Stop Coddling the Super-Rich

[HVC]

You know, the rest of the world is not like Hungary.  We do have rule of law here, and rampant cheating of that kind just doesn't exist here. 

unless you're in wall street

[DGuller]

You know, the rest of the world is not like Hungary.  We do have rule of law here, and rampant cheating of that kind just doesn't exist here. 

unless you're in wall street

I think that went without saying.  Wall Street is not the whole US economy, though, it's just a small part of the economy that saps wealth from the rest of it.

[Tamas]

the first $25k paid in wages from payroll tax.

Oh goodie! We had that for almost a decade! Minimum wage was income tax free. Boy, did we become the land of the minimum wage or what! ALMOST EVERYONE, save for the employees of the companies too big to cook the books, have been working on nominal minimal wages and payed the rest of the worker's salary to their pocket.

You know, the rest of the world is not like Hungary.  We do have rule of law here, and rampant cheating of that kind just doesn't exist here.  That rule of law in fact is probably the biggest contributor to the relative wealth of US.  You're evaluating suggested changes to US policy through Hungarian point of view, and that's just illogical.

oh don't give me that crap. You are not rampantly cheating taxes because the risk-reward ratio is way off, not because you are a supreme race of people. After all, Wall Street isn't exactly in Zimbabwe, neither was it the government of Chad which presented false WMD evidences to the UN. So just cut it.

The higher taxes with the more complex tax laws, the more tax evasion you have. I am fine and well with citing Hungary as an example, because it is an extreme end of spectrum, and you can be sure that if you advocate of moving your country toward that end, I'll tell you how it may end.

[HVC]

You don't mess with the IRS. They took down the mob, and as a more damning example they even go after hollywood. Hollywood dammit, actors get away with everything, drugs, assault, you name it, but not tax evasion


*edit* mob, not mod

[DGuller]

oh don't give me that crap. You are not rampantly cheating taxes because the risk-reward ratio is way off, not because you are a supreme race of people. After all, Wall Street isn't exactly in Zimbabwe, neither was it the government of Chad which presented false WMD evidences to the UN. So just cut it.

The higher taxes with the more complex tax laws, the more tax evasion you have. I am fine and well with citing Hungary as an example, because it is an extreme end of spectrum, and you can be sure that if you advocate of moving your country toward that end, I'll tell you how it may end.

There are a couple of reasons why there is not rampant cheating.  The major reason is that because most people generally don't cheat (too much anyway).  That's not tautological, that's just a cultural trait.  No police in the world can get people to comply with laws, if most people didn't have it in their mind to obey the laws in the first place. 

You are right about risk-reward ratio being different as well, but you seem to go straight to assuming that it's lack of reward that's an issue, when in fact the risk is what's driving it.  IRS is pretty good at cross-checking sums, and it's fearsome once they catch on to someone.  That is also a piece of governance that takes many decades to develop.

[Tamas]

oh don't give me that crap. You are not rampantly cheating taxes because the risk-reward ratio is way off, not because you are a supreme race of people. After all, Wall Street isn't exactly in Zimbabwe, neither was it the government of Chad which presented false WMD evidences to the UN. So just cut it.

The higher taxes with the more complex tax laws, the more tax evasion you have. I am fine and well with citing Hungary as an example, because it is an extreme end of spectrum, and you can be sure that if you advocate of moving your country toward that end, I'll tell you how it may end.

There are a couple of reasons why there is not rampant cheating.  The major reason is that because most people generally don't cheat (too much anyway).  That's not tautological, that's just a cultural trait.  No police in the world can get people to comply with laws, if most people didn't have it in their mind to obey the laws in the first place. 

You are right about risk-reward ratio being different as well, but you seem to go straight to assuming that it's lack of reward that's an issue, when in fact the risk is what's driving it.  IRS is pretty good at cross-checking sums, and it's fearsome once they catch on to someone.  That is also a piece of governance that takes many decades to develop.

No. I didn't single out the lack of reward, altough there is certainly that. Still, you must realize it comes through quite arrogant to state that you have less tax crimes (altough I'd like to see statistics on that) because you are Americans, and you don't have it in your culture to steal from the state.

Or, rather, go ahead and make that argument, but then make sure to side with me on the "are gypos thieves by culture?" topics, or with Slargos on basically everything.

[DGuller]

No. I didn't single out the lack of reward, altough there is certainly that. Still, you must realize it comes through quite arrogant to state that you have less tax crimes (altough I'd like to see statistics on that) because you are Americans, and you don't have it in your culture to steal from the state.

Or, rather, go ahead and make that argument, but then make sure to side with me on the "are gypos thieves by culture?" topics, or with Slargos on basically everything.

Arrogant or not, that's the case.  I wasn't singling out gypsies either, most of the world outside of the West has that problem. 

