Continuing the theme of taxation threads, I read an opinion piece by Steve Rattner in the Sunday NYT. I gather he was some Treasury flunky in the Bubba administration. He proposed ending the fiction that payroll taxes are the means by which contributors get "vested" in the system, concocted by Effdeear to hornswoggle (there's a good word for the non-Americans) the American public who were leary of socialism. Just throw Social Security and Medicare onto the general fund.
What say ye?
(Not what say Yi. HA HA HA HA stole everyone else's joke.)
Quote from: Admiral Yi on November 28, 2012, 02:53:01 PM
I read an opinion piece by Steve Rattner in the Sunday NYT. I gather he was some Treasury flunky in the Bubba administration.
Good Lord, Yi. He was a Wall Streeter for ages, and Obama's auto czar in the Treasury during the bailouts.
Yes payroll taxes are the job killer. Not taxing people so that can only afford a 100 foot yacht instead of a 100 foot one.
Quote from: Admiral Yi on November 28, 2012, 02:53:01 PM
Continuing the theme of taxation threads, I read an opinion piece by Steve Rattner in the Sunday NYT. I gather he was some Treasury flunky in the Bubba administration. He proposed ending the fiction that payroll taxes are the means by which contributors get "vested" in the system, concocted by Effdeear to hornswoggle (there's a good word for the non-Americans) the American public who were leary of socialism. Just throw Social Security and Medicare onto the general fund.
What say ye?
(Not what say Yi. HA HA HA HA stole everyone else's joke.)
I agree with that proposal. Social Security is social welfare program, deal with it.
We should tax everything we want less of. So, Bieber Tax, Anime Tax and Telemarketing Tax.
Quote from: crazy canuck on November 28, 2012, 03:48:36 PM
Not taxing people so that can only afford a 100 foot yacht instead of a 100 foot one.
:hmm:
Let's say for the sake of argument we abolished FICA and FUTA. That leads to the question then of the proper distribution of taxes throughout the income distribution. What percentage of the population should be net recipients? What percentage net neutrals? What percentage net payers?
I'm talking about lifetime taxation and benefits, so leave out the obvious fact that retirees are net beneficiaries.
Something like 20/60/20 maybe?
Quote from: Admiral Yi on November 28, 2012, 04:58:25 PM
Let's say for the sake of argument we abolished FICA and FUTA. That leads to the question then of the proper distribution of taxes throughout the income distribution. What percentage of the population should be net recipients? What percentage net neutrals? What percentage net payers?
I'm talking about lifetime taxation and benefits, so leave out the obvious fact that retirees are net beneficiaries.
Something like 20/60/20 maybe?
It's not going to be symmetrical like that, because income distribution is highly skewed. It's also unlikely to stay constant, because such ratios are going to be a function of the income inequality, and income inequality in turn can be affected by the very actions you describe.
Also, they will skew over time as the future retirees will not be paid in current dollars.
Quote from: DGuller on November 28, 2012, 05:04:13 PM
It's not going to be symmetrical like that, because income distribution is highly skewed. It's also unlikely to stay constant, because such ratios are going to be a function of the income inequality, and income inequality in turn can be affected by the very actions you describe.
Then use the present distribution, Captain Nitpick.
Quote from: Admiral Yi on November 28, 2012, 05:08:22 PM
Quote from: DGuller on November 28, 2012, 05:04:13 PM
It's not going to be symmetrical like that, because income distribution is highly skewed. It's also unlikely to stay constant, because such ratios are going to be a function of the income inequality, and income inequality in turn can be affected by the very actions you describe.
Then use the present distribution, Captain Nitpick.
I don't have nearly enough information to even pretend to make an informed decision. Sure, I can throw out a set of three numbers, but what value will they provide?
Quote from: Habbaku on November 28, 2012, 04:57:09 PM
Quote from: crazy canuck on November 28, 2012, 03:48:36 PM
Not taxing people so that can only afford a 100 foot yacht instead of a 100 foot one.
:hmm:
Perhaps a 'one' is a type of vessel in Canada?
Quote from: DGuller on November 28, 2012, 05:17:50 PM
I don't have nearly enough information to even pretend to make an informed decision. Sure, I can throw out a set of three numbers, but what value will they provide?
They will give an indication of what part of the income distribution you believe deserve to have their existence subsidized.
Or you could approach the issue from a defined-benefit POV. What is the minimum consumption basket that all American should be guaranteed regardless of ability to pay? Just free primary and secondary education plus minimal state pension?
