Democrats have left moderate voters behind

[Digressions]

IUC, the core problem with what you’re saying here is that federal tax revenues (as %GDP) have more or less remained flat since the 1950s. They rarely get above 18% and they rarely get below 16%. When they do, it’s because of ephemeral macroeconomic conditions - such as in the wake of 2008-9, when they dipped below 15%. On the high side, the dotcom boom put them briefly near 20%. They always revert to the mean within a couple years.

Here’s a table with every year going back to 1950 to demonstrate.

Keep in mind what marginal income tax rates have done over that period. In 1950, the top rate was 91%! In 1964, it went to 70%. In the mid-80s it briefly got as low as 28%. And it’s mostly settled in the high 30s ever since — 39.6% or 37.6%.

But spending is another story. See if you can spot the trend in federal spending as %GDP. It doesn’t revert to any mean. On the contrary, it has followed a very clear trend.

These two charts illustrate our problem. It is not that we haven’t taxed enough. We’ve had very high tax rates during this period. It’s that our spending has grown.

And I don’t think many people have internalized that the problem is set to get significantly worse….because of entitlements. They’re on auto-pilot. And the metrics that determine their annual outlays are moving away from Treasury’s favor, not towards it.

Let's put aside Gov. Daniels for a moment.(If someone could find the video of him producing those numbers to the public would be helpful.)

Also, set aside the government spending side for a moment. We should all agree that entitlements are the driver. The solution is not that difficult. It’s the ability of politicians to quit politicking that hinders.

Let's stay on revenues. One problem is the way revenues are reported. Another problem is the way revenues are viewed.

Like you’ve done here, stating that rates aren't as important because receipts generally come in at ~17%, is disingenuous. Rates are extremely important. When top marginal rates were 91% people were forced to spend capital on tax deductible items, such as labor and equipment. This artificially stimulated demand/consumption.

Rates also limited the ability of companies to outsource(nominal manufacturing jobs peaked in 1979)(Disney moved to guest workers around 1990 and on and on), and pay executives exorbitant amounts of money. (Insert ceo compensation chart here.) Rates matter for a multitude of reasons.

A major problem this country has is the way taxes are viewed and discussed. Taxes are viewed as government thievery. The right uses percentage of tax receipts as argument in favor of their policies. And people eat it up. Ha.

As I stated above money is relative. You don't pay taxes alone. We pay taxes. And the fact that the top 1% keep paying the higher percentage of taxes is bad for the vast majority of Americans.

When I was younger, I complained about my bill for drying gas for my corn. An old farmer told me I should stop complaining because that bill was a privilege.

Not having a bill for drying gas would have been much worse.

 

[crazed_hoosier2]

Let's put aside Gov. Daniels for a moment.(If someone could find the video of him producing those numbers to the public would be helpful.)

Also, set aside the government spending side for a moment. We should all agree that entitlements are the driver. The solution is not that difficult. It’s the ability of politicians to quit politicking, that hinders.

Let's stay on revenues. One problem is the way revenues are reported. Another problem is the way revenues are viewed.

Like you’ve done here, stating that rates aren't as important because receipts generally come in at ~17%, is disingenuous. Rates are extremely important. When top marginal rates were 91% people were forced to spend capital on tax deductible items, such as labor and equipment. This artificially stimulated demand/consumption.

Rates also limited the ability of companies to outsource(nominal manufacturing jobs peaked in 1979)(Disney moved to guest workers around 1990 and on and on), and pay executives exorbitant amounts of money. (Insert ceo compensation chart here.) Rates matter for a multitude of reasons.

A major problem this country has is the way taxes are viewed and discussed. Taxes are viewed as government thievery. The right uses percentage of tax receipts as argument in favor of their policies. And people eat it up. Ha.

As I stayed above money is relative. You don't pay taxes alone. We pay taxes. And the fact that the top 1% keep paying the higher percentage of taxes is bad for the vast majority of Americans.

When I was younger, I complained about my bill for drying gas for my corn. An old farmer told me I should stop complaining because that bill was a privilege.

Not having a bill for drying gas would have been much worse.

Whoa, hold on.

I view taxes as the means by which we fund government. Yes, I do think it’s incredibly important how much of our money remains in our control versus how much is put into the control of politicians. I’ll proudly plead guilty to that.

But they’re still just the money government needs to pay its bills. But what bills they have to pay are, also, within their control. And they constantly ask us to tighten our belts….while never once, in my lifetime, tightening their own.

Do I resent this? Yes. And I’m not going to apologize for it. It’s utterly reckless on the part of our elected leaders.

It hasn’t always been the case that government outspends its means. But it has pretty much universally been the case since the Great Depression/New Deal era.

And taxes seem to have basically maxed out…which is why they need to be focusing, at long last, on reducing the cost of government rather than trying in vain to raise the revenues to pay for whatever they want to spend, without limits.

 

[crazed_hoosier2]

Let's put aside Gov. Daniels for a moment.(If someone could find the video of him producing those numbers to the public would be helpful.)

