Throw Momma from the Train

[blackshoe]

It occurs to me that one thing, at least, that causes an economy to grow is private investment. The more money we have to pay in taxes, the less we have for private investment, so that will slow (stall?) the growth of the economy.

 

Maybe a growing or fast(er) growing economy is a Bad Thing™. :ph34r:

[jdonn]

Why do we have to have taxes?

Because there are services society needs, or (much of society) wants, that won't exist unless they can be paid for. If you think there is a way to get them paid for without requiring society to pay for them, you probably should read this.

 

It occurs to me that one thing, at least, that causes an economy to grow is private investment. The more money we have to pay in taxes, the less we have for private investment, so that will slow (stall?) the growth of the economy.

 

Maybe a growing or fast(er) growing economy is a Bad Thing™. :unsure:

It occurs to me that one thing, at least, that causes me to live longer is police protecting me from being killed. The more money we privately invest, the less we have for police to protect me from being killed, so that will decrease (stall?) the length of my life.

 

Maybe an extended or long(er) life is a Bad Thing™. :unsure:

 

What is the point of this argument? I think we can all agree that money used for one thing can not be used for another? But we have more than one priority. Hmmm.

[mike777]

Good point, I agree.

 

There is definitely a trade off between risk and reward or as others put it government keeping me more safe but with less freedom or growth.

 

 

Denmark has very high taxes but it is also called the happiest country on earth.

[Winstonm]

The vast, vast preponderance of US spending is concentrated among Defense, Medicare, and Social Security.

 

Any meaningful savings in government spending must be addressed in these three areas - anything else is simply wishful thinking.

[mike777]

Meaningful savings......government spending....hmmmm

 

Ok I am for both.

[blackshoe]

I don't think the assertion "the police protect me from being killed" is true. Even if it is, it does not necessarily follow that the police need to be funded through taxes.

[jdonn]

I don't think the assertion "the police protect me from being killed" is true. Even if it is, it does not necessarily follow that the police need to be funded through taxes.

It also does not necessarily follow that the only way to grow the economy is through private investment. But ok if police don't have to be funded through taxes, please suggest an alternative.

 

And obviously the specifics of my point were on some level facetious, the point being we have more than one priority, and frankly 'growing the economy' is not my biggest one.

 

Also, btw, everyone in jail who would kill someone if they weren't in jail is an example of the police protecting someone from being killed. They got to jail somehow...

[blackshoe]

Yeah. There was a trial, with a judge, and a jury, most likely.

 

I didn't say that private investment was the only way to grow the economy.

 

Okay, there are priorities. One of mine is "that government governs best which governs least". I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

 

An alternative to funding the police through taxes? Privatize the police function. Note: you asked for an alternative, this is one. Whether (or how well) it will work is another question. I can give one example, though. Before J. Edgar Hoover conducted his (successful) campaign to accrue more power to the FBI, that agency was established and intended to provide (only) investigative services to local and state police forces. It was funded through federal taxes, but could just as easily have been funded on a "pay as you go" basis by its customers (the aforementioned local police). The question of where the police forces would get the money for that is a separate issue.

 

I suppose it boils down to "what are the legitimate functions of government?" Followed then by "how do we fund those functions?" As to the first, my list is a lot shorter than Washington's. As to the second, taxes is not the only way, and probably not the best way.

[hrothgar]

I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

Ed, I'd like to make you - or anyone else on these forums - a deal...

 

Let's start a book club.

I'll pick a good intro level text book on public economics.

We can walk through a chapter or so a week.

I'll be happy to answer questions, help with mathematical derivations, you name it.

 

If you're seriously interested in having a meaningful discussion about these sorts of topics this is the standard starting point.

[jdonn]

Yes let's privatize the police, so only people who can afford it get police protection. It worked so well for the current health care system.

 

I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

I mean seriously you keep saying stuff like this without offering up any (serious) alternatives!

[helene_t]

FWIW I think abandoning gvt spending on police, justice and education would reduce economic growth. I might be wrong, though.

