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Occupy Wall Street's statement

Discussion in 'Alley of Lingering Sighs' started by damedog, Oct 16, 2011.

  1. Splunge

    Splunge Bhaal’s financial advisor Adored Veteran Pillars of Eternity SP Immortalizer (for helping immortalize Sorcerer's Place in the game!) Torment: Tides of Numenera SP Immortalizer (for helping immortalize Sorcerer's Place in the game!)

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    Leaving the death part out for the moment, I earn money, I pay income taxes on it, and I buy a car with it (and thus select to whom it goes). Does that mean that the car dealership shouldn't have to pay taxes on the money I gave it? (Yes, the dealership gets to deduct what it cost them to provide me with the car, but arguably that's in effect the same with an estate, except that the cost of acquiring the inheritance is nil.)
     
  2. The Great Snook Gems: 31/31
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    No, because buying a car is a business transaction (for the dealership, not for you). If we use your argument then a child should pay taxes on the value of the Christmas presents they receive every year. Also don't forget that twenty dollar check from Grandma for your birthday, that should be taxable also. How about college? Should the amount a parent pays for their child to get a degree be taxable to the child? If a parent can pay for college does that make them rich enough so let's slap another tax on them (or the child)?
     
  3. Splunge

    Splunge Bhaal’s financial advisor Adored Veteran Pillars of Eternity SP Immortalizer (for helping immortalize Sorcerer's Place in the game!) Torment: Tides of Numenera SP Immortalizer (for helping immortalize Sorcerer's Place in the game!)

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    Correct me if I’m mistaken, but I believe the situations you describe (with the possible exception of tuition) are taxable as gifts in the US, but there are annual exemptions up to a certain dollar amount per recipient, with a maximum lifetime exemption equal to the estate tax exemption. I don’t think anyone would argue that gift tax exemptions aren't OK, although the dollar amount of the exemption could be debated.

    I should point out that, in Canada, we have no gift or inheritance taxes, but there are income attribution rules to prevent a person in a high tax bracket transferring income-producing property or investments to, say, a spouse in a lower tax bracket.

    I understand the concept of taxation as it relates to business transactions (I’d better, being an accountant), but business transactions aren’t the only things that are (or should be, although you might disagree) taxable, plus I’m just enjoying playing devil’s advocate. And please don’t get me wrong – I’m not suggesting that a certain amount of inheritance shouldn’t be exempt from tax (and maybe $5 million is just fine), but I’m not opposed to the concept of estate taxes in general.
     
    Last edited: Dec 5, 2011
  4. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    I'm not sure about that, since it seems that we are not really clear on who is exactly doing the protesting. If you believe Snook, it has nothing to do with the poor, since it is a bunch of "rich kids." Personally, I believe it is both the rich and the poor; since it seems that at both ends there is a desire for some fairness in the system. It is those with the "can do" point of view who complain the least, IMO. And THAT is one thing I believe about the notion of class warfare. BTW, the middle in the US is shrinking at a fast pace, which is why things suck here so much at the moment.
     
    Last edited: Dec 6, 2011
  5. The Great Snook Gems: 31/31
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    True, but not taxable as income they are taxable as estate/gift taxes. That is why they shouldn't be used in an analogy with a business transaction as they are very different things.
     
  6. Aldeth the Foppish Idiot

    Aldeth the Foppish Idiot Armed with My Mallet O' Thinking Veteran

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    Sorry to go a few posts up, but I'm with Shaman here - since when is $75K per year among the highest income earners? It's definitely above the median, and while "highest income earners" is a nebulous term with no strict definition, I think most would consider that to be people in the top [enter single digit number] percent. And $75K is no where near that - I'm sure there are many posters on these boards making considerably more than that who do not consider themselves wealthy. Hell, even a family making twice that wouldn't be enough for me to consider them among the "highest income earners".
     
  7. Splunge

    Splunge Bhaal’s financial advisor Adored Veteran Pillars of Eternity SP Immortalizer (for helping immortalize Sorcerer's Place in the game!) Torment: Tides of Numenera SP Immortalizer (for helping immortalize Sorcerer's Place in the game!)

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    Yeah, that surpized me as well.

    No argument there; I was just addressing your original (and fairly broad) assertion that, if you give someone some after-tax money, the recipient shouldn't have to pay taxes as well as that would constitute double taxation. And in that context, the analogy works. Once you differentiate between income types, the analogy falls apart, but I addressed that in the last part of my post when I said "I understand the concept of taxation as it relates to business transactions [...], but business transactions aren’t the only things that are (or should be, although you might disagree) taxable".
     
  8. The Great Snook Gems: 31/31
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    According to the link I posted above from taxfoundation.org, in 2009 Adjusted Gross Income in excess of $66,193 were in the top 25% of tax filers. This group paid 87.3% of all of the federal individual income taxes.

    I will leave it to you to make your own decision as to if the top 25% should be considered upper or middle class. If you look at the numbers it is truly staggering how few people really support so many.

    You are absolutely correct that there really is a difference between how much some makes and if they are wealthy. That is why when Obama was trying to sell his tax on people making more than $200K per year small business owners went crazy. They may be making a lot, but if you keep pumping your money back into your business, you may not really be wealthy.
     
  9. damedog Gems: 15/31
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    The top 20% also own 80% of the wealth, so it's not nearly as unfair as it sounds. It may astound you that the so few people pay so much in taxes, but what astounds me is that there can be such incredible wealth in such few hands.

