The Self-Destruction of the 1 Percent

[Gerald]

IN the early 14th century, Venice was one of the richest cities in Europe. At the heart of its economy was the colleganza, a basic form of joint-stock company created to finance a single trade expedition. The brilliance of the colleganza was that it opened the economy to new entrants, allowing risk-taking entrepreneurs to share in the financial upside with the established businessmen who financed their merchant voyages.

Venice’s elites were the chief beneficiaries. Like all open economies, theirs was turbulent. Today, we think of social mobility as a good thing. But if you are on top, mobility also means competition. In 1315, when the Venetian city-state was at the height of its economic powers, the upper class acted to lock in its privileges, putting a formal stop to social mobility with the publication of the Libro d’Oro, or Book of Gold, an official register of the nobility. If you weren’t on it, you couldn’t join the ruling oligarchy.

The political shift, which had begun nearly two decades earlier, was so striking a change that the Venetians gave it a name: La Serrata, or the closure. It wasn’t long before the political Serrata became an economic one, too. Under the control of the oligarchs, Venice gradually cut off commercial opportunities for new entrants. Eventually, the colleganza was banned. The reigning elites were acting in their immediate self-interest, but in the longer term, La Serrata was the beginning of the end for them, and for Venetian prosperity more generally. By 1500, Venice’s population was smaller than it had been in 1330. In the 17th and 18th centuries, as the rest of Europe grew, the city continued to shrink.

http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-destruction-of-the-1-percent.html?hp


Note: October 13, 2012

[u crank]

Very interesting read. Especially the last three paragraphs. :hmmm:

[Onkel Neal]

The Self-Destruction of the 1 Percent (http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-destruction-of-the-1-percent.html?pagewanted=all&_r=0)

In the 1950s, the marginal income tax rate for those at the top of the distribution soared above 90 percent, a figure that today makes even Democrats flinch. Meanwhile, of the 400 richest taxpayers in 2009, 6 paid no federal income tax at all, and 27 paid 10 percent or less. None paid more than 35 percent.

Alas, why can't we make it simple and just have all individuals pay a flat rate on their income, say 15%. No exceptions, no loopholes, no deductions.

[Catfish]

Because this would be unfair.
The well-off do so much for the society, and they still pay more taxes than the unwashed masses. Said Bush. Says Romney.
And someone has to pay a trillion dollars for the new jets alone, let alone funding the CIA and NSA. You can't even ask where the money goes because of course it is all confidential.
Also, the "grey lady" is of course ultra-left. Say republicans.

Ahem I think you are right, but this would be too easy and a lot of people would lose their jobs (like tax advisors) And the rest of the big US companies would probably entirely move to China ..

[the_tyrant]

Alas, why can't we make it simple and just have all individuals pay a flat rate on their income, say 15%. No exceptions, no loopholes, no deductions.

Hey, where would all the accountants work? :03:

Well I believe, that we are fundamentally living in an age of high social mobility. It is easier than ever for one to simply pack up, and move.

The nation state has always been a monopoly. There is only one in a given location. You must pay up the taxes, and you must accept their "services" (i'm sure there are criminals out there who would "refuse" the "policing" service). Thus nations have always been able to get away with a lot. You can't even establish competition! (hey, if you want to start your own government, the government calls you a rebellion and sends in the army) Thus, I would say, that nation states have once enjoyed a monopolistic position that even AT&T and Microsoft cannot touch.

However, this is rapidly changing. My family has bounced around the world a lot, living in quite a few different places. I know lots of people like that out there, one of my dad's friends moved to Canada because the smog in Shanghai is killing him.I also know Canadians who go abroad to work, since there are better opportunities out there.

Thus in this day and age, the 90% taxation is IMPOSSIBLE. Remember the surprise when one of the Facebook co-founders gave up on his American citizenship? he is willing to give it up, because in his opinion, the "services" the US government pays him is not worth the "price" (taxes).

If your country "charges too much" for the "services", you can leave.

There are millions of people who risk their life to enter the US illegally every year. They are voting with their legs, and wallets.

If you don't like a country, you can leave (although yes, it is still difficult, but it is a viable option now).


Raise the tax, and what is to stop people from leaving? Remember, America is competing with around 200 other countries out there.

