The monthly prebate check is calculated by multiplying the annual poverty level spending published each year by the Department of Health and Human Services times the FairTax rate and dividing by twelve. Poverty level spending represents what it costs families of varying household size and composition to buy their necessities.Originally Posted by Veldan Rath
Still need to define Poverty Level. Didn't we already establish (in another thread) that those formulas haven't been updated in decades?
Hey Lewk, you voiced my thought when I read that post.
How often do I get to say that in this kind of thread?
By Proxy, meaning even though I myself wouldn't profit from it, the reason boils down to that I am envious of A's money and rather see it going to B than it remaining in A's possession? May I enquire what you have to support this assessment? Because you offered only the conclusion in a form of a statement and an explanation what you meant by that statement, not the argumentation that led you to that conclusion.
Could you also include in that argumentation the debunking of my personal reason why I believe a higher percentage for richer people is justified in my opinion since they also have a larger percentage of their income which they don't need for basic necessities. Mind you, I want you to debunk that this is my reason instead of envy. I'm not interested in you debunking whether that reasoning is valid, since that would be meaningless if that isn't my motivation in the first place.
I could have had class. I could have been a contender.
I could have been somebody. Instead of a bum
Which is what I am
I aim at the stars
But sometimes I hit London
Be careful, his head might explode!
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Money in the bank isn't resources, per se. The rich simply have the power to influence the economy to produce the goods they desire, whether it be factories or luxury boats. The government can take some of that power away via taxes and allow themselves (through spending) or the non-rich (through deficit reduction) to have greater influence on what the economy produces.
It's all about who gets to decide what is made, and where it goes.
Sure, OK. But the Reaganomics notion is that cutting taxes on the wealthy to make them wealthier will impel them to invest their money in businesses, which will stimulate the economy and lead to more jobs, more wealth, etc. This notion is being tossed around an awful lot as we discuss the Bush tax cuts, roughly half of the revenues of which have come from the wealthy. But the wealthy are sitting on their money, and cutting taxes further will cause them to sit on their money more. It's not going to help the economy, which is why Nessie's observation is relevant.
On what basis are you making that claim? The rich do spend a smaller portion of their income than the poor (for obvious reasons), but how can you claim that they're not spending money at all?And there's a difference in how the two groups spend their money. The poor spend it on goods, which benefits the economy in the short term, but not necessarily in the long-term. The rich tend to invest money in areas that directly creates jobs and/or boosts productivity.
Coincidentally, I'd argue that keeping money in the bank is better for the economy than spending it (assuming a decent rate of consumption). Savings = investment, which means that the money in the bank is going to lead to lower interest rates, more lending, and more corporate borrowing. Of course this isn't really an issue now, when the interest rate is already zero.
Hope is the denial of reality
Big business is doing great, and so are the wealthy. They're just not reinvesting the money. I've read several articles to that effect. It's construed as a lack of confidence.
Each dollar the federal government spends today on extending unemployment benefits will raise gross domestic product by $1.60 a year from now, according to an analysis by Mark Zandi, chief economist at Moody’s Analytics. That “bang-for-the-buck” compares with, for example, just 35 cents per dollar for making the Bush-era tax cuts permanent.
Recent analysis from the Economic Policy Institute, a think tank in Washington, found that continuing extensions through 2011 would cost about $65 billion, but would increase gross domestic product by about $105 billion, translating to about 488,000 payroll jobs.
http://www.marketwatch.com/story/job...dist=afterbell
Extending unemployment failed to pass. I'm betting the GOP is wielding those 2 million who'll lose benefits, to keep Bush's tax cuts for the wealthy.
I've got to say that GDP doesn't mean much when all you produce is consumption through debt distribution.
Faith is Hope (see Loki's sig for details)
If hindsight is 20-20, why is it so often ignored?
And other policy people say the opposite. Wouldn't hurt you to look at your source either: "The Economic Policy Institute is a progressive non-profit US think tank that was created in 1986. According to EPI's website, the institute was established to "broaden the discussion about economic policy to include the interests of low- and middle-income workers.""Each dollar the federal government spends today on extending unemployment benefits will raise gross domestic product by $1.60 a year from now, according to an analysis by Mark Zandi, chief economist at Moody’s Analytics. That “bang-for-the-buck” compares with, for example, just 35 cents per dollar for making the Bush-era tax cuts permanent.