Also, set aside the government spending side for a moment. We should all agree that entitlements are the driver. The solution is not that difficult. It’s the ability of politicians to quit politicking that hinders.

Let's stay on revenues. One problem is the way revenues are reported. Another problem is the way revenues are viewed.

Like you’ve done here, stating that rates aren't as important because receipts generally come in at ~17%, is disingenuous. Rates are extremely important. When top marginal rates were 91% people were forced to spend capital on tax deductible items, such as labor and equipment. This artificially stimulated demand/consumption.

Rates also limited the ability of companies to outsource(nominal manufacturing jobs peaked in 1979)(Disney moved to guest workers around 1990 and on and on), and pay executives exorbitant amounts of money. (Insert ceo compensation chart here.) Rates matter for a multitude of reasons.

A major problem this country has is the way taxes are viewed and discussed. Taxes are viewed as government thievery. The right uses percentage of tax receipts as argument in favor of their policies. And people eat it up. Ha.

As I stated above money is relative. You don't pay taxes alone. We pay taxes. And the fact that the top 1% keep paying the higher percentage of taxes is bad for the vast majority of Americans.

When I was younger, I complained about my bill for drying gas for my corn. An old farmer told me I should stop complaining because that bill was a privilege.

Not having a bill for drying gas would have been much worse.

Also, I’m not going to let go of you besmirching Daniels on the Iraq War thing.

You are right that he and his staff calculated the cost estimation. And, of course, he was also the one who reported it.

My point is that the calculation didn’t come out of thin air. The OMB wasn’t the one making estimates of duration, troop movements and levels, supplies consumption, weapons usage, etc.

They all came from DoD — where else would they come from? Daniels’ task was to take all these assumptions and digest them into a dollar figure. And that’s what he did.

His calculations of the costs of these assumptions weren’t what proved faulty. The assumptions themselves did.

Again, this is like blaming Garbage Out on the software…rather than on the Garbage In. It makes no sense.

 

[crazed_hoosier2]

Like you’ve done here, stating that rates aren't as important because receipts generally come in at ~17%, is disingenuous. Rates are extremely important. When top marginal rates were 91% people were forced to spend capital on tax deductible items, such as labor and equipment. This artificially stimulated demand/consumption.

Rates also limited the ability of companies to outsource(nominal manufacturing jobs peaked in 1979)(Disney moved to guest workers around 1990 and on and on), and pay executives exorbitant amounts of money. (Insert ceo compensation chart here.) Rates matter for a multitude of reasons.

On these parts, you’d be onto something…if the 1970s hadn’t happened.

Marginal rates still went to 70% until Reagan’s reforms (JFK and LBJ lowered them from 91% to 70%).

A common word heard in the 70s was stagflation. Until that time, most mainstream (Keynesian) economists believed that inflation and employment had a consistently sympathetic relationship. Look up the Phillips Curve. They were taken aback by what happened in the 70s. They didn’t think stagflation was possible (not for very long, anyway).

But they shouldn’t have been. Because there was this one particular economist who had told them a decade or so prior that the Phillips Curve was bullshit, or at least very temporary. None of them listened to him though. In fact, none of them listened to him even after he was proven right about this.

 

[Digressions]

Whoa, hold on.

I view taxes as the means by which we fund government. Yes, I do think it’s incredibly important how much of our money remains in our control versus how much is put into the control of politicians. I’ll proudly plead guilty to that.

But they’re still just the money government needs to pay its bills. But what bills they have to pay are, also, within their control. And they constantly ask us to tighten our belts….while never once, in my lifetime, tightening their own.

Do I resent this? Yes. And I’m not going to apologize for it. It’s utterly reckless on the part of our elected leaders.

It hasn’t always been the case that government outspends its means. But it has pretty much universally been the case since the Great Depression/New Deal era.

And taxes seem to have basically maxed out…which is why they need to be focusing, at long last, on reducing the cost of government rather than trying in vain to raise the revenues to pay for whatever they want to spend, without limits.

Like it or not, rates have a function. Always have. Rn rates function to ship jobs elsewhere, promote wealth gains to the wealthiest among us, and promote investment over consumption.

 

[crazed_hoosier2]

Like it or not, rates have a function. Always have. Rn rates function to ship jobs elsewhere, promote wealth gains to the wealthiest among us, and promote investment over consumption.

So give me a Reader’s Digest view of where you think rates should be set, given the current circumstances.

And feel free to throw in what you’d do with deductions and credits, since they go hand in hand.

 

[IUCrazy2]

IUC, we can all agree that spending cuts are necessary to at least come closer to balancing the budget. Therefore, it is easy to toss the phrase "cut spending" around.

Unfortunately, if cutting spending was all that easy Congress would have done it long ago.

So why isn't easy? It isn't easy because the mandated programs of Social Security and Medicare along with the discretionary defense spending are popular.

Given that Trump cannot run again maybe he will make an all out effort to tackle the popular Big Three. Then with a Republican Congress bitting the bullet behind him, we can actually cut spending.

