THE U.S. IS A LOW-TAX COUNTRY
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That will come sooner or later. There's no way the government is gonna let all that Roth money get by without getting some tax money out of it.
To me, the two are not even related. It's like me saying that I have to base my budget based on what my neighbor across the street does.
That's like saying the only way to decrease my debt is to make more money without even looking at what I spend.
More, more more.... that's the answer I ever hear.
Truer words have never been spoken. Most repair people in about every industry comes out and puts their little machine on what's not working and if it doesn't tell them what is wrong they have no idea what to do. I ran into the same problem with a relatively new refrigerator... little machine said everything was fine so the repair people have no idea hos to engage their brain and figure it out... probably because they really have no idea how it works.
If people actually understood Bitcoin the fair value price, in 2025 dollars, is at least 5-10 million.
The irony is Bitcoin solves a lot of the issues you probably have with the current system. The money supply has consistently grown around 7% for the past 50 years. Most of that liquidity eventually flows to scarce desirable assets (land, stocks, art, gold, and etc.). Unfortunately, this causes those assets to far outpace wages and in turn less affordable for more and more people over time.
And as you correctly noted the wealthy get to swoop in and scoop them up when bubbles burst for penny’s in the dollar. Then we start the entire cycle again at a higher elevated level than the previous level.
I’d also add the wealthy are the ones who benefit the most from the growing money supply (newly created capital out of thin air). They can access a shit ton of it, at extremely low rates, and buy up even more scares.
I’m going to be busy coming up for the foreseeable future and won’t be on here as much, as well. Several of my buddies growing up were farmers and some of my fondest memories was going out to their farm and jack assing around. Cheers on future harvests.
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Hopefully you can drop in sometimes. Even though I don't agree with some of your positions I enjoy reading your posts. You always post respectfully .... hate to see you leave.
Thank you, and back at ya. I will pop in every once in awhile, but mainly lurk. This place can get time and thought consuming. Which is a double-edged sword.
I'm a little blue dot in a sea of red. If I got mad everytime I disagreed with someone I wouldn't have any friends, or family.
I'm also not under any illusion that my posts will change the world, but it is gratifying to post something that's not popular, or understood, and see it play out over time. I posted about asset bubbles pre 2008. I posted about the relativity of money, and that if you give everyone something, you've given them nothing pre covid relief, ect.
In the near future, the FFS schedule changes I discussed will be made. It’s so hard to find info/data on it, it may already be changing. Likewise, in the distant future, tax rates will be viwed more by function and less by fairness.
Have a good day, y'all.
No, it is example of something that works just fine in other countries. Obviously the budget isn't under control so why not look at other examples? Better to stick ones head in the sand apparently.
Never said anything about not looking at what was being spent. But there aren't enough cuts to be made to address the deficit on cuts alone. People who think otherwise are living in fantasy land. Neither party is good on the deficit and now that republicans are in charge, they'll ignore the subject because they don't want people looking at it while they destroy the deficit even further.
lol uh huh sure.
Sometimes I don't see anyway out of our mess. I honestly believe that if you could double the government's revenue today at the snap of your fingers without destroying the economy that in 4 or 5 years we'd be running a deficit again.
How people in Trump's last administration treated government money.
www.pbs.org
But now he cares about cutting spending and the deficit? i'll believe it when I see it.
Lavish travel and questionable gifts loom over 6 Trump officials
There are now six current or former Trump cabinet members tangled up in ethics controversies over their use of government resources.
www.pbs.org
But now he cares about cutting spending and the deficit? i'll believe it when I see it.
I've seen the question IUJIM ask about what is their fair share many times and I've never heard a straight answer. The answer is always that they need to pay more. If someone tells me I'm not paying my fair share then tell me what my fair share is....more is not an answer.
No one is going to take the time to come up with exact figures that should be paid mainly because they have no power to implement whatever they come up with anyway. Most people probably also don't have the expertise to come up with an appropriate tax code and know all the factors that go into it (although not that often stops anyone from pretending to be an expert).
