Trump tax plan

Originally posted by normbenign
The reason that a few super wealthy don't pay taxes is shelters, deductions and waivers, not low rates. The majority of the income tax is already paid by upper level wage earners. The change at the bottom isn't much, as about 48% don't pay any income tax already.

A flat tax with no deductions would yield more than the current progressive tax with loads of exceptions.

That statement isn't true in and of itself. You'd have to state what the rate of the flat tax would be and if all income was covered by it (most flat tax proposals exempt all kinds of income like capital gains, dividends and inheritances which primarily go to the highest income quintile).

And it is deliberately misleading to act like federal income taxes are the only taxes. Study after study has shown that total taxes (including State and local and other Federal taxes) make the tax system virtually proportional with the highest income earners paying only a few percentage points more of their income than the median. And virtually every income earner pays some taxes so the right wing claims that half the population doesn't pay any taxes is a deliberate falsehood.

EDIT: Examine Figures 6 and 7 here: http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Figure 6 shows that even the poorest 20% of households pay 16% of their income in taxes, while the middle class pays 20-28% and the highest income earners 30-31%.

Figure 7 shows that the highest earning 20% have 59.1% of the income and pay 64.3% of total taxes.

Originally posted by normbenign
[b]Regrettably for the corporations, they have accumulated immense financial assets in places where they can get no value from it.

Sure, you know more than the CEOs operating these multinationals.

The reality is that corporations have huge cash surpluses which are not circulating productively in our global economy,

And you know this h ...[text shortened]... either. Whether it works or not, it is totally immoral, and the work of demented criminal minds.[/b]

Your ideology relies on so many falsehoods and misrepresentations it is tiresome to respond. Instead, a good place to send you is an American classic: The Contours of American History by William Appleman Williams. Since you uphold the false notion that the 19th Century "was the heyday of merchantilism. Laissez Faire never had a heyday" you would benefit from his detailed chapter describing the differences between mercantilism and laissez faire, starting out in Elizabethan England, working through England's Glorious Revolution and the huge differences between Lord Shaftsbury (exponent of Mercantilism) and his protege, John Locke (who has become America's favourite "philosopher" through his presentation in an early form of the hidden hand of the market). He then takes us through a century of American history, in which the debate between mercantilism and laissez faire was by all means a lively one but consistently settled in favour of the latter. When you protest there has never been a true free market environment, that is because you are promoting a level of fundamentalist insanity worthy of the American Taliban. Your ideal is a fantasy and you know that - it cannot work as an intelligent part of any practical debate. The reality is that Laissez Faire was the dominant and prevaling ideology of the first American century.

Your hatred of government in all its forms is part of your dangerous and anti-social (potentially traitorous) fundamentalism. Williams describes very well the instability and weakness associated with the weak state, both in the early days prior to establishing the federal constitution, and in the following century as the limitations of free market ideology were laid bare. What emerged in the 1870s to supply a far more effective and sustainable political structure was not any form of socialism but the dominance of the (still quite new) corporations. Their managerial expertise in the running of large corporations gave executives the perfect skill set to operate the political system in similar form, and direct the nation of course to their own sectional interests at the expense of any wider social concern. You should see Donald Trump very much in this American tradition and he should make Americans very afraid.

The whole point of Mercantilism was to prevent one interest group exploiting its political and economic power at the expense of other interests. This applied both to vested interests within the elite (eg between landed wealth and business) and to relations between rich and poor; with a healthy respect for the capacity of the poor to foment mischief when provoked. These subtleties were wasted on Locke, whose unbalanced, market centred ideology provides no protection against the capture of the state by vested interests and addresses the poor only with violence.

The fact is, though, that your pretentious appeal to mercantilism and pure laizzez faire ideology does not even address, let alone refute, the evidence of market failures in 19th Century America and the necessity for state engagement to supply stability and even, indeed, to supply the conditions for fair competition without which markets will inevitably fail and routinely have done, notably in the great crash of 2008 which you are hiding away from recognizing.

When Americans support the political demands of their corporations, always under confused and ill informed appeals to free markets, they need to appreciate that the corporations are the major part of America's problem and that the executives running those corporations are not working for the benefit of shareholders (which includes the accumulated savings of ordinary citizens) but for their own perverse ends and at the public expense.

