Ken777
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Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 9:29 pm

Quote:
Minnesota Governor Tim Pawlenty, a potential 2012 Republican presidential candidate, said Congress should extend the Bush-era tax cuts for upper-income Americans and pay the cost by cutting government spending.

. . .

Pawlenty, 49, would spend unused funds from the economic stimulus program and reduce spending on entitlement programs such as Social Security to finance the extension of tax cuts.
http://www.bloomberg.com/news/2010-0...end-fund-upper-income-tax-cut.html

I would be laughing about this if it wasn't a real possibility. Gotta cut payments to people on SOcial Security in order to fund continued tax cuts for the top tier? Maybe he'll go for even more tax breaks for the rich, funded by closing down the VA and leaving the Vets on the street.

And this guy wants to run for President.  Wow!
 
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Tugger
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 9:51 pm

The real problem though is that by only having the "top tier" tax cuts expire, over 75% of the tax revenue that could be realized will not be.

No matter what, government expenditures will have to be reduced (in other words: programs cut) or there will be no balancing the budget and getting out of the debt hole we are in. It is not popular but at the tax cuts across all brackets should be allowed to expire AND cuts made to the budget.

Tugg
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rwsea
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 10:19 pm

The tax cuts have to go, and the sooner the better. You can't simply cut taxes, start two wars at the same time, and expect any sort of fiscal solvency. Thrown in multiple bank bailouts, stimulus packages, etc. and it's surprising that the US isn't bankrupt.

I think at a minimum, the Bush tax cuts must be repealed. Even better would be to add 3% (making a maximum rate of 42.6%) for top wage earners, and perhaps 1.5% for the bracket below that.

I'm sure the usual reaction will be the hysterical cries that "raising taxes will KILL our economic recovery". I'm not convinced. There is no evidence that minor tax cuts such as these have directly driven any long-term economic growth. Further, no one can argue that the economy of the late 1990s was extremely robust, and it was at a time when taxes were higher than today.

You can only cut so much. At some point the revenue side of the equation must be fixed. The US government has racked up too many charges on their credit card. It's time to start paying it off.
 
bhill
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 10:29 pm

More tax breaks!!?? Cry me a river....“For every dollar of wealth in America, the top 1 percent got about a quarter and the rest of us split the other 76 cents.”

http://www.federalreserve.gov/pubs/feds/2009/200913/200913pap.pdf
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BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 10:31 pm

Screw the income tax and go with a VAT. If nothing else, it might teach Americans better money habits.
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Tugger
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 10:38 pm

Quoting BMI727 (Reply 4):
Screw the income tax and go with a VAT. If nothing else, it might teach Americans better money habits.


To wipe out all income tax you would need about a 21% VAT.
However I am not sure what would be included in it. I would say that you would need to include every transaction that "sells" something and I am quite sure that Wall Street would have a conniption fit about that (not to mention the real estate industry, etc).

Tugg
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BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 10:57 pm

Quoting Tugger (Reply 5):
To wipe out all income tax you would need about a 21% VAT.

Maybe you wouldn't want to get rid of the income tax entirely, but the VAT is an easy solution to those who complain about the rich getting richer and how much you pay is entirely up to you.
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StarAC17
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 11:07 pm

Quoting BMI727 (Reply 4):
Screw the income tax and go with a VAT. If nothing else, it might teach Americans better money habits.

A VAT (we call it a GST) got Canada out of fiscal trouble back in the late 80's and our federal rate is now 5% (plus provincial sales taxes which vary), but you need it in combination with an income tax IMO as a 21% VAT will discourage spending big time, because it gets passed on to the consumer.

It was discussed in Canada last year looking at the US deficit last year that a 3% federal VAT with your current tax rates would pretty much wipeout your 2008 deficit.

Quoting Tugger (Reply 5):
However I am not sure what would be included in it. I would say that you would need to include every transaction that "sells" something and I am quite sure that Wall Street would have a conniption fit about that (not to mention the real estate industry, etc).

In Canada it covers all goods and services which is pretty much everything.
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LTU932
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Fri Aug 06, 2010 11:34 pm

Just be careful with a VAT. From what I remember, any sales tax that may resemble a VAT is set by the state, so a federal VAT or GST could cause that the states complain that this is federal law meddling in state affairs. That being said, we in Germany had an increase of the VAT from 16 to 19% about 3 years ago, and it has not done anything to solve our problems. In fact, the government has cut taxes for the richer, while social programmes and benefits for lower income people have been reduced or even cut (I remind the issue with the parent benefits that are being kept for high income parents and was cut for lower income parents and also for people who are under welfare). The coalition member party FDP still insists on tax cuts, while the people are outraged by these tax cuts and demand higher taxes for high income people and even millionaires. Even millionaires have pleaded that they're willing to pay more taxes to help our country, but those pleas have been blatantly ignored by the FDP and the federal government.