It isn't easy because government took over some things in a way that they shouldn't have. The way Social Security was set up was a collosal mistake. I think that much of the explosion in medical costs can be in some part blamed on Roosevelt freezing pay forcing employers to get creative on benefits like healthcare. I am not changing those kind of fundamental beliefs.

However, to both your and @crazed_hoosier2 points, yes, spending is a problem and the biggest problem is the entitlement programs. Crazed mentioned that tax rates held mostly the same over time while spending increased. What did we see in the private sector over that same time frame though? The decline (to almost extinction) of private pension plans. Corporations were able to offload that liability to the government while maintaining the rate of taxes. Half of private workers in the 60's had access to a pension plan through work. Only 15% do now. They have to fund that through social security, medicare, and contributions to a 401k that hopefully their employer matches. Given that massive liability that most employers were able to shuffle to the government, you would expect either higher taxes or more compensation to employees that would help the government with the increased burden or their employees to better self fund. Neither has happened.

The pendulum needs to swing back a bit, one way or the other.

 

[snarlcakes]

I addressed the Trump tax cuts and explained why they weren't progressive about a week ago. It was a direct response to you. They aren't progressive. They appear to be progressive, but they aren't, which is my broader point.

A person's "bottom line" relative to everyone elses bottom line is the only measure that matters wrt a person's ability to compete in a market (even in the aggregate). Tax rates do effect a person's bottom line and therefore matter.

I'm not sure I can make it any simpler. Just because a person received a cut that didn't affect their disposable income, it still had a net effect on their bottom line, correct?

If these are your concerns you should much more worried with the growth in money supply (on average 7% the past 50yrs) and the Cantillon effect from it.

 

[Digressions]

On these parts, you’d be onto something…if the 1970s hadn’t happened.

Marginal rates still went to 70% until Reagan’s reforms (JFK and LBJ lowered them from 91% to 70%).

A common word heard in the 70s was stagflation. Until that time, most mainstream (Keynesian) economists believed that inflation and employment had a consistently sympathetic relationship. Look up the Phillips Curve. They were taken aback by what happened in the 70s. They didn’t think stagflation was possible (not for very long, anyway).

But they shouldn’t have been. Because there was this one particular economist who had told them a decade or so prior that the Phillips Curve was bullshit, or at least very temporary. None of them listened to him though. In fact, none of them listened to him even after he was proven right about this.

But that is obvious because supply of goods/commodities are not a factor included in the Philips curve.

In fact, I think it was you who poo-poo'd my suggestion that droughts, bird flu, and ASF, also played a role in inflation, while all the rage was the wage-inflation cyclone. Whether that was you, or not, a sincere thank you. I wish I would have thought of that myself.

It's great that we didn't have to cut the 4 million jobs President Trump's Fed Chair said we would have to cut. It's amazing what a little bit of corn, soybeans, oil, ect, can do, right?

 

[crazed_hoosier2]

It isn't easy because governmwnt took over some things in a way that they shouldn't have. The way Social Security was set up was a collosal mistake. I think that much of the explosion in medical costs can be in some part blamed on Roosevelt freezing pay forcing employers to get creative on benefits like healthcare. I am not changing those kind of fundamental beliefs.

However, to both your and @crazed_hoosier2 points, yes, spending is a problem and the biggest problem is the entitlement programs. Crazed mentioned that tax rates held mostly the same over time while spending increased. What did we see in the private sector over that same time frame though? The decline (to almost extinction) of private pension plans. Corporations were able to offload that liability to the government while maintaining the rate of taxes. Half of private workers in the 60's had access to a pension plan through work. Only 15% do now. They have to fund that through social security, medicare, and contributions to a 401k that hopefully their employer matches. Given that massive liability that most employers were able to shuffle to the government, you would expect either higher taxes or more compensation to employees that would help the governmwnt with the increased burden or their employees to better self fund. Neither has happened.

The pendulum needs to swing back a bit, one way or the other.

Do you know why private employers dodged defined benefit pensions (and other legacy labor costs and liabilities)?

Google the name Rick Wagoner.

It shouldn’t surprise any of us that fellow business leaders wouldn’t want to follow in his footsteps. He didn’t take GM there, it was there (or on the track there) his first day on the job. But he certainly failed to get them off that track. And GM went bankrupt.

The single biggest causal factor in their bankruptcy was legacy labor costs and liabilities.

Defined benefit pensions are a dinosaur for a reason. In no way should we want the pendulum swinging back in that particular direction…especially as we’re getting a first row seat to the impending implosion of the biggest DB pension plan on earth.

 

[Digressions]

So give me a Reader’s Digest view of where you think rates should be set, given the current circumstances.

And feel free to throw in what you’d do with deductions and credits, since they go hand in hand.

The most important thing would be to add brackets. I would also slowly start a path to a top marginal rate of 49%. Assuming outside factors remained stagnant, I would start eliminating/lowering the EITC. Relativity is the key, not the number.

I acknowledge the short-term benefits of tax reductions if outside forces warranted it. So, there would be scenarios where I would cut taxes. Thank you for asking.

What would your fix for taxes look like? Also, feel free to move to entitlements and spending whenever you're ready. I appreciate the back and forth.

