| Author | Message | ||
     Ft_bstrd |
Brumbear, Seek an HSA. Second solution, stop covering uninsured illegal immigrants. | ||
| Doug_s |
fatty, good on you for having a parent at home to raise the kids. it was the choice i made as well. most folks do not make that choice. hell, most folks can't make that choice even if they wanted to. but many can and choose not to - the pressure to acquire more stuff seems to overwhelm. is it greed? maybe not, but it is certainly gluttony... i suspect this is the largest problem our country faces, both economically and socially - no one at home to take care of the kids. but it's politically incorrect, no one wants to talk about it. i have always felt that daycare should not be subsidized, and i have always thought a tax of at least 50% on a home's second income - regardless of tax bracket - would be good social policy... ymmv, doug s. ps - i am also agreed that illegal immigrants should not be granted free healthcare, and that their children born here should not be granted citizenship... | ||
| Sifo |
i have always thought a tax of at least 50% on a home's second income - regardless of tax bracket - would be good social policy... OK, I'll bite... Please, please, please explain why this would be good social policy! | ||
| Hootowl |
Well, it would encourage one parent not to work, but I adamantly oppose using tax policy to effect social change. | ||
| Sifo |
I fully agree Hootowl. I just want to hear Doug_s explain it in conjunction with this statement he made...
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| Doug_s |
it would encourage one parent not to work. i am yust throwing this out there as a discussion point. it would obviously be an administrative nightmare to actually try to to enforce something like this. but, i really think something needs to be done to discourage two-income households. regarding this statement in conjunction with the statement that folks will still wanna get rich if taxed at a higher rate, well it really is simple. folks making big money will still want to be making big money. folks not making big money will still try to figure out some way to make big money. higher tax rates will not stop this from happening. but, folks making making $10-$20/hour in second-income jobs will certainly think twice when it means they're making nothing, or close to it, after the added expenses are factored in. perhaps 50% tax rate isn't high enough for second-incomes. maybe 75%? doug s. | ||
| Sifo |
it would encourage one parent not to work. i am yust throwing this out there as a discussion point. it would obviously be an administrative nightmare to actually try to to enforce something like this. but, i really think something needs to be done to discourage two-income households. regarding this statement in conjunction with the statement that folks will still wanna get rich if taxed at a higher rate, well it really is simple. folks making big money will still want to be making big money. folks not making big money will still try to figure out some way to make big money. higher tax rates will not stop this from happening. but, folks making making $10-$20/hour in second-income jobs will certainly think twice when it means they're making nothing, or close to it, after the added expenses are factored in. perhaps 50% tax rate isn't high enough for second-incomes. maybe 75%? doug s. So do higher tax rates on more income discourage people from putting the effort into making more money or not?  | ||
| Hootowl |
It's almost like that now. Factor in another car (or at least the expense of driving/putting miles on it) daycare, lunch, etc. You've got to make a pretty good chunk of change to compensate for that. Daycare is expensive. More than rent/mortgage in some cases, especially if you have more than one child. I grew up in a three income household. My mother stayed home. My father worked two jobs during the week and did construction on the weekends until I was 12. | ||
| Doerman |
but I adamantly oppose using tax policy to effect social change I'm coming around to that point too. I used to think home mortgage interest deduction was a good thing. After what has transpired the last couple of years, I'm not so sure any more. I am sure that the 401K deduction is a good thing though. Go to a flat tax. | ||
| Sifo |
The home mortgage interest deduction had little to do with the mortgage meltdown. There were other government policies that had far more influence in an effort to get people into homes with lower qualifications. If the qualifications were not lowered excessively the tax incentive would have no power for the unqualified anyway. I'm not really taking a position on the tax incentive, just saying it played little roll in the meltdown. | ||
| Doug_s |
