Perry's NumbNuts Tax Plan

[Doove]

Originally Posted by Budman

You act like that is all Cain ever did.

And then, for a lesson in Irony 101....

that sure is a hell of a lot better than a community organizer.

[CuteOldGuy]

Uh, that really is a hell of lot better than a community organizer.

[punisher]

Originally Posted by Budman

You act like that is all Cain ever did. I would provide a link to detail his background but I'm sure you already know his history. But let's assume all he has done was run Godfathers Pizza, that sure is a hell of a lot better than a community agitator. This idiot-in-chief has 14 months left before he is booted from office.

Unless Nobama suspends the election as suggested by North Carolina Gov. Beverly Perdue (http://www.wnd.com/index.php?fa=PAGE.view&pageId=349717). Then the he will have the excuse to implement Martial Law when the American people revolt.

[blue3122]

I find myself asking about Obama's tax plan. Then I realize he has yet to propose one. I think most of us believe the tax system can be changed for the better. (Notice I don't use the word "fair" because it seems to be undefinable.) Almost any plan, in the end will collect roughly 19% of GDP. It would seem the primary purpose of a plan is to assist in GDP growth while collecting that 19%.

Perry's plan, while it may have flaws, might be better than the one that hasn't been proposed (in 3 years) from the curren WH.

[Doove]

Originally Posted by CuteOldGuy

Uh, that really is a hell of lot better than a community organizer.

Whoooosh. Over your head again, eh COG?

[CuteOldGuy]

LOL! Doove! So you couldn't come up with a definition of "fair", eh? Well maybe TTH can come up with one.

[Whirlaway]

The Perry Proposal is the kind of bold restructing of the tax code that we need; the muddling incremenalism of the rest of the candidates (especially Romney and Obama) isn't reform of the current system; but is a continuing of what has gotten us so deep in debt.

[wellendowed1911]

Originally Posted by Whirlaway

The Perry Proposal is the kind of bold restructing of the tax code that we need; the muddling incremenalism of the rest of the candidates (especially Romney and Obama) isn't reform of the current system; but is a continuing of what has gotten us so deep in debt.

so Whirlway now you are supporting Perry? You know come to think about it you and Perry are both alike- like You Perry was once a big time Democrat- like you Perry can't communicate and can't debate. Like you Perry plays to the base by pretending to be some true conservative.

[Texas Contrarian]

Originally Posted by TexTushHog

I think that we should abolish many deductions, including mortgage interest on any home that costs more than $500,000 and any second home.

I agree with this in principle, inasmuch as I think it's ridiculous to allow the perverse incentive of subsidizing the purchase of homes valued much above the median. But rather than having a cutoff based on the price of the home, why not simply limit mortgage interest deduction to a certain aggregate amount, say $15,000/year or so? The interest deduction allowances now are ridiculous. You are allowed to deduct interest payments on mortgage balances up to $1 million. If you have a first and second home, and they both have 7-figure mortgages, or if the mortgages add up to a 7-figure sum, your tax preparer then has to fill out a form calculating the blended interest rate. Or something like that. What a clusterfuck!

Originally Posted by TexTushHog

And I think that capital gains and dividends should be taxed at the same rates as ordinary income after the first $5,000 combined.

That would not work nearly as well as most liberals seem to think, and would also produce some adverse unintended consequences. I explained this in another thread just a couple of weeks ago, so I'll just quote myself:

Originally Posted by CaptainMidnight

There is a very strong inverse correlation between net realizations and the top tax rate on cap gains. I think you could probably raise the rate to 20% (where it was from 1997-2003) without producing significant distortions, but if you tried to push it much beyond that, you'd find that a lot of the anticipated revenue would quickly pull a disappearing act.



The above graph surprises a lot of people. Non-investors always seem to find this sort of mysterious, but it's really pretty easy to understand when you consider all the ways people can reduce their cap gains tax burdens.

When the top rate is 15-20%, many investors sell off a lot of stocks in overvalued markets (such as 1998-99 and 2006-07) without worrying much about tax consequences. If the cap gains rate were 35% or 40% (which is about where it was during much of the 1970s) that's not the case. Then investors were disincentivized to realize gains, or at least careful to match up gains and losses in the same tax year.

People should always remember that realizing gains is completely optional. Another technique non-investors are generally unaware of is borrowing against an appreciated asset. With today's ultra-low interest rates, that's especially appealing. You can protect your gain with simple hedging techniques that cost a tiny fraction of the increase in capital gains taxes sought by liberals.

Even the finance ministers of Europe's social democracies do not advocate that capital gains tax rates be raised to anywhere near the levels to which they've pushed rates on ordinary income. There are very good reasons for that.

Returning the tax rate on qualified dividends to the ordinary income rate would also produce some unintended consequences. First of all, I and many other investors like dividend-paying stocks when the tax rate is 15%. If the rate were pushed all the way up to about 45% (expiration of the Bush tax cuts plus the proposed 5.6% surcharge on income from dividends and cap gains), then owning high-dividend stocks would not be very appealing. If politicians decide to get serious about pursuing these types of tax increases (most investors believe they are not going to happen anytime soon) people in the top bracket will sell out of these stocks, exerting downward pressure on the prices of many utility stocks and other categories that retirees who are not very affluent depend on for income.