I would do away with most (if not all) deductions and make taxes much simpler. I would have different tax brackets still with people making poverty level wages paying little to no taxes and people flying around in their private jets paying more taxes.
If people don't know the facts then how can they say someone should be paying more. To me that is just a copout.
I would support a flat tax. There would have to be some kind of adjustments for low income people. The wealth tax idea thrown around is just plain stupid. If the ultra rich want to hold on to their millions of shares of stock (which is a lot of their wealth) a tax code could be written that would encourage them to sell it so they could collect taxes on the profits. Currently, long term (1 year or longer) capital gains are taxed at a lower rate. Why not make that lower rate a window, say the lower rate applies between 1 and 10 years and anything outside of that window the gain is taxed as normal income. (Note: I just randomly selected 10 years for example purposes)
if you don't know the facts, then how can you say they should be paying less or even the same?
What we do know is we have a ballooning deficit.
What we also know is you can't squeeze revenue from the poor and the middle class is also shrinking.
What we also know is that the wage gap between the wealthy and the not so wealthy is widening at an exponential rate.
Which makes one wonder why some people are delusional enough to think the wealthy are getting a raw deal.
This statement makes no sense.
You may argue that the political will to make sufficient cuts isn’t there. But of course Congress could cut spending as much as they wanted or needed to. That’s far more within their control than is how much they can raise in tax revenue. They literally attach a dollar amount to every spending item.
If you read through one of my long posts above, you’ll see that since 1950 (so 74 years) we’ve only had 1 year where tax revenues eclipsed 19% GDP. And only 10 years where they were above 18%.
A couple things about this:
1) For 12 of the 74 years, the top income tax rate was 91%. For another 17 years, the top rate was 70%. The top rate the lone year we went over 19% GDP was 39.6%.
2) The years above 18% all happened during years with high growth.
What this suggests is that growth has been a better predictor of tax revenues than tax rates. There are a number of reasons for this. One of them is that taxation drives economic decisions - many of them that not only deprive the Treasury of tax dollars, but that also deprive our economy of growth-inducing investment or consumption.
So, to your statement, it would be a lot more in line with history to say that there’s only so much we can hope to raise in taxes. If Congress ever decides to fix the fiscal imbalance, most of it is going to have to come from paring expenses.
This is a zombie lie. No matter how many times it’s debunked, it keeps on coming back.
Here is the World Bank’s chart of our GINI - which measures distribution of income. The higher the GINI, the fewer hands our aggregate income is in (ie, higher is more income inequality).
As you see, it’s been flat since the early 90s. It bounces between 40 and 41.3…on a scale of 100.
This is a zombie lie. No matter how many times it’s debunked, it keeps on coming back.
Here is the World Bank’s chart of our GINI - which measures distribution of income. The higher the GINI, the fewer hands our aggregate income is in (ie, higher is more income inequality).
As you see, it’s been flat since the early 90s. It bounces between 40 and 41.3…on a scale of 100.
GINI is widely used and provides a single simple number which is easy to understand. However, it does not show details about how incomes are distributed. Details which reveal inequality.
This thread is supposed to be focusing on incomes and taxation along with somehow balancing the federal government budget. A task which in my view must be resolved by Congress with input from the Executive branch.
The problem, as I see it, is that Congress and any Executive branch at a given time represents a broadly diverse constituency. We pride ourselves on being a country with a diverse population. But with diversity (including greatly unequal incomes and wealth) comes the problem of having our politicians with constituents whose interests conflict.
Furthermore, our pols today don't seem to get along. The fact they somehow must compromise so constituents with conflicting interests all get a fair shake escapes them.
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Neighbors love to talk about their home values rising..
When I remind them this is a bookkeeping increase and will result in an out of pocket increase in property taxes, they stare at me in silence.
And you don't hear me saying that i should pay less either so what right do I have to say the rich should be paying more. I think there's a lot of envy/jealousy when talking about the rich.
