Americans what a Swedish economic system (if asked the right questions)

[GhostWriter16]

@BvBPL- I'll admit to not being the most knowledgeable on Clinton but yes, if the government weren't in debt, or even maybe in debt that looked like we might eventually get out of, and the government showed every sign that the money would be there when I needed it, I'd have less issue with it than I do now.

I still do have some slight technical issues since, unlike a bank, I don't get a choice, but then again, my main reason for being frustrated with it is because I DON'T believe it will be there for me when I retire. That's why its upsetting for me, I feel like I will have to pay in without ever getting to collect.

And that's a pretty common viewpoint whether its accurate or not, that the money just won't be available when my generation hits 65.

As for social security being a scam, I didn't mean to imply that it was a deliberate scam in a conspiracy type of way. But ultimately its character is similar to a scam. Maybe not a "Scam" so much as a failure. But there's a real problem with it because the first collectors had never paid into it, so ultimately the generation before the old of the New Deal era paid for the elderly generation of that era, the next generation paid for the working generation of that era, exc. Social security is always on the backs of the people still working, rather than on the backs of those who actually did work to save for it.

Now, if you criticize that it wouldn't be right to just let people starve, I'm not totally unsympathetic, but I think there's a real issue with just handing out free money. It could have been phased in, or they could have started with collection yet not handing out money until people that paid in retired, but instead they just flat up and did it and put the bill on the backs of people still working, money that never went to them.

 

[GhostWriter16]

More of the poors' work is actually going to the rich than is actually going to them. So it would be just as reasonable to argue that the poor are slaves to the rich. If the poor are slaves to the rich, and the rich are slaves to society, and society is providing the poor with services they could not otherwise afford, is it not fair that the rich are slaves to society?



The maths here bugs me because I don't know any system that operates in the way you describe.

If the tax bands in a progressive tax system are as follows:

0 - 20000: 0%
20000 - 40000: 10%
40000 - 100000: 25%
100000 - 500000: 35%
500000+: 50%
(I'm not taking this from an existing system, I'm trying to incorporate the rates you used)

The guy who made 1000000 will pay 40.7%, not 50%:

20000*0% + (40000 - 20000)*10% + (100000 - 40000)*25% + (500000 - 100000)*35% + (1000000-500000)*50% = 407000

If I hadn't included a 35% tax band and the 25% band went all the way to 500000, he would pay 36.7%

The guy who made 100000 will pay 17%, not 25%:

20000*0% + (40000 - 20000)*10% + (100000 - 40000)*25% = 17000

However ignoring the maths and using your figures so the first guy has a net income of 500000 and the second has a net income of 75000, the first guy had a net income 425000 greater than the second guy. He had a net income more than 5 times the size of the second guy. If you ask people which income they'd rather have, >99% of people would choose the first.

Under a progressive tax system, if one person has a gross income X and a net income x and another has a gross income Y and a net income y, and if X > Y, then x is always greater than y. Every extra cent you earn increases your net income. Increasing your gross income does not decrease your net income. You are not being punished for making more money.

This ignores effects due to tax deductions and source of income.

OK, so to make it even simpler just to make sure I get it, if the tax was just 10% on income up to 50,000 and 20% on anything more and you made 100,000, you'd actually pay 10% on the first half of your income and 20% on the other half?

I didn't actually know that, and it does make the rates a little lower than I originally suggested. There's a point where that doesn't even matter though. Some people on these boards (Not sure if you are) are proposing rates of taxation well over 70% for the very wealthy. Granted, if you're Bill Gates it barely matters, but still. Its still not RIGHT, regardless of if it matters or not. If you really don't need the money, give it to charity.

After thinking it through, I'm not really sure about the "Flat tax with exemption" tax, although I think it would be better than what we have. The reality is that tax is fair (At least if you think "Fair" = close to equal in terms of percentage paid) for the middle class and the rich, but the poor will still pay almost nothing. While everyone uses the government, the poor is no exception, so they should really pay something for it, even if they pay less than some other people, everybody should contribute "Something."

I guess I just disagree with the goals as being expressed in this thread. If we are going to do something, and I don't disagree that we should, I'd rather focus on getting the opportunity to be rich as close to even as possible, rather than trying to get the divide between the rich and the poor as thin as possible.

And on the Inheritance Tax, I have two viewpoints that contradict each other and so I'm not sure what I think about it, but on the one hand I agree with equality of opportunity, which mandates a high inheritance tax, but secondly, I support the rights of parents to take care of their kids, which would presume a lower inheritance tax. Ideally, the inheritance tax would be high enough that wealth doesn't just sit somewhere for several generations, but low enough that the person who does earn his wealth can at least take care of his kids and grandkids. I'm not sure how to do both, but there's probably a number that would do both.

 

[Samson]

I guess I just disagree with the goals as being expressed in this thread. If we are going to do something, and I don't disagree that we should, I'd rather focus on getting the opportunity to be rich as close to even as possible, rather than trying to get the divide between the rich and the poor as thin as possible.