Creating the sort of selling pressure that would knock a few percentage points off the portfolio values of middle-class Americans is not exactly my idea of good public policy.

You should always remember that when politicians start trying to fire bullets at the wealthy, of lot of middle-class innocent bystanders get caught in the crossfire.

Originally Posted by TexTushHog

Also impose a new bracket on all income in excess of $1,000,000 of 45% and 48% on all income in excess of $5,000,000.

Raising rates on high earners might haul in some additional revenue. But when you start pushing rates too aggressively, you tend to find that a lot of that income simply pulls a disappearing act. High-level executives then tend to structure compensation packages in different ways, and business owners and executives realize income at different times and in different forms.

The British are now finding that out. After recently raising the top bracket income tax rate from 40% to 50%, their treasury found that the anticipated addtional revenue failed to materialize.

This should come as a surprise to no one who operates in the real world, but it always seems to mystify lovers of high rates of taxing and spending.

Originally Posted by blue3122

I find myself asking about Obama's tax plan. Then I realize he has yet to propose one.

The only "plan" I've seen him propose involves asking "millionaires and billionaires" to pay their "fair share", whatever that is.

In other threads, we've already discussed why people like Buffett, among many others, will not be likely to pay significantly more tax even if tax rates on income and capital gains are returned to the levels of the 1990s.

There are a lot of misunderstandings and misconceptions concerning tax policy. Some people don't realize that the 1986 tax reform, even though it dropped the top bracket rate from 50% to 28%, actually raised taxes on the wealthy. (Notice that I said "wealthy", not "moderately affluent.") The reason is that while broadening the base, it eliminated a lot of deductions and exclusions.

Check this:

http://finance.yahoo.com/taxes/artic...d=taxes-filing

Here's a key excerpt:

The tax reform of 1986, meanwhile, wasn't designed to increase federal tax revenue. But that didn't mean that no one's taxes went up. Because the reform bill eliminated or reduced many tax breaks and shelters, high-income tax filers who previously paid little ended up with bigger tax bills.

"Some of these taxpayers were substantial contributors to the Republican Party and to the president's re-election campaign, and had direct access to the White House. Reagan rebuffed their pleas," wrote J. Roger Mentz, the Treasury assistant secretary for tax policy in 1986, in a Tax Notes commentary last year.

(End of excerpt.)

That points up just one more way that things are not always as they seem.

[TexTushHog]

Originally Posted by CuteOldGuy

Uh, that really is a hell of lot better than a community organizer.

What is wrong with being a community organizer? I would think that people would regard that as a noble calling.

As for a definition of fairness or justice, that is an undertaking for a Ph.D. thesis. But I'll give it short shrift and an quick, but inadequate definition. First, it is, at least in the sense used here, more a description of social structures than it is a individual moral character (which distinguishes it from the way it was used by Plato). Second, it is a judgement about the way in which rights, obligations, and the means of acquisition of all valuable things are arranged and distributed throughout society. Third, it has both a procedural and a substantive component. Finally, it must be a distribution system that we would accept behind Rawlsian "veil of ignorance" where we would not know our position in the distribution in advance.

It cannot be based purely on utilitarianism, as it fails to take seriously the distinction between persons. Nor can it only be based on Pareto optimization, as that ignores issues of distribution and the veil of ignorance.

I don't know that I agree with Rawls that the only system one would agree to under these circumstances are either 1) egalitarianism; or 2) egalitarianism + only those diversions from egalitarianism that advance the welfare of the most impoverished, but the outcome must have some egalitarian features or otherwise any rational actor behind a veil of ignorance would not accept the distribution.

So I think what you end up with is a mixed model similar to what Andrew Hirsh had in Doing Justice -- some elements of utilitarianism while avoiding the failure to take seriously the distinction between persons; some elements of social contract/rational positivism theory a la Rawls; and some traditional elements of Pareto optimal capitalism subject to regulations to avoid huge inequality.

Obviously that is just sketching a very broad picture, and leaves out huge chunks. Hirsh's book is a very good one to read. My recollection is that it came out shortly after Rawl's A Theory of Justice.

Likewise, The Idea of Justice, by Nobel Prize winning economist Amartya Sen is a very good book on the subject, although it is a big dense. It cites several works by a former teacher of mine, Prasanta S. Pattanaik (who I had for advanced micro) who has done some very good work in social choice theory. Sen is a former student of Rawls (even though Rawls was a philosopher and Sen is an economist). The Idea of Justice incorporates some very interesting process centric ideas into Rawls work. It updates it to make it less binary and views justice as an on-going quest of perfect rules and processes, not simply as something achieved or not achieved in any given circumstance.

But the notion that we cannot define fairness of justice is ridiculous. That is what the entire course of the common law is, and has been, for over 1,000 years. The fact that is an ongoing inquiry and is never complete does not mean that it is impossible. That is a marker of it's strength, not it's weakness.

