The Poor, the Rich and the Ugly by dreamtrove

REAL WORLD EVENT DISCUSSIONS

The Poor, the Rich and the Ugly

POSTED BY: DREAMTROVE
UPDATED: Thursday, April 21, 2011 06:06
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Tuesday, April 19, 2011 12:31 PM

I've been avoiding this because these things are whirlpools of sinking partisanship, but I have to weigh in here: (ETA: I think this post deserves its own thread, the discussion of who we mean when we say things like "poor" "rich" "welfare recipient" "taxpayer" etc.)

I think there's a popular misconception:

The financial trainwrecks of this country are not "poor" by classical definition. They are people with poorly managed finances. I have several times in my life found myself dealing with people who live in trailer parks, have six non-working cars in the yard, and rentacenter is coming to the door to collect their furniture. These guys are not always on welfare, very often they work. Sometimes decent jobs, 30-40k.

A lot of people I've known on welfare are drug addicts who are busy supporting their dealer. Some of them are rich kids, but they've gotten themselves classified as "mentally disabled" so they can go on and support their habit and their dealer.

Some recipients are the actual disabled, or the elderly. A lot are people who worked their whole lives to save money in a trust fund that some idiot banker gambled away on mortgage derivatives.

Some are people who, despite being disabled, and eligible for disability, chose to work their whole lives, and are suddenly unable to do so.

Some are millionaires living in grand estates, but are eligible for a handout, and so take it. Some are eligible for two or three, and take them.

And yes, some are system gamers who are determined to cheat the economy. These guys are usually neither lounging around or kicking back, and they're not hardworking contributors to society, they tend to be taking the time off from online poker. That's because this sort of manipulation takes a certain kind of mind, an organized mind capable of understanding and manipulating complex rules systems, a kind of mind that the trailer bound couch potato doesn't have.

I think the left thinks its helping the poor, and I think the right thinks its pushing society to work harder, but I don't think these are the important things going on.

A small % of welfare is going to help people who need it, who are or aren't poor. A large % is going to people who don't need it and are rich, and a moderate % is going to people who are manipulating it to support some underworld industry. It's overall a terrible way to run a railroad.

The better way, IMHO, to analyze this is to say "what is the need (of the poor, disabled, etc)" and then "what is the real world cost of that need" and then "Who is paying for it?" and "how can we cover that need without being a burden to the population?"

Finally, let me start off with this: "Whose responsibility is it?"

If we're to take a serious look at this, some of these situations are hard luck cases, and the answer is that the responsibility belongs to us, collectively, not some segment of us, but all of us who want that to be there for us if we are suddenly unable to work for whatever reason.

It's not the responsibility of the rich, or of the poor, or the govt, it's the responsibility of society as a whole, as long as we're not willing to starve if we have an accident or hit a bad job market.

That said, what isn't our responsibility?

Feeding someone's drug habit
Helping buy new gold-plated forks because the gold plate is wearing off the old ones
Hiring prostitutes
Taking a trip to the Bahamas
Taking a trip to the Casino
Investing in high risk Derivatives
Quitting your job
Throwing parties for your boys
Buying a flatscreen TV

These are all things that have been done with welfare money by people I know.

You can think what you want about these activities, from a libertarian perspective, however:

What they aren't is our responsibility, as a society.

If we accept the concept of social safety net, we do so because we want it their for us and ours, and we do so to stop people from descending into crime, etc. or starving, etc. I think even Auraptor would agree that these are things we don't want.

I also wanted to detail where this money is currently coming from:

A tax on wages < $100,000 of about 15% (15.3%, scheduled to scale up to 20% as liabilities of the current system don't change.) It does not really matter how you are employed, you pay this tax. Whether or not the entire thing appears on your W2 depends on your employment status, but you pay it nonetheless.

The result of this is that it is added, in a compound manner to the price of everything we pay, since all middle class people pay it as well, your retailers, truckers, warehouse workers and manufacturers are paying it, and that's hiking up the price of everything you buy. If you're middle class, you're spending most of your disposable income on goods and services.

