harveyc

I didn't say most people were out of their homes but that can't keep getting equity loans to buy things since home equity no longer exists, in many cases. The fact that people sucked paper equity out of their homes is well documented and the cessation of such spending decreases economic growth, increases unemployment, etc.

Providing incentives for capital investments does stimulate such activity and benefits the economy, including those in those in the middle and lower classes of the economy.

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sbl

Like the last 9 yrs? When the rich were getting 350 billion per yr in tax breaks? While the middle class paid the same tax rate and found those benefits of the stimulated economy getting harder and harder to find.

I haven't borrowed on my house or my 401K or IRA, but we still have less and less to spend on discretionary items due to increasing cost, yet we are still asked to pay twice the income tax rate of the rich and you think that is fair?

Richard

Have fun with this article:

Editorial - The Truth About the Deficit - NYTimes.com

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sbl

Good article--I found this line particularly true:
"that running big deficits when the economy is expanding only sets the country up for bigger deficits when the economy contracts"

harveyc

You don't pay twice the tax rate as the rich. You get the same benefits of long term capital gains treatment as the rich do. As noted previously, essentially nobody derives all of their income from long term capital gains and it rarely makes up a majority of a taxpayer's income, even for the rich. The rich are paying higher rates on their other income than you are.

I didn't everyone borrowed against their home (nor retirement accounts) but many people did and now that this source of spending has dried up the economy has tanked. That affects everyone, including those that were responsible with their borrowing. Tax cuts did not lead to the recession, decreased spending did.

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sbl

The top 10% make more money than the other 90% put together. By your own admission, they only pay 50% of the taxes. None of those rich have salary in the billions (some make millions). Of course, capital gains and dividends make up most of their income, it makes up a few % of mine.
They do not pay higher rates than I do on their income--at best they pay the same rate on their salary.

So, where did all that money go as the middle class struggled ( both the ones that borrowed and spent responsibly and the ones that had to borrow against their homes and raid their savings just to make ends meet)? It went to the rich that were making billions on mortgage derivitives--mortgages that they made to people they did not tell about increasing interest rates--mortgages where brokers lied about incomes so that people would qualify.
To the oil companies that made billions in profits. To the insurance companies that have more than quadruples their rates. To the bankers that are charging interest rates of more than 30% on credit cards and raising fees on everything.

And you think they should get more tax cuts?

harveyc

sbl, do you have any documentation for your claims or do you make it all up? I know my insurance has barely budged in 10 years.

I have said nothing that I think the rich should get more tax cuts. I don't think there should be any tax cuts for anybody and I don't think people that don't pay income taxes should get "refunds".

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harveyc

From what I could find, the top quadrant makes about 50% of the income in the U.S., not the top 10th percentile.

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Abnshrek

I believe th top quad is 3%.. And that those folks that get refunds that don't pay taxes, just chap my 4th point (buttocks) of contact. :^) talk about redistribution..of income... WTH is this world coming to.

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I'm a Nannerhead :^)

sbl

If you look at the table below, the top 10% make more than all the rest combined. Back in 92, the bottom 90% made almost as much as the top 10%.

From Wikipedia:

Before-Tax Family Income in the U.S. from 1989-2004[27]
(thousands of 2004 dollars)
before tax family income (mean)

Percentiles of net worth 1989 1992 1995 1998 2001 2004
90-100 205.1 158.5 172.8 206.3 272.7 256.2
75-89.9 74.6 67.0 65.0 78.3 83.7 87.9
50-74.9 52.9 48.1 50.1 54.3 62.7 60.6
25-49.9 36.9 36.4 38.6 39.3 42.1 42.2
Less than 25 21.5 22.9 22.9 23.6 25.6 25.1

Maybe your insurance did not go up, but mine has quadrupled in the past decade--if I had kept the same policy I had in 2000--it would be up 10 fold.

sbl

Here is another link on incomes:

Income inequality in the United States - Wikipedia, the free encyclopedia

harveyc

I can't read your post #90 very well and it speaks of percentiles of net worth but mixes income in the heading, so I don't know what it's reporting. I already read the link in post #90 but it doesn't show me that the top 10 percent of income earnings make 50% of the income as you claimed earlier.

It is well documented that insurance companies paid out billions for claims due to hurricane damage. Did you ever think that your increased premiums are due to that instead of insurance companies ripping you off? Insurance is to protect against risk and if the risk is higher, the premiums need to be higher.

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sbl

The table is pre tax income. The percentiles are based on net worth (the richest) The top 10% has an average income in 2004 of $256,200. The total income of the other brackets adds up to less than $220,00.

I have been through 5 hurricanes since I lived here. I have not had one dollar in claims through all 5 hurricanes, but my insurance has shot up to cover the rich people who live on the beach and whose million dollar homes have had to be rebuilt several times.

My medical insurance has more than doubled in the last 5 yrs and I have since had to take a lower option plan.

It is good to know you are not arguing for more tax cuts for the rich, I would have never guessed that.