We were promissed "Mehr Netto vom Brutto (More net from our gross salary)", but the government has epically failed in keeping that promise that it made during the campaign for people in lower income classes.
 
fr8mech
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 12:09 am

Quoting rwSEA (Reply 2):
I'm sure the usual reaction will be the hysterical cries that "raising taxes will KILL our economic recovery". I'm not convinced.

Let's look at it this way:

Our government pplaces a tax on activity that it wishes to discourage, for any variety of reasons. Right, wrong or indifferent, that is what happens. Let me write that again, if the government wishes to curtail an activity it places a tax on it.

Further, if a special interest group wishes an activity to be curtailed, they lobby for a tax, conversely, if the government or a special interest group wishes an activity to continue or even expand, a tax cut or credit is offered.

That is how we use tax policy in the United States. Again, right, wrong or indifferent.

Then how can anyone argue that taxing economic activity (income, dividend distribution, capital gains, etc.) will not have a negative affect (or is it effect) on those very activities? Allowing the tax cuts to expire WILL, not may, will have a negative influence on this economy. It will kill this jobless, anemic recovery.

Quoting bhill (Reply 3):
More tax breaks!!?? Cry me a river....“For every dollar of wealth in America, the top 1 percent got about a quarter and the rest of us split the other 76 cents.”

Since you're so good at research, what percentage of tax does the top 1% pay into the dole? Top 10%, how about them? What about the bottom 50% of earners? What do they pay?

Taxes are necessary to run government. But when government expands into areas that it does not belong, it costs us money. Truth be known, I don't believe my tax burden is too high. But, I wish the distribution were different. Much less to the Federal Government (let's say enough to pay for their enumerated powers) and much more to my local and state governments, so that they can continue to provide my neighbors and me the services for which we need (police, fire, ems, infrastructure, etc) and those we may ask for (garbage collection, leaf collection, parks, recreational activities, etc)

[Edited 2010-08-06 17:13:46]
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Dreadnought
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 12:32 am

I'm going to buck the trend.

I say that the lowest tier tax cuts need to go away. The Bush tax cuts, as well intentioned as they were, resulted in nearly half the households in the country paying no Federal Income Tax at all. No wonder you have half the population loving the idea of increasing federal spending and increasing government social programs - they don't have to pay a bloody cent for it! That mentality has to stop - even if you only pay a few hundred bucks per year, everyone needs to have at least some skin in the game. Maybe then they will think a bit more when they vote.

I would keep all the middle and upper tiers at the same rate they are today, or even lower them a tad.

But then I would add some tiers, say another tier at $500,000, another at $1 million, one at $5 million. The top tier at that point would be something like 42-45%. The idea that someone earning $300K per year (a healthy upper management salary) being taxed at the same rates as Bill Gates is silly.

I would maintain and even reinforce the capital gains tax cuts. Investment drives the economy, and it should be encouraged, not penalized. To that end, I would drastically increase the tax deductability of investing in 401ks and IRAs. You should be allowed to deduct up to 25% of your gross income, in my opinion.

All that is if we insist on keeping the Income tax system. Personally I tend to think that eliminating income taxes (including corporate) entirely would be a good idea, to be replaced by a Consumption Tax (or a VAT) and a tax on net worth, say 2 or 3%. That will encourage savings and investment. Exports would have virtually no tax load.
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Flighty
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 12:57 am

Pawlenty is a slut. He will sleep with anybody to get ahead, figuratively speaking. He doesn't even know what he is talking about.

He is right that business people are worried about stability. That's because the federal budget overhang is just too damn large in this country. Given that, only a fool would invest in a long term business venture in the USA. They need to make a real plan involving taxes and austerity to make the business world believe the USA is going to be around long term, and not be reorganized under Beijing command.

Quoting Dreadnought (Reply 10):
The idea that someone earning $300K per year (a healthy upper management salary) being taxed at the same rates as Bill Gates is silly.

Even sillier is that cardiologist or VP making $300k per year pays far HIGHER tax rates than Bill Gates. Gates pays nowhere hear 50% of his income on taxes. More like between zero and 15%. If Gates died this year, his heirs would pay 0% on his estate.

A $300k earner living in New Jersey or Mass could easily be nearing 50% of gross income in tax. That's because W-2 income is treated differently from capital income. Hedge fund guys are known to pay 10% or less on their income, using tax lawyers and roundabout deferred capital gains. A VP or cardiologist can't afford to spend $50k on a tax attorney every year.

And, obviously, the bottom 50% of the tax rolls aren't paying very much.
 
dxing
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:01 am

Quoting BMI727 (Reply 4):
Screw the income tax and go with a VAT. If nothing else, it might teach Americans better money habits.

Only if the 16th amendment is repealed first.

Quoting LTU932 (Reply 8):
We were promissed "Mehr Netto vom Brutto (More net from our gross salary)", but the government has epically failed in keeping that promise that it made during the campaign for people in lower income classes.