Just fair warning, I'm about to start preparing for a winter storm, so I might not be as active. I do care about what you have to say.

 

[crazed_hoosier2]

But that is obvious because supply of goods/commodities are not a factor included in the Philips curve.

In fact, I think it was you who poo-poo'd my suggestion that droughts, bird flu, and ASF, also played a role in inflation, while all the rage was the wage-inflation cyclone. Whether that was you, or not, a sincere thank you. I wish I would have thought of that myself.

It's great that we didn't have to cut the 4 million jobs President Trump's Fed Chair said we would have to cut. It's amazing what a little bit of corn, soybeans, oil, ect, can do, right?

Droughts and bird flu don’t ring any bells for me.

Also, are you saying that the debunking of the Phillips Curve should’ve been obvious?

If so, you should read the history of its debunking. Friedman and Schwartz were laughingstocks in their profession for making this case when they made it.

They predicted 1970s stagflation in the same way Peter Wallison predicted the subprime mortgage collapse annd bailout…and both of them about a decade before the respective dams broke.

And guess who became the bane of the rest of the members of Financial Crisis Inquiry Commission? I’ll just post the commissioners names and let everybody guess.

The lesson, of both of these things, is that we’ve been listening to the wrong people. We listen to the people who tell us what we want to hear. And we scoff at and ridicule people who tell us what we don’t want to hear.

 

[crazed_hoosier2]

The most important thing would be to add brackets. I would also slowly start a path to a top marginal rate of 49%. Assuming outside factors remained stagnant, I would start eliminating/lowering the EITC. Relativity is the key, not the number.

I acknowledge the short-term benefits of tax reductions if outside forces warranted it. So, there would be scenarios where I would cut taxes. Thank you for asking.

What would your fix for taxes look like? Also, feel free to move to entitlements and spending whenever you're ready. I appreciate the back and forth.

Just fair warning, I'm about to start preparing for a winter storm, so I might not be as active. I do care about what you have to say.

I’ll circle back to you later as well. I have some things to take care of.

 

[snarlcakes]

Do you know why private employers dodged defined benefit pensions (and other legacy labor costs and liabilities)?

Google the name Rick Wagoner.

It shouldn’t surprise any of us that fellow business leaders wouldn’t want to follow in his footsteps. He didn’t take GM there, it was there (or on the track there) his first day on the job. But he certainly failed to get them off that track. And GM went bankrupt.

The single biggest causal factor in their bankruptcy was legacy labor costs and liabilities.

Defined benefit pensions are a dinosaur for a reason. In no way should we want the pendulum swinging back in that particular direction…especially as we’re getting a first row seat to the impending implosion of the biggest DB pension plan on earth.

Also, pension plans are vastly overrated if they’re not attached to CPI or some cost of living measurement. Take Indiana teachers pension for example. The State pays 7.5% of a teachers salary and school pays 3%. I’d much rather have the option of having a matching program with that money than a pension. I’d be much better off.

 

[crazed_hoosier2]

Also, pension plans are vastly overrated if they’re not attached to CPI or some cost of living measurement. Take Indiana teachers pension for example. The State pays 7.5% of a teachers salary and school pays 3%. I’d much rather have the option of having a matching program with that money than a pension. I’d be much better off.

You’re not kidding you’d be better off.

On the DC plan I’ve been trustee of, virtually everybody who works a full career retires a millionaire. And those numbers keep going higher.

Before too long, we’ll start seeing multi-millionaires. And most of these people don’t have anything more than a high school education. And we’re in Southern Indiana.

Anybody who says that DB is preferable to DC is either a liar or ignorant.

 

[Digressions]

Droughts and bird flu don’t ring any bells for me.

Also, are you saying that the debunking of the Phillips Curve should’ve been obvious?

If so, you should read the history of its debunking. Friedman and Schwartz were laughingstocks in their profession for making this case when they made it.

They predicted 1970s stagflation in the same way Peter Wallison predicted the subprime mortgage collapse annd bailout…and both of them about a decade before the respective dams broke.

And guess who became the bane of the rest of the members of Financial Crisis Inquiry Commission? I’ll just post the commissioners names and let everybody guess.

The lesson, of both of these things, is that we’ve been listening to the wrong people. We listen to the people who tell us what we want to hear. And we scoff at and ridicule people who tell us what we don’t want to hear.

I do think that it's obvious, but I have the luxery of hindsight, and their forethought. Kudos to those two.

To your point in the last paragraph: Both Keynes and Friedman were forced to fight against conventional wisdom. They both sought to improve the world they inherited. Our world is not perfected yet.

 

[crazed_hoosier2]

I do think that it's obvious, but I have the luxery of hindsight, and their forethought. Kudos to those two.

To your point in the last paragraph: Both Keynes and Friedman were forced to fight against conventional wisdom. They both sought to improve the world they inherited. Our world is not perfected yet.

The problem with Keynes isn’t his theories. It’s that human politicians make for terrible Keynesian policymakers. If they had the discipline to manage the business cycle with deficits during contractions and surpluses during expansions, we’d be in a very different place.