Some sort of health care should be included too, no? At the very least, some sort of emergency treatment?
Quote from: Jacob on November 28, 2012, 06:02:31 PM
Some sort of health care should be included too, no? At the very least, some sort of emergency treatment?
That's it? No housing, no food, no walking around money? Transportation?
Quote from: Admiral Yi on November 28, 2012, 06:09:35 PM
Quote from: Jacob on November 28, 2012, 06:02:31 PM
Some sort of health care should be included too, no? At the very least, some sort of emergency treatment?
That's it? No housing, no food, no walking around money? Transportation?
Fun fact everybody: Yi's stamps say "Equality Forever" on them.
A thousand calories for the plebs. Mexicans get 600.
Quote from: Ideologue on November 28, 2012, 08:03:41 PM
Fun fact everybody: Yi's stamps say "Equality Forever" on them.
I don't get it.
I figured you were taking a jab at my Randian love of inequality, but I just couldn't figure out the connection to the post you quoted.
Quote from: Admiral Yi on November 28, 2012, 08:25:10 PM
I figured you were taking a jab at my Randian love of inequality, but I just couldn't figure out the connection to the post you quoted.
I thought it was some kind of reference to the Stamp Act, and couldn't figure what that had to do with the thread.
Quote from: Admiral Yi on November 28, 2012, 08:25:10 PM
I figured you were taking a jab at my Randian love of inequality, but I just couldn't figure out the connection to the post you quoted.
It is about time for your stalker to log on.
Wot's all this then? I Was busy playing Fallout New Vegas.
:lol:
:D
Quote from: Admiral Yi on November 28, 2012, 06:09:35 PM
Quote from: Jacob on November 28, 2012, 06:02:31 PM
Some sort of health care should be included too, no? At the very least, some sort of emergency treatment?
That's it? No housing, no food, no walking around money? Transportation?
I was trying to put in what I thought was the minimum acceptable bottom for conservatives such as yourself. You proposed primary and secondary education and minimal social security. I assume that you don't think dying people should be turned away at hospitals. If so, I figure that ought to be included in that minimum. If not, then of course not. I assume you don't want to provide food, housing, walking around money, or transportation... but if you do, you should add those as well :)
For my part, I don't think a "minimum consumption basket" captures my approach to government at all; I believe in the social welfare state and believe that government can engage constructively in a whole range of areas. I'm still interested in hearing what you think should be in that basket however.
I believe in a safety net as distinct from a welfare state as I understand it. People who are down on their luck through no fault of their own get a bare minimum to get get by until they're back on their feet. The assumption being of course that they want to get back on their feet. The problem with overly generous transfer payments (I've mentioned this before) is that they disincentivize work. And all the ancillary decisions and habits that are related to work and contributing to society, such as applying oneself educationally and not committing too much crime. And thank God Bubba and Newt killed AFDIC, which was established with the absolute best of intentions (poor girl got knocked up, we gotta help her and the innocent kid out).
I've mentioned several times that Scandinavian socialism can only work in a place with high social capital and cohesion. I think if we were to pass a law saying everyone gets food, housing, medical care, transportation, education, clothes, and a few bucks for smokes and booze then half the country would stop working. We're a nation of grifters and hustlers.
Now let's hear about how government can engage constructively in a whole range of areas. Or more importantly, why it should.
BTW, I'm currently reading The Road to Serfdom and so far I must say for such a hyped book he doesn't have a lot to say.
Yes. If nothing else it would end the non-stop bullshit about them 'going bust'.
QuoteI believe in a safety net as distinct from a welfare state as I understand it.
I have no doubt your understanding of 'welfare state' is a bit skewed from mine :P
Quote from: Admiral Yi on November 28, 2012, 09:50:41 PMNow let's hear about how government can engage constructively in a whole range of areas. Or more importantly, why it should.
Essentially, where the majority of the population would benefit from what is essentially insurance a well managed non-profit with a mandate to serve the common weal (which usually means government mandated, since the profit motive is the main reason for private actors to get involved) tends to provide superior results, assuming you rate the well being of the citizenry over individual profit. I think the Canadian Crown Corporation model works pretty well, for example, but it's not the only way to do it.