    What it is even more unbelievable to me is that the "free market capitalism" model, the system that got us into where we are now, is still accepted as the best way to go. What it amounts to in practice is those with enormous wealth are able to exploit those with no wealth with minimal third party (government) interference, and I believe OWS is a sign that people are waking up to that reality.
     
  10. The Great Snook Gems: 31/31
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    Exploit? Don't make me laugh. Listen you are just a 19 year old kid. You are just starting out in life. Do you make $66,193 per year and therefore are in the top 25% of earners and per you responsible for the top 80% of wealth? I doubt it, however stay in school, get a degree in a useful major, get a job, work hard at it and I am willing to guarantee that before too long you can join me in the ranks of the taxpayers in the top 25%. Then you can look at everyone below you and question "What did I do to exploit these people so badly that I'm where I am and they are not". You will quickly realize that you did nothing, the government did nothing, and the people who are complaining that they have nothing, it is because they also did nothing to improve their lots in life.

    I don't believe there is a reasonably intelligent person who with an effort cannot make it in the U.S. Can they make the top 1%?, Probably not as that requires a lot of luck to go with skill and drive. However, the top 25% shouldn't be a problem for anyone and I don't care what race, sex, religion, orientation, etc. they are.
     
    Last edited: Feb 10, 2012
    T2Bruno, Harbourboy and dmc like this.
  11. Aldeth the Foppish Idiot

    Aldeth the Foppish Idiot Armed with My Mallet O' Thinking Veteran

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    Yeah, if we're setting the bar at $66K, a lot of people are going to get there. In fact, it rather surprises me that only 1 in 4 get there. You would think that with a college degree, you would be nearly assured of breaking that threshold within 5-10 years of experience. And I certainly thought more than 25% of people went to college... what did they major in - basket weaving?

    That said, I never like arguments that use percentages like that, because you can never eliminate the bottom XX%. Even if we did a perfect job motivating people to work had and earn more money, no matter what you do, there will always be a bottom XX% that you can never erase. You cannot even do it with people living below the poverty line - unless you want to move to communism, there's always going to be people at the bottom and people at the top.

    And of course it's unlikely that damedog is making $66K per year because of just what you said - he's 19. I was still in college then, and I worked a part time job at the mall. I was only making a few thousand dollars per year, as I imagine most 19-year olds do. But damedog is correct that it makes more sense about the top 25% paying the vast majority of taxes, because the top 25% have the vast majority of money.

    That said, I don't think there are many people out there saying that taxes should be raised on the the top 25% of income earners, or that is what OWS movement is even about. Hell the argument isn't about the top 10% - or even the top 5% most of the time - it's about the top 2%. But I would even go further.

    When you talk percentages with Average Joe, his eyes glaze over. If you want to get something with mass appeal, you have to go with something that someone with a few functioning neurons can understand. I've proposed this before, and I'll do so again. If you want to raise taxes on the wealthy, and you want to do it in a way where Average Joe doesn't think you might want to raise his taxes, this is what you do:

    You create the Millionaire Tax! If you make more than $1 million per year, we have an extra high tax bracket for you - like 45% for income above $1 million per year. That's got to be less than the top 1% of income earners. Average Joe doesn't get pissed off, because Average Joe knows he isn't a millionaire, and short of hitting the lottery, he never will be!
     
  12. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    The average wage for 25 year old, with some college:


    That is an "individual average income," not household, or combined....

    http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

     
  13. The Shaman Gems: 28/31
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    That, and kind of letting the Bush cuts expire, is what I think would generally help the "revenue" part of the equation. By "kind of" I mean that you adjust the categories (tax brackets) upward by 30% to account for inflation, the GDP increasing, and so on. $250,000 in 1980 and in 2015 are slightly different things.
     
  14. Aldeth the Foppish Idiot

    Aldeth the Foppish Idiot Armed with My Mallet O' Thinking Veteran

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    Right - the only way that individual income = combined income = household income is if you are the only income earner in your household. That's true by default if you live by yourself, but most people are either married, or have a live in significant other, or are just living with a friend to split the rent. So in most cases, they aren't the same.
     
  15. damedog Gems: 15/31
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    I think one thing that has been left out of this discussion of OWS's message is it's position on the bank bailouts. They are entirely right, and I believe the majority of Americans agree with them, when they demand some kind of accountability from the financial institutions when we use public money to bail them out. Banks were sitting on around 20 billion in reserves in 2007, which is rather low, but now (thanks to us) they are sitting on 1.6 trillion in reserves. Despite the infallible "throw tons of money at them and hope they use it right" strategy, loans to small businesses has been a net negative since 2008, meaning they are paying back more in loans than they are taking in. Why invest in things that will help the greater society when they are going to pay you for your mistakes anyway? I believe it is the right of the government, if it saved the banks from their own actions with it's own money, to demand that money be spent in job growth.

    You would think that our representatives would at least get serious about better regulations in light of all this, but apparently government is simply too entrenched in the pockets of industry to want to make any serious changes. As of December 2nd, Dodd-Frank regulators have met with Goldman Sachs 97 times, J.P Morgan lobbyists 75 times, Morgan Stanley 73, Bank of America 61, the Chamber of Commerce 30 times, Americans for Financial Reform 19 times, and the Center for Responsible Lending 8 times. I think it's clear who's voice is being heard here.
     
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