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Taxes and fiscal cliff

Races for the Senate, U.S. House, etc. and other issues of national importance.

Re: Taxes and fiscal cliff

Postby Huckleby » Thu Jan 03, 2013 2:25 pm

Stebben84 wrote:
Huckleby wrote:100K to 2M: comfortably middle class


That is a ridiculous jump. Someone making 100K has a completely different lifestyle than someone making 2M(lets say they both live in the same city)


For the sake of this discussion, I will surrender the semantic argument. We can just call the "middle class" the households earning less than $100K. 20% of Americans are "rich." That seems to be what many liberals want. I think it is not an honest representation, but OK.

The problem with the fiscal cliff resolution is that it doesn't set the stage for getting additional revenues from the rich in the future.
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Re: Taxes and fiscal cliff

Postby wack wack » Thu Jan 03, 2013 2:59 pm

Huckleby wrote:Yes, wack, I agree with you. The households earning $250K can and should be paying much more in taxes. In fact, that is my central point.


Wait, hold on... I'm not agreeing that those making $250k should be paying more taxes, I was only criticizing the routine argument that the amount represents hardship in some markets.

Huckleby wrote:Yet the $250K earners are also very different from households that have large amounts of wealth. (Forget household income.) The $250K earners are going to suffer a lot more from tax increases than would a $2M household, who can easily pay for college and such. That's my second point. It is only honest to acknowledge the pain inflicted.


I agree with this.

I'm not suggesting the people living with $250k should have any less than they do, but perspective is important. "Good college" is a fair concern, and something I wish all hard-working families could expect in this country, but it is not an equivalent concern to, "what excuse will I give the landlord for late rent this month?" I know reasonable, responsible people in the Chicago market making $50k who ask this regularly.
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Re: Taxes and fiscal cliff

Postby Stebben84 » Thu Jan 03, 2013 3:59 pm

Huckleby wrote:We can just call the "middle class" the households earning less than $100K. 20% of Americans are "rich." That seems to be what many liberals want. I think it is not an honest representation, but OK.


Whatever. Why do you have to get all pouty? You're acting like my 9 year old niece now. I never fucking said 250k couldn't be middle class, but you wanted to go ahead and lump up to 2m in there. I think there are actually many "levels" to the middle class and so that may not even be a good term any more.

Do do actually agree that raising the tax cap up to 400k wasn't such a bad thing.

Huckleby wrote:The problem with the fiscal cliff resolution is that it doesn't set the stage for getting additional revenues from the rich in the future.


I fully agree with this. We keep putting band aids on these things and aren't getting any long term solutions done. I blame a broken congress and a president who isn't good at negotiating.
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Re: Taxes and fiscal cliff

Postby jman111 » Thu Jan 03, 2013 4:05 pm

Stebben84 wrote:I think there are actually many "levels" to the middle class and so that may not even be a good term any more.

Agreed. The assignment of definitive income brackets to presumed "classes" seems like an exercise in futility to me.
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Re: Taxes and fiscal cliff

Postby kurt_w » Fri Jan 04, 2013 8:23 am

The NY Times had an interesting series about "class in America" back in 2005:

http://www.nytimes.com/pages/national/class/index.html

There's a lot of material there that I can't summarize easily. They did ask people how much income a household needed to be considered "rich":

    Under $100,000: 16%
    $100,000 to $199,999: 29%
    $200,000 to $299,999: 19%
    $300,000 to $399,999: 5%
    $400,000 to $499,999: 3%
    $500,000 to $749,999: 6%
    $750,000 to $999,999: 2%
    $1 million: 5%
    Over $1 million: 3%
The median answer is somewhere at the low end of the range $200,000 to $299,999. That seems reasonable to me, though I'd personally put it a bit lower than that (somewhere in the $150k-$200k range). And 97% of the US population would disagree with Huckleby's assertion that an income of $1 million does not make you rich.
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Re: Taxes and fiscal cliff

Postby kurt_w » Fri Jan 04, 2013 8:24 am

There's also a difference between "economic class" based on income alone, and "social class" based on income and many other factors. There's a nifty interactive tool at the NYT that lets you calculate a person's social status based on their occupation, education, income, and wealth.
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Re: Taxes and fiscal cliff

Postby Stella_Guru » Fri Jan 04, 2013 8:57 am

jman111 wrote: The assignment of definitive income brackets to presumed "classes" seems like an exercise in futility to me.

It is about livelihood, the owners of capital, and those who must go to them and secure their permission to earn a living, give their best energies and then stand aside while the imperial class enjoys the fat of the land.
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Re: Taxes and fiscal cliff

Postby Henry Vilas » Fri Jan 04, 2013 11:16 am

A novel solution to the fiscal cliff brouhaha: mint trillion dollar coins. If make from platinum they would not need congressional approval, except for who appears on the coins.
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Re: Taxes and fiscal cliff

Postby Huckleby » Fri Jan 04, 2013 12:37 pm

kurt_w wrote: The median answer is somewhere at the low end of the range $200,000 to $299,999. That seems reasonable to me, though I'd personally put it a bit lower than that (somewhere in the $150k-$200k range). And 97% of the US population would disagree with Huckleby's assertion that an income of $1 million does not make you rich.


What you said with great authority and certainty was that the 90 percentile are rich. That's an income of $144K.

Who is your dentist? If he or she is established, their family probably pulls in around $250K, depending on the spouse. Is your dentist rich? My point is your dentist lives in an environment very different from the wealthy.