Compound FICA is roughly 25% of the cost of everything you buy. About 60% of your income is spend on goods and services for a typical middle class household, so this makes for 15% of your income.

So, the social welfare system is cost you about 30% of your income. If you work 40 hours, that means you're working 12 hours, or a day and a half, so from Monday through the middle of Tuesday, to support this system.

Now, the above system sucks. I think that's a pretty solid statement. A cocker spaniel could design a better one. Could a human? Feel free to give it a try.

We need to actually analyze how much this support really costs, and also who should really pay for it, and how. I think a decent solution should provide the social safety net the people want, (even if those people aren't you, there are clearly people here who want it, even though they don't use it,) and at the same time does not cause the damage to society and the economy that the people don't want (even if those people are not you, clearly people here don't want that.)

Fire away

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 1:15 PM

MAGONSDAUGHTER

I'm kind of typing on the run, but it seems to me that welfare does not support anyones drug habit, unless your welfare system is heaps more generous than ours and your drugs are very cheap. Most druggies I know, either work for their habit, or pay for it by illegal activity or prostitution.

There are a lot of people who receive welfare of some kind in this country who are not poor and not deserving in any way. That was largely a policy of one of our most conservative governments, and now of course, this has all become a voter insistent entitlement.

But there are also a lot of people who need a bit of support, particularly those with illness, mental or disability. Doesn't mean they can't work, but they may not be able to work much or all the time. And the elderly. I hate the thought of older people living in squalor.

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Tuesday, April 19, 2011 1:23 PM

HARDWARE

Quote:
Originally posted by dreamtrove:
...If we're to take a serious look at this, some of these situations are hard luck cases, and the answer is that the responsibility belongs to us, collectively, not some segment of us, but all of us who want that to be there for us if we are suddenly unable to work for whatever reason.

It's not the responsibility of the rich, or of the poor, or the govt, it's the responsibility of society as a whole, as long as we're not willing to starve if we have an accident or hit a bad job market...

Prior to FDR the responsibility was on you or your family. It had always been the only way things were done. However, the politics of the time made the established order in Washington just about shit their britches. Communists had seized power in Russia, were fighting a civil war in China and socialists were gaining power in Germany. In fact, an army had marched on Washington only a few years earlier and the army had to be called out to destroy their squatter camp and disperse them. If the bonus army had gotten violent the white house would have burned again.

Redistribution of wealth through social security and welfare was the only way to save their collective bacon. So, they did it.

Where in the Constitution does it authorize the government to give money to people? It doesn't. It shouldn't. Big brother is not here to protect you from a rainy day. Bad luck happens and it is through your wit, guile and prior preparation that you survive it.

The more I get to know people the more I like my dogs.

...and he that has no sword, let him sell his garment, and buy one. Luke 22:36

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Tuesday, April 19, 2011 2:36 PM

RIONAEIRE

Beir bua agus beannacht

I think this a good post and you have worded it in a very reasonable and logical way, sounds very neutral to me which is good, the way you describe it. I will look forward to seeing what people can come up with, I agree that we need to give it another look, decide how to procede as a society to make sure people get what they need in a logical way. I'm not cool with that credit card idea though, where the government sees everything we buy and says "I'm sorry, you didn't have to go out to dinner with your sister this month, I'm deducting your pay", that's just not kosure".

"A completely coherant River means writers don't deliver" KatTaya

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Tuesday, April 19, 2011 3:32 PM

WHORACLE

Quote:
Originally posted by RionaEire:
I think this a good post and you have worded it in a very reasonable and logical way, sounds very neutral to me which is good, the way you describe it. I will look forward to seeing what people can come up with, I agree that we need to give it another look, decide how to procede as a society to make sure people get what they need in a logical way. I'm not cool with that credit card idea though, where the government sees everything we buy and says "I'm sorry, you didn't have to go out to dinner with your sister this month, I'm deducting your pay", that's just not kosure".