The biggest asset Western economies have is rule of law, and high quality of governance coming from that.  Unfortunatley, it's often a vicious circle: you can't have a compliant citizenry without good governance, and you can't have good governance without compliant citizenry.

[frunk]

I'm not sure compliant is the best word here.  Maybe cooperative?  It's important that the citizenry follows the rules, but it's also important that it keep a wary eye on the government to follow its own rules.

[DGuller]

Compliant with the laws, that's the sense I intended.

[Tamas]

No. I didn't single out the lack of reward, altough there is certainly that. Still, you must realize it comes through quite arrogant to state that you have less tax crimes (altough I'd like to see statistics on that) because you are Americans, and you don't have it in your culture to steal from the state.

Or, rather, go ahead and make that argument, but then make sure to side with me on the "are gypos thieves by culture?" topics, or with Slargos on basically everything.

Arrogant or not, that's the case.  I wasn't singling out gypsies either, most of the world outside of the West has that problem. 

The biggest asset Western economies have is rule of law, and high quality of governance coming from that.  Unfortunatley, it's often a vicious circle: you can't have a compliant citizenry without good governance, and you can't have good governance without compliant citizenry.

Good point, except of course for the boring and old magyars=gypos shtick reference

Yet, humans are humans. High taxes and bigger government redistribution gives birth to inefficiency, corruption, and dependancy on welfare. On the western-cultured long-term effect of the latter, I route you toward the recent British riots.

And like it or not, singling out income stratas, jduging how much more that whole is supposed to contribute than the rest is a small step toward that. I am not saying you should keep letting your rich get more lenient tax laws than your average Joe's, but it brakes my heart to read (not just from you lot) ideas which would start the US down a European-style governance road, a governance which has quite clearly failed.

[Zanza]

Arrogant or not, that's the case.  I wasn't singling out gypsies either, most of the world outside of the West has that problem. 

The biggest asset Western economies have is rule of law, and high quality of governance coming from that.  Unfortunatley, it's often a vicious circle: you can't have a compliant citizenry without good governance, and you can't have good governance without compliant citizenry.

I concur. You only notice that when you go to countries that don't have good governance. Before that you make jokes about how bureaucratic everything is at home, but when you notice corruption and outright non-governance in other countries, you start to understand that it all has a sense at home.

[Zanza]

And like it or not, singling out income stratas, jduging how much more that whole is supposed to contribute than the rest is a small step toward that. I am not saying you should keep letting your rich get more lenient tax laws than your average Joe's, but it brakes my heart to read (not just from you lot) ideas which would start the US down a European-style governance road, a governance which has quite clearly failed.

In which aspect does the US differ from Europe really? They have progressive taxes, an extensive welfare state etc.

And quite clearly failed? Please. Life is still really good here compared to virtually all of the rest of the world.

[viper37]

Buffett owns six insurance companies that sell life insurance to billionaires in order to reduce their tax exposure. He has a vested interest in higher taxes on his potential customers. Just sayin.

true.
But for a multi-billionaire, would he really increase his insurance coverage if his taxes were higher by 3-4%?
They are likely to be already covered by as much as they can.

In any case, let's assume there is a direct link (it's more complicated than that, but let's go for the math thing).
My taxes raise by 3%, I increase my insurance coverage by 3%.
My insurance company will increase its profits as it sells more insurance.
It will be taxed more, and it will distribute more wealth to its shareholders, wich in turn will be taxed on it (some of them are foreigners though, so they won't pay taxes in the US).
So, as the government you just multiplied you tax income, because that 3% (if multi-billionaire are all increasing their insurance by 3%), is going to affect a lot of people who are becoming wealthier and hence pay more taxes.

As a result, the insurance coverage decision should not be factored in this case, as it has no adverse effect on anyone.
And all multi-billionaires are likely to own a stake in some insurance company somewhere, so they would all benefit from this.
And stock traders would too, as the insurance cies make more money, their share price will likely increase.

[viper37]

You are a bunch of envious socialists.

If he has a gazillion dollars of income, it means he pays 15% of gazillion as tax. While poor people pay 15% of their meager income. Everyone participates equally. I know the "rich has more to spare", but that's the road on which you can eventually arrive to the "omg he is not poor! the bastard! where did he get it?!!!!!" society, which is NOT fun to live in, trust me.

No, poor people pay more, because of the wages tax.  Those with gazillion dollars of income likely get their money from dividends and capital gains wich is taxed less overall than wage.

[Martinus]

You are a bunch of envious socialists.

If he has a gazillion dollars of income, it means he pays 15% of gazillion as tax. While poor people pay 15% of their meager income. Everyone participates equally. I know the "rich has more to spare", but that's the road on which you can eventually arrive to the "omg he is not poor! the bastard! where did he get it?!!!!!" society, which is NOT fun to live in, trust me.

His point is that poor people pay 40%.

You are wrong. His point is that the middle class pays 40%, not the poor. Which is worse.