Which unfortunately is exactly where we would find ourselves in this country.


But even some top democrats are calling for the tax cuts to be extended much to the chagrin of their colleagues.

http://thehill.com/homenews/senate/1...eptember-showdown-on-bush-tax-cuts

Midwestern centrists such as Sens. Kent Conrad (D-N.D.) and Evan Bayh (D-Ind.) have called for an extension of all of Bush’s tax cuts, including those benefiting individuals earning more than $200,000 and families earning over $250,000 annually.
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ltbewr
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:18 am

My plan would be to allow some cuts to continue, and reinstate in part the expiring or expired ones.

Return the top rate for the highest incomes although raise the income needed for that level, with limited exemptions for small business owners to encourage their investments.

Reinstate the 'death tax', with a higher deductable and a lower rate than under the former law as well as allow for deductable exemptions for certain family owned properties or businesses to prevent disruption and sell outs under pressure.

Cap by income, adjusted by regional costs of living, deductions for real property taxes and mortgage interest. In effect this would hold down taxes on the middle class and encourage their purchase of homes and make investments while raising them on the .

A higher rate of short-term (less than 2 years) capital gains taxes on real property, stocks, bonds and commidities to discourage 'flipping' of such investments to reduce financial bubbles.

Substantually raise the limits as to the Alternative Minimum Tax or ditch it completly with caps on non-taxable income that the ATM covers now.

Change corporate tax laws to discourage excessive compensation for executives, shipping out of jobs to other countries or to limit extorted tax subsidies by local and state governments that hurt their revenues.

Raise by 48 cents a gallon, by 1 cent a month over 48 months, the Federal tax on road gasoline (not on road diesel). This would help discourge consumption, reduce pollution, recognize in part the real cost of gasoline (enviromental, health, military) and raise revenues for badly needed infrastructure projects, perhaps targeting highways and decrepit bridges.
 
cws818
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:35 am

Quoting Dreadnought (Reply 10):
Maybe then they will think a bit more when they vote.

Are you implying that people who vote in a different way from you do so because they have not thought enough about the issues?
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thegreatRDU
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:48 am

The sad thing is the federal government has done nothing to curtail spending....

But this will just lead to more tax evasion
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Dreadnought
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:07 am

Quoting Flighty (Reply 11):
Even sillier is that cardiologist or VP making $300k per year pays far HIGHER tax rates than Bill Gates. Gates pays nowhere hear 50% of his income on taxes. More like between zero and 15%. If Gates died this year, his heirs would pay 0% on his estate.

Don't compare income with investment returns or estate. Investment and saving is something we should be encouraging. Estate taxes is criminal theft IMHO, as that money has already been taxed. If someone worked hard all his life, what he leaves behind should be a windfall for his kids, not the government which has already taken its piece of the pie and has not earned the rest.

Quoting Flighty (Reply 11):
A $300k earner living in New Jersey or Mass could easily be nearing 50% of gross income in tax. That's because W-2 income is treated differently from capital income. Hedge fund guys are known to pay 10% or less on their income, using tax lawyers and roundabout deferred capital gains. A VP or cardiologist can't afford to spend $50k on a tax attorney every year.

So simplify the tax code. No deductions or credits apart from the base credit per family member, deduct charity and part of your mortgage payment (on primary residence only) and apply the rates. Tax forms do not need to be more than 1 page.

Quoting cws818 (Reply 14):
Are you implying that people who vote in a different way from you do so because they have not thought enough about the issues?
http://www.youtube.com/watch?v=P36x8rTb3jI

People vote their pocketbooks.

Hell, I think we should consider limiting the vote to people who are net payers of taxes. If you don't pull your share of the weight, you don't vote. The idea is attractive, though granted prone to possible abuse.
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cws818
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:09 am

Quoting Dreadnought (Reply 16):
http://www.youtube.com/watch?v=P36x8rTb3jI

That little clip features only one person and does not establish a general trend or rule.
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Dreadnought
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:23 am

Quoting cws818 (Reply 17):
That little clip features only one person and does not establish a general trend or rule.

Ok, let's try a few more...

http://www.youtube.com/watch?v=53C2-b8BOLs&feature=related

In my own experience, those people I know who voted for Obama are either 1) independents who just wanted a change and thought they were voting for a traditional democrat like Clinton (and who are now regretting their decision), 2) Socialists and idealists who truly believe that the country would be better off without business and capitalism, or 3) Ignorants like those in the video.
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OA412
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:33 am

Quoting Dreadnought (Reply 18):
In my own experience, those people I know who voted for Obama are either 1) independents who just wanted a change and thought they were voting for a traditional democrat like Clinton (and who are now regretting their decision), 2) Socialists and idealists who truly believe that the country would be better off without business and capitalism, or 3) Ignorants like those in the video.