[TexTushHog]

CaptainMidnight, I agree in principle with most of your points. As for capital gains rates, sure, I consider holding things longer if I've got a gain, or try to sell an offsetting loss just like everybody else. But when an investment reaches a point where it is no longer attractive, I sell it and so will everybody else. In marginal cases, significant increases will cause more long term holding of stock. But why is that necessarily bad? I'm not suggesting that this primarily as a revenue raising tool. I think it is a tool for social justice and distributive justice so that the wealthy don't pay less when they pay tax than do the working class. If you can live on current income without selling stock, then there is no taxable event. No tax.

And I also agree on your point about increase marginal rates and income being re characterized. There are two ways to fight that. First, don't raise the additional rates too high. I intentionally kept the top rate in my example under 50% for that very reason. And second, go after the re-characterized income.

[IIFFOFRDB]

Originally Posted by TexTushHog

What is wrong with being a community organizer? I would think that people would regard that as a noble calling.

As for a definition of fairness or justice, that is an undertaking for a Ph.D. thesis. But I'll give it short shrift and an quick, but inadequate definition. First, it is, at least in the sense used here, more a description of social structures than it is a individual moral character (which distinguishes it from the way it was used by Plato). Second, it is a judgement about the way in which rights, obligations, and the means of acquisition of all valuable things are arranged and distributed throughout society. Third, it has both a procedural and a substantive component. Finally, it must be a distribution system that we would accept behind Rawlsian "veil of ignorance" where we would not know our position in the distribution in advance.

It cannot be based purely on utilitarianism, as it fails to take seriously the distinction between persons. Nor can it only be based on Pareto optimization, as that ignores issues of distribution and the veil of ignorance.

I don't know that I agree with Rawls that the only system one would agree to under these circumstances are either 1) egalitarianism; or 2) egalitarianism + only those diversions from egalitarianism that advance the welfare of the most impoverished, but the outcome must have some egalitarian features or otherwise any rational actor behind a veil of ignorance would not accept the distribution.

So I think what you end up with is a mixed model similar to what Andrew Hirsh had in Doing Justice -- some elements of utilitarianism while avoiding the failure to take seriously the distinction between persons; some elements of social contract/rational positivism theory a la Rawls; and some traditional elements of Pareto optimal capitalism subject to regulations to avoid huge inequality.

Obviously that is just sketching a very broad picture, and leaves out huge chunks. Hirsh's book is a very good one to read. My recollection is that it came out shortly after Rawl's A Theory of Justice.

Likewise, The Idea of Justice, by Nobel Prize winning economist Amartya Sen is a very good book on the subject, although it is a big dense. It cites several works by a former teacher of mine, Prasanta S. Pattanaik (who I had for advanced micro) who has done some very good work in social choice theory. Sen is a former student of Rawls (even though Rawls was a philosopher and Sen is an economist). The Idea of Justice incorporates some very interesting process centric ideas into Rawls work. It updates it to make it less binary and views justice as an on-going quest of perfect rules and processes, not simply as something achieved or not achieved in any given circumstance.

But the notion that we cannot define fairness of justice is ridiculous. That is what the entire course of the common law is, and has been, for over 1,000 years. The fact that is an ongoing inquiry and is never complete does not mean that it is impossible. That is a marker of it's strength, not it's weakness.

Even WTF would say WTF?

[CuteOldGuy]

I didn't ask for a definition of the fairness of justice, I asked for a common definition for both. The fact is there isn't a common definition of fairness. Each person views situations from their own perspective, so for one person to try to force their position on someone else on the basis of "fairness" is ridiculous. Your definition of fairness in no more accurate or valid than mine.

The fact that you have to pull out Rawls, Hirsch, et al shows you don't have a clue how to answer that will convince me that your definition of fairness ought to be applicable to me, or anyone else. It's not going to happen.

I kind of look at it this way. Is it fair for the Rangers to walk Albert Pujohls almost everytime he comes to the plate? No, of course not. Albert would like to take a swing. Is it fair that he hits better than almost anyone else in the game? No. Every team should have an Albert Pujohls, just to be fair. ( I don't know if I'm spelling his name right. No offense intended.) The Rangers may say that it is certainly fair to walk him. The teams won't agree on fairness.

Is it just? Well, yeah. Everything is occurring according to pre-established rules. There hasn't been a compelling case made to change the rules. Did the Cardinals acquire Albert through an established procedure that allowed other teams the same opportunity? Yes, theoretically. So has justice been served? Yeah.

[CPT Savajo]

Originally Posted by TexTushHog

Looks like everybody hates Perry's ridiculous tax plan.

http://www.latimes.com/news/politics...tory?track=rss

And while it will raise two-thirds of current revenue, Governor Goodhair has yet to specify what programs he'll cut -- naturally. What a fucking idiot. Even the Republicans think this one is a non-starter. Only he could make Herman Cain look prepared to be President.

Well the mainstream media are doing their best to sell his plan! Praising Perry, saying it's a good idea to combat Herman Cain's plan. What a joke!

[TexTushHog]

Why would you claim it's not fair to walk poujols, even though that is a very weak analogy. Baseball only has procedural fairness issues, not substantive fairness issues. To me an intentional walk is self-evidently fair.