And I always thought it was ironic that it was on this basis that he rejected his friend and colleague Hayek’s basic views.

Here was what Keynes said about TRTS:

"In my opinion (TRTS) is a grand book. Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.​

​

What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger ahead is the probable practical failure of the application of your philosophy in the United States."​

​

It would be fascinating to know what Keynes (and Hayek, etal) would say about where we sit today.

 

[hoot1]

Also, pension plans are vastly overrated if they’re not attached to CPI or some cost of living measurement. Take Indiana teachers pension for example. The State pays 7.5% of a teachers salary and school pays 3%. I’d much rather have the option of having a matching program with that money than a pension. I’d be much better off.

Before ERISA came into being and employers shifted away from defined benefit plans my recollection was the retirement pay was often a percentage of income at the time of retirement.

Thus if their pay increased along with inflation the final retirement pay would reflect inflation.

To cover the ultimate defined benefit payout an actuary working on behalf of the employer would have to predict what the pay of each employee would be at retirement along with the number of years the employee and spouse would live. A fiduciary working with the actuary would determine an investment plan so as to have the necessary funding for each employee.

Needless to say, once employers heard what the actuaries and fiduciaries were telling them, they looked for alternatives to their defined benefit plans. The actuaries and fiduciaries were confident they could meet the challenges, but employers didn't share their confidence.

In my view, the shift away from defined benefits has made Social Security vital to all too many people these days even with employers contributing to 401 (k) plans.

 

[snarlcakes]

The problem with Keynes isn’t his theories. It’s that human politicians make for terrible Keynesian policymakers. If they had the discipline to manage the business cycle with deficits during contractions and surpluses during expansions, we’d be in a very different place.

And I always thought it was ironic that it was on this basis that he rejected his friend and colleague Hayek’s basic views.

Here was what Keynes said about TRTS:

"In my opinion (TRTS) is a grand book. Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.​

​

What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger ahead is the probable practical failure of the application of your philosophy in the United States."​

​

It would be fascinating to know what Keynes (and Hayek, etal) would say about where we sit today.

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriched some.”

It’s a quote from his Essays of Persuasion and he’s sort of railing against inflation in the short essay.

 

[snarlcakes]

It's a natural hedge. If you exchange your money for goods, you no longer are exposed to inflation because you aren't holding the currency. It's quite possible that Bitcoin may (or already has) become preferred to gold. You’re correct that it will be up to the market.

I'm still not convinced on the second point. Skipping the "why" there is a need for monetary interventions, why would you want to take that option away? Do you not believe that the feds QE prevented further hardships?

I never answered the questions. I think QE only kicks the can down the road, makes the problem worse, and transfers the hardships to other people (wage class & younger people). The FEDs balance sheet is 10x now. Debt to GDP is up to 125%. CPI hasn’t been under 2% for 4 years and trending back up. At some point the music is going to stop.

 

[CO. Hoosier]

The bottom line is referring to how much money someone has to spend. If discretionary income/money works better, that's fine.

The problem with the tax analysis you provided now and originally (you posted several articles... I think one was from The Guardian) is that it uses percentages as some sort of evidence of progressiveness. Percentages don't purchase goods and services. I don’t recall the exact numbers, but it was from your source. For efficiency- and I'll try to be generous to your side- let's say a lower middle class worker received a $5,000 reduction(read- increase in discretionary income), it would only truly be progressive/beneficial if the people above received less than $5,000.

Why? Because the heart of the matter is that Republicans claim that the tax cut benefits the middle class worker. It in fact, does not. Why not? As I've said for years, if you give everyone something, you've given them nothing. Prices in the aggregate are derived from money in the aggregate. If you shift the amount of money in the aggregate, prices will shift. Agreed? An example is inflation.

So, if you give everyone $3,500, you would expect that inflation would eventually move aggregate prices to a place where no one is better off. But if you give 99% of people $3500, and 1% of people $20,000, as aggregate prices move, the $3500 is eaten away from everyone, leaving the 1% relatively better off.

This fact is important to everyone, whether you invest in rockets, or not. Everyone is competing with everyone else in some form or fashion. Take housing for instance. I don’t buy Dairy Queen, or Coke, but Buffet owns 242,000 acres. I do buy acres.

Full Stop

I can't let this go:
"To illustrate just how much the progressivity of the tax code has increased over the past 40 years, consider that in 1980 the top 1 percent of earners bore 19 percent of income taxes, the top 10 percent of earners bore nearly half of income taxes, and the bottom 50 percent paid 7 percent. That’s twice as much as today."

This goes to the deception of voodoo economic proponents. They are using this statistic as positive evidence in favor of current policy.

When Musk hires lower wage H1B workers, the tax burden placed upon the 1% will continue to grow, and the middle class tax burden will continue to diminish. Yay!

Is the increase in the standard deduction a tax cut? If so isn’t that a fortiori an increase in progressiveness?

 

[BradStevens]

I don’t think we can or even should attempt to legislate fairness and justice. (Fair share tax policy is stupid on its face ). If we can encourage more economic freedom and competitiveness, which includes eliminating DEI, and other discrimination against minorities in education and employment, and get serious about rent seekers and influence peddling, fairness and justice will take care of itself. But it willl take at least a generation.