Wow! That characterization is offensive on so many levels. You're basically suggesting that those who voted for Obama are ignorant, independents who are too stupid to find out who it is they are voting for, or a bunch of pinko socialists who want to hold hands and sing kumbaya. Do you really harbor that much contempt for those who voted for Obama?
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fr8mech
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:53 am

Quoting ltbewr (Reply 13):
Reinstate the 'death tax', with a higher deductable and a lower rate than under the former law as well as allow for deductable exemptions for certain family owned properties or businesses to prevent disruption and sell outs under pressure.

You do realize this will discourage savings, correct? I'm more likely to do what I can to divest myself of assets before my death if a larger percentage of my estate will go to the government. The money has, generally, already been taxed. It was the deceased's income at some time and was probably taxed.

The Left (and some on the Right) is found of social engineering by using the tax code. They want to shape behaviour to conform to whatever view of society they have.

Increase taxes on fuel, there will be less driving.
Increase taxes on cigarettes, there will be less smoking.
Increase taxes on alcohol, there will be less drinking.
Increase taxes on inheritances, there will be less savings.
Increase taxes on business income, there will be less business income.

Should I go on?
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BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:59 am

Quoting thegreatRDU (Reply 15):
The sad thing is the federal government has done nothing to curtail spending....

Exactly. The whole notion that the solution is raising taxes is ludicrous. What happens when we spend all of that money?

Quoting thegreatRDU (Reply 15):
But this will just lead to more tax evasion

   Let the games begin.

Quoting Dreadnought (Reply 16):
People vote their pocketbooks.

I can look past a lot if it will make me a profit.

Quoting Dreadnought (Reply 16):
Investment and saving is something we should be encouraging. Estate taxes is criminal theft IMHO, as that money has already been taxed.

  
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Dreadnought
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 3:16 am

Quoting OA412 (Reply 19):
Wow! That characterization is offensive on so many levels. You're basically suggesting that those who voted for Obama are ignorant, independents who are too stupid to find out who it is they are voting for, or a bunch of pinko socialists who want to hold hands and sing kumbaya. Do you really harbor that much contempt for those who voted for Obama?

Why is it offensive? Those are my observations. I have no contempt for committed socialists - I think they are wrong, and just wish they wouldn't get so defensive about it. Those independents I've talked to, I can understand how pissed off they were at Bush - I certainly was too. The only people I have something akin to contempt for are those who don't bother to inform themselves about political affairs, who have no clue of the issues of the day, of the key people in government, who their congressman is, who are only interested in the next American Idol or Desperate Housewives, and who vote for whoever their friends say it's cool to vote for (and in 2008, it was cool to vote for Obama).
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thegreatRDU
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 3:34 am

Quoting BMI727 (Reply 21):
Exactly. The whole notion that the solution is raising taxes is ludicrous. What happens when we spend all of that money?

The bail out to the states will give them a free pass to continue their recklessness...look at CA and NY...
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cws818
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 3:34 am

Quoting Dreadnought (Reply 16):
People vote their pocketbooks.

Generally, but not exclusively. Sometimes a person will vote his or her conscience, too.
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Flighty
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 3:52 am

Quoting Dreadnought (Reply 16):
Don't compare income with investment returns or estate.

Well, they are both income. In the business world they are fungible. Income is investment returns is stock options. There are gray areas. Some people don't work at a "job" job. Instead, they invest. Retirees, rich guys, rich kids, trust fund babies, you name it. Are you saying we should only tax people who work a 9-5 job, but not self-employed investors...

Many people I know don't work a 9-5 because they are wealthy enough that an average Joe's salary doesn't mean much to them. A $50,000 might pay their electric bill and their boat slip for the year. I really feel strongly we need to tax people like that, based on their income, even if it is from investments or their trust fund.

I get that people can say "it's already been taxed," but I could say my grandfather was taxed in 1951, therefore my trust fund money (say I have a trust fund) should be tax free, and keep growing as my family builds wealth, and as I eat bon-bons and lie flat on my back. I don't think the Dems will let that happen, nor should they.
 
fr8mech
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 4:51 am

Quoting Flighty (Reply 25):
Many people I know don't work a 9-5 because they are wealthy enough that an average Joe's salary doesn't mean much to them. A $50,000 might pay their electric bill and their boat slip for the year. I really feel strongly we need to tax people like that, based on their income, even if it is from investments or their trust fund.



I don't think he's saying that it shouldn't be taxed, nor am I. But, it should be taxed at the rate of income and not at some higher rate.

Why should my income be taxed at, say 15%, but my dividend income be taxed at 30%, or whatever it will go up to? That kind of disparity provides a disincentive for me to buy and/or hold stocks.

Capital gains taxes are another example of how taxation modifies behaviour. If the capital gains rate goes up on 1/1/11, what kind of sell-off do you think will occur on 12/31/10? I know I will be looking hard at my meager portfolio come December.
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Pyrex
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 7:01 am

Quoting Tugger (Reply 5):
To wipe out all income tax you would need about a 21% VAT.

