Bill Maher on tax increases...

[Encryptshun]

What we really need is a total restructuring of the tax code (the most complicated and incomprehensible code of any industrialized nation) to simplify the burden and exemptions to allow the tax paid to be remainded only from any investment that is in the long-term best interest of the country. So self-funded healthcare; education; secular charitable donations; business investment directly tied to on-shore job creation, job retention, and product/service innovation; self-funded retirement planning as % of current income level; purchasing a primary residence as % of current income level, etc. Those sorts of investments.

I think if we implemented the correct reforms, we could eliminate the debate-wasters like capital gains, AMT, and estate taxes by rolling those burdens into the overall code.

[IBCoupe]

It seems like you're suggesting a revamping of only the system of deductions that we have. Would you be tackling the marginal tax rates at the same time, or do you think deduction reform would be sufficient?

I should say that I may have mischaracterized the flat tax system - there's an alternative way to factor in that imaginary $5,000 cost-of-living deduction; one can drop that off of the income and have a taxable income that sits just $5,000 under the actual income. This lessens the stark progressiveness of the functional flat tax, but doesn't remove it completely.

A person earning $20,000 would deduct $5,000, leaving them with a taxable income of $15,000. The 20% creates a $3,000 tax burden, which is a 15% tax rate.

In that same process, a person earning $30,000 would have an actual 16.7% tax rate. A person earning $50,000 would have an actual 18% tax rate. A person earning $100,000 would have an actual 19% tax rate. A person earning $300,000 would have an actual tax rate of 19.7%. That might be the method that flat-tax proponents would choose to use, and I want to make sure that I'm fairly characterizing the system. It's still a progressive tax system, but it's not as blatant this way.

[RobPaulson]

[Capitalism as we know doesn't work. It's broken.

you can take michael moore c0ck out of ur anus now, i think he's done.

We are going to need to raise taxes, we are is a financial sh*t storm and this is America so if taxes are raised and you can't handle it "ggeeiiitttout". A 3% tax increase when you are living check to check is difficult to deal with. But when it cuts into your expendable income, I stop caring.

FTR:
I do think our government is miserable with spending money.

How is the expendable income any different than someone living check to check? I live check to check, i still have 'expendable' income, 3% wouldn't ruin my budget. If 3% ruins your budget living check to check, you need to reassess your budget and learn to manage your phukn money better, because your officially living beyond your means if 3% cripples you.

Lets take this analogy a bit further. I get taxed an extra 3% as a struggling 20-something. Guess what? I don't go out to the bar a few times a month. I'd cut back.

I view it the same way for the rich, so, their taxes get increased by 3%, maybe they can't take tennis lessons anymore at the country club.

It should all be equal.

I just don't understand what makes people, who are less well off than others, feel like they should get any different treatment. Most people who make a lot of money, have worked hard to get where they are and for what they have. There are obvious exception, but why punish the hard working because you cant balance your phukn check book and come up with a comprehensive budget to keep your scrub a** out of debt?

[MinisterofDOOM]

The real world doesnt work that way. If you tax something, it will LEAVE. The US isn't the only game in town anymore.

Yep. Or someone will find loopholes in the taxation which will just introduce new problems without solving the original one.

[IBCoupe]

...but why punish the hard working because you cant balance your phukn check book and come up with a comprehensive budget to keep your scrub a** out of debt?

Nobody's punishing anybody. Stop it.

[AppleBonker]

acceptation

[RobPaulson]

...but why punish the hard working because you cant balance your phukn check book and come up with a comprehensive budget to keep your scrub a** out of debt?

Nobody's punishing anybody. Stop it.

its a punishment from their point of view. "Make more, we'll take more!"

So where is the incentive to invent? Manage? Push through adversity and create a business? Just to get pushed into the highest tax bracket imaginable and barely bring home more than you were 10 years ago?

It kills ingenuity and drive for people, why work hard to make a lot of money when I can sit back, do nothing, and collect govt money while i smoke chiba in my house that taxpayers are paying for

and DIAF auto correct. i hate u adam.

[AZhitman]

Bill Maher caters to the lowest common denominator. Color me uninterested.

To those of you who demonize outsourcing, keep in mind that you're whipping the wrong mule - Outsourcing is an alternative to overpriced (and underperforming) union workers holding corporations hostage.

If you were a shareholder of ANY big company (and you should be), you'd want them to MAKE money, not piss it away supporting corporate welfare (aka unions).

If the company you've invested your retirement savings in has the option to make widgets for $2 apiece in the US, and make a $3 profit on each one, OR have them made in China for $. 02 each, making $4.98 on each one, you tell me which you'd choose. Over time, that's the difference between retiring on $25,000 and retiring on $1.1 million.

See? That American worker doesn't seem so important now, does he?

Sure, it'd be great to keep all those jobs here in the US. But until people realize that an illiterate 8th-grade dropout who does nothing harder than slap 20 lugnuts on a new Malibu all day is NOT worth $70K a year plus a fat retirement at 20 years, nothing's gonna change. Nothing.