So do higher tax rates on more income discourage people from putting the effort into making more money or not? progressive tax rates - i.e.: higher taxes on progressively higher incomes - do not discourage people from putting the effort into making more money. a 50%-75% tax rate on all income - even if minimum wage - would certainly discourage the effort if it were limited to a second income, and were not progressive in nature - duh! have you ever considered using common sense? or, is everything for you black and white, with no room for gray? if you think you had a "gotcha" moment, you are gonna have to do a lot better than that...  doug s. | ||
| Hootowl |
With exceedingly low interest rates on home loans these days, the tax deduction for interest paid is not worth much. I pay less tax if I take the standard deduction than I do if I itemize. | ||
| Ft_bstrd |
progressive tax rates - i.e.: higher taxes on progressively higher incomes - do not discourage people from putting the effort into making more money. False statement. I work with clients daily who are evaluating where to place their capital. As the tax rate increases, the net after-tax yield decreases. This is true for investments or business. Muni-bonds become more attractive as the tax rate increases. Capital investment becomes less attractive as the tax rate increases. If you know that you are going to pay 15% in taxes on capital gains, you ware willing to invest in one particular investment or another. If the capital gains rate goes to 35%, the investment becomes unattractive and the capital moves elsewhere. You believe that taxes are only negative to one group but not another? Those with capital decide where to place their capital based upon two main formulas: Risk vs. Reward Pre-tax vs. After-tax net Those with capital don't just invest blindly and hope for the best. | ||
| Sifo |
progressive tax rates - i.e.: higher taxes on progressively higher incomes - do not discourage people from putting the effort into making more money. a 50%-75% tax rate on all income - even if minimum wage - would certainly discourage the effort if it were limited to a second income, and were not progressive in nature - duh! have you ever considered using common sense? or, is everything for you black and white, with no room for gray? if you think you had a "gotcha" moment, you are gonna have to do a lot better than that... doug s. Funny! You're the one that doesn't see the shades of gray. You claim that one high tax will have a different incentive than another high tax because one is progressive and one is not. Flat out wrong. The effect may not be equal, but the incentive is without a doubt in the same direction. You also still seem to be stuck on the idea that only the top 5% have kept up with inflation. You seem to get that from reading this in an opinion piece...
I posted the data that supports that statement and it shows that ALL income groups are bettering inflation during the time period analyzed. You refuse to let go of your assertion though. The funny thing about all of this is that the period analyzed only included the run up of the housing market and not the bursting of the bubble. Going with current data that reflects the drop in home prices will without a doubt show a better result for the middle class. I have no idea why you can't see this. Just out of curiosity, do you, or have you ever worked in any sort of financial industry? I'm just wondering if you might share what your background is. You seem easily mislead with opinion statements that are based on a borderline dishonest interpretation of data. | ||
| Ft_bstrd |
There is a reason the HOUSING costs have spiraled out of control. GOVERNMENT INTERVENTION INTO THE FREE MARKET. | ||
| Doug_s |
There is a reason the HOUSING costs have spiraled out of control. GOVERNMENT INTERVENTION INTO THE FREE MARKET. don't you mean the UN-intervention of the government w/its repeal of the Glass-Steagall act? doug s. | ||
| Sifo |
There is a reason the HOUSING costs have spiraled out of control. GOVERNMENT INTERVENTION INTO THE FREE MARKET. That is certainly a part of it. I would say that was the part that created the mortgage crisis we are seeing. Part of it also that as people gain wealth they look for places to invest that wealth. Moving to a larger home is typically a good place to start investing, so even the middle class has been buying homes that would not have been dreamed of a few decades ago. Glen Ellyn, IL is an area where one of the big attractions is that you can walk to the train station to get to work easily down town. Why was there such a trend up to a few years ago to tear down quite nice houses to build a new McMansion with a minimum of a 4 car garage. These aren't even the ultra rich folks either. You should see what goes on in the closed gate communities in Oak Brook! | ||
| Sifo |
I would guess he's referring the Community Reinvestment Act. That's what lead to writing risky mortgages that never used to be allowed. BO is starting the whole thing again too. | ||
| Sifo |
From the WSJ...