Legislating against discrimination is legislating fairness and justice.

 

[BradStevens]

The reasoning?

 

[mcmurtry66]

Legislating against discrimination is legislating fairness and justice.

On a contingency

 

[CO. Hoosier]

Legislating against discrimination is legislating fairness and justice.

Don’t agree. Creating and legislating about specified classes is legislating about discrimination against members of a class. Fairness and justice is a much larger and broader concept. The due process clause covers that regarding government. There is no statutory obligation for us to treat each other with fairness and justice.

 

[Spartans9312]

https://www.wsj.com/economy/what-happens-when-a-whole-generation-never-grows-up-d200e9ef

“Renata acknowledges that it’s a privilege to be able to wait for a job she loves rather than take whatever’s offered. But she admits that the longer she stands by, a seeming bystander in her own life, the more hopeless she feels about ever launching at all.”

“I still feel like a little kid”

Perspective: Home alone for the holidays

A growing number of Americans will find themselves 'kinless' as they age, making the holidays less enjoyable.

www.deseret.com

“Kinlessness”

“Starting in the past decade, the share of ‘kinless’ prime-aged (18-55) adults - defined here as those who are never married and have no children in the home - exceeded the share of Americans who are married with children for the first time in our nation’s history.”

 

[IUCrazy2]

Do you know why private employers dodged defined benefit pensions (and other legacy labor costs and liabilities)?

Google the name Rick Wagoner.

It shouldn’t surprise any of us that fellow business leaders wouldn’t want to follow in his footsteps. He didn’t take GM there, it was there (or on the track there) his first day on the job. But he certainly failed to get them off that track. And GM went bankrupt.

The single biggest causal factor in their bankruptcy was legacy labor costs and liabilities.

Defined benefit pensions are a dinosaur for a reason. In no way should we want the pendulum swinging back in that particular direction…especially as we’re getting a first row seat to the impending implosion of the biggest DB pension plan on earth.

No, I agree with that. I am saying that the loss of those plans created a hole that was stepped into and filled by government. The problem being that when government stepped in to fill that hole (and others) that corporations got the benefit of not having to worry about those things anymore and were also not asked to kick in anymore to help defray the cost to "We the people". Now, my expectation would be that some of that windfall would probably be kicked back to employees in the form of wage growth then. And that larger growth would create a larger tax pool that government was pulling from so that 17%(ish) rate would still bring in more receipts to cover these new liabilities. That is trickle down.

That didn't happen. What did happen is that around the magical inflection point where really rich and connected people got to start ****ing with our money supply when it went off the gold standard (and corporations began dropping some of their liabilities), corporations and investors made out like bandits. Automation and technology helped make every worker vastly more productive, real wages stagnated, defined pension plans went away, corporate taxes were decreased, and the top ends of our economy did really well.

Cumulative change in real hourly wages of all workers, by wage percentile,* 1979–2013

Okay, well we all know that medical expenses are increasing and most Americans rely on their employer for health coverage. And there are increasing costs there for the employer and the employee. Overall though, net gain for the Chamber of commerce that far exceeds the gains of their employees. So where did that gain go? Well the bosses are making out like bandits, CEO pay trends:

Are CEO's today really worth 296 times what their employees make? If so, what was so bad about CEO's in the 80's and 90's that were only worth 30 to 87 times what their employees make?

So again, I am not some economics genius but I think I am smart enough to look at charts and identify a problem. I think corporations and people should be able to make all the money they can make. However, I also believe that government's role is to govern responsibly within the parameters that their voters have assigned. Voters of all stripes want Social Security. They want Medicare. They want a social safety net. I would argue that based on the charts above that some people have done really well in this economic environment and that decisions they have made have made it so that our social safety net has had to pick up the slack. Cutting taxes for them hasn't made anything cheaper for me or you. Regular old technological development and shipping medium income manufacturing jobs overseas for slave labor wages has done that. (wandering off the path for a second: So that yellowish colored 1980's fridge that is in people's garages and still kicking has been replaced by nominally cheaper ones made in Mexico or China that need replaced more frequently. So yay, cheaper junk, but how much of it is throw away stuff that doesn't last as long and which subsequently cuts into those "savings"?) Returning to the path, looking at all of those charts and data, I come to the conclusion that yes, government spending needs addressed. However, as we have both admitted, most of the growth in government spending has been in the social safety net. How do you cut spending there without exacerbating our growing social dysfunction? I don't think you can. Someone is going to have to pay more. Walmart and McDonald's can't have their pay gap covered by government services anymore. Either they need to do something about those stagnating wages or they are going to have to kick more into the social safety net that employers like them have had a hand in increasing the costs. Walmart is the largest private sector employer in the US. McDonald's is in the top 50 but that is diluted because of franchises. Those two employers are everywhere.

https://www.google.com/amp/s/www.cnbc.com/amp/2020/11/19/walmart-and-mcdonalds-among-top-employers-of-medicaid-and-food-stamp-beneficiaries.html

Again, as I posted above, you and I end up paying for that burger or toaster one way or the other. Trickle down didn't happen in the wages so if we are going to have the system our voters want, Corporations are going to have to be forced into alleviating some of the government spending issues they are responsible for along with the spending cuts you and I both believe need to occur. They aren't doing it on their own with wages so the only other option is taxing them.