That is also the context in which to see the $2.1trillion held in foreign jurisdictions and primarily in poorly regulated tax havens by Amerian based corporations in order to evade taxation legally imposed by a democratically elected state. If you cared a toss for deficits and for national debt, you would recognise that this level of tax evasion is a major assault on American democracy and the American state, placing Americans in the ridiculous position of being unable to pay their way and forced to turn to countries like Saudi Arabia and China to fund state bonds from the proceeds of their trade surplus with the US. As Williams points out, this reflects a long standing strategy of the corporations - to get the American state to provide the funds from which other countries could buy American products and the military force to open foreign markets - but it has become even more perverse since he wrote that book, because the corporations now benefit by producing stuff abroad for the Americans to buy. Obama's current mission to extend free market agreements around the globe are not for the benefit of Americans but for the benefit of multi national corporations that no longer even pretend any loyalty to America.

If you want to prevent vested interests from extracting unfair advantage from the American state, then it is not laissez faire but mercantilism that you are preaching, unless - as we all suspect - you just don't know what the words even mean. Certainly that inability to understand the complexity of the issues was Locke's major failing. His patron, Lord Shaftsbury, was a far more intelligent and competent economist and political theorist.

Originally posted by normbenign
[b]From first principles, if you impose a consumption tax then people will buy less.

Perhaps people should buy less, what they can afford, not everything they want. They take the que from the government, and buy with debt.

If economics is any kind of a science, then the suggestion that a consumption tax would cause reduced consumption would not be contentious. Your odd desire to introduce a moral consideration is clearly not scientific but ideological and it is a diversionary tactic that makes no sense here.

In any developed country, and certainly in one as wealthy as the US, people have no choice but to participate in the money economy and to purchase the necessities of life. The level of spending required to maintain decency in a market economy is not always available to them in the form of earned income. The margin is determined by price levels and any increase in prices will of necessity shift the boundary and drag more people into a level of poverty from which either the state will provide relief or it will not. An economic policy that has the predictable effect of pushing more people into poverty and / or into dependenchy on public wefare is immoral in a way that spending on the necessities of life, and enforced borrowing to maintain decency, is not immoral.

Conversely, in a deeply unequal society, there are wealthy people who have the means to purchase far more than they could possibly be said to need in any rational terms. When such people engage in conspicuous spending and display their extravagent wealth, at a time when others in the same society are pushed into poverty by unfair income distributions, then that spending is immoral even though it is not supported by borrowing.

You advocate a policy that would, of necessity and by its very nature, increase the spending power of the wealthy to pay for prestige purchases and reduce the affordability of necessary consumption in the lower income groups, which are numerically far greater. It is an odd type of morality that appeals to the selfish wishes of the affluent minority at the expense of the ability of a majority to make ends meet. But that's the American Taliban for you!

Quite apart from morality however, the point really is that your proposal would profoundly distort the economy in ways that are deeply undesirable by any sensible criteria and inherently unstable and unsustainable.

Originally posted by finnegan
Your ideology relies on so many falsehoods and misrepresentations it is tiresome to respond. Instead, a good place to send you is an American classic: The Contours of American History by William Appleman Williams. Since you uphold the false notion that the 19th Century "was the heyday of merchantilism. Laissez Faire never had a heyday" you would be ...[text shortened]... ron, Lord Shaftsbury, was a far more intelligent and competent economist and political theorist.

Your ignorant attacks on Locke for positions he never espoused is unnecessary to the point you are making. Locke's concepts of spoilage and prejudice constraining the amount of property that one can rightfully obtain is about as far from laissez faire as any economic idea short of communism can be.

Here's an interesting article applying Lockean concepts to defend the idea of a full employment jobs program: http://neweconomicperspectives.org/2012/08/a-conservative-defense-of-a-jobs-guarantee-program.html#more-3002

Originally posted by no1marauder
That statement isn't true in and of itself. You'd have to state what the rate of the flat tax would be and if all income was covered by it (most flat tax proposals exempt all kinds of income like capital gains, dividends and inheritances which primarily go to the highest income quintile).

