Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I wasn't too far off the thought: Cyprus banks open, limit of €300 cash withdrawal, €5000 payment. Cheques are not cashed. Travel limit of €1000 cash (not sure how that'll be enforced). All accounts over €100,000 thieved. http://www.foxnews.com/world/2013/03/28/cyprus-banks-reopen-with-strict-limits-on-transactions/

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Major progress on tax reform in the Senate: Senate votes 51-48 to recognize officially that when tax rates change, people adjust their behavior accordingly.

it's a good sign that before going on recess a majority of the Senate endorsed "dynamic scoring" of changes in tax law.

For decades the official forecasters at the Congressional Budget Office and Joint Committee on Taxation have assumed that changes in tax rates have little impact on how businesses and households behave or on the competitiveness of the U.S. economy. In this alternative universe, people work nearly as much at a 60% income tax rate as they do with a 30% rate, and investors don't care all that much if the tax on capital gains is 15% or 30%.

This often leads to crazy results. In January 2003, for example, the modelers predicted that capital gains revenues would be $68 billion in 2006 and $73 billion in 2007. In May 2003 Congress cut the capital gains tax rate to 15% from 20%, and in its revised budget forecast in August 2003 CBO estimated that the rate cut would reduce revenues to $65 billion in 2006 and $69 billion in 2007.

CBO wasn't even close. Actual capital gains revenue rose despite the lower tax rate to $109 billion in 2006 and $126 billion in 2007, thanks to faster economic growth and a greater incentive for investors to cash in their gains at the lower rate.

So it's notable that during its recent budget debate the Senate voted 51-48 for a nonbinding resolution that would require CBO to produce a dynamic score for tax changes.

....

By always scoring tax rate reductions as losing huge amounts of revenues and tax increases as automatically lowering the deficit, the Beltway rules are stacked against sound tax policy. The issue is especially timely now, because enacting pro-growth tax reform depends on better real-world scoring.

Tax reform done right should be revenue neutral using standard CBO static analysis, but a dynamic model would predict a large revenue windfall from the overall increase in investment and economic efficiency. As part of a budget deal, those extra tax dollars that Democrats crave could be earmarked for deficit reduction.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Major progress on tax reform in the Senate: Senate votes 51-48 to recognize officially that when tax rates change, people adjust their behavior accordingly.

They have to have a bill for that?! Wow.

 

[pirate]

They have to have a bill for that?! Wow.

Many follow economic theory like they follow religion...they often find one, believe anything that supports the premise and attack any competing theories.

If you are raised only hearing that more government spending solves all social problems and more taxes are the only way to pay for it, then you believe it to be so.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Many follow economic theory like they follow religion...they often find one, believe anything that supports the premise and attack any competing theories.

If you are raised only hearing that more government spending solves all social problems and more taxes are the only way to pay for it, then you believe it to be so.

Based upon what I've seen in the past few years, I'll buy that. If that's what they need in order to have the truth be known, then so be it.

I wonder what the 'stains on here think about that...

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I wonder what the 'stains on here think about that...

"at first, we were annoyed at having to tone down our class warfare rhetoric, but upon sober reflection we then decided that anything that raises tax revenues is fine by us....you know we'll have no trouble spending it thricefold!"

 

[unofan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

and more taxes are the only way to pay for it.

Ignoring the first half of your statement for the moment...how else would you pay for government? Say, for argument's sake, that we knew the perfect amount of government spending. Would you not need that amount in taxes/royalties/government revenue to pay for said spending?

I think it's fair to argue about how much government spending is necessary. I'm curious, though, as to what else you think would pay for that if not some form of taxation (by any other name, be it tariff, duties, penalties, etc.)

 

[pirate]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Ignoring the first half of your statement for the moment...how else would you pay for government? Say, for argument's sake, that we knew the perfect amount of government spending. Would you not need that amount in taxes/royalties/government revenue to pay for said spending?

I think it's fair to argue about how much government spending is necessary. I'm curious, though, as to what else you think would pay for that if not some form of taxation (by any other name, be it tariff, duties, penalties, etc.)

I believe I said MORE taxes.

Sorry, you'll have to play "gotcha" with someebody else today.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

how else would you pay for government?

How about paying for different parts of government in different ways, each of which fits and makes sense for that portion?

User fees, market-based rents and royalties (I've heard that there are quite a few below-market leases of federal lands to ranchers, foresters, etc. though I don't know how accurate that information is).

The biggest issue overall it seems to me is extremely fundamental: do we do what every other non-governmental entity does and say "our overall spending will be $xxx billion, how do we prioritize so that we allocate it effectively?"


Or do we say "here is our wish list for every nice thing imaginable, how do we go out and scrounge up the money to pay for it?"

 

[unofan]

I believe I said MORE taxes.

Sorry, you'll have to play "gotcha" with someebody else today.

Considering we aren't even covering what we've already bought, and many on here seem to have taken the grover pledge themselves, it's still a legitimate question. I have no doubt there are some on here who would argue that all taxes are theft or something of that nature. In fact, it's been done before.