"A completely coherant River means writers don't deliver" KatTaya

Did I miss the "credit card" idea? Please explain. More.

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Tuesday, April 19, 2011 5:39 PM

BYTEMITE

Magons: he said that he has known people who DID use welfare money to buy drugs. He used to live in Chicago in the inner city, if that helps you reconcile his observation.

He also distinctly mentioned the elderly and disabled as people in need of support.

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Tuesday, April 19, 2011 5:48 PM

DREAMTROVE

Quote:
Originally posted by Magonsdaughter:
I'm kind of typing on the run, but it seems to me that welfare does not support anyones drug habit, unless your welfare system is heaps more generous than ours and your drugs are very cheap. Most druggies I know, either work for their habit, or pay for it by illegal activity or prostitution.

There are a lot of people who receive welfare of some kind in this country who are not poor and not deserving in any way. That was largely a policy of one of our most conservative governments, and now of course, this has all become a voter insistent entitlement.

But there are also a lot of people who need a bit of support, particularly those with illness, mental or disability. Doesn't mean they can't work, but they may not be able to work much or all the time. And the elderly. I hate the thought of older people living in squalor.

Magon,

It's the number one thing that welfare recipients I've known personally have done with their check. The reason isn't the people, it's the organization of the drug dealers. The checks all come on the first of the month. So, the dealers come around and give out free samples, just before people get their checks. Then, with judgment impaired, they collect the mail, and the druggie signs over his check.

Drug dealers have a special operation. It involves getting people stoked up on drugs, and then letting them crash, as the drugs leave the system. At that point, they can be taken into a psych ward and classified as schizo, and then put on disability. They like to collect about half a dozen of these guys and rent them a house together.

That said...

There are a lot of people who need it. But by dollar amounts I calculate it to be about 10% of the budget. I know that if we just cut the budget by 90%, that will not fix the problem. Organized drug gangs and the wealthy will still be getting some, but the poor will be out on the street.

The system could use some reform. Suggestions?

ETA: Byte, it's not just Chicago. This is common in NY as well.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 5:50 PM

DREAMTROVE

Quote:
Originally posted by Hardware:

Where in the Constitution does it authorize the government to give money to people? It doesn't. It shouldn't. Big brother is not here to protect you from a rainy day. Bad luck happens and it is through your wit, guile and prior preparation that you survive it.

Depends on the nature of your bad luck. Anyway, decent analysis of the problem. Any suggestions?

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 5:57 PM

DREAMTROVE

Quote:
Originally posted by RionaEire:
I think this a good post and you have worded it in a very reasonable and logical way, sounds very neutral to me which is good, the way you describe it. I will look forward to seeing what people can come up with, I agree that we need to give it another look, decide how to procede as a society to make sure people get what they need in a logical way. I'm not cool with that credit card idea though, where the government sees everything we buy and says "I'm sorry, you didn't have to go out to dinner with your sister this month, I'm deducting your pay", that's just not kosure".

"A completely coherant River means writers don't deliver" KatTaya

Riona,

Thanks. I understand your concern about surveillance society.

I don't think the EBT system goes that far. It's more like food stamps, there's an approved list. If you took the EBT card to the strip club, it probably wouldn't work because the state probably wouldn't approve them as a vendor of essential services.

The computer is probably going to flag you if you buy 1000 lotto tickets or a large number of anything with a fair street price.

Criminal activities are generally conducted with cash, which is less easily traced. It doesn't have to be impossible, it's just difficult enough that they would use some other income sources. IIRC there's a limited level of cash withdrawal allowed, but this is reasonable, as approved sources won't cover everything. It just helps prevent widespread abuse, of the sort I just explained to Magon.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 5:58 PM

DREAMTROVE

Quote:
Originally posted by Whoracle:
Quote:
Originally posted by RionaEire:
I think this a good post and you have worded it in a very reasonable and logical way, sounds very neutral to me which is good, the way you describe it. I will look forward to seeing what people can come up with, I agree that we need to give it another look, decide how to procede as a society to make sure people get what they need in a logical way. I'm not cool with that credit card idea though, where the government sees everything we buy and says "I'm sorry, you didn't have to go out to dinner with your sister this month, I'm deducting your pay", that's just not kosure".

