Who Actually Earns $400,000 Per Year?

by Emily Guy Birken · 3,223 comments

Surgeons

After the unending media coverage of the fiscal cliff throughout December 2012, it was a relief to everyone when a last-minute compromise was reached. In particular, the most reported-on compromise had to do with the extension of the Bush-era tax cuts. Those cuts will remain in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Those fortunate few who make more than that amount will see their rates rise from 35% to 39.6%.

The news about this particular tax rate increase got me wondering: what professions can expect to earn that kind of money? Since I don’t personally know anyone bringing home $400,000 per year, I decided to find out what kind of jobs command such high salaries:

1. The President

Perhaps the most famous $400,000 per year job is the leader of the free world. The office of president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.

There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.

2. Surgeons and specialists

Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their career. Plastic surgeons can make up to twice that amount.

3. CEOs

The median salary of a Chief Executive Officer is over $700,000. These directors are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry backwards and forwards (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.

4. Wall Street Bankers and Lawyers

If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past year and a half.

The Top Percent of the Top Percent

These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.

Thankfully, even though individuals in this bracket are few and far between, the government estimates that raising the tax rate on this small group will raise about $600 billion in new revenues over the next decade.

Not bad for a group that small.

What other professions that earn annual incomes of $400,000? 

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{ 3223 comments… read them below or add one }

Peter N August 10, 2014 at 9:35 pm

“You are absolutely wrong about government spending not creating jobs.”
No, I am not. The gov can’t create jobs without first taking from the private economy that would have created jobs more efficiently. The second option is that the government can create jobs using future money that the younger generations must pay back/

Where do you think the money to create jobs comes from?

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Steven H August 12, 2014 at 6:56 pm

“The gov can’t create jobs without first taking from the private economy that would have created jobs more efficiently.”

But the private economy has plenty of money to create jobs and the more money that goes to the investor/business class over time, the fewer jobs have actually been created here in the US. Your theorem does not hold water.

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Peter N August 13, 2014 at 9:25 am

“But the private economy has plenty of money to create jobs”
Yes but they don’t have money to waste like the government does on creating jobs that create no wealth. What government job creates wealth?

The point is that private industry is more efficient that government and if you take away money from private industry you take away the option to create jobs that create wealth.

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Steven H August 14, 2014 at 10:20 pm

The government of the US is the voice and strength of its people. Government of the people, by the people and for the people. For society.

It is not the job of government to be efficient at creating jobs, or at creating wealth. To imply that government is failing because it does those things poorly is to completely misunderstand the function of government. It is the function of government (grouping national, state and local gov’t functions) to look after the needs of the people; to defend them, provide police and courts to keep order and defend laws, to provide legislatures to create those laws, and when deemed necessary to provide social programs for the benefit of society. These programs have included public education, social security, and various safety nets for the poor, the old, the sick and the needy.

You could argue that some of these are economic issues and that Business should take care of the situation. But Business is really “failing” at meeting these societal goals. Is that a fair assessment? No. Business is amoral (not immoral), and its only functions are to make money for the business owners and stockholders.

Get it?

It is not the duty or province of business to improve society, and it is not fitting to judge business on that yardstick. Business’ duty is generally to create wealth, within the bounds the laws and rules of business deemed suitable by society.

It is not the duty or province of government to create wealth, and it is not fitting to judge government on that yardstick. Government’s’ duty is generally to improve society by keeping it organized, providing social and physical infrastructures to support the quality of lives of it’s people, and incidentally, also providing infrastructure to aid business, and rules to govern business to assure that business is a benefit and not a detriment to society.

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Peter N August 16, 2014 at 10:40 pm

“It is not the duty or province of government to create wealth, and it is not fitting to judge government on that yardstick.”
Why not? I can and I do.

There have been a few cases where the gov has created wealth. Dams and canals for one. These are structures that pay for themselves over time and are still paying.

What the government spends its money on today is largely gone with no return on investment.