And wait until more automation and AI get a chance to make another run through the workforce. The middle class has managed to hold on by a thread. If AI does a job on those white collar middle class jobs like globalization has done to manufacturing jobs, that is when you are in line rich people up against a wall territory. We have to figure this out.

 

[BradStevens]

Don’t agree. Creating and legislating about specified classes is legislating about discrimination against members of a class. Fairness and justice is a much larger and broader concept. The due process clause covers that regarding government. There is no statutory obligation for us to treat each other with fairness and justice.

Yes, there is a statutory obligation for us to treat each other with fairness and justice. That's exactly what anti-discrimination laws are about.

 

[snarlcakes]

No, I agree with that. I am saying that the loss of those plans created a hole that was stepped into and filled by government. The problem being that when government stepped in to fill that hole (and others) that corporations got the benefit of not having to worry about those things anymore and were also not asked to kick in anymore to help defray the cost to "We the people". Now, my expectation would be that some of that windfall would probably be kicked back to employees in the form of wage growth then. And that larger growth would create a larger tax pool that government was pulling from so that 17%(ish) rate would still bring in more receipts to cover these new liabilities. That is trickle down.

That didn't happen. What did happen is that around the magical inflection point where really rich and connected people got to start ****ing with our money supply when it went off the gold standard (and corporations began dropping some of their liabilities), corporations and investors made out like bandits. Automation and technology helped make every worker vastly more productive, real wages stagnated, defined pension plans went away, corporate taxes were decreased, and the top ends of our economy did really well.

Cumulative change in real hourly wages of all workers, by wage percentile,* 1979–2013

Okay, well we all know that medical expenses are increasing and most Americans rely on their employer for health coverage. And there are increasing costs there for the employer and the employee. Overall though, net gain for the Chamber of commerce that far exceeds the gains of their employees. So where did that gain go? Well the bosses are making out like bandits, CEO pay trends:

Are CEO's today really worth 296 times what their employees make? If so, what was so bad about CEO's in the 80's and 90's that were only worth 30 to 87 times what their employees make?

So again, I am not some economics genius but I think I am smart enough to look at charts and identify a problem. I think corporations and people should be able to make all the money they can make. However, I also believe that government's role is to govern responsibly within the parameters that their voters have assigned. Voters of all stripes want Social Security. They want Medicare. They want a social safety net. I would argue that based on the charts above that some people have done really well in this economic environment and that decisions they have made have made it so that our social safety net has had to pick up the slack. Cutting taxes for them hasn't made anything cheaper for me or you. Regular old technological development and shipping medium income manufacturing jobs overseas for slave labor wages has done that. (wandering off the path for a second: So that yellowish colored 1980's fridge that is in people's garages and still kicking has been replaced by nominally cheaper ones made in Mexico or China that need replaced more frequently. So yay, cheaper junk, but how much of it is throw away stuff that doesn't last as long and which subsequently cuts into those "savings"?) Returning to the path, looking at all of those charts and data, I come to the conclusion that yes, government spending needs addressed. However, as we have both admitted, most of the growth in government spending has been in the social safety net. How do you cut spending there without exacerbating our growing social dysfunction? I don't think you can. Someone is going to have to pay more. Walmart and McDonald's can't have their pay gap covered by government services anymore. Either they need to do something about those stagnating wages or they are going to have to kick more into the social safety net that employers like them have had a hand in increasing the costs. Walmart is the largest private sector employer in the US. McDonald's is in the top 50 but that is diluted because of franchises. Those two employers are everywhere.

https://www.google.com/amp/s/www.cnbc.com/amp/2020/11/19/walmart-and-mcdonalds-among-top-employers-of-medicaid-and-food-stamp-beneficiaries.html

Again, as I posted above, you and I end up paying for that burger or toaster one way or the other. Trickle down didn't happen in the wages so if we are going to have the system our voters want, Corporations are going to have to be forced into alleviating some of the government spending issues they are responsible for along with the spending cuts you and I both believe need to occur. They aren't doing it on their own with wages so the only other option is taxing them.

And wait until more automation and AI get a chance to make another run through the workforce. The middle class has managed to hold on by a thread. If AI does a job on those white collar middle class jobs like globalization has done to manufacturing jobs, that is when you are in line rich people up against a wall territory. We have to figure this out.

It brings a tear to my eye when people start to discover Bitcoin. You have the diagnosis correct, going away from sound money. The answer however isn’t higher taxes. It’s Bitcoin. You’ll be saving your nieces by Easter Sunday.

Side note Social Security is awful for the middle class. They would be much better off taking the 12% of their income and investing it into the market. They get back pennies on the dollars.

 

[CO. Hoosier]

Yes, there is a statutory obligation for us to treat each other with fairness and justice. That's exactly what anti-discrimination laws are about.