And it is deliberately misleading to act like federal income ta ...[text shortened]... gure 7 shows that the highest earning 20% have 59.1% of the income and pay 64.3% of total taxes.

I am well aware of all the "facts" you bring up as standard liberal arguments. We're now talking about Federal Income tax, and Trumps plan. Let's stick to that, and discuss the rest in another venue.

I would agree that flat tax proposals ought to include most Federal taxes, if not all. Anything to hide or make some form of income exempt is not in the spirit of a flat tax, and probably the reason that the current system of deception will continue.

Originally posted by normbenign
The problem is the failure to tax wealth and the failure to invest in infrastructure.

Governments tax but don't invest. Leave the investing to people who understand and do it well. The whole notion of stealing money that others have earned, has never worked out well, and it wouldn't this time either. Whether it works or not, it is totally immoral, and the work of demented criminal minds.

Capitalism is constructed on the theft of the proceeds of labour by the owners of capital. Capitalism cannot function in the absence of the modern state. The question is do we allow the wealthy to control the state or advocate democracy; does the state serve the special interests of an elite or the general good. You are an advocate of corporate power, of unregulated special interests and an opponent of democracy, which makes you a worthy member of the American Taliban.

Originally posted by normbenign
I am well aware of all the "facts" you bring up as standard liberal arguments. We're now talking about Federal Income tax, and Trumps plan. Let's stick to that, and discuss the rest in another venue.

I would agree that flat tax proposals ought to include most Federal taxes, if not all. Anything to hide or make some form of income exempt is not in the spirit of a flat tax, and probably the reason that the current system of deception will continue.

No, let's not. The Federal Income Tax needs to be highly progressive merely to offset the regressive nature of all other taxes levied on the People. Flat tax proposals are almost invariably set up to reduce the progressive nature of the FIT to the benefit of the wealthy. Plus you have allied your flat tax proposal with the idea of a regressive Federal consumption tax on top of the regressive State and local sales taxes that already exist. Again this benefits the wealthy and punishes everyone else.

Originally posted by finnegan
Capitalism is constructed on the theft of the proceeds of labour by the owners of capital. Capitalism cannot function in the absence of the modern state. The question is do we allow the wealthy to control the state or advocate democracy; does the state serve the special interests of an elite or the general good. You are an advocate of corporate power, of ...[text shortened]... interests and an opponent of democracy, which makes you a worthy member of the American Taliban.

Here are two simple facts:
Labor gets paid for their work.
Those who invest capital take risk and should get a reasonable return.
Everything else you say is argumentative and inaccurate.

Originally posted by quackquack
Here are two simple facts:
Labor gets paid for their work.
Those who invest capital take risk and should get a reasonable return.
Everything else you say is argumentative and inaccurate.

Here are another two simple facts. Labour does not get paid fairly and the research of Thomas Pikkety demonstrated that the return to investments (including the rewards from unearned wealth such as inheritance; but a large proportion of current wealth is unearned as you should know) are consistently greater than the return to any form of work, including risky investment in productive business projects. The point is that those who invest capital get more than their fair share. The measure to demonstrate this is a simple one - wealth has been steadily transferred to the richest 1% at the expense of the rest since the end of the 1970s. As his research showed, we are moving increasingly into a society where inherited wealth is far more important than any form of earned income, and ti is becoming impossible to actually achieve wealth through earnings as such. That is our future and that, of course, was how things were up to the end of the 19th century. You are defending the new aristocracy, born to privilige. [The special conditions of the American West, with cheap land and natural resources, were what made it possible for the US to ignore its social strains; those conditions will not return].

If you believe that the rich are risking their wealth in any productive way, you are dreaming. More importantly, you are economically illiterate and ignoring the evidence. The savings of the rich are silting up in offshore accounts and being used to support a casino economy that is many times greater than the productive economy of real work. Corporate wealth is also sitting idle because in our post crash economies, there are not the productive investment opportunities out there to put their cash moutnains to productive use. That is because the income and assets of the majority - over 90% of our people - has been stifled for over thirty years by neoliberal economics and people are collectively too debt laden to support the levels of demand necessary for economic recovery.