A question...
If you had to choose one priority or the other, which would you choose:
1) Reducing income inequality
2) Putting the country on a sustainable fiscal path
Charlie Munger made this observation shortly before he passed away.
He prefaced it by pointing out that many people get envious despite being so much better off than earlier generations were. In other words, people with this worldview assess their standing less by how they're doing compared to last year or last decade...or to their parents or grandparents, but rather by how they're doing compared to other people they see around them, or on TV, or on social media. And, to make matters worse, they view it through a lens of fairness. As if financial success happens as some kind of cosmic chance -- and, in a fair world, would happen to them, too.
That's a self-defeating way to look at oneself and the world. I think envy works the opposite way of what people intend when they adopt it.
I'm sure that encourages it. People see so-and-so getting their shiny new Mercedes. Or "did you see what the inside of their house looks like"? Or "the rock on that finger?!" Or, gosh it really must be nice to have a place at Vero Beach.
But, as Munger said, this has always gone on to some extent. It's part of human nature -- which is something that really doesn't change much, if at all.
I don't think it can be eradicated, but I do think that a person can navigate around it if they choose to. And they can start by having genuine gratitude for the many blessings they do have.
Jerry Seinfeld had a good bit on "our lives suck"....
For sure. But with social media you don’t escape it. I think it’s worse with women. My exes having thousands of followers/friends. It’s just an endless scroll of that new house in vero, kid accepted to wherever, lost 10lbs, got a new nose, opened a boutique, got a new car times thousands, and that’s before you get to the fairy tale influencers. In the past You drove home spoke to your nosey neighbor then were free. No more
This is a zombie lie. No matter how many times it’s debunked, it keeps on coming back.
Here is the World Bank’s chart of our GINI - which measures distribution of income. The higher the GINI, the fewer hands our aggregate income is in (ie, higher is more income inequality).
As you see, it’s been flat since the early 90s. It bounces between 40 and 41.3…on a scale of 100.
The income gap | Miller Center
Along with terrorism, climate change, disease pandemics, and the prospect of persistently low economic growth, inequality has crept up the international policy agenda to become one of the most urgent and important issues of our time.
A better chart. You don't have to bother reading the blather.
The income gap | Miller Center
Along with terrorism, climate change, disease pandemics, and the prospect of persistently low economic growth, inequality has crept up the international policy agenda to become one of the most urgent and important issues of our time.millercenter.org
A better chart. You don't have to bother reading the blather.
It looks like it says the same thing as FRED’s chart. There are a couple of different entities that calculate GINI. FRED’s comes from the World Bank.
But our GINI has been pretty much flat since the early 90s. Yet people still believe that it’s skyrocketing.
Look at the scale on the left of this chart - keeping in mind that Gini goes from 1 to 100. Ours is in the low 40s and has been for quite a long time.
Compare my chart to top marginal tax rates.
I'm going to try to read Brad's second link.
The other problem is the only way to usually bring it down is from a negative event. A depression, recessions, war, decling living standards, and etc.
Wrt your last link:I think you're a lot more well versed in economics than I am, so I hope you'll bear with me. I don't understand why one asset class can't grow faster than GDP. I'd assume that happens a lot, and it's not necessarily a sign of a bubble. If what you said were true, any time an asset class grew more than say 3% in a year it would be a bubble and not indicative of its "true value." (In fact, I don't even understand the comparison of an asset's rise in value and GDP; I don't think GDP takes account of asset value fluctuations).
In fact, if you look at GDP vs. the S&P 500 over the last 80 years, you're going to see that the S&P doubled the growth rate of GDP. Gold did, too. Do you believe the S&P and gold have been in a bubble that whole time? Or am I missing something here?
FWIW, on the underlying question I asked about, here's a blog post re this from an economist. But it appears this guy thinks the causation runs the other way:
As an aside, I'm very skeptical any time someone thinks something can be solved in macroeconomics "almost by definition." If that were true, economists would be able to predict large market crashes--or anything of substance, really. There are almost always too many variables and it is just too complex for these things to be figured out by armchair thinking or retrofitting data onto a theory. I also question how you can determine "fundamental value" other than what the current price of something is.