In case you did not read the link here is one of the key factors (quote):
"Between 1979 and 2005, the mean after-tax income for the top 1% increased by 176%, compared to an increase of 69% for the top quintile overall, 20% for the fourth quintile, 21% for the middle quintile, 17% for the second quintile and 6% for the bottom quintile.[21] For the same time span the aggregate share of after-tax income held by the top percentile increased from 7.5% to 14%"

harveyc

There should be some clearer census information such as was presented in 1997 in this article: Income Inequality: How Census Data Misrepresent Income Distribution, but I haven't found it.

I certainly don't know much about the distribution of communities in Florida but the two people I know who have had severe damage to their homes were not wealthy people. One was in Homestead (was in the middle of a move to California and he was out here while his wife and kids were unfortunate to go through Andrew alone) and then another in Port Charlotte.

I honestly don't pay much attention to our health insurance premiums but know they have gown up a lot, but also know that our medical costs have gone up a lot. Our insurance paid out nearly $30,000 for us last year, mostly for testing for our son that ended up all being unnecessary (long story, I posted about it elsewhere already). Funny thing about that is that our son's hematologist decided that no further follow-up was needed after I requested that his blood work be performed using two different methods (to prove that the traditional method was unreliable). The insurance company denied payment for the second test performed on the same sample. That's not because of any evil profit incentive; just plain ol' bureaucracy at work. The hospital refunded our co-payments and we told them we had no plans to make a legal claim because that's a big part of the problem with medical costs today.

The story behind this example of beer drinkers shows that everybody gets a tax cut, with the 5th guy who previously paid for his beer now getting his for free. While the 10th guy got the biggest cut in the price of his beer, he had a smaller percentage decrease than the others and was still paying much more. The story is similar to when we have had across-the-board tax cuts. Newspapers will report that the wealthiest are getting the largest dollar cut but not reporting that they are still paying more nor saying that their cut is a smaller percentage than others. With the current deficits being racked up and our huge deficits, I don't think anybody should get tax cuts. I also don't think government spending is going to turn our economy around and that various forms of incentives can be helpful, but a restoration of consumer confidence is of utmost importance. Blaming banks and others for the problems of today is misguided as people who were irresponsible in their spending need to recognize their mistakes instead of blame others. I such a bubble is not repeated again in my lifetime, but I'm not hopeful that this will be the case. I am seeing many homes selling for 75% less than what they sold for less than four years ago (I may buy a second home closer to where my son will later go to school). Crazy. Banks sure aren't getting rich from selling their collateral for much less than they are owed.

I don't like the government redistributing wealth and would rather do that myself. We're sponsoring three children/families in Nicaragua and feel better about that as they are like family to me. Let the government get involved and things would cost ten times as much.

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momoese

You are being naive to think others will follow your path. Also keep in mind that money (imo) would be better spent on the poor in this country. Not saying it's a bad thing to help them, that's great, but there are many people just as unfortunate here.

harveyc

There are many generous people that donate to needy causes. I also donate to many charities here in the USA (more money here), but I don't feel the close connection that I do with the kids in Nicaragua. And I don't think borders should make a difference.

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momoese

I agree but it seems you guys are talking about what can help us here in the good ole USA.

Richard

I don't know why anyone would use Rush Limbaugh as a source of information when he does things like refer to meeting of advocates for the mentally handicapped as "a retard summit."

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harveyc

Richard, I'm not using Rush as source. I'm using U.S. Census data. I Googled and just picked a site with the census data. Give me a direct link to the census information and I'll use it. I think Rush probably has some good points from time to time but don't rely on him for information as it's mostly about entertainment, IMO. But I also think the same about most of our political leaders.

Mitchel, this thread is mostly about taxation but has expanded into other areas but nothing specifically has been stated about making the USA a better place. Still, I think generosity worldwide helps all of humanity and benefits everyone, including the donors.

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sbl

The Heritage foundation is a republican mouthpiece that misrepresents data all the time. Like the fact (true) that the Bush Tax Cut would cut taxes for 95% of American taxpayers. They did not tell us that the 58,000 rich people who were paying over a million dollars a yr in taxes (in 2000) would get a 50% tax cut while millions of Americans would get a few dollars.


I can tell you. Most of the middle class lives in houses worth 100-200K that are not on the waterfront. Most of the rich live in houses on the waterfront worth millions. When a hurricane hits, many of the inland houses loose a roof or have a tree fall on it causing a few thousand to tens of thousand dollars in damage. Most of the houses on the beach get wiped out ahd have to be totally rebuilt. Fortunately, the only damage I have had is trees falling but not on the house--insurance does not pay for tree removal unless it fall on your house.


Redistribution is an important function of governments, otherwise all the money ends up in the hands of a few like most third world countries where the masses can barely afford to survive.

"As I've often said... this [increasing income inequality] is not the type of thing which a democratic society—a capitalist democratic society—can really accept without addressing. - Alan Greenspan, June 2005"

It was Bush that gave all working Americans a $600 tax refund at a cost of about 60 billion (even if they did not pay income tax) because someone told him that the economy was not really "fundamentally strong" and that the $350 billion tax cut/yr he gave the rich was not really stimulating the economy.