[Gerald]

http://www.subsim.com/radioroom/showthread.php?t=199135

:hmmm:

[Takeda Shingen]

Alas, why can't we make it simple and just have all individuals pay a flat rate on their income, say 15%. No exceptions, no loopholes, no deductions.

QFT. And just think about how much simpler tax time would be.

[Sailor Steve]

But...but...but...but just think of how the unemployment rate would skyrocket, with the poor IRS going out of business!

Have you no hearts?

[Skybird]

I'm for it. But not before you have installed a truly communist society where private wealth practically has been abandoned and all people are equal in material chances and starting conditions.

Then one fixed mark for the poor and the rich as well is not just simple, but also balanced and fair.

But the "no loopholes, no exceptions" part is something I can subscribe too without second reading. But lobby groups will prevent this from coming true - before that happens it's more likely that the stand-your-ground laws in half of the American states will fall.

[Stealhead]

I'm for it. But not before you have installed a truly communist society where private wealth practically has been abandoned and all people are equal in material chances and starting conditions.

Then one fixed mark for the poor and the rich as well is not just simple, but also balanced and fair.


Then in fact you are not for it because your prerequisite condition is simply impossible to achieve even in such societies positions become wealth and a truly communist
society is impossible this fact has been proven communism fails at its goal of making people equal if one person feels that they are not.Even in your own wording you use practically
not completely.

[Armistead]

I added up all my taxes once about 10 years ago. I'm talking all the taxes, income, property, sales, gas, all those lil taxes in bills, etc.... Turned out I was paying about 37% of my income on taxes. Think I was making about 60K a year when I did this.

My guess is I left out some somewhere...., probably closer to 40%.

[nikimcbee]

Neal, don't be a hater. What will the tax lawyers do? and and and, it would only take 5 minutes to do your taxes with quicken. What will the tax software programmers do? You'll ruin the democrat playbook. How can you do class warfare if everybody has the same rate?

and and and, just think of all the threads you will wipe out by not being able to post whose percentage is paying X percentage and the 40% of the 12 % that pays 32% on Mondays but not Fridays when the 67% of kitten owners use 23% of the resources in Canada, but 5% of Quebecers use 99% of Reece's makeup kit that he bought on holiday to Kiwiland who use 11% of the BBQ sauce produced in 45% of New Jersey, when it's not fair that Texas produces only 47% consumed by .75 % ofharley riders but not 25% of suzuki riders that left San Antonio going 46% of 56km/hr and the 84.5% of rich honda goldwing owners left Sturgis going 65 mph, at what point do they intersect 3% of the way?.

Think of Jim's post count!

I think it's just easier to leave the tax code as is.

[u crank]

http://www.glasbergen.com/wp-content/gallery/taxes/tax6.gif

[Skybird]

Then in fact you are not for it because your prerequisite condition is simply impossible to achieve even in such societies positions become wealth and a truly communist
society is impossible this fact has been proven communism fails at its goal of making people equal if one person feels that they are not.Even in your own wording you use practically
not completely.

Congratulations, you have correctly observered that, and very precisely. :D

[Takeda Shingen]

You need to do something about freezing payroll tax too. Otherwise, nothing's stopping Washington from doing the ol' Gipper two-step.

[Stealhead]

Imagine if there was a flat tax rate and you also got to choose where your money went and have to pick at least one agency or you could choose to divvy it up to as many government branches as you wished.

So lets say that you think that national defense is the most important you so select that 100% of your taxes went to the DoD.You would also say how much if any of your tax dollars went to the pay and benefits of Congress and the Senate.Of course they'd never allow that because most Americans would elect to give them nothing.This would insure that they do a better job as
if they did good work people might allow a share of their tax dollars go to them.

This is all of course is in my fantasy world.Though it supposed to be a government of the people right? So why not make it just that and let the people choose what their tax dollars go towards.

[AVGWarhawk]

Herman Cain suggested something similar. He was destroyed by the media. I don't think I would persue this line of thinking. :hmmm:

[eddie]

Forbes proposed the same thing years ago, haven't heard anything of him since!

[Onkel Neal]

http://www.subsim.com/radioroom/showthread.php?t=199135

:hmmm:

Oops, sorry :wah:

Great post, Vendor, I'll merge this one into yours.

