Re: how to compare living standards


"tonyp" <tonyp@xxxxxxxxxxxxx> wrote in message
news:n92dnRMpLavImq_ZRVn-pQ@xxxxxxxxxx

"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.

Hi,

Yes.

.....I have no reason to believe your estimate -- or
disbelieve it, for that matter.

No one knows the answer. I base my estimate on a combination of historical
data and my conversation with people as to how much trouble they are willing
to go to in order to avoid having taxable income.

...Either way, what say you to my _actual_
question?

Sorry, I thought that was the question.
As to under what circumstances I would donate extra money to the Bush
administration, I can't imagine any.
But during WW II (while in grade school), I donated pennies and collected
newspapers and tin foil to "help win the war".

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?

No.

....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.

It looks like some people just can't see the contradiction in protesting
lower taxes by putting the money they saved to better use than it would have
had if they had their way on tax policy.


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.

The idea is that people will arrange to not have much "taxble income"
subject to a 90% tax rate. Is is the very rich that can make their
"taxable income" be just about whatever they want it to be.


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.

People have a lot of control over how much gasoline they burn. Car pool,
walk, bus, bike, telecommute, move, change jobs, more efficient car, etc.


....But since you keep wanting to cut
income taxes at the _top_,

If that will generate more government revenue.

.....all I see you advocating is yet another shift of
the "tax burden" down the income scale.

That may be all you can see.

I see making the US less dependent on imported oil, more efficient use of
energy, and stimulating economic growth and tax revenue.
(and probably reducing obesity also ;-)


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.

Looks like about 1.3% of revenue. That assumes that it didn't actually
reduce overall revenue as high income individuals give assets to lower
income relatives so as to reduce their estate tax.


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.

But it is those "near rich" who pay that tax. .

....The base exemption is very
negotiable.

And has been changing every year. But is scheduled to increase to infinity
then return to 1M in 2011.

.....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.

Except she (actually her kids) is most likely to pay it. Because she didn't
realize how rich she was.

....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?

They are unlikely to pay any estate tax. Because they know they are rich.

....You want to argue on principle?

Yes. My "fairness principle" here is that it is "unfair" to have a tax that
anyone can avoid if they hire a smart lawyer

....Start by
making your fairness arguments at the _high_ end.

I did. Those who know they are rich can avoid the tax.

When you do, keep this in mind: there's no such thing as "fair".

I agree that "fair" is subjective.

...The only
question in life is "fair compared to what?"

I would say "fair according to who?"

....Tax money has to come from
_somewhere_,

Yes.

....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.

Er, you are defending the tax that your jet-setting heiress can pay a few
grand to her $200,000 a year lawyer to avoid. And on the grounds of
"fairness"!!!


...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?!?

Notice that you switched from "GOP" to "the rich".

The GOP want to end the estate tax. I say largely because of the "fairness"
issue, plus it funds the Democrats.
The Dems want to keep it for the same reasons..

But do "the rich" want to end it? Recall it was Bill Gates parents and
....who was on that list of billionaires that lobbied to keep it?

And surely even you can see the irony in Teddy Kennedy claiming that keeping
the estate tax will spare us from having the children of rich families
running American politics.


(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.

But individual Americans are investing in it.

...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 --

At the same time individual Americans (through mutual funds for example) are
investing in global and multinational companies.

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.

Sounds like you think Uncle Sam will have enough money troubles. Another
reason why I don't want to depend on him for all of my retirement income.

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.

Except it means more of my retirement income will be from global stocks and
bonds, and less will be from Social Security.



???? 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?

I know of none. Do you?


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.

Smartest?

....He gets to
tax the whole economy.

But for Social Security, he is restricted to a capped flat tax on US wages.

....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 I do.

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

Whic is why I don't think we should all depend on him alone. He should
encourage those 300 million nieces and nephews to save more for their own
retirement.



,,,,,,,
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(_)
jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
This message was brought to you using biodegradable
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