Recent analysis from the Economic Policy Institute, a think tank in Washington, found that continuing extensions through 2011 would cost about $65 billion, but would increase gross domestic product by about $105 billion, translating to about 488,000 payroll jobs.
http://www.marketwatch.com/story/job...dist=afterbell
Extending unemployment failed to pass. I'm betting the GOP is wielding those 2 million who'll lose benefits, to keep Bush's tax cuts for the wealthy.
http://en.wikipedia.org/wiki/Economic_Policy_Institute
These kind of places have a clear agenda and push it at all times.
Hope is the denial of reality
Sitting on this money won't hurt the economy, either. If the wealthy don't actually spend any money, then those who do spend the money decide what is made, and where it is spent.
I don't agree, though, that they are simply going to be sitting on the money. Have you seen money market rates recently? Given the non-existent interest rates these days, there would be a significant incentive to invest in a business, if there was anything to invest in, except gold or silver...
Actually there is at least one study I know which points in the other direction. Unfortunately I don't have a direct link but the article
http://www.tagesanzeiger.ch/wirtscha...story/18484880 (German)
Google Translation
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
I'm coming from a purely theoretical perspective. If you have money, but don't spend it, and no one knows you have it, it is essentially like you don't have it. Disagree?
Edit: I read the chopped up translation, and it doesn't make any sense, but I did see Robert Reich appear in there... a super-liberal who's super-wrong!
Edit 2: Ok, it seems to advocate wealth distribution away from the super rich, but what I said in your quote was on a slightly different subject.. just to be super clear, sitting on money would be perhaps putting it in government bonds, as opposed to investing it on stocks or spending it on diamond-studded skin cream bottles.
Yes I disagree, the money didn't came from nowhere.
Translations like that are bad, I don't know about Robert Reich, (his name is funny though Reich=rich). But the Tagesanzeiger is a lefty paper, usually I prefer the NZZ.Edit: I read the chopped up translation, and it doesn't make any sense, but I did see Robert Reich appear in there... a super-liberal who's super-wrong!
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Reich is a political analyst, not an economist. He also has a pretty clear agenda.
Also, the situation in Switzerland is unique. The problem isn't that you have rich people. It's that you try to get rich people from other countries to move their money to your country.
Hope is the denial of reality
Actually the people themselves often move here too. This obviously leads to a large difference in fortune. The differences in fortunes are much bigger here than the differences n income.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Maybe you shouldn't be providing tax havens to these people and allowing them to steal billions of dollars from their (often poor) countries.
Hope is the denial of reality
Uh, no. If you're playing against equally skilled opponents (which I assume the case to be in a tournament, at least for the later rounds), then the outcome is ultimately decided by sheer luck. And a combination of results of luck is still based on luck.
Sorry to rain on your parade there. Poker is a game of luck. As is "business success" - you can skew the numbers, but there will always be variables outside your control. You're somehow thinking that skewing "50:50" to "60:40" makes it "skill based". Nothing could be further from the truth. You can't, don't and won't ever control everything you need to yield a success.
Or let me put it another way: If you can predict success with a certainty, then you can also predict the future, which would make you a very wealthy man. Strangely enough, even business schemes which were researched, peer reviewed and advertised to hell and back fell flat on their noses. So, if even business behemoths like Microsoft, Apple or IBM, with all their power, experience and control over the markets can't ensure success - why do you think a single person with way less control over his surroundings will always reap a huge bounty if he only invested enough time, power, money, whatever?
When the stars threw down their spears
And watered heaven with their tears:
Did he smile his work to see?
Did he who made the lamb make thee?
Enjoying this mental masturbation now, Professor Loki?So far all you've done is dismiss data and sources, popping in with your red pencil like you're grading papers. Too liberal, too political, too many agendas. Even linking non-profit and think tank definitions, as if we're ignorant 8th graders that need your guidance? Really.
Yet, you continue using terms like rich and poor without clear definitions. Now you're criticizing countries for their tax havens for the rich, at the expense of the poor. Looks like you need a re-direct.
The last tangent was related to extending Bush's tax cuts for the wealthy. Tax savings to the top earners theoretically would influence the economy toward growth; wealthy would invest in buying boats or factories, their purchasing power would trickle down to more production, creating more jobs. But that didn't happen.
http://economix.blogs.nytimes.com/20...th/#more-89629Were the Bush Tax Cuts Good for Growth?