 

I consider it plausible that abandoning gvt spending on military and health care would encourage growth, though, at least in the short run.

 

Not sure about infrastructure, For the most part I suppose roads and utilities could be left to the market, but not entirely.

[Winstonm]

If you privatize police, you grant greater access to capital and less to the proletariat. These are the ideas that led to revolutions.

[hotShot]

Are those guys that come into the shops to collect a protection fee, not private policemen?

[mikeh]

Why do we have to have taxes?

 

Some people need governments and we all have to pay for them.

Again, why?

 

"Because" is not an answer.

I don't pretend to 'know' all of the answers, but certainly there are a number of factors that suggest that we, as humans, 'need' government.

 

As far as anthropologists seem to have discovered, all humans live in groups...we are social animals, as are our closest relatives in the great ape species (yes, I know that there are differences between some of the species in their behaviours). Of course there are creationist loonies (and I use the term intentionally) who won't let evidence impact their worldview. But even they must surely accept that man has always gathered and lived in groups.

 

And within those groups, there are always social hierarchies....someone is on top...the chief...and as the groups get bigger, and involve more and more families or groups of families, the structure grows more complex. Those in charge take from those over whom they have power. In exchange, they offer services, such as forms of justice, direction of communal effort (say, irrigation projects, or defence or offence) and so on.

 

As tribes become nations, the power structure becomes ever more complex.

 

The reality appears to be that government is an emergent property of the way humans think. It seems to be the result of the way we and our ancestral species evolved as social animals.

 

Libertarian fantasies are no more reflective of human reality than were the communist principles of marx and lenin. They believed in the malleability of man..that man could be changed into a sharing animal..with no need for a power structure or government...the initial revolutionary government was needed in order to bring about this change in human nature....and it would then wither away. Except that practice somehow didn't mesh with theory.

 

One tiny glimpse into the fallacies of libertarian philosophy was afforded by the Bush era deregulation of the securities industry, when the SEC waived a number of long-standing protective rules, and allowed the players to self-certify compliance with others....the financial disasters of the last couple of years were the result of allowing the market to govern policy.

 

Other countries that did not adopt such a laissez-faire attitude have already emerges from the recession. Indeed, the major Canadian banks, heavily regulated, have prospered, acquiring significant US assets at bargain prices, with none of them failing and few financial businesses requiring any government aid.

 

So government seems to be the natural outgrowth of our social nature, and we try to ignore that at our peril.

[Mbodell]

The problem is that they didn't index it, and the popularity of mutual funds allowed more and more middle income people to invest well, so now many middle class taxpayers have found themselves with estates subject to the tax.

You have a different definition of "middle class" and "many" than I do.

 

Last year your first $3.5 million of estate paid no taxes at all. And even once everything goes back to the old ways your first $1 million of estate pays no taxes at all.

 

And even looking back at 2004 numbers (pre peak of bubble, but folks doing better than now), if you were in the 80-89.9 percentile your median family wealth was 313K and in the 90-100 percentile the median family wealth was 924K. So only the top 5% of families have household net worth to even clear the old lowest estate tax exemption. And while it is true that people are wealthier, generally, when they are older (up to a point) and also die more when they are older, the demographic that is wealthiest is the households with head of household between 55-64 (I.e., just about to retire) and their median wealth amount is 249K. The distribution is a skewed one as the very, very wealthy effect the curve as the mean wealth for this demographic is 844K.

 

In 2007 (exemption $2 million) about 2.4 million people died in the US. That is 2.4 million people leaving estates. Only 14,700 owed any estate taxes at all! That is just 1 in 163. In 2009 (exemption $3 million) only 5,500 will owe any estate taxes (around 1 in 436). Even in 2011 when it goes back to $1 million it is estimated that only 44,200 will owe any estate taxes (about 1 in 54). And most of those who owe anything, will not owe much.

 

So this effects somewhere in the neighborhood of the top 2% of families who die to less than the top 0.5% of families that dies (depending on if you count 2007-2009 or an unadjusted 2011 and on).

 

Something that effects only a few thousand Americans a year doesn't seem like many to me.