Here's another interesting article on asset bubbles and the problems in predicting (or even defining) them:
Detecting and Measuring Asset Bubbles Not Easy Tasks | St. Louis Fed
How do booms and busts in asset prices, in particular for stocks and real estate, relate to financial crises? And why are such bubbles difficult to predict?www.stlouisfed.org
"Typically, four macroeconomic indicators in a country show common features before financial crises: 1) a slow run-up of asset prices followed by sharp contractions just before the onset of the crisis, 2) a slowdown of real gross domestic product (GDP) growth, 3) a sizable increase in government debt-to-GDP ratios, and 4) large capital inflows translating into negative current accounts. These elements can be observed in the U.S. and other advanced economies just before the crisis erupted in 2007-08."
This sounds like a fastball blew right by them. What they’re describing is after the bubble has burst, right? Absolutely reliable source, but lagging.
"Some economists conceptualize bubbles as situations in which the price of the asset grows faster than the asset's fundamental value, a notion that is similar to Shiller's explanation. When the asset price surpasses the asset's fundamental value, the asset can be considered overvalued. The idea behind this definition is that prices serve as signals of market conditions, derived by demand and supply: The increase in price signals a shortage of supply; eventually, supply increases, the price drops and there is a new equilibrium in price and quantity. However, in times of bubbles, prices may not serve as good signals and, thus, may not reflect market conditions or changes in the underlying value of the asset. Instead, the bubble sends out a signal that the asset is more valuable than it actually is."I think you're a lot more well versed in economics than I am, so I hope you'll bear with me. I don't understand why one asset class can't grow faster than GDP. I'd assume that happens a lot, and it's not necessarily a sign of a bubble. If what you said were true, any time an asset class grew more than say 3% in a year it would be a bubble and not indicative of its "true value." (In fact, I don't even understand the comparison of an asset's rise in value and GDP; I don't think GDP takes account of asset value fluctuations).
In fact, if you look at GDP vs. the S&P 500 over the last 80 years, you're going to see that the S&P doubled the growth rate of GDP. Gold did, too. Do you believe the S&P and gold have been in a bubble that whole time? Or am I missing something here?
FWIW, on the underlying question I asked about, here's a blog post re this from an economist. But it appears this guy thinks the causation runs the other way:
As an aside, I'm very skeptical any time someone thinks something can be solved in macroeconomics "almost by definition." If that were true, economists would be able to predict large market crashes--or anything of substance, really. There are almost always too many variables and it is just too complex for these things to be figured out by armchair thinking or retrofitting data onto a theory. I also question how you can determine "fundamental value" other than what the current price of something is.
Here's another interesting article on asset bubbles and the problems in predicting (or even defining) them:
Detecting and Measuring Asset Bubbles Not Easy Tasks | St. Louis Fed
How do booms and busts in asset prices, in particular for stocks and real estate, relate to financial crises? And why are such bubbles difficult to predict?
Sound familiar?
You don’t think growing the money supply is the main driver of these bubbles?
Income inequality will always exist. To complicate matters individuals and families move into and out of what we call poverty. Businesses fail and people have health problems. Some parts of the country see jobs go elsewhere.
The private sector with help from the government has historically promoted an economy which has created immense wealth and high incomes. r
Some fifty years when both parties agreed to bring Americans above what they called the poverty line we have struggled with poverty and inequality. So it isn't as if inequality hasn't had it's day in the sun.
In the 1980s a balanced budget through growth brought about by tax reductions made many of us start believing a balanced budget was achievable. We've only had one since then. So it isn't as if a sustainable path to reducing the fiscal shortfall hasn't gotten lip service.
Chosing a priority isn't my call. Given today's politics I would say trying to improve our deficit problem will get way more attention with income inequality being almost ignored.
