The Blog Of Your Betters

[Mise]

Politicians who play the class card like to decribe tax cuts in dollar terms: "These tax cuts would give the average millionaire $30,000 per year and the average single mother $1,000 per year. The single mother needs the money more. Why should we give millionaires more money? We should be giving the single mothers $30,000 per year!"

Oh.... I've never heard that kind of argument being presented before. Guess that's why I was confused

 

[Bamspeedy]

I got that, but I don't see what "reducing the price of the beer" from $100 to $80 means. The bartender/gov't made 20% cuts in public services, and is trying to pass this onto the public, through tax decreases? Well, why give the TOTAL amount paid, and the percentage REDUCTION in taxes, then? The government never does this. The government reduces the tax rates -- it never tells people that the top 10% are going to get a 16% reduction in the TOTAL amount paid, it tells people that the top 10% tax band will fall/rise by x%.

It's not so much what the government does, but how the media portrays it. "The top x% got $1 trillion in tax breaks". Ok, but how much did they pay so I can put that trillion dollars into perspective?

The Bush tax cuts will give a higher tax cut to the wealthy, I will admit that (of course they already were paying a much higher rate than everyone else), but there are many media sources that focus on the $ amount. Here is one example:

http://www.ctj.org/html/gwb0602.htm

Over the ten-year period, the richest Americans—the best-off one percent—are slated to receive tax cuts totaling almost half a trillion dollars.

Ok, but how much are they going to make? How much are the lower income people receiving if you lump all their taxes together?

By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 percent of the total tax cuts will go to the richest one percent

Doesn't the top 1% own half the wealth already, and paying half the taxes? Then they should receive half of the tax cuts, no?

The rest of the report deals almost exclusively with the $ amount that each group will save by lumping their incomes together and doesn't talk about the % reduction in tax rate for individuals.

So, I will do the work for them:
Using the second big chart "Effects of the 2001 tax cuts in 2010, using 2010 projected income levels.." So, read the chart for details about these categories.

I took the average tax cuts divided by the average income.
The second column below refers to if the estate tax is repealed.

Income group-Income Tax (Rate) Cut-Total Income Tax (Rate) Cut
Lowest 20% 0.8% 0.8%
Second 20% 1.8% 1.8%
Middle 20% 1.7% 1.7%
Fourth 20% 1.4% 1.4%
Next 15% 0.9% 0.9%
Next 4% 0.6% 0.9%
Top 1% 3.4% 5.7%

This helps put it into better perspective. Yes, the top 1% is benefitting more, but not as much as the media would have you believe.

 

[Richard Cribb]

I have to take an Economics class for sociology credit, because liberal arts colleges make you study things you don't want to study.

My condolances.

Barstool Tax Policy


An ec 10 student emails me the following parable: <Snip>

I read quite a lot of hilarious stuff both here and elsewhere, but I think this must be unsurpassed recently. It has corporate stooge written all over it. One wonders if in certain countries one can get professorates in cornflakes boxes.
Or perhaps this is how stupid one becomes by living in a corporatocracy.
Fortunately the people commenting on his blog has done all the good work, so those interested can just visit it and learn how "good" his point really is.

The solution is to confiscate private property to prevent the transfer of assets abroad.

Obviously

Yes indeed, that is the ideal solution. But even in the not-so-ideal with a sterner tax on the privileged one shouldn't worry too much. Seeing how governments everywhere are providing them with almost everything (which considering the state's class character is hardly surprising), it is perhaps wrong to blame those people (and their host of "intellectual" apologists and groupies) for behaving like spoiled children. However, just let them whine for a while, they are usually staying, quite naturally they enjoy being under the protective wings of mammy state (And feel free to check out the link in my sig about the "conservatve" nannystate also).

Politicians who play the class card

In a class society, every politician plays the "class card" also your beloved president throwing money after your beloved corporate elite.Some people are only more honest about it.

like to decribe tax cuts in dollar terms: "These tax cuts would give the average millionaire $30,000 per year and the average single mother $1,000 per year. The single mother needs the money more. Why should we give millionaires more money? We should be giving the single mothers $30,000 per year!"

I don't know who those politicians are, but I assume that the whole idea with socialism for the rich (to borrow a phrase from one most excellent USAian) is what they find harmful for moral, social and political reaosn, and I can but agree with them. I have no wish to elaborate on this though, either you get it or you don't. If the last mentioned is the case, don't expect me to educate you for free.

 

[Bad Player]

I want to see how many more people like the bottom story or think it is anywhere close to accurate

Well in fact contrary to what I suspect is your opinion , this does in fact happen (and I have a theory that globalisation will increase this issue and force governments to compete for skilled workers or they will have to collude to bring taxes in line or some such anti-competitive behaviour).