[gimpy117]

The Self-Destruction of the 1 Percent (http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-destruction-of-the-1-percent.html?pagewanted=all&_r=0)



Alas, why can't we make it simple and just have all individuals pay a flat rate on their income, say 15%. No exceptions, no loopholes, no deductions.

not to argue too much, but 15% of 30,000 or less is a lot less livable than 15% of 1,000,000+. it would need to still have a minimum

[Tribesman]

Flat taxes with no loopholes?
Just for a simple starter.
Petrol, diesel, agri-diesel, autogas, heating oil?
Now work out the implications for individuals and business.

[Rilder]

http://www.glasbergen.com/wp-content/gallery/taxes/tax6.gif

Exactly how I act in strategy games like Victoria II, I'll tax every one of you bastards 100% if it means the country I'm playing stays out of debt. :O:

[JU_88]

http://www.glasbergen.com/wp-content/gallery/taxes/tax6.gif

:haha: Nice one,
Agree Income Tax would be fairer if it was just a universal percentage for everyone. In fact I cant think of anything fairer that that.

[Catfish]

:haha: Nice one,
Agree Income Tax would be fairer if it was just a universal percentage for everyone. In fact I cant think of anything fairer that that.

Hmm, why is this fair ?

A state or nation grants companies the allowance to use an infrastructure they did not build and pay themselves for, or they would find at otherwise cheaper places on the globe. They are also granted a lot of other advantages as well. Also before the globalization the access to the consumers via delivery, marketing and advertising was much better and shorter that way.
Since a worldwide distribution is possible and even cheaper (average loan 60 dollar cent for an hour, for workers building the iPhone in China), they do not cling to "their" nation anymore.

Wealthy and rich folks do not forget to mention all the time, what a (self-appointed) elite they are, and what they are doing for the plebs.
You would take that excuse away from them, impossible :03:

(Not all of course, some really sell their company to e.g. General Electrics and then spend the rest of their life where they transferred the "tax" money all the time - like Cayman islands, Gibraltar, or Suisse.)

Greetings,
Catfish

[mookiemookie]

Flat taxes seem like a fair idea on the surface. What could be more fair than everyone paying the same percentage? But it presents problems when you dig deeper into it.

1. One of the biggest knocks on capitalism is that it takes money to make money. You could make the best coffee in the world, but you're never going to cut into Starbucks' market share. Too often the person with the better idea or product can't compete with the person with money - the one with money can essentially write the rules and regulations to favor themselves and present barriers to entry to any upstart, no matter how superior the upstart's product or service may be. A progressive taxation system addresses this inequality.

2. You don't need a flat tax to simplify the tax code. Too often these two ideas are conflated. Eliminating deductions and loopholes can be done while keeping a progressive taxation system in place.

3. Sometimes the old arguments are best - a rich person receives less marginal utility (http://en.wikipedia.org/wiki/Marginal_utility) for each additional dollar earned than a poor person does....you may take away the rich person's ability to buy a 4th house by taxing them at that rate, but you may be taking away the poor person's ability to stay in their only house by taxing them at the same rate.

4. Our laws, infrstructure and financial system benefit those with money more than those without. If you've got $1 million in the bank, you need the government to protect that $1 million through law and military force a lot more than the guy with $100 in the bank. Why shouldn't the person with more to lose pay more?

[Gerald]

Oops, sorry :wah:

Great post, Vendor, I'll merge this one into yours. No prob,:)

[August]

4. Our laws, infrstructure and financial system benefit those with money more than those without. If you've got $1 million in the bank, you need the government to protect that $1 million through law and military force a lot more than the guy with $100 in the bank. Why shouldn't the person with more to lose pay more?

$1M bucks in the bank is not nearly as protected as the $100.

For one thing the Fed only insures losses up to $250k whereas the $100 is totally covered. Secondly the amount of security required to protect a bank is the same regardless of whether one has a million in the bank or 10 cents.

Are you trying to say that $100 bucks isn't as important to a person as $1 million is to another?

[Tribesman]

$1M bucks in the bank is not nearly as protected as the $100.

100bucks is an entirely different stake than 1 million.

For one thing the Fed only insures losses up to $250k whereas the $100 is totally covered.
Irrelevant.

Secondly the amount of security required to protect a bank is the same regardless of whether one has a million in the bank or 10 cents.

Firstly you are off on the wrong angle, secondly even on that angle you are wrong


Are you trying to say that $100 bucks isn't as important to a person as $1 million is to another?