"A completely coherant River means writers don't deliver" KatTaya

Did I miss the "credit card" idea? Please explain. More.

I think she was referring to EBT
http://en.wikipedia.org/wiki/Electronic_Benefit_Transfer

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 7:44 PM

RIONAEIRE

Beir bua agus beannacht

There was a post not too long ago about such a system being thought about/proposed. Just reitterating what I think of it. But I think that suggestions, even if I don't agree with them, are fair game here on this thread, as DT said.

"A completely coherant River means writers don't deliver" KatTaya

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Tuesday, April 19, 2011 9:01 PM

DREAMTROVE

Riona

EBT is a real system, I was hypothesizing about its use for expanding and taking over some of the roles that are currently held by Social Security and other forms of welfare.

With information in the computer, you can easily not only track abuses, but reverse transactions. If, for instance, someone lied to hide the fact that they had over a million dollars, you could charge them back for the thousands in welfare money that they took.

You voiced some valid concerns about privacy, and additionally, it could be argued that this could create a class society, but each year we're spending $2.14 trillion on welfare on a federal level, and $3.1 trillion when you add in state welfare programs. (not including healthcare programs or housing programs)

43.6 million Americans live below the poverty line, but that number includes me and many people I know who are not, objectively, in need of welfare by any means (For instance, I own my own business.) Do we make less than someone on welfare? Sure. But we're not dependent.

So, how do we calculate the economic shortfall of the poor?

We could take the govt's estimate of $10,000 per person as what it costs to live in this country and multiply it times 43.6 million and get $436 billion. That assumes that 100% of those under the poverty line are making $0. This is not reality. *(it also falsely assume the govt. is accurate, but that's another matter.)

Let's assume that the goal of welfare was to bring people out of the govt's definition of poverty by bringing them up to its 10,000 mark, by supplementing their income through welfare.

The number of people who make $6,000 is very similar to the number who make $10,000, and the number who make $0 is $0, and those two points are pretty much a straight line. each is about 6.6% or 21.8 million. This makes the math pretty simple. Let's call the upper-poor the underemployed, and the lower-poor the destitute.

To supplement the underemployed, we can calculate their total shortfall at $43.6 billion. That was easy. The destitute, $152.6 billion. So together, it's $196.2 billion.

That was really easy. Okay. To shore everyone up to $10,000 would cost us $196.2 billion.

Let's suppose we float this as a bill. Let's pay for it.

Constitutionally, we can impose trade tariffs. So let's do that. The US takes in $2.5 trillion in imports. We need to raise $200 billion, just to be on the safe side. That's an even 8%. An 8% tariff on all imports would shore everyone's income and bring the people out of poverty.

Even that's a bit high, of course, because a fair number of those people are children, and we'd be shoring up their income to $10,000 as well, but the basic principle is pretty simple.

But, if you had guaranteed income, why would the people work? Well, you could have disincentives, such as that your purchases would be monitored. An even more secure way to make sure people didn't quit their jobs to go on guaranteed income would be to offer the 10,000 in services whenever possible, such as housing, food, and other essentials. People are a lot less likely to give up their apartments to get a guaranteed spot in low income housing than they are to give up their $10,000 at the qwik-e-mart for $10,000 in free cash.

Best of all, we can dispense with 12% of the regressive flat tax on the income of the middle class.

It's worth noting that companies like Apple sell iPads at a price determined by what the market will bear.

iPad's cost estimates run from $229 to $271, so let's split the difference and call it $250. It still sells for $500 new. iPad 2 costs $325, and sells for $829. Clearly an import tariff of $20 on iPad is not even going to change the price, nor seriously eat into Apple's profits.