That's it? In Portugal we have a 21% VAT AND a 40+% income tax rate.

Quoting LTU932 (Reply 8):
(I remind the issue with the parent benefits that are being kept for high income parents and was cut for lower income parents and also for people who are under welfare)

So you are saying that the people who should be the ones breeding in the first place are the ones being given the incentive to do so? The shock, the horror...

Quoting Dreadnought (Reply 10):
tax on net worth, say 2 or 3%. That will encourage savings and investment.

Excuse me? How will taxing people on how much money they have in the bank encourage savings?

Quoting Flighty (Reply 11):
He is right that business people are worried about stability. That's because the federal budget overhang is just too damn large in this country.

No, the business people are worried about stability because Obama has shown, in every occasion possible, absolute contempt for private property and business. They are nervous because they don't know if they are going to be the next industry singled-out and put on the spot for extorsion, like what happened to Toyota. Under the current political environment you would need to be insane to invest in growing your business.

Quoting Flighty (Reply 11):
If Gates died this year, his heirs would pay 0% on his estate.

As they should, given that it is money that has already been taxed.

What I find amazing about this whole thing is that the media is still calling it "the Bush tax cuts" and not "the Obama tax increases". That implies that there is somehow a magic, correct level of taxation in society and that any deviations from it are temporary disturbances caused by politicians.
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BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 7:03 am

Quoting Pyrex (Reply 27):
That's it? In Portugal we have a 21% VAT AND a 40+% income tax rate

Damn. For that much, they better be paving the freeways with marble.
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Aaron747
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 8:42 am

I just have a question for the majority of people who oppose tax cuts for those in the highest bracket - don't you *want* them to have some incentive to pay *you* more? Just a thought.

So long as we're going to continue with a progressive tax the system should be more progressive. The majority of people who own small businesses earn under $500K a year. The brackets under immediately this figure should be adjusted slightly downward with new categories for those $500K - $1 million and another for those over $1 million and over $100 million. There are not many people in the latter two brackets but they are ostensibly the individuals who would feel the hit the least.
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LTU932
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 10:03 am

Quoting Pyrex (Reply 27):
So you are saying that the people who should be the ones breeding in the first place are the ones being given the incentive to do so? The shock, the horror...

No, I'm saying that high income parents get unlimited benefits, while low income parents (those who work, as well as those who are on welfare) are getting those benefits cut, and can't afford to have their already born children anymore. The point in our case is social fairness. Kids of lower income parents thus get indirectly punished for existing in the first place. For example, if you fall into welfare because your unemployment benefits have run out, and you're still looking for a job and have absolutely no luck whatsoever, your kids already go to school, then the parent benefits get cut, and you'll be having lots of trouble actually paying for clothes and school supply, as well as food for the kids.
 
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:07 pm

Quoting Pyrex (Reply 27):
Quoting Dreadnought (Reply 10):
tax on net worth, say 2 or 3%. That will encourage savings and investment.

Excuse me? How will taxing people on how much money they have in the bank encourage savings?

You cut the part where I talked about eliminating the income tax and replacing it with a consumption tax. Altogether, I think that encourages people to earn as much as possible, and spend as little as possible, and build up their own savings and investment portfolio (hopefully we could eliminate the overdependance on Social Security), but we would tax a modest amount off the top of your net worth, instead of taxing it as you earn it.

Of course this is a pipedream, and goes against the whole consumer mentality of the country.
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STT757
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 1:21 pm

I would let the tax cuts expire and direct the additional revenues towards paying off the debt run up by all these supplemental war spending bills, the revenues could only be directed towards paying off debt run up due supporting the operations in Iraq and Afghanistan over the years. Once that's taken care off, then I would direct the revenues towards homeland security (inlcuding border security) as well as addressing transportation infrastructure (highways, ports, airports, rail, new ATC system).
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LTU932
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 2:58 pm

Quoting Aaron747 (Reply 29):
I just have a question for the majority of people who oppose tax cuts for those in the highest bracket - don't you *want* them to have some incentive to pay *you* more? Just a thought.

Tax incentives for small business are all fine and OK, but the issue is with people in the highest bracket, who do NOT own a small business and just get paid for their work (or possibly lack there of), receive lots of bonusses, and possibly even get a golden parachute if they leave.

Quoting Aaron747 (Reply 29):
The majority of people who own small businesses earn under $500K a year. The brackets under immediately this figure should be adjusted slightly downward with new categories for those $500K - $1 million and another for those over $1 million and over $100 million.

Or at least, make harder conditions to qualify for a tax break. If you own a small business, then people should have the chance of getting a tax break, so they are incentivised not only to pay taxes in the first place, but also to expand their business and thus contribute to the economy. Just don't give the entire higher bracket tax breaks, only those who genuinely qualify should get them, not just any rich guy.
 
fr8mech
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 4:08 pm

Quoting STT757 (Reply 32):
I would let the tax cuts expire and direct the additional revenues towards paying off the debt run up by all these supplemental war spending bills,

You assume additional revenues. But, revenues will be lower, because the recovery, such as it, will die or remain anemic, at best.