No he is saying one person has more of a stake to lose and as such gets more service.

[GT182]

I've heard that England is going to reinstate their Tea Tax here once again. Reason being the high tax rate they impose on their own people isn't enough for the British government to survive. And our government will do anything it can to raise taxes is the second reason.

[Tribesman]

Reason being the high tax rate they impose on their own people isn't enough for the British government to survive.
Does Britain have a high tax rate?
Perhaps you had better tell the French as they are complaining about Britains low taxes.

[Hottentot]

Exactly how I act in strategy games like Victoria II, I'll tax every one of you bastards 100% if it means the country I'm playing stays out of debt. :O:

Indeed. I propose we save time and money by abandoning needless bureaucracy and firing unneeded officials. From now on the taxes shall be handled with one form and three questions:

1: Do you have money?
2: Where are you keeping it?
3: When can we come take it from you?

The citizens will hardly even notice the difference in the end result. Everyone wins. :D

[Onkel Neal]

Flat taxes seem like a fair idea on the surface. What could be more fair than everyone paying the same percentage? But it presents problems when you dig deeper into it.

1. One of the biggest knocks on capitalism is that it takes money to make money. You could make the best coffee in the world, but you're never going to cut into Starbucks' market share. Too often the person with the better idea or product can't compete with the person with money - the one with money can essentially write the rules and regulations to favor themselves and present barriers to entry to any upstart, no matter how superior the upstart's product or service may be. A progressive taxation system addresses this inequality.



4. Our laws, infrstructure and financial system benefit those with money more than those without. If you've got $1 million in the bank, you need the government to protect that $1 million through law and military force a lot more than the guy with $100 in the bank. Why shouldn't the person with more to lose pay more?

I really don't buy those arguments. It certainly helps to have money to make money, but capitalism is about good ideas attracting investors. Many, many people started with very little and made fortunes. I sure don't see that as a basis to tax them more, that's penalizing excellence and success.

One person, one vote. Why should one guy pay 40% income tax when another only pays 5%, or nothing. Especially when the guy paying 40% is contributing $20 million dollars and the guy pitching in 5% is contributing $500. Yes, I agree about the point that a guy making $20,000 a year needs every dollar he can get, but still, think about it. Even if you are wealthy, it's all relative. I would be sick to think of being forced to pay millions in taxes and be outvoted by thousands who pay nothing at all.

I never worked for a poor man.

[Tribesman]

Why should one guy pay 40% income tax when another only pays 5%, or nothing. Especially when the guy paying 40% is contributing $20 million dollars and the guy pitching in 5% is contributing $500.
Thats OK in theory, but too often its the little guy getting the huge bill and the millionaire paying the 5 or 10%(or more accurately its the middle which gets thoroughly shafted with the big bill)

I never worked for a poor man.

I have lots of times, and I always found they pay up all that is due and they pay when it is due, I find that often the higher the wealth (or apparent wealth)the slowerr they are to cough up what they owe, sometimes even stringing it out to the stages when legal action has to be taken

[mookiemookie]

I never worked for a poor man.
Sure you have. Jobs aren't created by fiat by a wealthy person. You're working as a teacher - your job exists because people, both rich and poor, send their kids to school. But let's go back to the private sector. You worked in the oil and gas industry, right? Your job only existed because regular joes filled up their cars with gasoline. So while Mr. Boss man signed your paycheck, he's just there to facilitate your part in supply meeting consumer demand. Demand creates jobs. If all of a sudden the world switched to electric cars, do you think your job would have been in jeopardy? Of course it would have, and the reason why would have had nothing to do with how much money Mr. CEO had in his pocket.

[AVGWarhawk]

You're working as a teacher - your job exists because people, both rich and poor, send their kids to school.

Most states it is mandated a child attends school to a certain grade. The job exists because the gov't says it does.

Your job only existed because regular joes filled up their cars with gasoline. So while Mr. Boss man signed your paycheck, he's just there to facilitate your part in supply meeting consumer demand.

I suspect bossman did not wake up one day wealthy. He dug a well. It poured oil. He worked his way up from there. He became wealthy and shouldered the responsibilies, like the rules and regs set by the gov't. He is more than just there to Facilitate a part in meeting demand.

If all of a sudden the world switched to electric cars, do you think your job would have been in jeopardy?