(Message edited by SIFO on August 11, 2010) | ||
| Doug_s |
sifo, the "opinion piece" i read was based upon 22 FACTS; one of which i stated. everything i have found, factually, supports this view, even the stats you cite. for example: Middle 20% (a.k.a. "the middle class") • 1975 household income: $39,807 • 2001 household income: $51,538 • increase: $11,731 • percentage increase from 1975: 29.4% well, this is what the article you get that from has to say about it: "...The results are striking. The vast majority of income increases has accrued to the top 20% and especially the top 5%..." "...The consequences of such massive income shifts are readily apparent. A 2009 survey found that 30% of American households earning $100,000 or more a year are living paycheck to paycheck, compared to about 60% of all U.S. households who are living without much of a financial cushion..." "...Perhaps it's a coincidence, but the fact that 60% of households are living paycheck to paycheck and the fact that the lower 3/5ths (60%) of U.S. households have not gained much ground in the past 35 years is noteworthy..." "...Only the top 5% of households actually gained enough income to match the rise in housing costs. Even the "upper middle class" in the top 20% of households gained only 74% -- substantially less than the 90% rise in housing. The lower 60% of households' ability to afford a house was essentially destroyed by this asymmetric rise in the cost of housing..." "...Other data support the conclusion that the financial gains in the U.S. economy have largely accrued to the top 20% of households. Sociologist G. William Dumhoff has drawn an important distinction between the net worth held by households in "marketable assets," such as homes and vehicles, and "financial wealth." The key difference is that homes and other tangible assets are, in Dumhoff's words, "not as readily converted into cash and are more valuable to their owners for use purposes than they are for resale." "Financial wealth such as stocks, bonds and other securities are liquid, and therefore easily converted to cash. These assets are what Dumhoff describes as "non-home wealth" in "Wealth, Income, and Power in America" on his website. As of 2007, the bottom 80% of American households held a mere 7% of these financial assets, while the top 1% held 42.7% and the top 20% held fully 93%." "If we look at these data together, it's clear that the majority of American households have little "non-home wealth" financial cushion, and thus it's no wonder that these same households are often living paycheck to paycheck. While many may be tempted to launch a partisan tirade to "explain" these statistics, trends that stretch back decades are structural in nature. Any comprehensive account must incorporate the complex economic history of the past 35 years..." couple this w/the info i posted yesterday, (and again - all the overwhelming data out there about how the middle class is losing ground, and shrinking), and i don't see how any rational person could think otherwise. hell - yust look around you, and see how most average folks are doing!?! or, maybe you are too young to know how things were economically, in the 70's? (re-post from yesterday): "...More Is Less The single-income family with two children in the early 1970s earned about $32,000 in inflation-adjusted dollars, compared to $73,000 for the dual-income family in the early 2000s. Despite the higher income, today's families save less and carry more debt: In 1970, the one-income family saved 11 percent of its take-home pay and allocated 1.4 percent of its annual income to pay revolving debt, such as credit cards. In 2005, the two-income family saved nothing, and allocated 15 percent of its annual income to revolving debt, according to Warren. In other words, the two-income family spends everything -- the second income, all of its annual savings -- and has piled on debt. Where does the money go? Despite the sticker-shock that goes with buying a gallon of milk these days, they didn't spend it on food, clothing, appliances, electronics, or automobiles -- on an inflation-adjusted basis, those costs actually went down. The Big Five Warren found two-earner families today spend three-quarters of their household incomes on five categories (which consumed only half the income of single-earner families a generation ago): Housing: The cost for families with children has risen 100 percent in inflation-adjusted dollars since 1970. Health Insurance: For a healthy family that has an employer-sponsored insurance plan, costs have risen 74 percent in inflation-adjusted dollars since 1970. In that year, the demographic group most likely to lack health insurance was a 23-year-old unmarried man with no children; today it's a person age 35 who is married with children. Cars: Families today spend 52 percent more on automobiles than in 1970, on an inflation-adjusted basis, Warren found. While the inflation-adjusted price of automobiles has dropped since 1970, families are still spending more on this category because they typically need two cars to get to work. Taxes: The first dollar that the second earner earns is taxed after the last dollar of the first earner, Warren notes. This means that the tax rate for the family unit has risen by about 25 percent between 1970 and today. Child Care: In 2007, fees in licensed centers ranged from $10,920 a year for 4-year-old children to $14,647 a year for infants, according to a study by the National Association of Child Care Resources and Referral Agencies (NACCRRA). In every region of the United States, annual costs of child care surpass the cost of food..." http://finance.yahoo.com/expert/article/moneyhappy /81176 doug s. | ||