Side note: Good to see you guys getting interested in this stuff. It matters.

Oh, and Bill Maher is still useless.

[RCA]

you can take michael moore c0ck out of ur anus now, i think he's done.

Huh? What does Bowling for Columbine have to do with capitalism?
Capitalism as we know it is broken; laissez-faire capitalism doesn't work. We can't trust people in power to make the right decisions; obvious by the history of bubbles and our economy. Companies facing pressure from stock holders almost never do what's right, they do whats best for 4th quarter numbers.

How is the expendable income any different than someone living check to check?

When you need to maintain your yacht less often because of a tax increase VS preparing a lower quality meal for your family, that's the difference.
My point is, a tax rate needs to happen and it's 3%; if your bitching about it, you're and a*shole. And please, by all means, leave the country and go to another who isn't raising taxes...

[Encryptshun]

1) There is a big difference between outsourcing and offshoring. Let's be clear which we're talking about. Outsourcing is a business strategy for excising non-core functions to companies who have a better chance of providing innovation, cost-reduction, and leveraging economies of scale than they do. Offshoring as a component of an outsource supplier relationship is designed to leverage payroll optimization. Outsourcing is A GOOD THING for our economy (though it might not be so great for the companies who choose to subscribe to it), so long as the outsource provider is domestic and uses a domestic workforce.

2) The whole "it's because of the unions" thing is too broad a brush to paint with. Any corporation -- any -- will send jobs overseas in a heartbeat if it means an increase to profits without overwhelming damage to company PR. If the executives can get an extra few million in their performance bonuses, they will do it. It's naive to think otherwise -- just take a look at the executive compensation statements published annually by the board for any company you hold stock in. There are TONS of non-union jobs sent overseas -- even jobs that here would be minimum-wage or just above. An average 50% reduction in wage rates with no fringe is what it is, even if it's a telemarketer earning $5.25/hour. They do it because they can, not because they are backed into a corner.

3) I realize the example was somewhat academic, but basing one's entire retirement investment strategy around stock price increases/splits is a recipe for disaster. The only way to get rich in the market is to either own so much stock that you get incremental benefit from the small shifts that realistically occur, hitch your wagon to one single star and roll the dice, or invest in a teeny company with lots of potential as a "preferred stock" shareholder, waiting either for an IPO or for them to get acquired by a bigger fish. And you NEVER want to put all your money into one company -- that's like betting your life savings on 34 black in Vegas and letting it ride for 30 years.

[RCA]

If the company you've invested your retirement savings in has the option to make widgets for $2 apiece in the US, and make a $3 profit on each one, OR have them made in China for $. 02 each, making $4.98 on each one, you tell me which you'd choose. Over time, that's the difference between retiring on $25,000 and retiring on $1.1 million.

See? That American worker doesn't seem so important now, does he?

Sure, it'd be great to keep all those jobs here in the US. But until people realize that an illiterate 8th-grade dropout who does nothing harder than slap 20 lugnuts on a new Malibu all day is NOT worth $70K a year plus a fat retirement at 20 years, nothing's gonna change. Nothing.

Side note: Good to see you guys getting interested in this stuff. It matters.

Oh, and Bill Maher is still useless.

Outsourcing for manufacturing has no shot; The sub standard conditions are unmatched outside the US. IDK if it is unions or over paid unskilled workers but unless is NEEDS to be made in America, it will be made some where else; period. If you have a manufacturing job, please learn another skill because you stand zero chance.

[AZhitman]

2) The whole "it's because of the unions" thing is too broad a brush to paint with. Any corporation -- any -- will send jobs overseas in a heartbeat if it means an increase to profits without overwhelming damage to company PR. If the executives can get an extra few million in their performance bonuses, they will do it. It's naive to think otherwise -- just take a look at the executive compensation statements published annually by the board for any company you hold stock in. There are TONS of non-union jobs sent overseas -- even jobs that here would be minimum-wage or just above. An average 50% reduction in wage rates with no fringe is what it is, even if it's a telemarketer earning $5.25/hour. They do it because they can, not because they are backed into a corner.

Agreed. I was being VERY simplistic - Primarily because we're in Gen Chat, secondarily because I'm no economist.

But you're right.

3) I realize the example was somewhat academic, but basing one's entire retirement investment strategy around stock price increases/splits is a recipe for disaster. The only way to get rich in the market is to either own so much stock that you get incremental benefit from the small shifts that realistically occur, hitch your wagon to one single star and roll the dice, or invest in a teeny company with lots of potential as a "preferred stock" shareholder, waiting either for an IPO or for them to get acquired by a bigger fish. And you NEVER want to put all your money into one company -- that's like betting your life savings on 34 black in Vegas and letting it ride for 30 years.

Again, simplistic for reasons. Assumption was that most folks would have their holdings spread out (mutual funds), wherein my example would still hold true (more or less), just for a bunch of companies, not just one.

Not sure I completely agree with your "The only way..." statement, but I also know that you know your stuff, and were probably just being parsimonius.