I have already surrendered on the distracting war of semantics. We can call anybody who makes more than $100K rich. Households in the $100K to $1M range are very different in interests and spending capacity than household that can write $1M checks to political candidates. People in the $100K to $1M range are (to varying degrees) burdened by the cost of college. Fluctuations in the stock market affect their consumption of goods and services. They have more in common with what we agree to call the middle class (50K to 100K) than they do with billionaires. That's why I called this group "the comfortable middle class", which I believe is a more accurate and honest depiction. But you win, and we have promoted them to rich.
Last edited by Huckleby on Fri Jan 04, 2013 12:49 pm, edited 1 time in total.
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Re: Taxes and fiscal cliff

Postby Huckleby » Fri Jan 04, 2013 12:45 pm

Stebben84 wrote: Whatever. Why do you have to get all pouty? You're acting like my 9 year old niece now. I never fucking said 250k couldn't be middle class, but you wanted to go ahead and lump up to 2m in there. I think there are actually many "levels" to the middle class and so that may not even be a good term any more.


The "middle class" has become a political term, obviously. I want to tax people in that 100K to 2M band a lot more, but I also want to honestly acknowledge that those taxes are going to bite a lot more than they will for the Mitt Romney clan.

The estate tax, for instance, would hurt a lot if the cap is lowered, as I would do.
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Re: Taxes and fiscal cliff

Postby Huckleby » Fri Jan 04, 2013 12:57 pm

fisticuffs wrote: The even bigger joke is that the 90th percentile isn't wealthy. They damn well should be. There is far too much wealth in the top .001%, the top .01%, the top .1% and then even the top 1% to the point that even the top 10% of us aren't really doing that great.


This is a very good point. I was shocked to learn that $250K of income is above the 99 percentile. For a prosperous country, we have far too few millionaires and too many billionaires.

Back to the issue of off-shoring that wack-wack sees as core evil: lots of foreigners invest heavily in our economy. If we enact protectionist measure that limit our overseas investment, won't other countries respond in kind?

The solution of bringing investment home is seductive because it is simple and seemingly 100% painless. I am not sophisticated enough to analyze what can be accomplished in that area by changing tax laws. Maybe there is some gold in them thar hills. But I'm convinced the money to fix the deficit is going to mostly come from painfully extracting it from people with good jobs and nice houses. People like Kurt's dentist, who invested 200K and 8 years in college, and now has to deal with people's bad breath for 10 hours a day.


There's another distinction to argue about. Chris Rock makes some observations about difference between being rich and wealthy:
http://www.youtube.com/watch?v=4m37JkkGjAY
Last edited by Huckleby on Fri Jan 04, 2013 1:16 pm, edited 1 time in total.
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Re: Taxes and fiscal cliff

Postby kurt_w » Fri Jan 04, 2013 1:11 pm

Huckleby wrote:
kurt_w wrote: The median answer is somewhere at the low end of the range $200,000 to $299,999. That seems reasonable to me, though I'd personally put it a bit lower than that (somewhere in the $150k-$200k range). And 97% of the US population would disagree with Huckleby's assertion that an income of $1 million does not make you rich.


What you said with great authority and certainty was that the 90 percentile are certainly rich. That's an income of $144K.


Actually, I didn't. Or I don't think I did.

I did say that the 50th percentile are "middle class", and I think any definition of "middle class" that excludes the -- you know -- middle of the income distribution is nuts.

The graphs I posted show how Congress responds to the wishes of the 10th, 50th, and 90th percentiles. It pretty much ignores the 10th and 50th percentile. But the fact that it responds more strongly to the 90th percentile doesn't mean that it stops there. We don't have a curve on that graph for the 95th or 97th percentile, but I would bet that Congress would be even more responsive to their desires than to the 90th percentile.

Households in the $100K to $1M range [...]


That range covers a full order of magnitude. It makes no more sense than lumping together households with $10,000 incomes and $100,000 incomes.
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Re: Taxes and fiscal cliff

Postby wack wack » Fri Jan 04, 2013 1:14 pm

Huckleby wrote:Back to the issue of off-shoring that wack-wack sees as core evil:


Just to be clear: I believe that off-shoring is a symptom of the core evil, which is extreme greed.
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Re: Taxes and fiscal cliff

Postby kurt_w » Fri Jan 04, 2013 1:24 pm

wack wack wrote:
Huckleby wrote:Back to the issue of off-shoring that wack-wack sees as core evil:


Just to be clear: I believe that off-shoring is a symptom of the core evil, which is extreme greed.


The real, underlying core evil is the multi-billion year increase in entropy. Ultimately, the universe is doomed.
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Re: Taxes and fiscal cliff

Postby Huckleby » Fri Jan 04, 2013 1:27 pm

kurt_w wrote:I did say that the 50th percentile are "middle class", and I think any definition of "middle class" that excludes the -- you know -- middle of the income distribution is nuts.

Middle class is not defined by the median income. BTW, did you take a stats class on the road to your G.E.D.? (just kidding, professor.) Distributions are not all bell-shaped.

"Middle class" denotes a standard of living. Home ownership. Having some discretionary income to take a vacation. Most importantly, a measure of security in the dynamic job market.

In Brazil in the 1980s, perhaps 10% of the population was middle class. maybe that is where we are heading.

kurt_w wrote: But the fact that it responds more strongly to the 90th percentile doesn't mean that it stops there. We don't have a curve on that graph for the 95th or 97th percentile

No, the fact that the 90 percentile is 143K rather than 10M is critically important. It suggests that the politicians are responding to voters more than dollars. And btw, we have learned that 95 and 97 are not so special, you need to get about 99 to find wealthy people.

kurt_w wrote:
Households in the $100K to $1M range [...]
That range covers a full order of magnitude. It makes no more sense than lumping together households with $10,000 incomes and $100,000 incomes.

It ain't the numbers its the behavior. It's entirely possible, and in fact true, that people in 100K->1M band have substantially similar concerns.

A factor of ten at $10K of income is wildly significant.
A factor of ten at $10M of income probably makes zero difference in behavior.
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