This is the root of the disagreement here IMO. I see there are a number of options for the aim of tax policy:

• Equalising the opportunity to be rich
• Maximising the opportunity to be rich
• Minimising the divide between the rich and the poor
• Maximising total happiness
• Maximising average happiness
• Minimising total suffering
• Minimising average suffering
• Maximising GDP
• Minimising percentage poverty

These all (except possibly minimising the divide) are worthwhile goals, and it is difficult to really prioritise one over the other.

 

[Cutlass]

Originally Posted by GhostWriter16 View Post
I guess I just disagree with the goals as being expressed in this thread. If we are going to do something, and I don't disagree that we should, I'd rather focus on getting the opportunity to be rich as close to even as possible, rather than trying to get the divide between the rich and the poor as thin as possible.

If you actually believed that, you would reverse your position on virtually every issue.

 

[GhostWriter16]

If you actually believed that, you would reverse your position on virtually every issue.

I think if anything it might affect my fiscal policy. I'm not even sure if you know what my positions are, but I do in fact believe what I posted, that the opportunity to get rich should be equal.

With the caveat that merit itself is not something the state can or should do something about.

I think the liberal position is more wanting to make the results equal, or at least closer to equal, rather than ensuring everyone has the opportunity to succeed.

I don't think total equality of opportunity is possible but I think it should be as close as we can possibly manage it.

 

[Cutlass]

I think if anything it might affect my fiscal policy. I'm not even sure if you know what my positions are, but I do in fact believe what I posted, that the opportunity to get rich should be equal.

With the caveat that merit itself is not something the state can or should do something about.

I think the liberal position is more wanting to make the results equal, or at least closer to equal, rather than ensuring everyone has the opportunity to succeed.

I don't think total equality of opportunity is possible but I think it should be as close as we can possibly manage it.

If you believe that the liberal position is to equalize outcomes than you are even far more ignorant of the real world than I think you are. The liberal position is to make initial conditions more equal so that outcomes would be based on merit and opportunity maximized.

So, again, you need to reverse what you believe to accomplish what you claim you want to accomplish.

 

[Ironsided]

Unfortunately, the last 25 years the water in the Swedish buckets have been flowing from the poor buckets to the rich buckets in a slightly alarming rate. We are rapidly moving way downhill in equality. I hope Norway picks up the torch and lead the way. they may have higher inequality but they have less poor people for sure.

 

[BvBPL]

Jello Biafra probably had the right idea for ensuring equity: kill the poor.

Efficiency and progress is ours once more!

 

[NedimNapoleon]

Now that we have the neutron bomb!

 

[Ironsided]

Good man, Jello!

 

[W|M]

It's nice and quick and clean and gets things done

 

[NedimNapoleon]

Away with excess enemy But no less value to property

 

[SamSniped]

No sense in war but perfect sense at home

You're welcome, nedim.

 

[GhostWriter16]

If you believe that the liberal position is to equalize outcomes than you are even far more ignorant of the real world than I think you are. The liberal position is to make initial conditions more equal so that outcomes would be based on merit and opportunity maximized.

So, again, you need to reverse what you believe to accomplish what you claim you want to accomplish.

Why a progressive tax system then? How does that equalize opportunity rather than making the results closer to equal?

 

[aronnax]

Why a progressive tax system then? How does that equalize opportunity rather than making the results closer to equal?

Just because the action of taxing different people different rates is not equal doesn't mean the actual result ends in inequality.

In order to narrow the income gaps as much as possible, in order to give every person a good and stable fighting chance at being successful, in order to make sure everyone has the best opportunity to escape poverty, you need:

1) Good Education
2) Affordable Healthcare
3) A safe home
4) Enough food
5) Basic amenities

All these require money, money that the poor often does not have. Sure, you have that one person who worked 3 jobs to earn enough money for his son to get into a good private school, but these people are few and rare given the intensive sacrifice to life. Even if it isn't rare, why should the poor be forced into many years of hardship and suffering just so he can have a shot of breaking out of the poverty cycle while so many others do not.

The government however can provide the helping hand, needed to boost people out of poverty and into a more prosperous life. But for the government to carry out social services that help to level out the playing field, it needs money, which they get from taxes.

But why tax the rich more than the poor? Why should they be held more responsible for providing the money for all these? Aside from the examples that Trunion had given, it's also simply because:

1) The Rich has gained the most from the society maintained by the government.
2) The Rich have more to gained from a society that is further enriched by social services.
3) The Rich are hurt the least in a progressive tax

The Rich aren't rich because they tripped over a pot of gold one day. They are rich because they own or hold stake or invest in the industries that provide goods and services. And the demand for such goods only exist because the government is there to maintain the society that buys such goods. You can bet your shiny dollar that if the government collapses, anarchy sets in and civil society is disrupted, big businesses can't safely ship their goods, maintain a stable currency or perform operations. Who's going to buy a computer (Gates) or book a hotel room (Hilton) if no society exists to demand them?

