.

Home ownership is at an all time high and even with the most recent recession new home starts have consistently set all time records.

If you look at “Table 5.--Returns with Positive Adjusted Gross Income (AGI): Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates, by Selected Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year, Tax Years 1986-2000”

here

You’ll see that in every category more people moved into the higher brackets consistently, between 1986 – 2000, at least.

I realize its fashionable to bemoan the state of the economy and I was unemployed for almost two years so I understand the pain and uncertainty that brings.

But do you really believe, as John Edwards and Congressman Sanders apparently do, that we were better off in 1970??

I sure don't!

[The Great Carouser]

Originally posted by OperaTenor:
Can you say, "flat tax"?

:p

As a matter of fact, I can!

Flat Tax proposals

[The Great Carouser]

As long as the fire's still hot and the spoon's still out what do you think of this?

Do investors pay less taxes than workers?

...or this;

Corporate pork vs. Jobs

<small>[ 08-04-2004, 07:46 PM: Message edited by: The Great Carouser ]</small>

[The Great Carouser]

..and especially, what do you think of these? Our Secretary of the Treasury

An "unofficial" view of Secretary Snow

[RC]

income polarization stats from Center on Budget & Policy Priorities

Before I go on, let me qualify my statements by saying that there are so many variables in such a complex calculation, it would be impossible to have an all encompassing statistic to prove (or disprove) a polarization in income trend.

It may be that your general perception as a laborer in the economy is the most elucidating evidence that there is an increasing disparity, (as stated in the link provided by Haggis

I "Googled" a bit and found the following opinion piece.

).

Because of extenuating circumstances, I have to discount my own perception. However, to say

... its fashionable to bemoan the state of the economy

, indicates that my perception is not unique.

If we do as the article suggests and use general perception rather than statistics, then it follows from Haggis' statement that if the "fashionable" belief suggests there is a problem, then indeed, there is.

As for consumption being an indication of wealth, I disagree again. I did not bother to Google statistics on savings versus indebtedness because I think it is fair to say that our consumer credit situation is common knowledge. This indicates we're greedy not wealthy and does not necessarily correlate with the ability to pay.

Also, purchasing a pair of $70.00 Nike's does not mean you aren't taking advantage of welfare, (as illogical as that is, we all know it happens).

As for comparing life now to life in the 1970's, consider this; in 1975, 47.3 % of mothers with children under 18 worked. In 2001, 72.1 % of mothers with children under 18 worked. (Dept of Labor). Take them out of the workforce and see how many families drop a tax bracket or two. Good thing we have all those TV's because daycare is expensive...

The statistics listed in the article comparing telepohnes, complete plumbing, refrigerator, stove, tv, and vehicle, did NOT consider that
a.) the price of these items has declined drastically with technology much like the price of Haggis' VCR, and
b.) many of these things are considered a necessity today when they weren't so much then, e.g. telephone, plumbing (mandated in most areas), stove & refrigerator (can't pass a building inspection without them in most states) and vehicle. This says NOTHING of income disparity.

From the "South-North Development Monitor (SUNS); annual working hours in the US have been steadily rising since 1980 and US workers put in the longest hours among industrialized nations.

Broken record: a protestant work ethic does not get you anywhere anymore.
It doesn't appear, in general, that higher education or specialization sets you apart anymore either.
IMO, we don't have a capitalist economy anymore.

Evidence of income/class polarization; crime stats, political polarization, need for welfare.

[Shapley]

RC:

RE: <<telepohnes, complete plumbing, refrigerator, stove, tv, and vehicle, did NOT consider that
a. the price of these items has declined drastically with technology much like the price of Haggis' VCR,>>

The price of consumer electronics has declined drastically. The price of plumbing, appliances, and vehicles (particularly vehicles) has increased markedly over the past three decades. The payments for a vehicle may be comparatively low, with 0% APR and seven years to pay, But $25,000 to $40,000 for a family car is way out of line with the price of a vehicle in the '70s.

[haggis]

Well, then let me state my personal opinion based on my personal life.

My and my personal family's quality of life so exceeds that of my parents and grandparents that I can't even find a comparable point of reference.

[RC]

Shapley,
agree, I should have specified relativity. What is your opinion of the theory of polarization though?

Haggis,
I think you and I are talking apples and oranges and it's probably my fault. So I'm going to quote myself to pull us back into line with each other:

... is it possible then that for whatever reason, the wealthiest 1% are gaining in wealth while more "middle class" folks are falling into "poverty" status? If so, that 1% would most certainly be paying a greater share of federal taxes.