No, there are other items that require petroleum products to make that product.

:O:

[mookiemookie]

Most states it is mandated a child attends school to a certain grade. The job exists because the gov't says it does. Then if we're a government of the people, by the people, then yes, he's working for a poor person.


I suspect bossman did not wake up one day wealthy. He dug a well. It poured oil. He worked his way up from there. He became wealthy and shouldered the responsibilies, like the rules and regs set by the gov't. He is more than just there to Facilitate a part in meeting demand. Bossman only became wealthy because there was a demand for the goods and services he was able to provide. So no, his entire job is based around facilitating supply to meet demand. And all of that is absolutely irrelevant if there's no customer and no demand. So the real job creator is the guy filling his gas tank up. And everyone, rich or poor, uses gas.

[AVGWarhawk]

Then if we're a government of the people, by the people,

This notion died about 4 decades ago.

Bossman only became wealthy because there was a demand for the goods and services he was able to provide.

Tell that to the snake oil salesman. :03:

So no, his entire job is based around facilitating supply to meet demand.
Like most, but at CEO level, his job encompasses more than just meeting demand.







And all of that is absolutely irrelevant if there's no customer and no demand.

Economics 101 :up:

So the real job creator is the guy filling his gas tank up.

Trickle down theory. Got it. :up:

And everyone, rich or poor, uses gas.

Except those that do not own a car. Walk or ride a bike. Like many who live in the city. These folks are rich and poor but do not use gas.

I'm just busting your balls Mookie. :D

[mookiemookie]

Trickle down theory. Got it. :up:
Trickle up theory. Like peeing straight up in the air. Don't get wet! :har:

[August]

Then if we're a government of the people, by the people, then yes, he's working for a poor person.

No he is not. Parents are clients of the government but they are not clients of the teacher. Don't believe me? Try getting your kids teacher to change their curriculum without the government authorizing the change.

[AVGWarhawk]

Trickle up theory. Like peeing straight up in the air. Don't get wet! :har:

Pissing into the wind. :03:

[Sailor Steve]

Thats OK in theory, but too often its the little guy getting the huge bill and the millionaire paying the 5 or 10%(or more accurately its the middle which gets thoroughly shafted with the big bill)
Which is the point of having everybody pay the same percentage, with no exceptions.

[Tribesman]

Which is the point of having everybody pay the same percentage, with no exceptions.
But the point is the theory fails and the reasoning behind it is based on fixing something that doesn't even really exist
Which is why it doesn't work, its a pipe dream, you might as well start talking about the virtues of communism since its just as big a pile of rubbish
Try thinking about the fuel examples I put up earlier to see why it cannot work.
One size fits all just simply doesn't work.
Cain was mentioned earlier with his version of the pipe dream. Straight away he started with ....well of course there will have to be be exemptions for XY&Z and there would be incentives for AB&C and JK&L would be deductable and NO&P can be deferals.....

[Sailor Steve]

And that was his mistake. No exceptions means no exceptions.

[Armistead]

And that was his mistake. No exceptions means no exceptions.

Why it will never happen. The majority of the tax code was designed for the rich to control real assets and buy more toys. It may have helped create jobs when Americans made the toys, but not so much now.

[Tribesman]

And that was his mistake. No exceptions means no exceptions.

No mistake, its reality.
Terms and conditions apply(as always)

Did you think much about the fuel taxes and exemptions in relation to income tax?
The problem in the main isn't exemptions, its people gaming the exemptions.
Unfortunately the answer for people who are complaining about the loopholes is an answer they will object to also.
Its more regulation and more enforcement which of course means bigger government.:hmmm:

[Sailor Steve]

The problem in the main isn't exemptions, its people gaming the exemptions.
Then take away the exemptions. It's kind of hard to "game" what isn't there.

[AVGWarhawk]

Then take away the exemptions. It's kind of hard to "game" what isn't there.

But it's called entitlement.

[Tribesman]

Then take away the exemptions. It's kind of hard to "game" what isn't there.
Take the single type of materials I mentioned and use a single sector of business and see what no exemptions means and what implications it throws up.
I did choose fuels as an example because it is very wide ranging but fairly simple to start yet progressing further and further each time you look and actually impacts on nearly all sectors.

[Gerald]

Rock on Trib, :arrgh!: