Re: how to compare living standards


"Jim Blair" <jeb@xxxxxxxx> wrote

But for the USA today, I would estimate the
top marginal income tax rate to be
in the range of 25-30%.


I assume you mean "the Laffer optimum", i.e. the rate which maximizes
government revenue. I have no reason to believe your estimate -- or
disbelieve it, for that matter. Either way, what say you to my _actual_
question?

Are you telling me, in a roundabout way, that if the top marginal rate were
reduced substantially below 25%, then _you_ would be inclined to voluntarily
contribute some of _your_ tax savings back to the Treasury? You were making
a big deal about "rich liberals" not doing that. I just want to know what
it would take to get _you_ to do it.

By the way, what is your hang-up with the "top marginal income tax rate"?
Marginal rates are related to income _brackets_. If you, or Laffer, assert
that a "top marginal rate" of 50% kicking in at $10 million a year, or 90%
kicking in at $100 million a year, would seriously reduce government
revenue, or substantially distort the economy, then I laugh down my nose in
your general direction.


Of course I have been advocating increases in
some taxes. I wanted Ross Perot's 50 cent increase
in the gas tax back in 1992, and think it should have been
incremented up to several dollars a gallon by now.
(the ways people avoid the income tax are generally harmful,
the ways they avoid the gas tax are usually beneficial)


If you advocate raising the gas tax while cutting income taxes in the
_lower_ tax brackets, I'm with you. That would reduce gasoline demand
because, even though low-income people "have" to drive, they would not spend
_all_ their tax savings on gasoline. But since you keep wanting to cut
income taxes at the _top_, all I see you advocating is yet another shift of
the "tax burden" down the income scale.


As of 2004, the IRS was collecting about
$25billion a year in estate tax.

What fraction of the federal budget is that?


It ain't zero.


Who do you figure paid _that_?

Mostly people who died "richer than they thought they were",
or who on principle didn't want to pay a lawyer for something
of no immediate tangable benefit to themself.

http://www.geocities.com/capitolhill/4834/estate.txt

Note especially the comments by Grinch.


Once again, Jim, there's principle and there's brackets. If you want to
argue that _any_ estate tax is "unfair" as a matter of principle, do _not_
cite examples of its incidence on the near-rich. The base exemption is very
negotiable. A retired schoolteacher who (thanks to small, steady
investments in those never-failing mutual funds of yours) leaves a portfolio
worth $2million should not pay estate tax? Fine. How about a retired
schoolteacher who (thanks to a wise selection of 6 numbers out of 48) leaves
an estate worth $200million? How about a 3rd-generation investment banker
who (thanks to leveraged buyouts, greenmail, and government contracts)
leaves an estate of $2billion? You want to argue on principle? Start by
making your fairness arguments at the _high_ end.

When you do, keep this in mind: there's no such thing as "fair". The only
question in life is "fair compared to what?" Tax money has to come from
_somewhere_, and if it's more "fair" to collect $1K from each of one million
people getting by on $20K incomes, or to collect $1billion from a
jet-setting heiress who will still have $1billion left over, then go ahead
and say so.


...If it is soooo easy to avoid the estate tax,
why has God's Own Party fought
tooth and nail for years to repeal it?

Same reason the Dems fought tooth and nail to defend it.
Because lawyers support Dems.


Your cynicism is showing, Jim. You think the rich want to end the estate
tax just to save on lawyer fees?!?


(On the workers of the world supporting US retirees)

You mean those same governments that support US
deficits by buying our treasury bonds?


Yes, them. We're not talking about _today_, Jim. Look, to _invest_ in the
"world economy" we first have to stop _borrowing_ from it. The "world
economy" is currently "investing" in _us_, big time. They supply us with a
net surplus of about a trillion dollars a year in goods and services, today,
in exchange for financial claims on our future production -- i.e. government
bonds and corporate assets. They are in the position you want _us_ to be
in. They will be wanting to see actual returns (a surplus of real goods and
services flowing _their_ way) in "the future" -- i.e. when we are all
retired.

To achieve your dream of "them" supporting "us" in our retirement, _we_ have
to run current-account and/or government _surpluses_ today. It's the _sum_
of those two that represents our net aggregate investment in the "global
economy". Increasing the government deficit (by reducing FICA collections)
and reducing the current-account deficit (by assuming or requiring
individuals to invest the money abroad) accomplishes exactly nothing, on net
and in the aggregate.


???? Can you name even one broad based mutual fund
that has lost money during the last 20 years?
Or during the last 40 years?


I do not have encyclopedic knowledge on the subject. Are you asserting
there are none?


Read my "stock broker joke" again. The dumb guy thinks
he can pick the winners. The smart guy does not try to.


The smartest fund manager in the room is therefore Uncle Sam. He gets to
tax the whole economy. He has absolutely no worries about picking good
companies for _his_ "fund". On the flip side, he's in no danger of getting
"above average returns", either.

I know, I know: he doesn't get to include foreign companies in his fund.
But, given his current tax policy and the (non)saving habits of is 300
million nieces and nephews, HE DOESN'T HAVE THE MONEY.

-- TP


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