As to fishy's post, while the gov't surely has fiscal constraints, you can't treat it like a business. I don't want the criminal justice system to be operated with a profit motive in mind, for instance. To the extent efficiency helps the courts provide justice, that's great. But it should only be considered in that context, and should not be the goal in and of itself. If an inefficient process keeps an innocent man out of jail, it's worth it.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

How about paying for different parts of government in different ways, each of which fits and makes sense for that portion?

User fees, market-based rents and royalties (I've heard that there are quite a few below-market leases of federal lands to ranchers, foresters, etc. though I don't know how accurate that information is).

The biggest issue overall it seems to me is extremely fundamental: do we do what every other non-governmental entity does and say "our overall spending will be $xxx billion, how do we prioritize so that we allocate it effectively?"


Or do we say "here is our wish list for every nice thing imaginable, how do we go out and scrounge up the money to pay for it?"

In the end, it's all taxes.

The difference is that some of us are trying to look from a basis of the aggregate amount as function of both the rate AND the amount expected to be contributed per person, while some are not even considering the amount contributed per person, because they assume that a change in tax rate does not change behavior. No one's arguing against all taxes; we already learned during the days of the Articles of Confederation that that didn't work, so that talking point can be dumped. Everything has an opportunity cost, and different people value different things differently. As an example, take toll roads in the Northeast. We see a number of trucks using U.S. highways instead of interstate highways simply because of insane toll increases on the trucking community (specific examples: I-80/90 vs. Ohio 2 and US 20, or I-90 in NY vs. US 20; you should see the anti-trucking legislation they're trying to push in the village of Skaneateles because of it). This is probably the simplest case available of taxation and the effects on the population.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Considering we aren't even covering what we've already bought, and many on here seem to have taken the grover pledge themselves, it's still a legitimate question. I have no doubt there are some on here who would argue that all taxes are theft or something of that nature. In fact, it's been done before.

As to fishy's post, while the gov't surely has fiscal constraints, you can't treat it like a business. I don't want the criminal justice system to be operated with a profit motive in mind, for instance. To the extent efficiency helps the courts provide justice, that's great. But it should only be considered in that context, and should not be the goal in and of itself. If an inefficient process keeps an innocent man out of jail, it's worth it.

Wrong. You have to treat government like a business, or else you're going to be siphoning off money for years, just like we are now. I understand that business is a libstain code word for "dirty profiteering corporations", but all I see is someone trying to promote a brand to which they see benefit. Not that I blame you; we are on a sports message board, after all. At the end of the day, there is no fundamental economic difference between government and a private business. I'll give you that the perception of growth may be different, however the fundamental way to achieve equilibrium happiness are no different.

 

[Rover]

Many follow economic theory like they follow religion...they often find one, believe anything that supports the premise and attack any competing theories.

If you are raised only hearing that more government spending solves all social problems and more taxes are the only way to pay for it, then you believe it to be so.

Of course, nobody actually subscribes to the theory of your second paragraph so either you're building straw men again or you have a martyr complex.

However, Fishy I think has somewhat of a good idea, which is wherever possible to link a tax to a specific benefit. For example SoS taxes pay for the program, despite the idiocy you might here about Ponzi schemes, etc from people who don't ever seem willing to give up that money.

Where I would start is transportation/infrastructure. Fund it with the gas tax. That's a direct link and since the US uses less gas than in previous years due to better efficiency in cars (and I imagine better transit options as the country becomes more urban), people wouldn't be paying any more in real dollars.

Flaggy, you're 100% wrong on running a govt like a business. Govt is a non-profit entity. Corporations are not. Also, no corporation on God's green Earth has the responsibilities that govt has. BTW - How well did the first President with an MBA and a former CEO as Vice President work out again?

 

[unofan]

Wrong. You have to treat government like a business, or else you're going to be siphoning off money for years, just like we are now. I understand that business is a libstain code word for "dirty profiteering corporations", but all I see is someone trying to promote a brand to which they see benefit. Not that I blame you; we are on a sports message board, after all. At the end of the day, there is no fundamental economic difference between government and a private business. I'll give you that the perception of growth may be different, however the fundamental way to achieve equilibrium happiness are no different.

When G.E. starts its own mint and becomes a sovereign entity, then maybe you'd have a point. Otherwise, no. Businesses and governments are not interchangeable.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

while the gov't surely has fiscal constraints, you can't treat it like a business. I don't want the criminal justice system to be operated with a profit motive in mind, for instance. To the extent efficiency helps the courts provide justice, that's great. But it should only be considered in that context, and should not be the goal in and of itself. If an inefficient process keeps an innocent man out of jail, it's worth it.

It isn't only a business that says, "here is how much we have available, how best can we spend it?" Families do it, non-profits do it, every other entity in the world does it. Everyone else has to be accountable, I don't accept that government deserves a special dispensation that says they don't need to be accountable.