The Rich are rich because society makes them rich. Accordingly the Rich should acknowledge this and pay their dues back to society.

Secondly, basic amenities aside, there are a lot of rich people who are rich because they provide goods and services that are otherwise unnecessary. You don't need branded clothes to live. (Abercrombie & Fitch, Forever 21) You don't need to watch movies or TVs either (Paramount, ABC, NBC). You only need one house (Real Estate Companies).
If society is richer and more prosperous because government social services help so many people to break out of the poverty cycle, then there will be more people with more money to spend without having to worry about breaking the bank. Having a larger and more secure financial income means people are more likely to splurge on additional goods and services which in turn gives business to the rich.
The Rich benefit even more than others from a progressive tax system because the money taxed from them returns to them through a richer society.

Lastly, it hurts them the least.
If a Rich man earns 300,000 dollars in one year and a poor man earn 30,000 in one year and I tax the Rich man (An extremely high and ridiculous rate)89% of his income and tax the poor man nothing. The Rich man is still $3,000 richer than the poor man. The progressive tax taxes the rich more, simply because the rich are not disadvantaged as greater as the poor.

 

[Hygro]

Why is it fair that a subset of our population pay a higher percentage than others? What you explained would be more logically covered by the fact that even if the same percentage is paid, rich people still contribute a lot more money than the poor do.

How is an arbitrary system based on something as non-real as a percentage of income more fair than a system based on physical needs and reality-based fairness?

 

[Truronian]

How is an arbitrary system based on something as non-real as a percentage of income more fair than a system based on physical needs and reality-based fairness?

Yeah, I really don't get what is so great about 'equal proportion'. People don't spend an equal proportion of their money on food, shelter, healthcare, childcare, insurance etc. Why then so some people insist they do* when it comes to taxes?

Spoiler :

*Or at least roughly the same percentage like VRWC.

 

[Thedrin]

I think if anything it might affect my fiscal policy. I'm not even sure if you know what my positions are, but I do in fact believe what I posted, that the opportunity to get rich should be equal.

With the caveat that merit itself is not something the state can or should do something about.

I think the liberal position is more wanting to make the results equal, or at least closer to equal, rather than ensuring everyone has the opportunity to succeed.

I don't think total equality of opportunity is possible but I think it should be as close as we can possibly manage it.

Why a progressive tax system then? How does that equalize opportunity rather than making the results closer to equal?

I don't believe that we should try to equalise incomes. I do believe that we should try to equalise opportunity. I believe a progressive tax system is a better means of achieving this than the flat tax.

I don't doubt that there are people who want to equalise incomes via a progressive tax, but it as a huge mistake to assume that all or even most who advocate for the progressive tax want to equalise income.

I think you're against the US taking part in foreign wars. Just because some hippy who's opposed to working for the man is also opposed to foreign wars because we should, like you know, just live in peace and harmony with Mother Earth, man, doesn't mean I assume you are opposed to the US taking part in foreign wars for the same reason.

A consequence of the progressive tax is that the difference between the incomes of the poor and the wealthy will get smaller, but this is not the reason why many advocate the progressive tax.

I'm going to echo something Aronnax just said now: In the first world, to equalise opportunity you need:
- education for all
- healthcare for all
- shelter for all
- protection of the law for all
- food for all
- water for all
- electrical, communications, and transport infrastructures

I do not believe that the government needs to provide everyone with all of these things for free. Nor do I believe that the government needs to provide everyone with the best quality form of all of these things. It would be too costly and impractical.

The free market can provide for some of these things but not all. The flat tax doesn't cover the difference. A progressive tax can.

Slight change of direction here:

Earlier you talked about how someone with a very large income will work January to June for the government and only from July to December for himself whilst a well off guy with a smaller income would only work from January to March for the government and from April to December for himself. I would add to this description of taxes by saying the very wealthy guy works from January to June for the government, for two weeks in July for his necessities, and for 5 and a half months for profit. The less well of guy works from January to March for himself, from April to June for his necessities, and for 6 months for profit. A poor person works for January for the government, from February to November for his necessities and for December for himself. Someone with a very small income doesn't pay taxes but spends the whole year working to cover necessities.

 

[Thorgalaeg]

@GhostWriter16. To defend a flat tax is as good as to defend a regressive tax (rich paying less than poors), for the same reasons already expossed by Truronian to deffend progressive taxes. In fact while in all developed or minimally civilized countries direct taxes are all progressive there is still some indirect flat taxes around as the VAT. Which BTW we can take as a example of flat tax being indeed regressive, because in relation to his total income poors consume much more than riches, ence poors give a higher portion of his total income to the VAT than riches even if we all pays the 18% VAT (or whatever).

So, you cant defend flat taxation on the basis of equality because that is just what it is not.