What I'm theorizing is that the disparity between the "wealthy" and the "poor" is growing. That is usually what people are complaining about when they say "the rich are getting richer and the poor are getting poorer".

I'm NOT saying the standard of living is getting worse in general.

<small>[ 08-05-2004, 02:07 PM: Message edited by: RC ]</small>

[Shapley]

RC,

I haven't had the opportunity to read the article entirely. However, I agree with your disclaimer that "there are so many variables in such a complex calculation, it would be impossible to have an all encompassing statistic to prove (or disprove) a polarization in income trend".

I think when you factor in the end of the baby boom, the increasing number of retirees (little or no income), etc. You will possibly find that the "polarization" is a factor of normal wealth distribution, not a result of tax policy. Keep in mind that, according to the article, this trend has continued for nearly two decades, through Republican and Democrat presidents and Republican and Democrat congresses, plus at least two "major overhauls" of the tax code designed to improve tax fairness.

If your own standard of living is improving, and you have food, shelter, etc., does it really matter whether your neighbors income is 10 times or 100 times what you make? I say no.

V/R
Shapley

[haggis]

"But $25,000 to $40,000 for a family car is way out of line with the price of a vehicle in the '70s."

According to the Bureau of Labor and Statistics'

CPI Calculator

$40,000 in 1972 dollars was approximately $8,814.

That would have bought a pretty good car in 1972. It'll probably get you an even better one in 2004.

The point that I’m apparently incapable of conveying is that what was poor in 1972, is middle class in 2004.

Increases in productivity, technology and the capitalism (and yes, RC we are very much still a capitalistic country, moping aside) put what used to be considered luxuries within the reach of the average middle class citizen and has reduced many of those “luxuries” to “necessities” for the consumer.

If your life hasn’t improved since the levels of 1972, I’m sorry for you and I can’t imagine what that must be like. But as for me and mine I’m very happy and looking forward to the future regardless who will the president in the next four years.

As I said before, the republic has survived much, much worse than anything we face today and there is every reason (for me, anyway) to be optimistic about the future.

Cheers!

[RC]

Hey guys, don't lose site of why we were discussing taxes which was this: was Bush's tax break primarily for the benefit of the wealthy?

I haven't posited an opinion...yet (I do have one).

Thats why discussing the standard of living compared to 1970 is irrelevant except to say that maintaining your relative position takes more effort than it did in the 1970's.

If you buy into the theory of income polariztion trends in the US, then Bush's tax cuts are, by default, for the wealthy. Now the entire question is reduced to simple mathmatical ratios.

The wealthy pay more taxes because the wealthy make more money and they make more money at an increasing rate... Doesn't matter what your "bracket" is. If the top 1% make an increasingly larger proportion of total income in the US than everyone else, they WILL pay more taxes... If the wealthy pay more taxes, and there are, by comparison, more poor, the breaks were for the wealthy.

If our economy were capitalistic and no one cheated or got special treatment, you shouldn't have income polarization. There would be a few elite and a few poor and a huge middle class.

IMO, the breaks were for the wealthy. IMO, it doesn't matter. IMO, the tax breaks serve only two purposes: increase the deficit (ever so marginally), and garner political support for Bush.

[RC]

Shap & Haggis,

You guys had 54 minutes to read my post and you BOTH missed this line!?:

"I'm NOT saying the standard of living is getting worse in general."

You think you might be jumping to conclusions about what my political views are instead of actually thinking about what I'm saying?

"Moping"!!! ARGHHHH

Shapley: "I haven't had time to read the article..."... IT WAS A GRAPH!!!!!!!!! YOU DIDN'T EVEN LOOK!!
NOW I KNOW YOU'RE JUMPING TO CONCLUSIONS. If you're not going to read the post, why bother commenting?

<small>[ 08-05-2004, 04:16 PM: Message edited by: RC ]</small>

[Shapley]

RC:

I clicked on this link you provided:

http://www.cbpp.org/5-31-01tax.pdf

Which brings up an entire article in .pdf format. I browsed through it. I didn't know you just wanted me to look at the graph! Sorry!

I did see your line about the standard of living, which was the reason for the last part of my post. I did have time to read your post, just not the article. I answered because you addressed me specifically, and I thought it rude not to reply.
Sorry, once again.

V/R
Shapley

P.S. None of this has any bearing on whether or not President Bush's tax cut benefitted the wealthy, since the the latest data referenced by the article was in 1997, before President Bush took office.

<small>[ 08-05-2004, 04:29 PM: Message edited by: Shapley ]</small>