By DAVID LEONHARDT
Liz Peek at FoxNews.com congratulates me for writing about the importance of economic growth. So in the spirit of maximizing growth, I want to pose a question: Why should we believe that extending the Bush tax cuts will provide a big lift to growth?
Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.
The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 — the dreaded 1970s — but it still had 3.21 percent average growth.
The picture does not change if you instead look at five-year periods. Here’s a chart ranking five-year periods over the past 50 years, in descending order of average annual growth:
Bureau of Economic Analysis, via Haver Analytics
I mean this as a serious question, not a rhetorical one: Given this history, why should we believe that the Bush tax cuts were pro-growth?
Is there good evidence the tax cuts persuaded more people to join the work force (because they would be able to keep more of their income)? Not really. The labor-force participation rate fell in the years after 2001 and has never again approached its record in the year 2000.
Is there evidence that the tax cuts led to a lot of entrepreneurship and innovation? Again, no. The rate at which start-up businesses created jobs fell during the past decade.
The theory for why tax cuts should create growth and jobs is a strong one. When people are allowed to keep more of each dollar they earn, they are likely to work longer and harder. The uncertainty is the magnitude of this effect. With everything else that’s happening in a $15 trillion economy, how large of an effect on growth do tax cuts have?
Every available piece of evidence seems to suggest that the Bush tax cuts did little to lift growth. I have yet to hear a good argument to the contrary, but I’d be fascinated to see another blogger or an economist take a crack at it.
Update: A reader asks for statistics on real economic growth (that is, adjusted for inflation). The above chart is already adjusted for inflation.
NYT too librul, don't like Leonhardt, Haver Analytics, Moody's Analytics? Then how about the US Dept. of Labor...is that a valid source, Professor Loki?
http://www.bls.gov/news.release/pdf/cewbd.pdf
Where's the growth? Where are all those jobs created by the wealthy keeping more of their own money? How about you show us that continuing the Trickle Down theory will lead to growth and jobs this time around. We already know that returning to Clinton era taxes won't be painful for the top 2%, since they continued to grow their own money just fine at higher tax rates. We already know that nations with higher tax rates can also produce jobs and growth for the lower 98%.
So, give it up Professor Loki. Prove why extending Bush's cuts for the top 2% (or even 10%) would do anything but add to our debt.
Er.... this money has already been made by the rich, so how does how they made it come into play? I'm not sure we are on the same plane of reality, here...
If the wealthy have nothing to invest in, there is no growth. If they did have anything to invest in, interest rates for the money market would inch higher. (despite any manipulation by the Fed) Don't forget also that interest rates of developed countries don't vary very much worldwide (because they are developed, the assumption is that you can mostly withdraw and deposit at will)... tax policies vary. So, investment activity these days might not be as closely linked to tax policies as you think.
Regarding "wealthy investors" who are important to venture capital and start-ups:
http://online.wsj.com/article/SB1000...LEFTTopStories
Over a Trillion dollars in private capital IS apparently sitting on the sidelines, just as Tear said. Sitting on that money CAN be harmful to the economy, aggie. The millionaires and billionaires are supposedly angel investors, wealthy enough to take a risk or leap of faith in future opportunity, when no one else can. Where are they now? Holding congress hostage for their tax breaks to become permanent? Or is congress holding the other 98% hostage to pay back favors to their wealthy lobbyists and campaign investors?
Really, at some point it becomes obscene. No tax relief for the middle classes, no extension of unemployment benefits....too expensive. But they will exchange those things to benefit the top percentile, even though it means losing 700 BILLION in revenue....that's not too expensive?
That's what I've been saying --- that higher taxes for the wealthy (defined as the top 2% income earners) will NOT be negative for our economy. But that's what the GOP is saying, and that's why they're fighting to keep Bush's tax breaks permanent (or at least extended).
Often poor? Most come from Germany, France and the like. The richest person living here is actually from dirty poor Sweden (Ingvar Kamprad). Anyway the canton of Zürich has dropped the special tax agreement (Pauschalbesteuerung) by peoples vote. Let's see if other cantons will follow. A national solution would be possible, but there are always great opposition against proposals that take away authority from the cantons.Maybe you shouldn't be providing tax havens to these people and allowing them to steal billions of dollars from their (often poor) countries.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Not just the GOP saying that but the wealthy themselves are lobbying for it.