Things like employment insurance, old age benefits, health care, workers compensation, disability benefits fall clearly within this. You could argue that car insurance could be one as well, since driving is so fundamental to modern existence. I'm not opposed to private companies getting involved in some capacity, but I think they're best for providing additional services beyond a comfortable (not minimal) floor provided by the government or government mandated services (as long as this does not provide a moral hazard). Ideally such systems are revenue neutral in terms of mandatory fees (however they're calculated), as a properly managed insurance scheme should be.
Education is another area where the government should be heavily involved; again, because providing a quality public good is much more important than generating individual profit. Again, I'm not opposed to private actors being involved on the fringes, but privatizing education will inevitably leave significant portions of the population heinously underserved and that is unacceptable.
Another area that benefits from government involvement is large and even medium scale infrastructure, as well as services that have some characteristics of infrastructure. I'm thinking here of roads and bridges, hydroelectrical dams etc when it comes to infrastructure, and things like the postal services, electricity, water, garbage collection and public transit when it comes to services; arguably the postal service is no longer needed, but in lieu of that I think broadband access is becoming a necessity of modern life.
In all of those cases, I think semi-autonomous government corporations at arms-length from but ultimately responsible to politicians works the best. Yes, of course if they're badly managed that can be problematic, but the same is true of private entities in those situations; however, I think semi-public organizations are more responsive to the needs of the public than private companies, especially in areas where the huge infrastructure investments grant companies near monopolies or cartel-like control over the services. In some cases, a publicly managed call for contracts can work as well, but even so there's a significant need for public oversight to ensure standards are met and defined.
Similarly, government needs to be involved in setting standards for labour relations, food safety, product safety, as well as in areas where "the tragedy of the commons" is likely to occur such as environmental safety etc; the individual has little to no power compared to organized capital, and shortfalls in those standards carry too high a human cost.
Ultimately, the state is there to serve the needs population - especially in areas involving large projects and where the pooling of risk is useful.
This is not to say the the state should limit private enterprise unnecessarily, but some areas should only be provided by private enterprise if it's more efficient in terms of serving the population's needs, not in terms of generating income. In many areas, various factors prevent meaningful competition and the consequences of substandard service are too significant (and accepting substandard service should, if necessary, be an explicit part of the political process); that's where government should be involved.
What are payroll taxes? Serious question. I get the feeling I'd be interested in the debate, but I don't know the term.
Is it federal and where applicable state taxes taken directly off your paycheck?
Payroll taxes are 1.45% for medicare paid by the employee and 6.8% paid by the employee and another 6.8% paid by the employer for social security. This is before our income taxes are calculated.
They are taxes which in theory are dedicated to paying for Social Security and Medicare/Medicaid.
You get no exemption with these taxes; the very first dollar you earn gets taxed at 7.5% to pay for Social Security and 2.5% (I think) to pay for Medicare/Medicaid. The employer matches your contribution on Social Security. I'm not crazy about this part of the fiction either.
Only the first $64K or so in annual earned income gets hit with these taxes. Unearned income (i.e. investment income) is not hit at all. So as you can see they are very regressive taxes, as they hit the lower income groups for a greater chunk of their income.
SS and Medicare/aid are federal programs and the taxes are a purely federal matter.
p.s. MIM comes in with the precise numbers.
Ok, so these are like our social security / health / unemployment insurance contributions.
Quote from: Admiral Yi on November 28, 2012, 04:58:25 PM
Something like 20/60/20 maybe?
Yes, if these are percentages of national wealth and not percentages of national population.
Quote from: Zoupa on November 29, 2012, 12:45:56 AM
What are payroll taxes? Serious question. I get the feeling I'd be interested in the debate, but I don't know the term.
Is it federal and where applicable state taxes taken directly off your paycheck?
Not being sarcastic but I thought you lived in Canada.
CPP and EI are examples of payroll taxes in Canada. They are just as regressive as they are in the US.
Quote from: crazy canuck on November 29, 2012, 12:11:17 PM
Quote from: Zoupa on November 29, 2012, 12:45:56 AM
What are payroll taxes? Serious question. I get the feeling I'd be interested in the debate, but I don't know the term.
Is it federal and where applicable state taxes taken directly off your paycheck?
Not being sarcastic but I thought you lived in Canada.
CPP and EI are examples of payroll taxes in Canada. They are just as regressive as they are in the US.
Might be lost in translation. I've never heard of them being refered to payroll taxes outside of Languish.
What's CPP? I'm guessing we have a Quebec equivalent instead of the Canadian wide one.