Why, may you ask, is it Apple's responsibility to feed the poor?

Because it's in the Constitution, that's why.

Here's the simple logic: By taking its jobs and moving them to China, Apple is not hiring Americans. Those people who now don't have jobs at apple are not spending money at restaurants that don't exist. Etc. Because Apple doesn't hire Americans, there are more poor people.

So, what happens when, due to the tariffs, and lack of payroll taxes, American companies start competing, and imports go down, and our tariff revenue goes down? Well, when that happens, it will be because there will be more American jobs, and more money in America, and as a result, fewer poor people, and so less need to shore up incomes. I feel pretty confident that if we replace, say 40%, or $1 trillion of those imports with American goods, because we're adding 12 times as much to the US economy as we're losing in tariff revenue, that it will more than compensate.

Of course, to pass such a law, congress would have to like, have sworn an oath to uphold the constitution, or something.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Tuesday, April 19, 2011 10:38 PM

MAGONSDAUGHTER

Quote:
Originally posted by dreamtrove:

Magon,

It's the number one thing that welfare recipients I've known personally have done with their check. The reason isn't the people, it's the organization of the drug dealers. The checks all come on the first of the month. So, the dealers come around and give out free samples, just before people get their checks. Then, with judgment impaired, they collect the mail, and the druggie signs over his check.

I'm not denying that welfare money doesn't fund drugs, it just won't pay for a persons habit. So whether you provide welfare or not, will make little difference to someone's habit or the amount of people with habits. It might make a difference to the crime rate.

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Wednesday, April 20, 2011 2:36 AM

DREAMTROVE

Quote:
Originally posted by Magonsdaughter:
Quote:
Originally posted by dreamtrove:

Magon,

It's the number one thing that welfare recipients I've known personally have done with their check. The reason isn't the people, it's the organization of the drug dealers. The checks all come on the first of the month. So, the dealers come around and give out free samples, just before people get their checks. Then, with judgment impaired, they collect the mail, and the druggie signs over his check.

I'm not denying that welfare money doesn't fund drugs, it just won't pay for a persons habit. So whether you provide welfare or not, will make little difference to someone's habit or the amount of people with habits. It might make a difference to the crime rate.

Perhaps this is the case in Austraila. I've known several people that have paid for their habit this way. Perhaps also this is a colloquialism, by paid for their habit I mean purchased their supply. (usually I would think someone meant entire) It's not the case that drug addicts get drugs when they have no money. Drug dealers offer freebies to new customers, or people they think they can get into prostitution, but to most of the customer base. Poverty can be a great rehabilitator. Certainly, if people are aware that something will cost them personally, they will stop and think before doing it.

I'm thinking back to the last town board meeting here where they were talking about how to spend every last penny of the highway fund on the grounds it would be reduced if they didn't. This is exactly the human mentality that leads to excess.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Wednesday, April 20, 2011 2:49 AM

MAGONSDAUGHTER

I don't think that lack of money stops people from purchasing drugs if they have an addiction or are habitual users. They would find a way to fund it. Welfare isn't much here. The cost of living is high, so really people struggle to house and feed themselves on what payments they get. If they are unemployed, there are endless obligations that they have to fulfil. A lot of people who use also deal, that is how they fund their supply. I would suppose that a bit of small time dealing would be the way that most people are able to supply themselves and stay ahead.

Living in different countries, we may be talking different scenarios - appples and oranges, so I'm not going to argue with you if you have a different experience.

I do think that there is wasted government funds on many, many things over here. One of my major gripes is funding for private schools, which I think is outrageous.

However, just because I think that the government wastes money doesn't mean I don't think that there should be welfare, or services that are funded.