Yeah, I said that, too. The GOP should be careful not to be too cocky here. They assume they won house seats as a condemnation of Democrats. I think people in general are just fed up with how DC operates. If the GOP wants to fight for continuing croneyism that favors the top 2% wealthiest or corporate welfare, at the expense of the middle classes or working folk, they'd better be very careful.
I'm gonna pull a Fuzzy and ask that we get back to defining the Middle Class. We can keep discussing Bush tax cuts in the Debt Commission thread.
In earlier times, there was a clear delineation between the Working Class and the Investor Class. That was the era of defined benefit pensions, and workers weren't directly buying stocks or bonds for their future retirements. They didn't need to; their employer was the Investor Class. Workers could have a HS diploma and land a good paying job, enough to support a family, buy a house and car, and have a retirement plan. Workers could move from poverty into lower middle class, and over time (with hard work and loyalty) move into middle-middle class. Take a few employer or gummint subsidized college courses, and move into middle management. Get a college degree and move into executive management. That time was heavier in Manufacturing jobs and "Blue Collar" jobs and union power.
Then times changed. Defined benefit pensions turned into defined contribution pensions, and ultimately into 401-Ks, IRAs, etc. Labor unions lost favor and power, the Steel Belt turned into the Rust Belt, the Farm Belt turned into Big-Ag. Talent and education followed IT and the medical industries, Big Pharma and Big Insurance. The Financial service sector (using debt instruments to make profits) grew by leaps and bounds. Suddenly, even Main Street was connected to Wall Street. The average worker had become part of the Investor Class.
When the crisis hit, workers saw their retirements evaporate. Seniors were saying, "Thank God we didn't privatize Social Security!" Warren Buffet's quote about who'd been swimming without trunks became clear --- average workers, the middle classes. They'd trusted the markets with their retirement. Corporate Human Resources, Municipal Managers, University Trustees saw the whole thing blow up, right in their faces. Poof!
Now we find ourselves with huge education and income disparities. Massive numbers of wealth at the very top, by fewer and smaller numbers of people. Large numbers of poor/working poor at the very bottom, by more and growing numbers of people. Where is the middle, besides being hollowed out? The American picture looks more like an older era of robber barons and industrial magnates exploiting workers.
We can't keep saying a middle class lifestyle means working 3 part time service jobs with no benefits, or that a middle class family means 2 full time professionals with 1.8 children but precarious retirement savings. We can't keep saying we've got a strong middle class, when medical bankruptcy bumps millions down the ladder, or people can't retire until they turn 70 or drop dead first. We also can't keep millions of elderly and retired seniors in a middle class lifestyle, without stealing from current workers and future generations.
Something's gotta give. The center cannot hold.
/ramble
A bunch of Robin Hoods might prevent the American Third Estate from becoming a National Assembly.
Faith is Hope (see Loki's sig for details)
If hindsight is 20-20, why is it so often ignored?
What's that mean? Is that like the loonier contingents of the Tea Party saying their Second Amendment rights will ensure their First Amendment rights?
No, it's not harmful, theoretically. That money isn't doing anything. That means that what is made, and who it goes to, is decided by everyone whose money is doing something. So, either the wealthy, (if they spend money), make the economy better, or not. Can't have it both ways!
But this analysis assumes that not a single rich person does anything with their money, and that prices adjust much quicker than they really do...
EXAMPLE:
A rich person has $1,000,000, and everyone else has $1,000,000 in total. The rich person continually spends and/or invests this money. A loaf of bread costs $2. If that rich person puts his money in a secret vault and disappears, a loaf of bread will cost only $1, because the money supply has shrunk.
...
If the rich people's income is taxed more, which reduces the deficit, that can be good because it reduces problems for everyone in the country. If the income is taxed less, it means a small number of actually investing rich people (and government) will hold a large sway over what the economy does -- that can be bad.
It's a reference to the French Revolution. I'm guessing we'll have something similar here if wealth disparity continues on its current path. Hence the reference to Robin Hood.What's that mean? Is that like the loonier contingents of the Tea Party saying their Second Amendment rights will ensure their First Amendment rights?
Faith is Hope (see Loki's sig for details)
If hindsight is 20-20, why is it so often ignored?
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