 

And something that only effects the top 0.5 to 2% wealthiest of all families is not "middle class" to me. (The median family wealth, in case I wasn't clear, is measured in 5 figures, not 7).

[Hanoi5]

So government seems to be the natural outgrowth of our social nature, and we try to ignore that at our peril.

 

Even though I accept this I can't help but think that anarchy is the ultimate form of government (or non-government). Reading your post I see how far we are from it, but it's just because our education and way of thinking hasn't 'evolved' enough in the thousands of years we have of history. I believe in Barcelona there was some anarchist experiment in the 1930's which I understand did fine; it's a pity that fear and ignorance made it go away forever.

[Fluffy]

I used to think that the ideal world would be where people couldn't lie and never steal, kidnap, kill or anything.

 

That was a fantastic world for someone smart with logic mind.

 

But that world is not fantastic for someone stupid, big and strong, if you are stupid and strong your ideal world is somewhere where you can get what you want by force.

 

It happens that whatever you change, you are making the world better for some, but also worse for others. Who did give you the rights to take something away from others?.

[bid_em_up]

Here's a list of the tax rates:

 

Year......Tax Exempt.......Gift Tax Credit....Max. Tax Rate

2002......$1 million..........$1 million...........50%

2003......$1 million..........$1 million...........49%

2004......$1.5 million.......$1 million............48%

2005......$1.5 million.......$1 million............47%

2006......$2 million..........$1 million...........46%

2007......$2 million..........$1 million...........45%

2008......$2 million..........$1 million...........45%

2009......$3.5 million.......$1 million............45%

2010......Tax Repeal......Tax Repeal......... 0%

2011......$1 million..........$1 million...........50%

2012......$1 million..........$1 million...........50%

2013......$1 million..........$1 million...........50%

 

In 2009, anything over 3.5 million was taxed at a 45% rate.

 

Supposedly, this year, the Estate Tax is completely repealed.

 

This means if you die this year, you pay absolutely no taxes, no matter what the estate is valued at. So if Warren Buffet, Bill Gates, or (insert filthy rich person name here) dies this year, as it stands right now they would pay absolutely nothing in taxes (this is my understanding of it, I could be mistaken).

 

Needless to say, it is expected that Congress will close this loophole sometime this year, and make it retroactive to the first of the year.

 

Then it kicks back in next year, but only the first million dollars is exempt and then it will be taxed at a the higher 50% rate.

[mike777]

bid-um -up I think you are confused what the term no taxes mean.

 

 

 

Even if you die this year you still might pay alot in taxes. You just do not pay an estate tax.

 

Now if you think they whoever they are should pay even more in taxes..fair enough.

 

Everyone keep in mind even if you get a hundred million estate tax free....this year....you still will pay alot of taxes in this year otherwise in many forms and many taxes in future years.....

 

REst assured the rest of us will get our cut....

 

 

Whether it is legal to make a tax retroactive is debatable.....even the estate tax.

 

In any case there are one heck of alot of taxes we can put on these rich heirs if not this year then next year....so worry not...

[Winstonm]

bid-um -up I think you are confused what the term no taxes mean.

 

 

 

Even if you die this year you still might pay alot in taxes. You just do not pay an estate tax.

 

Now if you think they whoever they are should pay even more in taxes..fair enough.

 

Everyone keep in mind even if you get a hundred million estate tax free....this year....you still will pay alot of taxes in this year otherwise in many forms and many taxes in future years.....

 

REst assured the rest of us will get our cut....

 

 

Whether it is legal to make a tax retroactive is debatable.....even the estate tax.

 

In any case there are one heck of alot of taxes we can put on these rich heirs if not this year then next year....so worry not...

Like they said in The Shawshank Redemption: either get busy livin', or get busy dodgin' taxes!

[bid_em_up]

bid-um -up I think you are confused what the term no taxes mean.

 

Even if you die this year you still might pay alot in taxes. You just do not pay an estate tax.

I am not confused. I thought I said that they would pay no taxes on the estate.