Why do you think businesses are holding onto their cash? Why aren't they hiring? Government action is uncertain and business is not willing to spend money. Everytime we turn around, the Administration and Congress has its hand out, or more precisely, its hand on its legislative writing pen.

An additional tax burden will bring the US economy to a screeching halt.
When seconds count...the police are minutes away.
 
Ken777
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 5:27 pm

Quoting fr8mech (Reply 9):
Our government pplaces a tax on activity that it wishes to discourage, for any variety of reasons.

Actually the various levels of government use "Sin Taxes" because it's common knowledge that you can increase them without a major drop in use. Cigs & booze is the classic example. We elected a governor who promised a 50¢ per pack increase in the cigarette tax to increase funding to education. Voters generally vote for sin taxes.

When people talk about a VAT/GST for the US they tend to forget that the cities and states generate significant revenue from sales taxes. We actually vote for increases in sales and property taxes for funding various projects, from schools to roads. And these taxes provide the guarantees for various bonds that have been issued.

Any VAT/GST should therefore be carefully crafted to co-ordinate with the sales taxes at the various levels of government.

Quoting Dreadnought (Reply 31):
You cut the part where I talked about eliminating the income tax and replacing it with a consumption tax.

We already have a "consumption tax", called a sales tax in most states. That basically puts people in the lower income levels indirectly paying a fairly high tax on their earnings as they spend all of their earnings on purchases of one type or another.

I believe that we are on a pretty clear path for the top tier brackets to return to normal (the rates set before the temporary Bush cuts) and the lower levels will be retained for the present time.

I also believe that there will be a hard look at the $1,000 hand out per child (Child Endowment in Australia) as there is no need for that type of hand out to families in the upper income levels. Personally I would start phasing it out at $75,000 and closing it out at $150,000. The US version of the Child Endowment is rather queer as it is a socialist program started by conservatives with the sole purpose of winning an election. They won the election and we're still paying the price.

I also believe that there will be a hard look at Social Security funding, First on the list will be to eliminate the cap for the employer's side. Second will be to reinstate the employee's side when they hit a high income level, like $500K. I also believe we will be seeing FICA on other forms of income, like capital gains and non-cash compensation. And tricks like golden parachutes.
 
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Dreadnought
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 5:51 pm

Quoting Ken777 (Reply 35):
We already have a "consumption tax", called a sales tax in most states. That basically puts people in the lower income levels indirectly paying a fairly high tax on their earnings as they spend all of their earnings on purchases of one type or another.

Which is why in most countries there are separate VAT rates for food and necessities and another for everything else.

Quoting Ken777 (Reply 35):
I believe that we are on a pretty clear path for the top tier brackets to return to normal (the rates set before the temporary Bush cuts) and the lower levels will be retained for the present time.

Which is exactly the opposite of what should happen, IMHO. The lower levels are too low, and the upper level is about right, or even a bit too high.

A ran into a buddy of mine who just cashed his tax refund. He took his refund and spent the whole damned thing on shiny new rims on his car! The rims are Chinese-made too. Sometimes you just have to shake your head...
You have enemies? Good. That means you've stood up for something, sometime in your life. - W. Churchill
 
BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 7:08 pm

Quoting Dreadnought (Reply 36):
The rims are Chinese-made too.

What does that have to do with anything?

Quoting Ken777 (Reply 35):
I also believe that there will be a hard look at Social Security funding

Scrap the whole thing and tell people that if they want money when they are old they will either have to save or keep working.
Why do Aerospace Engineering students have to turn things in on time?
 
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Aaron747
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 8:02 pm

Quoting BMI727 (Reply 37):
Scrap the whole thing and tell people that if they want money when they are old they will either have to save or keep working.

That would be a hell of a thing to see. I doubt we'll see it in our lifetimes though.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Ken777
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 8:04 pm

Quoting BMI727 (Reply 37):
Scrap the whole thing and tell people that if they want money when they are old they will either have to save or keep working.

We did save, and we also INVESTED in Social Security. Since I'm around half a century older than you appear to be I'l understand that you have faith in the investments you make today. When I first worked I think minimum wage was about $1.25. Putting 10% away at that time would sure help today - especially with medical expenses.

Investing in a nice house has been a smart move, as has been investing in the kids college education. But those folks near my age with investments in Bush's 14000+ to
 
BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 8:12 pm

Quoting Ken777 (Reply 39):
Since I'm around half a century older than you appear to be I'l understand that you have faith in the investments you make today.

That and the realization that my generation will probably never see a dime of it.
Why do Aerospace Engineering students have to turn things in on time?
 