BBC

Switzerland's decentralised taxation system is causing irritation among its European Union neighbours.

The row was triggered by the decision, late last year, of the French rock star Johnny Hallyday to leave France and take up residence in the Swiss Alpine resort of Gstaad.

Hallyday, who has complained publicly about the high taxes in France, will now pay tax not on his multi-million-dollar income, but on the value of the fairly modest chalet he has built himself in Gstaad.

All he has to do in return is promise to live in the chalet for at least six months of each year.

In France, where Hallyday is a national icon, there is anger. Advisers to the French presidential candidate Segolene Royal have accused Switzerland of "looting" its neighbours.

Many high-earning celebrities, among them Charles Aznavour, Michael Schumacher and Tina Turner already live in Switzerland for tax reasons, and it is rumoured that the British pop star James Blunt will be the next to arrive.

'Unfair subsidies'

But aside from the irritation over the loss of celebrity tax income, Switzerland's neighbours have a more serious concern.

Swiss cantons are allowed to set their own taxes and many are now engaging in an internal corporate tax-cutting competition.

Canton Obwalden, in central Switzerland, slashed its corporate tax rate to just 6.6% at the start of 2006; it attracted 376 new companies in just 11 months.

The European Commission has warned that this may constitute an unfair subsidy under the European Free Trade Agreement.

"Talk to any tax expert," said Michael Reiterer, the commission's new ambassador to Switzerland.

"This is recognised as a subsidy. And there we think Switzerland should think a bit whether behaviour which is clearly outlawed in the EU is the best policy to follow in such a close relationship between two partners."

It is true that foreign businesses are beating a path to Switzerland's door, primarily to Zurich.

Its overall tax rate of 21% is not the lowest in Europe, but still far lower than Switzerland's immediate neighbours Germany, France, Italy and Austria.

Zurich 'grateful'

Google, Kraft and IBM have all chosen Zurich as their European headquarters. Google is set to expand its Zurich office this year from around 300 staff to 1,600, making it the biggest Google office outside the United States.

Stefan Kux, head of economic development for Zurich, is not the least bit worried by the complaints from Brussels, in fact he sees them as quite positive.

"We are profiting from the mistakes of our neighbours," he explained. "They are making economic promotion for us for free, everyone now knows that Switzerland has an excellent tax system, so I'm very grateful."

Switzerland is not in the European Union, nevertheless it does need good trade relations with the EU, and has spent 10 long years negotiating a set of complicated bilateral deals.

No-one now wants a row with Brussels, but within the Swiss government there is little patience with Europe's objections over tax.

"The Swiss position is on very safe ground," insisted Adrian Sollberger, spokesman for Switzerland's office of European policy.

"We do not have an agreement to harmonise taxes, none whatsoever, so by definition there cannot be any infringement of any agreement between Switzerland and the EU."

Quality of life

Many in Switzerland suspect that the complaints are inspired by a more basic emotion than any real legal concerns; jealousy that the little country which refused to join the European Union should now be doing so well.

Stefan Kux points out that Zurich, which regularly tops international quality of life surveys, has far more to offer than competitive tax rates.

"We are Big Apple big city and at the same time Long Island lifestyle," he said. "It's a very small city, we have a lot of multinational companies, but in five minutes you are in the countryside.

"You can't find that in London, or Frankfurt or Shanghai. And I think this mixture of the mountains and the business, good quality of life, I think that's the uniqueness of Switzerland."

That point of view is supported by Randy Knaflic, head of human resources for Google in Zurich.

"It is true that the corporate tax, and the personal tax rates, are big advantages," he admits. "Especially when you're recruiting a computer scientist who's been paying 40 or 50% tax in one of the neighbouring countries."

"But the comparison I make is living nine years in New York City," he continued. "In New York I had a wonderful apartment, but in the morning I'd wake up and look out the window and wave to my neighbour. Here I wake up and look out and I see the Alps."

But Brussels' quarrel is not with Switzerland's quality of life but with its tax system, and there the EU has made it clear it expects some compromise.

So far, the Swiss government will not budge; ministers say they view an attack on the tax system as an attack on Swiss sovereignty.

The row is sure to simmer on. Meanwhile the businesses and the celebrities just keep on coming.

 

[amadeus]

The story makes one glaring mistake in my eyes...which is part of the reason we have progressive taxation in the first place. The Rich have greater accsess to social capital, markets and power...and as such, they ought to pay more for that priviledge.

You wouldn't go to a bar where you're expected to pay for everybody else's tab.

 

[JollyRoger]

You wouldn't go to a bar where you're expected to pay for everybody else's tab.