[RobPaulson]

We can't trust people in power to make the right decisions

how can you make this statement, and then defend the decisions that the people in power are making?

[RCA]

how can you make this statement, and then defend the decisions that the people in power are making?

I was directing that at those in the financial sector.

[RobPaulson]

how can you make this statement, and then defend the decisions that the people in power are making?

I was directing that at those in the financial sector.

but you trust politicians? K i'm out LOL

[Encryptshun]

I'm no economist.

Hey, neither am I. I've just lived the corporate business world for many years. I would really like to see a cross-functional group of both economists AND practical business practitioners jointly make and execute the strategies -- especially around the FED, the IRS, and the SEC.
Economists are too theoretical -- business people are too conservative. A combination would give both innovative vision and realistic execution.

[AZhitman]

We can't trust people in power to make the right decisions

how can you make this statement, and then defend the decisions that the people in power are making?

Great point.

Just because someone's a politician, doesn't mean they're not also a major player in X or Y industry.

Kind of a wake-up call, ain't it?

[IBCoupe]

So where is the incentive to invent? Manage? Push through adversity and create a business? Just to get pushed into the highest tax bracket imaginable and barely bring home more than you were 10 years ago?

Because they still bring home more? Because they're bored? Fame along with that extra fortune?

EDIT - I can't believe I missed this one: because they realize that if doing so could bring an actual competitive advantage, they better be all over it or it will be their undoing?

[Encryptshun]

State and Federal congress (and executives) wrote the damned BOOK on conflicts of interest. Don't even get me started.

Fox guarding the henhouse INDEED.

[AZhitman]

Yep. Ain't it grand?

[MinisterofDOOM]

So where is the incentive to invent? Manage? Push through adversity and create a business? Just to get pushed into the highest tax bracket imaginable and barely bring home more than you were 10 years ago?

Since when is a paycheck the only incentive for success?

[Jesda]

The real world doesnt work that way. If you tax something, it will LEAVE. The US isn't the only game in town anymore.

^ Assumes there are better places out there. Except for what might be a recessional blip, the US is one of a very small number of games in town.

I thought it was mostly conservatives who looked at the world in such a narrow way?


The US economy is still dominant and will continue to be for a very long future, but the original point isn't about which market is strongest, its about the possibility of an MNC finding a new home to conduct international operations, adversely affecting GNP.

1. US labor is excessively expensive with new health care law exacerbating the problem. It may be educated, but most of the jobs being outsourced do not require more than rudimentary education.
2. Unions, while less powerful in a decreasingly blue collar America, charge high prices for labor that foreign craftsmen can frequently perform at a far lower cost.
3. Corporate tax policy in the US is typically friendlier than Japan and the EU, but emerging markets (defined as formerly dormant markets that are now rapidly growing) are developing legal and financial infrastructures sufficient to host large corporations. The rate of change and international growth is dramatic and while it isn't exponential, the curve resembles an asymptote:

In other words, the world you see today will be nothing like the world you see in 20 years. Technology gave the US productivity gains enjoyed since the early 1980s, and that same technology has allowed international markets to compete directly with the US, usually at a far lower cost.

You can only poke and prod for so long until conditions are favorable enough for someone to pack up and leave. The economic duty of national government in a global environment is to maintain its competitiveness and attract investment. I favor the Obama administration's recent focus on exports, but it's idiocy to simultaneously raise the cost of doing business on every level.

[marlin29311]

Capitalism as we know doesn't work. It's broken.

Capitalism works great. It's our distribution system that sucks.

[AZhitman]

Capitalism as we know doesn't work. It's broken.

Capitalism works great. It's our distribution system that sucks.

[IBCoupe]

I thought it was mostly conservatives who looked at the world in such a narrow way?

I got it from Forbes.

And it might just be that the cost of doing business has gone up everywhere, Jesda.

[Jesda]

Another important question: What is the American dream?

[Encryptshun]

I swear I'm not trying to be flippant or snide here, but the assumption that there is one ubiquitous answer to a question like "What is the American dream" is exactly why many Americans feel railroaded by forces they can neither avoid nor influence.

[PoorManQ45]

If the company you've invested your retirement savings in has the option to make widgets for $2 apiece in the US, and make a $3 profit on each one, OR have them made in China for $. 02 each, making $4.98 on each one, you tell me which you'd choose. Over time, that's the difference between retiring on $25,000 and retiring on $1.1 million.

And when no one can afford the $5 widget?

[AZhitman]

They will.

People thought the average family car would never top $20K. People thought gas would never reach $4/gal. People could never fathom a Coke costing $4.

People adapt.

Ask your grandparents if they could have ever imagined spending a quarter-million dollars on a house. Nowadays, in many aeras, that's a nice starter home.

[PoorManQ45]

That creates a whole new problem though.

To adapt the wages would need to be increased. Corporations are already so greedy that they have been eliminating wage increases for the past year or two.

We currently have nothing in place that accounts for cost of living increases. Corporations are a free to do as they please.

Federal minimum wage is an absolute joke.