Quote from: Grey Fox on November 29, 2012, 12:20:49 PM
Quote from: crazy canuck on November 29, 2012, 12:11:17 PM
Quote from: Zoupa on November 29, 2012, 12:45:56 AM
What are payroll taxes? Serious question. I get the feeling I'd be interested in the debate, but I don't know the term.
Is it federal and where applicable state taxes taken directly off your paycheck?
Not being sarcastic but I thought you lived in Canada.
CPP and EI are examples of payroll taxes in Canada. They are just as regressive as they are in the US.
Might be lost in translation. I've never heard of them being refered to payroll taxes outside of Languish.
What's CPP? I'm guessing we have a Quebec equivalent instead of the Canadian wide one.
I see. CPP is the Canada Pension Plan. Quebec may have its own equivalent. But it is still a payroll tax.
Yep. RRQ.
The UK government is considering just that, though it certainly won't happen much earlier than 2020, it's only at the consultation phase right now
I don't know how the other governments do it, but unless I'm mistaken Yi doesn't like the fact that we don't really have a "Medicare" or "Social Security" trust fund or anything that this money is going into. Instead, the Federal government just takes the money and it essentially mixes in with all tax receipts and is then used for whatever. Medicare and Social Security cash payouts are basically covered from the same pot of money as everything else. We leave basically treasury bonds in what is supposed to be the Social Security fund. This is why social security is said to be going bust, we do not actually accrue real assets but "intergovernmental debt." Since we basically issue new bonds out of thin air and move it into the fund the social security program holds like 40% of total government debt in the United States.
In fact, that's one of the weird fiscal fictions many are unaware of, when Clinton ran a "budget surplus" for several years, he actually didn't by any metric other than that used in government accounting. His general budget was in the green for those years, but only if you excluded the fact that each of those years billions of new debt was being created to plug into the social security system to make up for the cash collected out of it and used in the budget itself for other things. So if you factor in the new borrowing Clinton was actually doing (and that all Presidents do every budget) none of his budget years during his entire Presidency were actually positive overall.
In some ways it might make sense to just abolish this fiction we have a fund that we're paying into and instead just admit we are just funding the current benefits with a big pot of taxes that are used for every bit of spending we need to do, and leaving new debt instruments in its place (it'd be different if we were just giving cash and then the SSA was buying existing debt instruments, but we actually create new debt to put into the fund so we actually go further in debt perpetually.)
Quote from: OttoVonBismarck on November 29, 2012, 02:02:41 PM
In fact, that's one of the weird fiscal fictions many are unaware of, when Clinton ran a "budget surplus" for several years, he actually didn't by any metric other than that used in government accounting. His general budget was in the green for those years, but only if you excluded the fact that each of those years billions of new debt was being created to plug into the social security system to make up for the cash collected out of it and used in the budget itself for other things. So if you factor in the new borrowing Clinton was actually doing (and that all Presidents do every budget) none of his budget years during his entire Presidency were actually positive overall.
I was aware of this, and had mentioned it on Languish a long time ago, but I think a lot of people didn't believe me.
Quote from: OttoVonBismarck on November 29, 2012, 02:02:41 PM
I don't know how the other governments do it, but unless I'm mistaken Yi doesn't like the fact that we don't really have a "Medicare" or "Social Security" trust fund or anything that this money is going into.
I thought Yi's point was that the rationale for having them - ie to create some sort of buying to the system, was not sound policy.
Doesnt your point support his conclusion?
Quote from: crazy canuck on November 29, 2012, 05:29:55 PM
Quote from: OttoVonBismarck on November 29, 2012, 02:02:41 PM
I don't know how the other governments do it, but unless I'm mistaken Yi doesn't like the fact that we don't really have a "Medicare" or "Social Security" trust fund or anything that this money is going into.
I thought Yi's point was that the rationale for having them - ie to create some sort of buying to the system, was not sound policy.
Doesnt your point support his conclusion?
It was done that way in the beginning to sell it to the public as a savings/investment thing rather than a welfare program. Those older generations didn't like teh welfare.
Quote from: dps on November 29, 2012, 04:54:49 PM
I was aware of this, and had mentioned it on Languish a long time ago, but I think a lot of people didn't believe me.
I have mentioned on languish as well. I believe you :hug:
One of the reasons I was so frustrated by the Bush tax cuts and weird tax credits...for a non-existant surplus. Of course I wanted the "surplus" to go to the debts. But oh well. Nothing we can do about it now.