Ken777
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 8:27 pm

Quoting BMI727 (Reply 40):
That and the realization that my generation will probably never see a dime of it.

You might be surprised. The super rich will fight it like mad, pouring millions into propaganda. But the money is there.

You know how some people talk about this year's "Loss" for the SS program? How we paid out $41 Billion less then we took in?

Seems that number EXCLUDES the $118 Billion the program earned in interest on the money it had "loaned" the government. Loans that went to "pay" for the Bush tax cut.

http://www.latimes.com/business/la-f...0100808,0,1359956.column?track=rss

Quote:
with administrative costs of 0.9% of expenditures.

(Same source)

Think about that a bit. DO you really believe that the financial sector working with conservative Republicans will deliver programs that are as inexpensive to operate as 0.9%? Con you name a single private sector retirement fund that can deliver that cost level to you?

The only way you won't see a dime of it is IF you believe the crap people are putting out for their self interests. Those guys actually believe in the old saying "There's a Sucker Born Every Minute".

If you go along with them and give up that benefit you gain nothing. But you loose an important benefit.
 
Pyrex
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 9:08 pm

Quoting BMI727 (Reply 28):
Damn. For that much, they better be paving the freeways with marble.

Nope, you still have to pay tolls on most highways! You do have some streets paved with marble, but they are mostly in towns that produce a lot of marble and need something to do with the waste, so I don't think that counts.

Quoting LTU932 (Reply 30):
No, I'm saying that high income parents get unlimited benefits, while low income parents (those who work, as well as those who are on welfare) are getting those benefits cut, and can't afford to have their already born children anymore

Anything that discourages people on welfare from having more kids seems all right to me.

Quoting Ken777 (Reply 35):
I believe that we are on a pretty clear path for the top tier brackets to return to normal (the rates set before the temporary Bush cuts)

Again,

Quoting Pyrex (Reply 27):
hat implies that there is somehow a magic, correct level of taxation in society and that any deviations from it are temporary disturbances caused by politicians.

Prove that 39.6% federal (80% all-in) is the "correct" / "normal" tax rate.
Read this very carefully, I shall write this only once!
 
FlyPNS1
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 9:18 pm

Quoting Dreadnought (Reply 36):
The lower levels are too low, and the upper level is about right, or even a bit too high.

So your goal is to take money from people who have little or no money, so that wealthy people can have an even greater percentage of the wealth in the U.S.? You think this will help the economy how?

The reason the wealthy have to pay more is that they control far more wealth. The bottom 40% of Americans in income have only about 1% of total U.S. wealth. How much tax do you think you can extract from these people? They have NOTHING.

Quoting fr8mech (Reply 34):

Why do you think businesses are holding onto their cash?

Because there's no demand for additional product. Why hire new employees if there isn't demand to justify it?

Quoting Dreadnought (Reply 31):
Altogether, I think that encourages people to earn as much as possible, and spend as little as possible, and build up their own savings and investment portfolio (hopefully we could eliminate the overdependance on Social Security),

Maybe, but you would also destroy the U.S. economy which is largely based on consumer spending.

Quoting Aaron747 (Reply 29):
I just have a question for the majority of people who oppose tax cuts for those in the highest bracket - don't you *want* them to have some incentive to pay *you* more?

You assume that rich people will use their tax cuts to pay their employees more. However, that assumption hasn't held up so well. If you look back at the tax cuts of the 80's and 00's, you'll notice that it didn't trickle down much to those in the middle/lower income tiers. The wealth just accumulated at the top and stayed there.
 
Ken777
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 9:31 pm

Quoting Pyrex (Reply 42):
Prove that 39.6% federal (80% all-in) is the "correct" / "normal" tax rate.

Well, it is far lower than when JFK (not a poor man by any means) brought the top tier down to about 75%. And I don't see how you get 80% "all in". With tax accountants and lawyers they will pay far less than the average wage/salary owner.

Quoting FlyPNS1 (Reply 43):
You think this will help the economy how?

Gets more people living in the streets, filing bankruptcy, heading to prison, etc.

But Madoff's friends will be well taken care of. Just like they were under Bush/Cheney.

Quoting FlyPNS1 (Reply 43):
If you look back at the tax cuts of the 80's and 00's, you'll notice that it didn't trickle down much to those in the middle/lower income tiers.

True, We had a "tinkle down" economy, with the rich pissing on people in the lower income levels. I think we need to try the "rising tide raises all boats" approach that we had after WW II. Conservatives today simply cannot match those years, which is probably why they have abandoned the standards conservatives held in those days.
 
Pyrex
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 9:45 pm

Quoting Ken777 (Reply 44):
And I don't see how you get 80% "all in".

Not sure how many times I need to explain this but here it goes again, maybe this time around you are able to get it in your head. If you are living in a place like NYC, take 40% federal, tack in 9% state, another 4% for the privilege of living in that rat-infested hell-hole. With FICA, that is 55% while you are still living. Of course, once you die another 55% will go to the government. You do the math.