Originally posted by finnegan
Here are another two simple facts. Labour does not get paid fairly and the research of Thomas Pikkety demonstrated that the return to investments (including the rewards from unearned wealth such an inheritance) are consistently greater than the return to any form of work, including risky investment in productive business projects. The measure to demonstrat ...[text shortened]... are collectively too debt laden to support the levels of demand necessary for economic recovery.

Your ideas are simply wrong.
Labor gets paid more than fairly. We continually put in barriers like tariffs which interfere with the free market and prop up cost. We limit immigration when we fear workers will take lower salaries etc. You simply overestimate what labor is worth.
There is no such thing as unearned wealth. If someone has money, it is theirs. Part of this is giving it to whom they wish.
Corporate wealth will invest when there are opportunities but the increase in regulations simply slows down the process and makes investment less productive.

Originally posted by quackquack
Your ideas are simply wrong.
Labor gets paid more than fairly. We continually put in barriers like tariffs which interfere with the free market and prop up cost. We limit immigration when we fear workers will take lower salaries etc. You simply overestimate what labor is worth.
There is no such thing as unearned wealth. If someone has money, it ...[text shortened]... the increase in regulations simply slows down the process and makes investment less productive.

"Unearned" income has a meaning according to IRS regulations. It includes things like:

Rent
Interest
Dividends
Capital Gains
Inheritance
Gifts
Welfare Payments

If you owned property in central London, its value would have escalated without the slightest effort on your part. "As a whole the UK saw a staggering 60 per cent rise in the total wealth of its richest 250 investors over the last year, to £162.5 billion – the largest ever annual rise in the Estate Gazette’s Rich List." That is from the Telegraph, a very right wing paper. Tell us again about how capital deserves a fair return. Meanwhile, London is rapidly expelling its working class residents from the central areas, unable to afford to live there. Working is not a secret of success in this economy.

normbenign's much loved Mises institute would argue this: "If you’re worried about income or wealth inequality, why not go to the most obvious source. End central banking and take the unearned advantage away from the financial sector" - so they think unearned wealth exists. Again, the UK allows its economy to be grossly distorted to benefit the financial services sector at the expense of every other sector.

Perhaps you imagine the emergence of a wave of billionaires from Russia and China is a product of their hard work and reasonable earnings? Not, for example, the theft of public assets for private gain.

Have you noticed the recent evidence (as if we never knew) of banks with bases in tax havens facilitating the recycling of vast wealth from the South American drugs trade, in the midst of America's so called war on drugs? Is that earned wealth?

When you claim that I over-estimate what labour is worth, do you even understand what you are saying? There has been a radical shift in the Anglo Saxon economies since the Seventies, by which the income of at least 90% of the population has stagnated in real terms, but the income of the top 10% has increased enormously. That does not represent a shift in the value of the work done but a shift in the distribution of the proceeds, away from the 90% and in favour of the 10% - indeed, 1%. Look for example at the staggering changes in executive remuneration in this period and explain to me how the work of executives in our corporations has escalated in value while the work of their other employees has declined in value so severely.

When you say "If someone has money it is theirs. Part of this is giving it to whom they wish" - you simply display gross ignorance of how economics works. If we organise our economy on such terms that a tiny proportion of the population can suck in an excessive proportion of total income and wealth, that creates a range of harms that are ultimately unsustainable. When they are living on rent in all its forms, not productive investment, that is more dangerous still.

It is not regulation that is slowing down investment. In the Sixties for example there was far more regulation and far more investment. It is the lack of returns on investment owing to lack of sufficient demand. The trouble for the 1% is they cannot make money in a world without consumers and that is where they are taking us. That is why their money is increasingly to be found in the casino economy of the financial sector, generating the type of instability that brought the financial system to its knees in 2008 and will do so again in the absence of regulation.

Originally posted by utherpendragon
Released today,
"Under the Trump plan, no federal income tax would be levied against individuals earning less than $25,000 and married couples earning less than $50,000. The Trump campaign estimates that would reduce taxes to zero for 31 million households that currently pay at least some income tax. The highest individual income-tax rate would be 25 ...[text shortened]... :
http://www.wsj.com/articles/trump-plan-cuts-taxes-for-millions-1443427200?mod=trending_now_9

Personally I think everyone should be paying something even a very small amount just to have
some input into the pie everyone is drawing out of.