Then why do the wealthy still live here? Maybe the bar story isn't as spot on as some people are making it.

 

[downtown]

Because it isn't just about money, its about power.

 

[pboily]

Because the wealthy care more for the down-trodden than for their bottom lines?

HAHAHAHAHAHAHAHA!!!!

Ahhhhh, sorry, I needed that.

 

[JollyRoger]

Because it isn't just about money, its about power.

So if they have power, then they must like the tax system as it is or they would use their power to change it.

 

[downtown]

So if they have power, then they must like the tax system as it is or they would use their power to change it.

Well, that assumes that

a) The "wealthy" are a homogenous group with a singluar interest
b) there is only one type of power

Needless to say, there is a fragile consensus that the progressive tax is the most fair. We fight about the details (whether those 9th and 10th guys are taxed unfairly)

 

[amadeus]

Then why do the wealthy still live here? Maybe the bar story isn't as spot on as some people are making it.

They don't have to leave, they can just set up tax shelters and offshore accounts. I know the Cayman Islands and Luxembourg were big into that.

 

[JollyRoger]

They don't have to leave, they can just set up tax shelters and offshore accounts. I know the Cayman Islands and Luxembourg were big into that.

So guy # 10 isn't paying the tab then and the bar is still open.

 

[Pontiuth Pilate]

Here's what's wrong with the "analogy"

Actually, there are a BUNCH of things wrong.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.

Mistake number one. The poorest people in this country do not pay "zero taxes." State taxes, local taxes, sales tax, all have to be factored in if we're going to be looking at the utility of a total scheme of taxation.

The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

Mistake number two. OUR TAX SYSTEM IS NOT PROGRESSIVE. The rich like to pretend it is. The reality is that when you factor in all the other taxes I mentioned, not to mention REGRESSIVE taxes like Social Security which is higher than federal income taxes for something like 80&#37; of Americans, AND the fact that the uberrich use accountants and loopholes to "lower their tax burden," and whaddaya get? A "real" tax rate on the rich of something like 27% iirc which is not that much higher than the 25% that the average middle class household pays.

Mistake number three. This taxation scheme does not give each person one beer. The parable is trying, very slyly, to imply that the public goods our taxes pay for have equal utility for all citizens. We all get to use highways, we all get to go to public schools etc. That's ********. The CEO of UPS gets more utility out of the road system than you do. Bill Gates has more property than you do, thus he benefits more from a functional police system. What utility do you directly derive from free trade agreements? Far less than the CEO of Walmart does. The army protects us from attack. If we went to war, do you own any property that a foreign power would like to bomb? No? Then you derive less utility from national defense than a man who owns a factory.

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before.

Mistake number four. The savings each person got is irrelevant. What is relevant is their RELATIVE rate of taxation. The tax cut has made the system more regressive, not more progressive. This would POTENTIALLY not be a problem except for

Mistake number five. The federal income tax is a small portion of total taxes paid for everyone but the very rich. Thus, a regressive tax cut on federal income taxes makes the system REALLY regressive.

The nine men surrounded the tenth and beat him up.

Mistake number 6. Rich men never get beat up. Stop playing the victim, it's fooling no one.

The next night the tenth man didn't show up for drinks

Mistake number 7. Why would the rich guy not show up for drinks? Despite the charade of "paying" for drinks, the utility of his beer far outweighs what he pays out for it, as it should - HE OWNS THE BAR. Why do you think he's so rich? He inherited the place from his parents, and they inherited it from his grandparents. The bar has been a family business for 200 years.

Mistake number 8. Where is the rich guy going to drink instead? Not all bars are equal. Take Bill Gates. He was able to become the richest man in the world by being born in America and taking advantage of America's opportunities. Could he have done so in Britain? Maybe. Could he have done so in Russia? Probably not. Could he have done so in Zimbabwe? Haha, no. So, the value of being born in America is, for Bill Gates, approximately 40 billion dollars. I get a higher value out of having immigrated to this country too. But it's not 40 billion... yet


What's my point? America is the biggest consumer market in the world with some of the most educated and richest people on the planet. Every country is a market and just like casinos, each makes you pay a cover charge if you want to "play." Rich men should stop bullshitting us: the cover charge they pay to enter the American market is a bargain when you take into account the profits they can reap here as opposed to Singapore or France. Or Zimbabwe.

 

[amadeus]

Mistake number one. The poorest people in this country do not pay "zero taxes." State taxes, local taxes, sales tax, all have to be factored in if we're going to be looking at the utility of a total scheme of taxation.

The poor also get tax refunds when they didn't pay any federal income taxes.