| Oddball |
One thought on the tax'em till she stays home idea. Wouldn't that likely stop marriages? Then it's just two singles, not a couple in any official sense, to get around such a tax and social engineering scheme. | ||
| Ft_bstrd |
Again, you are targeting the wrong monster. The "rich" aren't getting richer at the expense of the low and middle classes. "The Man" isn't holding these folks down. Your conclusion is the equivalent of saying that it's dark here and light on the other side of the world because they are stealing all the light. | ||
| Redbuelljunkie |
The common thread I see here is that regardless of where one's "wealth" comes from (earned, inherited, government program, etc...) the universal trend seems to be that the individual wants to keep as much of it as possible, and to insure it continues to come in. Basic human survival instinct. Human nature will always overpower attempted government enforcement of social ideals and economic incentives/punishments for the "betterment" of society. They continue to try, and continue to fail. The answer lies in the reflection in the mirror, and someday our race will have to face up to, and accept, our true nature. Until then, it's just another exercise in futility... (Message edited by Redbuelljunkie on August 11, 2010) | ||
| Oddball |
zero sum gain ideology, Ft bstrd | ||
| Sifo |
Doug, you are confusing conclusions and facts. You are reading a list of conclusions. Yes they back them up with some facts, but leave out many other facts. Just as an example...
Their conclusion is that people earning over $100,000 per year are not doing well because they don't have a financial cushion. I hate to break this to you, but in that income bracket that is a choice that people are making. It is a trend that has been going on for a long time where people are looking for instant gratification. Back in the '70s, and I do remember it, people had a very different outlook on finance and how much debt they held. In the '70s you pretty much had to put 20% down to buy a house. That ensured a number of things. It ensured that the buyer had skin in the game and wouldn't just walk away. It ensured the the buyer had a record of putting money toward the goal of buying a house. It also ensured that the buyer didn't wind up upside-down in their mortgage. Fast forward to the '90s and due to government regulations intended to get the poor so they could buy a house you had crazy regulations such as 107% financing on a house so that you could not only not have a down payment, but also finance the closing costs putting you upside-down at the closing table. The really bad thing about this is that the law prohibited discrimination based on things such as income. This meant that the rich could finance themselves into a hole on day one too. They just had a much bigger hole. The opinion pieces you keep referring to ignore most of the factors in a very complex issue. That is simply dishonest and leads to false conclusions. BTW, I was a Loan Officer for American Home Mortgage for a while. I know just a little bit about this sort of thing. You haven't provided your background on this despite being asked. | ||
| Hootowl |
Glass-Steagall Act was signed into law by a Democrat. Curse those evil fat cat in-bed-with big-business Democrats...oh wait, I mean Republicans, wait....oh forget it. | ||
| Ft_bstrd |
Yeah, I have a degree in economics and finance and have worked in the financial services industry for 15 years. Odd, that someone who speaks so authoritative on economic subjects is hesitant to divulge his background and qualifications. | ||
| Oddball |
me, I'm a poor slob on the bottom of the economic ladder.  This string was so heated and political I stayed away till that "tax'em till she stays home" idea was suggested. | ||
| Sifo |
Just to drive the point home a bit more, take this paragraph from Doug's article...
So the article gives a snapshot in time as support for how things have gotten lopsided toward the wealthy. Are we really supposed to believe that there was a time when the poor held most of the financial assets? Is that even possible? | ||
| Ft_bstrd |
There is this perfect world where everyone holds an equal share of the wealth. The top 50% are no better off than the bottom 50%. This is a place where individual achievement provides no financial incentive, where sacrifice's only reward is the greater good to society as a whole. |