Of course you are right about protected classes so long as said protected class members are in certain defined circumstances or engaging in certain defined activities. That far different from legislating justice and fairness in general. Perversely, people like Robin Deangelo believe these laws legitimize being unfair and unjust to people not included in the protected classes.

.

 

[hoot1]

It brings a tear to my eye when people start to discover Bitcoin. You have the diagnosis correct, going away from sound money. The answer however isn’t higher taxes. It’s Bitcoin. You’ll be saving your nieces by Easter Sunday.

Side note Social Security is awful for the middle class. They would be much better off taking the 12% of their income and investing it into the market. They get back pennies on the dollars.

SC, you bring up a good point about hourly workers having 12% more to invest if Social Security and Medicare didn't come out of their pay checks The question of course remains how many would invest versus just spending it.

One thing we know for sure is that all too many of hourly workers don't have much to invest as per this article which in part states...

Hourly workers have always been the backbone of the U.S. economy, and the importance of the work they do has only become heightened during this pandemic crisis. Yet 4 of 10 Americans have less than $400 on hand for a crisis or emergency.

 

[hoot1]

No, I agree with that. I am saying that the loss of those plans created a hole that was stepped into and filled by government. The problem being that when government stepped in to fill that hole (and others) that corporations got the benefit of not having to worry about those things anymore and were also not asked to kick in anymore to help defray the cost to "We the people". Now, my expectation would be that some of that windfall would probably be kicked back to employees in the form of wage growth then. And that larger growth would create a larger tax pool that government was pulling from so that 17%(ish) rate would still bring in more receipts to cover these new liabilities. That is trickle down.

That didn't happen. What did happen is that around the magical inflection point where really rich and connected people got to start ****ing with our money supply when it went off the gold standard (and corporations began dropping some of their liabilities), corporations and investors made out like bandits. Automation and technology helped make every worker vastly more productive, real wages stagnated, defined pension plans went away, corporate taxes were decreased, and the top ends of our economy did really well.

Cumulative change in real hourly wages of all workers, by wage percentile,* 1979–2013

Okay, well we all know that medical expenses are increasing and most Americans rely on their employer for health coverage. And there are increasing costs there for the employer and the employee. Overall though, net gain for the Chamber of commerce that far exceeds the gains of their employees. So where did that gain go? Well the bosses are making out like bandits, CEO pay trends:

Are CEO's today really worth 296 times what their employees make? If so, what was so bad about CEO's in the 80's and 90's that were only worth 30 to 87 times what their employees make?

So again, I am not some economics genius but I think I am smart enough to look at charts and identify a problem. I think corporations and people should be able to make all the money they can make. However, I also believe that government's role is to govern responsibly within the parameters that their voters have assigned. Voters of all stripes want Social Security. They want Medicare. They want a social safety net. I would argue that based on the charts above that some people have done really well in this economic environment and that decisions they have made have made it so that our social safety net has had to pick up the slack. Cutting taxes for them hasn't made anything cheaper for me or you. Regular old technological development and shipping medium income manufacturing jobs overseas for slave labor wages has done that. (wandering off the path for a second: So that yellowish colored 1980's fridge that is in people's garages and still kicking has been replaced by nominally cheaper ones made in Mexico or China that need replaced more frequently. So yay, cheaper junk, but how much of it is throw away stuff that doesn't last as long and which subsequently cuts into those "savings"?) Returning to the path, looking at all of those charts and data, I come to the conclusion that yes, government spending needs addressed. However, as we have both admitted, most of the growth in government spending has been in the social safety net. How do you cut spending there without exacerbating our growing social dysfunction? I don't think you can. Someone is going to have to pay more. Walmart and McDonald's can't have their pay gap covered by government services anymore. Either they need to do something about those stagnating wages or they are going to have to kick more into the social safety net that employers like them have had a hand in increasing the costs. Walmart is the largest private sector employer in the US. McDonald's is in the top 50 but that is diluted because of franchises. Those two employers are everywhere.

https://www.google.com/amp/s/www.cnbc.com/amp/2020/11/19/walmart-and-mcdonalds-among-top-employers-of-medicaid-and-food-stamp-beneficiaries.html

Again, as I posted above, you and I end up paying for that burger or toaster one way or the other. Trickle down didn't happen in the wages so if we are going to have the system our voters want, Corporations are going to have to be forced into alleviating some of the government spending issues they are responsible for along with the spending cuts you and I both believe need to occur. They aren't doing it on their own with wages so the only other option is taxing them.

And wait until more automation and AI get a chance to make another run through the workforce. The middle class has managed to hold on by a thread. If AI does a job on those white collar middle class jobs like globalization has done to manufacturing jobs, that is when you are in line rich people up against a wall territory. We have to figure this out.

Craze, greatly appreciate the information contained in your post.

There is so much which could be said that I am almost speechless.

In reading your post I was reminded of a Warren Buffett quote and the importance along with the advantages of passive income versus hourly income as per the following...

“If you can’t make money in your sleep, then you are going to work until you die”.​