It's funny how the Trustee of a Trust is held to a higher standard of behavior, there is a codified list of fiduciary responsibility. It seems to me that government employees should behave more like stewards responsibile to others, held to a higher standard, instead of the greedy pigs we so often read about in NY or NJ or CT newspapers. It seems like every other week there is a new bribery or corruption or embezzlement story involving government officials or Medicare fraud or pension fraud.

 

[unofan]

It isn't only a business that says, "here is how much we have available, how best can we spend it?" Families do it, non-profits do it, every other entity in the world does it. Everyone else has to be accountable, I don't accept that government deserves a special dispensation that says they don't need to be accountable.

It's funny how the Trustee of a Trust is held to a higher standard of behavior, there is a codified list of fiduciary responsibility. It seems to me that government employees should behave more like stewards responsibile to others, held to a higher standard, instead of the greedy pigs we so often read about in NY or NJ or CT newspapers. It seems like every other week there is a new bribery or corruption or embezzlement story involving government officials or Medicare fraud or pension fraud.

And we never hear about business managers, attorneys, or financial planners breaching their duties by embezzling, stealing from the client trust fund, or pushing people to invest in their friends' ponzi schemes, do we? Corporations never raided their employees' pension funds, did they?

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

And we never hear about business managers, attorneys, or financial planners breaching their duties by embezzling, stealing from the client trust fund, or pushing people to invest in their friends' ponzi schemes, do we? Corporations never raided their employees' pension funds, did they?

??? are you saying that it is acceptable for government employees to steal???

If not, what is the point of your post? that some people are criminals? Gee, stop the presses, we have a breaking news story.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Of course, nobody actually subscribes to the theory of your second paragraph so either you're building straw men again or you have a martyr complex.

However, Fishy I think has somewhat of a good idea, which is wherever possible to link a tax to a specific benefit. For example SoS taxes pay for the program, despite the idiocy you might here about Ponzi schemes, etc from people who don't ever seem willing to give up that money.

Where I would start is transportation/infrastructure. Fund it with the gas tax. That's a direct link and since the US uses less gas than in previous years due to better efficiency in cars (and I imagine better transit options as the country becomes more urban), people wouldn't be paying any more in real dollars.

Flaggy, you're 100% wrong on running a govt like a business. Govt is a non-profit entity. Corporations are not. Also, no corporation on God's green Earth has the responsibilities that govt has. BTW - How well did the first President with an MBA and a former CEO as Vice President work out again?

First paragraph: You haven't paid a single iota of attention as to how Obama governs, have you?

The first phrase of the second paragraph deserves signature quotation.

There's a big flaw with your third paragraph, and it's exactly why states are considering either raising gas taxes (clear examples in Vermont and Virginia) or going to other means of collection (clear example in Oregon): As much as "people wouldn't be paying any more in real dollars", the cost of maintenance of this transportation/infrastructure does change. How are you going to cover these costs? On the side, what do you do from an import/export perspective? Let's take a look at this at a state level, and I'll use myself as an example to show you why gas and mileage taxes don't work. I grew up on the border between two states. I had essentially the choice to purchase things in either state. Because of the price (and crude/refinery/delivery/store-expense difference were essentially negligible; the only difference was taxes), I would cross state lines to purchase fuel because of the price difference, and then use the vehicle in the home state. My point is that the only truly effective way to make appropriate maintenance money from driving is to toll driving from a village-by-village or a road-by-road perspective. You can't do it simply by mileage, as once again, there's no guarantee that if you aren't collecting money, they aren't using your road.

Fourth paragraph: Once again, you're trying to refute my point through perception of growth. In addition, scale is not a good refute either, because you need only throw in a multiplier. It'd be like trying to compare between the diner down the road and a restaurant chain. The basic fundamentals of achieving a net difference between revenue and expenditure of zero or greater, whether you want to call it profit or surplus I don't really care because they are exactly the same thing, are exactly the same. Are certain routes of expenditure different based upon scale? Certainly. Are the methods of achieving revenue and retaining "customers" (citizens in the case of government given there's no NWO) the same? Yes. That is why there is no difference. As for your last part, Dubya and Obummer were dealt essentially the same hand: a down economy (you can't not acknowledge the dot com bust) and internationally-related instability. Given how each leader played the hand while they had full control, I'd take Dubya.

 

[unofan]

??? are you saying that it is acceptable for government employees to steal???

If not, what is the point of your post? that some people are criminals? Gee, stop the presses, we have a breaking news story.

I'm saying your scapegoating gov't workers as "greedy pigs" is getting old, when every criticism you throw at them can be thrown at every other employment sector, too. The next time I hear you call the ceo of megacorp a "greedy pig" for running it into the ground (and taking the economy with it) while getting a golden parachute will be the first.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

When G.E. starts its own mint and becomes a sovereign entity, then maybe you'd have a point. Otherwise, no. Businesses and governments are not interchangeable.

Oh, so because of the contractor chain (think of it like a food chain) and the specific products that are offered, there is an exception to the fundamental laws of economics? Once again, you are blinded by liberal brainwashing that you do not understand the core principles of life survival.