Mistake number two. OUR TAX SYSTEM IS NOT PROGRESSIVE. The rich like to pretend it is.

Who are these "rich," PP? You and the leftist cabal of Che Guevara T-shirt owners constantly lambast the rich, but when you're asked to identify who is and who isn't, I never get a reply.

The reality is that when you factor in all the other taxes I mentioned, not to mention REGRESSIVE taxes like Social Security which is higher than federal income taxes for something like 80% of Americans, AND the fact that the uberrich use accountants and loopholes to "lower their tax burden," and whaddaya get? A "real" tax rate on the rich of something like 27% iirc which is not that much higher than the 25% that the average middle class household pays.

That's absurd. The richest 1% of income-earners pay 30% of federal taxes in this country, and the top 5% pay over half.

Mistake number three. This taxation scheme does not give each person one beer. The parable is trying, very slyly, to imply that the public goods our taxes pay for have equal utility for all citizens. We all get to use highways, we all get to go to public schools etc. That's ********. The CEO of UPS gets more utility out of the road system than you do.

Of course! UPS is a delivery company.

What about companies like Google, NBC, or Boeing? I don't think any of those companies receive more utility per capita than we all probably do.

Bill Gates has more property than you do, thus he benefits more from a functional police system.

Which he has paid a disproportionate amount for, considering that I also don't imagine there are too many attempted break-ins at the Gates estate.

What utility do you directly derive from free trade agreements? Far less than the CEO of Walmart does.

If you put it in a per capita basis, I imagine that the public benefits as much as an executive does. Of course Wal-Mart is going to benefit more, because they're going to sell a million of the object in question, as opposed to you buying just one.

The army protects us from attack. If we went to war, do you own any property that a foreign power would like to bomb? No? Then you derive less utility from national defense than a man who owns a factory.

I can't think of many nuclear bombs that discriminate against targets.

Mistake number four. The savings each person got is irrelevant. What is relevant is their RELATIVE rate of taxation. The tax cut has made the system more regressive, not more progressive. This would POTENTIALLY not be a problem except for

It isn't a regressive tax; the same people are paying the same proportions of income they did once before. The only thing that has changed is that the actual dollars paid into the system has dropped.

Mistake number five. The federal income tax is a small portion of total taxes paid for everyone but the very rich. Thus, a regressive tax cut on federal income taxes makes the system REALLY regressive.

Almost half of all federal revenues are through individual income taxes, not a "small portion."

Mistake number 6. Rich men never get beat up.

Except when the Congress is run by the tax-and-spend lobby.

Mistake number 7. Why would the rich guy not show up for drinks? Despite the charade of "paying" for drinks, the utility of his beer far outweighs what he pays out for it, as it should - HE OWNS THE BAR. Why do you think he's so rich? He inherited the place from his parents, and they inherited it from his grandparents. The bar has been a family business for 200 years.

You'se got some learnin's to do in that there eco-nam-ics course, because the majority of the rich in this country earned it through a successful business or investment of some kind, not by being Conrad Hilton's great-granddaughter.

Mistake number 8. Where is the rich guy going to drink instead? Not all bars are equal. Take Bill Gates. He was able to become the richest man in the world by being born in America and taking advantage of America's opportunities. Could he have done so in Britain? Maybe. Could he have done so in Russia? Probably not. Could he have done so in Zimbabwe? Haha, no. So, the value of being born in America is, for Bill Gates, approximately 40 billion dollars. I get a higher value out of having immigrated to this country too. But it's not 40 billion... yet

Don't tell Carlos Slim Helú!

What's my point? America is the biggest consumer market in the world with some of the most educated and richest people on the planet. Every country is a market and just like casinos, each makes you pay a cover charge if you want to "play." Rich men should stop bullshitting us: the cover charge they pay to enter the American market is a bargain when you take into account the profits they can reap here as opposed to Singapore or France. Or Zimbabwe.

If all of their assets were liquid, U.S. billionaires often have less per capita (divided among their total national population) than overseas billionaires do. If Bill Gates divided up his fortune amongst the U.S. population, everybody would get $186. If the richest man in France did that, each person would get $422.

 

[ShannonCT]

I don't know who those politicians are, but I assume that the whole idea with socialism for the rich (to borrow a phrase from one most excellent USAian) is what they find harmful for moral, social and political reaosn, and I can but agree with them. I have no wish to elaborate on this though, either you get it or you don't. If the last mentioned is the case, don't expect me to educate you for free.

No worries. I paid plenty of money for several years of Economics education from world-renowned professors who were lucid, insightful, and coherent. Why would I pay anything for your elaboration of what so far amounts to an incoherent collection of stray thoughts in broken English?