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Wednesday, April 20, 2011 3:35 AM

DREAMTROVE

Maybe it's an economy thing, or a country mouse thing, but there are no other means of getting money, not enough, not where a drug addict is going to get a viable income source to support a habit over a clean individual.

Funding for private schools would be nice to have, but I don't fancy what the govt. might do to the curriculum in exchange for it.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Wednesday, April 20, 2011 5:27 AM

HARDWARE

Quote:
Originally posted by dreamtrove:
Quote:
Originally posted by Hardware:

Where in the Constitution does it authorize the government to give money to people? It doesn't. It shouldn't. Big brother is not here to protect you from a rainy day. Bad luck happens and it is through your wit, guile and prior preparation that you survive it.

Depends on the nature of your bad luck. Anyway, decent analysis of the problem. Any suggestions?

First, I am against income tax. It is a burden on worker and employer alike. Do away with it. Re-task the IRS to determine if a product is an end-use product or a raw material. Put a government sales tax on end-use products. Finished goods, consumer products, furniture, electronics. Excepting raw food, clothing under $200 and housing. So you'd pay tax on a meal out at KFC or Le Bec Fin, but not if you bought chicken and hamburger for a cook out. Buying a couple pair of jeans? No tax. Buying a $200 set of designer jeans? Fork over Uncle Sam's cut. Likewise on purchasing a car or motorcycle from a dealer. Corporations buying goods for their own use would also pay this tax, no evasion, no deductions. You buy it, you pay a cut on your consumption. No more tax return time, you pay at the cash register. A corporation that buys lumber to build furniture frames would not pay tax on that lumber, it is a raw material. But if they buy a truck to haul the lumber they would pay the tax.

This would reduce complexity of taxes, have a restricting effect on consumption, encourage limitation of resources and remove taxation and overhead on employers across the board. But primarily, this would encourage savings. There would be more money to save and invest and there would be more money available for institutions to lend. At the same time it would be less repressive because the people with lower incomes would pay less effective tax, and take home all of their pay. Plus, the things that really matter to them, food, clothing and shelter would not be taxed at their rate of consumption. Meanwhile, wealthier people who buy more expensive goods will be paying a larger percentage of tax for a comparable product. I can buy a $30,000 pickup truck and pay relatively little tax. But if you really want that $200,000 Mercedes, you'd better be prepared to fork over the cash, plus a bit more.

Next, there is nothing wrong with protectionist policies on imported goods. The government is supposed to be regulating trade, not joining in a one world government. Opening our borders to trade has had a disastrous effect on our economy. I'd support a free trade agreement with another country as long as they have the same or higher minimum wage laws as the US. Otherwise it is an open door for corporations to export jobs to that country. Think of it as a way to increase the standard of living in developing nations. Otherwise, protectionism. It is the only way to shield American workers from rapacious corporate greed. Sure, other countries can make cheap goods. But without a large consumer market, i.e. US consumers, there is no demand. We need to start protecting our demand and making our market work for us. When auto imports had heavy tariffs levied on them Honda and Toyota started building cars in the US. People were employed and given benefits. Honda and Toyota sold tariff free cars. Net benefit to all. It works, use it.

The objective of this all is to employ the workforce and encourage savings. Deleting social security, or even stopping it at a given cut off year will put pressure on employers to offer effective retirement plans to their workers. With a more fully employed workforce there is less benefit to an employer letting an older, experienced worker go in favor of a younger, cheaper worker. They may not be able to find one, and they'll be sending a positive signal to their employees that they are not valued.

Finally, the FTC needs to recognize that corporate acquisitions and mergers are bad for the economy. They stifle competition and decrease the economy by putting people out of their jobs. Those who are laid off or fired are usually the older, more expensive and more experienced. But those skills don't equate to a new job in a workforce with a surplus of labor.

We should ideally be shooting for an unemployment rate of 4% or less. Ideally, we should be shooting for an economy that can sustain a single income family. A single wage earner allows a family to have a safety net in an available labor pool in the second adult who can care for children or grandparents and is available to enter the workforce if the primary wage earner is disabled.