Quoting Ken777 (Reply 44):
But Madoff's friends will be well taken care of. Just like they were under Bush/Cheney.

I love it when democrats try to compare Republicans with Madoff-men, when more likely than not, people who are running pyramic schemes (such as good old Warren Buffett) are Democrats.

From Bernie Madoff's wikipedia page:

"He and his wife gave over $230,000 to political causes since 1991, with the bulk (88%) going to the Democratic Party, and 12% to the Republican Party."
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LTU932
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 9:50 pm

Quoting Pyrex (Reply 42):
Anything that discourages people on welfare from having more kids seems all right to me.

You still don't get it. I'm not talking about having more kids, I'm talking about people, who fall into the welfare system and ALREADY have kids. I'm NOT talking about people who try to abuse of the system by having more kids when they fall into welfare.

Sure, preventing abuse of the system is something we should do, but in the case of Germany, welfare (aka ALG 2 or Hartz IV) is a bureaucratic monster, where the people at the federal labour agencies (or Arbeitsämter) don't even understand the law themselves, so in any way, abuse is bound to happen. Plus a person, who has kids in school, used to work, couldn't find a new job although he continues to do so, falls into welfare because unemployment benefits have expire, needs some help with his kids, so they can at least continue going to school. Or would you plead that for those who already have children when they fall into Hartz IV should perform a "post-natal" abortion?  

No doubt, we need to help people out of welfare and that they get decent paying jobs, but for those who do not abuse of the welfare system, we also need to help in some way with their kids. Hell, there are some people, who even with three jobs or more, need a bit of welfare so they can pay their bills and have a decent living, because their paychecks are just not enough to sustain a living above the poverty line.
 
BMI727
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 10:00 pm

Quoting Ken777 (Reply 41):
You might be surprised. The super rich will fight it like mad, pouring millions into propaganda. But the money is there.

Perhaps, but the majority of baby boomers haven't gotten to retirement age yet, and that is usually what is projected to break the system. Besides, counting on government entitlements for income is only slightly more prudent than counting on the riverboat for income.

Quoting Pyrex (Reply 42):
Nope, you still have to pay tolls on most highways!

What does the government do with it all then?

Quoting Pyrex (Reply 42):
Anything that discourages people on welfare from having more kids seems all right to me.

   Like the DJ says in Grand Theft Auto, "Every time I have a kid, that eagle just shits more money."
Why do Aerospace Engineering students have to turn things in on time?
 
Flighty
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 10:18 pm

Quoting Pyrex (Reply 27):
As they should, given that it is money that has already been taxed.

What I find amazing about this whole thing is that the media is still calling it "the Bush tax cuts" and not "the Obama tax increases". That implies that there is somehow a magic, correct level of taxation in society and that any deviations from it are temporary disturbances caused by politicians.

Has Gates' money been taxed? Or Larry Ellison's or Michael Bloomberg's? That is an open question. My guess is that, no, it was never taxed. They are all primarily unrealized capital gains -- the money has not been taxed. Originally, the money did not exist. Microsoft went from a $5,000 company to a $200 billion company. Gates owned his shares during that time and did not pay tax on it yet. If he were to cash in today, he would pay 15%. About what a schoolteacher pays on his or her income, or a dental hygenist.

You are right that people call the Bush tax cuts "cuts" compared to the Clinton years, which were remarkable years of economic growth, as we all know. The Bush cuts designed to sunset. It would not be an "Obama increase" because Obama had nothing to do with writing those policies. The Bush cuts expire as written.

During the early 2000s (actually the entire decade 2000-2010), Americans were led to believe that the economy was weak. So the Bush cuts were sold as a way to improve the economy. Then, spending was. Actually, the best years of growth occured with higher taxes AND lower spending. Because it appeared to be sustainable. And yes, property rights were more respected.
 
Flighty
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RE: Congress Should Extend, Fund Upper-Income Tax Cut

Sat Aug 07, 2010 10:24 pm

Quoting BMI727 (Reply 47):
Besides, counting on government entitlements for income is only slightly more prudent than counting on the riverboat for income.

Exactly, we went through that in the airline industry. When the company is weakened, then don't expect your pension to happen. Especially when it was negotiated under duress such that it would be totally impossible to pay off.

Pensions at age 55 or 50 are a little bit crazy. If you have 20 year seniority and then spend 40 years drawing a pension, then, long-term you have 2 retirees per 1 worker. So, if you are paying worker X $50,000, in effect you must set aside $100,000 to pay the pensioners behind him. So, the real labor cost has tripled, to $150,000 per worker plus benefits. So, that's going into medical doctor territory.

When people ignore this actuarial truth, for the short term, it is basically an insult to common sense. Everybody knew these pensions would not work. A few people were trying to get lucky, but it wasn't a real system. It was just a trick.

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