Sounds remarkably old-fashioned, I know. But the system worked for many years. No reason why it cannot work again.

The more I get to know people the more I like my dogs.

...and he that has no sword, let him sell his garment, and buy one. Luke 22:36

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Wednesday, April 20, 2011 6:59 AM

NIKI2

Gettin' old, but still a hippie at heart...

You’ll get no argument from me that the system doesn’t need fixing, DT, or that it is taken advantage of by some. ANY system can be taken advantage of, and humans are pretty good at using their brains to do so. That’s a given. I think any system you come up with will have its share of fraud. I don’t have a solution for how we might fix it, but I also don’t think it’s as bad as you make out, or that we should toss it out because it doesn’t work as well as it should (recognizing you didn’t suggest that, but some do/will)

Quote:
It's the number one thing that welfare recipients I've known personally have done with their check

Quote:
There are a lot of people who need it. But by dollar amounts I calculate it to be about 10% of the budget.

I see those as statements of your own observation and your own opinion, not facts, and I would dispute both.

Nonetheless, it is a serious problem, I agree 100%, and if anyone can come up with a VIABLE method other than paying people to root out the fraud, I'd love to hear it.

Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off

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Wednesday, April 20, 2011 11:11 AM

DREAMTROVE

Quote:
Hardware:

First, I am against income tax. It is a burden on worker and employer alike. Do away with it.

I completely agree. I'd go further. I think it gunks up commerce completely.

Quote:
Re-task the IRS to determine if a product is an end-use product or a raw material. Put a government sales tax on end-use products. Finished goods, consumer products, furniture, electronics.

Why not just tax at point of sale? We already have sales tax, we can push any services that need paying for onto the state.

Anything a corporation buys, or anyone buys, that is part of a business, if you tax it, will increase the price of the product that business is producing.

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This would reduce complexity of taxes, have a restricting effect on consumption, encourage limitation of resources and remove taxation and overhead on employers across the board.

Let me give a brief rant to rail against the "fair tax": (because I'm afraid this logic leads there.)
1) If congress ever passed it, they would ADD it to the tax structure, but they'd never really pass the corresponding SUBTRACTION of anything else.
2) It's not fair. The poor and middle class spend all their income on goods and services, the rich invest it. (ETA: I get that you're planning to exempt certain things to avoid this, but remember, guys who make yachts are workers in the economy, as are people who work at fancy restaurants. I'm not sure on this point.)
3) The proposed "fair tax" would take a power currently belonging to the states and hand it to the federal govt.
[/rant]
Huh, I've posted that rant enough times it's gotten pretty short. Moving on.

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But primarily, this would encourage savings.

I might want to encourage savings to some extend, but I'd rather encourage commerce. Not consumption, but investment in society. You don't want to reward hoarding.

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wealthier people who buy more expensive goods will be paying a larger percentage of tax for a comparable product.

This assumes that the wealthy spend their money on consumer goods, but I don't think that's usually the case. I think they mostly invest. I want to tax Mercedes because it's a German import, (inspire of its incredibly spanish name) not because it's a luxury item. I don't really want to hurt specialty car makers.

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Next, there is nothing wrong with protectionist policies on imported goods.

Thank you.

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The government is supposed to be regulating trade, not joining in a one world government.

Again, yes. well said.

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I'd support a free trade agreement with another country as long as they have the same or higher minimum wage laws as the US.

Just have to add: The trade agreement also has to be a two way street: When we import from China, there is no tariff on Chinese goods. When we export to China, there is a 50% tariff on American goods. China's minimum wage is 5.60 RMB. The local buying power of the RMB is about a dollar. It's very similar to here. You can argue that the exchange rate has been artificially manipulated, and almost no one will argue, but it's not a problem with Chinese labor laws. Also, I kind of don't like anything that allows one country to dictate or influence another countries laws, because that is an undemocratic violation of sovereignty and a step towards one world govt.

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Think of it as a way to increase the standard of living in developing nations.

I don't feel that this is our responsibility. Developing nations have in places a better standard of living that us anyway, much improved now because of outsourcing, but it's our duty to look out for us, while simultaneously not screwing anyone else over. If we meddle in their economy, I think it's far more likely that we'll screw them over than that our govt. will help them, based on a) a long track record, and b) simple logic: We're more likely to screw them over than they are to screw themselves over.

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without a large consumer market, i.e. US consumers, there is no demand.

Unfortunately, this has very recently changed. We are now a secondary market. Most products produced in the developing world are made for export to other nations in the developing world. I first became aware of this when I had to wait for English language versions of gadgets which would come out with Korean, Japanese and Chinese versions first. When I got my Samsung Galaxy English edition, it was the European, because the American edition wasn't done yet. I did some digging in statistics, and we're a decreasing secondary consumer market. This is what it's like to be a dying empire.

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We need to start protecting our demand and making our market work for us. When auto imports had heavy tariffs levied on them Honda and Toyota started building cars in the US. People were employed and given benefits. Honda and Toyota sold tariff free cars. Net benefit to all. It works, use it.

I agree. Honda and Toyota are assets to this country, and other companies could be as well, if we used this sort of thinking. Market conditions have changed, but it would still have some effect, and even if newer companies were less concerned, perhaps home industry would be reborn. I'd like to see something like the Tesla Roadster in a reasonable price range.

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The objective of this all is to employ the workforce and encourage savings.

I would like to start further back: Encourage productivity and innovation.

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Finally, the FTC needs to recognize that corporate acquisitions and mergers are bad for the economy.

Thank you. Mergers are almost universally bad. The only time there should be a merger is at bankruptcy to prevent the business from going under. Also, the ban on purchasing direct competitors, the anti-trust that was repealed in the mid-90s, needs to be re-instated.

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Ideally, we should be shooting for an economy that can sustain a single income family.

We have to seriously examine outgo in order to correct this. Having a family didn't used to be as expensive as it is now.

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Sounds remarkably old-fashioned, I know. But the system worked for many years. No reason why it cannot work again.

I'm a little surprised, you're even to the left of me on some of these points, but good ideas.

Niki,

I don't believe I said it doesn't need fixing. I just don't always trust the fixers. Many of them would like to keep the cash themselves.

And we can easily do better than just handing a drug addict a thousand in cash. That's the same school of accountability that gave the banks $700 billion and didn't make any requirements on what they did with the money.

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Thursday, April 21, 2011 6:06 AM

HARDWARE

I don't want to see investment taxed because when you invest, either in a local bank or in longer ranged funds you in fact increase the supply of money used for capitalization and loans. Those loans allow businesses to expand or start up. They also allow your neighbors to finance the purchase of a home or auto, buying capital goods, which in turn helps support workers in other trades.

I'd also have to add medicine and medical services to the list of untaxed goods. I was explaining this tax plan to a female friend and she asked me about feminine supplies and toilet paper. It made me think that perhaps other things should be tax free.

I want to see raw materials untaxed, because it is a tax on businesses at all levels. When the government taxes a business that business passes the costs of those taxes onto the consumer. By removing wage taxes we remove the heaviest burden from businesses. By not taxing raw materials we lower the cost to produce consumer goods and pick up the tax when those goods are consumed.

Plus, if you tax any transaction it is a VAT. My plan is closer to a GST.

Business buy lots of stuff as end users. Think about how much paper alone gets used in businesses every day. Each and every sheet of paper would be taxed. When you walk into a business office, every single thing in that office would have a tax on it, because the business is the end user of those items.

And, the Constitutional amendment prohibiting public charity except for times of disaster (limited to 6 months) would preclude aid to foreign nations.

The more I get to know people the more I like my dogs.

...and he that has no sword, let him sell his garment, and buy one. Luke 22:36

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