Steven H August 14, 2014 at 10:36 pm

====
“But the private economy has plenty of money to create jobs”
Peter N.: “Yes but they don’t have money to waste like the government does on creating jobs that create no wealth.
====
There are many MANY jobs in private sector that create no wealth or that destroy wealth. My point was that the private economy has plenty of money to create jobs, but they are not DOING it. Because more money to the private sector does not guarantee creation of jobs or wealth. The DISTRIBUTION of money within the economic classes of the private sector is a large determinant of the efficiency at which the private sector makes money. That is the thesis we are discussing.

In the simplest of models, if all of the money goes to the producers, and little to the consumers, who will buy the goods? Goods are left in inventory, businesses fail, jobs are lost. The solution is not to give more tax cuts or tax incentives to the producers. That makes the problem worse! The solution also does not involve telling consumers they need to quit their low-level jobs at the current producers’ businesses and start their own business. That does not address the primary problem of the producers not paying the consumers enough as employees to actually buy goods as consumers!

Not everyone can be the 1%. Not everyone WANTS to be the 1%. We need to stop ONLY telling the lower classes how to get out of the lower class, and actually improve the lot of the lower class by (a) matching jobs to skills and skills to jobs, and (b) paint even the lower classes, who serve necessary societal functions, a decent living wage.

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Steven H August 14, 2014 at 10:37 pm

pay, not paint, the lower classes a living wage. Darned autocorrect.

Peter N August 15, 2014 at 10:36 am

“There are many MANY jobs in private sector that create no wealth or that destroy wealth.” There are jobs that are necessary like picking up garbage, lawyers, accounts etc so the rest of us can concentrate on creating wealth but destroying wealth? Unless you think demolishing an old structure in order to make way for a new one I just don’t see it.

” My point was that the private economy has plenty of money to create jobs, but they are not DOING it. ” The would if there was a ROI. Regulations, healthcare etc make getting a ROI more difficult. It is easier to buy machines.

“The DISTRIBUTION of money within the economic classes of the private sector is a large determinant of the efficiency at which the private sector makes money. ” The distributing money by the government doesn’t make the economy more efficient. People buying what they need or want is much better.

OT, Government can’t be trusted. These are from this morning’s news.

http://www.foxnews.com/politics/2014/08/15/republicans-question-hhs-officials-instruction-to-delete-internal-obamacare/

http://www.foxnews.com/politics/2014/08/15/report-tax-credits-meant-to-help-poor-communities-spent-on-doggie-day-care/?intcmp=trending

“In the simplest of models, if all of the money goes to the producers, and little to the consumers, who will buy the goods?”
Duh, even the producers consume.

” The solution is not to give more tax cuts or tax incentives to the producers. ” We have the second highest taxes in the world. We deserve a break. It wouldn’t make things worse if our taxes dropped enough then a lot of overseas profits could come home and companies wouldn’t be “inverting”.

“The solution also does not involve telling consumers they need to quit their low-level jobs at the current producers’ businesses and start their own business. ” Why not? They should try. The good one will succeed. The other will know how hard it is.

“That does not address the primary problem of the producers not paying the consumers enough as employees to actually buy goods as consumers!” Producers are consumers too and they have money. As for hiring, there usually must be a return on investment when hiring people or why bother?

Steven H August 15, 2014 at 9:18 pm

Destroying wealth: There were billions of dollars of wealth destroyed in the last economic crash, caused largely by investment banks seeking to evade risk and get rich. Who destroyed that wealth? It wasn’t the duped mortgage seekers. Vulture capitalists also destroy wealth for others in order to accumulate a small amount of existing wealth for themselves.

Distribution of money: I’m not talking about distribution by government, but by under-regulated capitalism that is out of control.

Trust: Centralized power and money is always a magnet for corruption. Humans must always be regulated and watched. Big Business is scarier than Big Government, because the people can oust elected officials easier than heads of business.

Producers consume: The 1% don’t consume that much relative to the 24% of all income they receive.

“As for hiring, there usually must be a return on investment when hiring people or why bother?”
PRECISELY: If there are no customers (because the employee/consumers have no money, and the producer/consumers don’t consume that much relative to the money they receive and control) then there will be no new jobs. More businesses and more jobs are unnecessary until there is a market, a consumer-base, to support those businesses and jobs.

Steven H August 15, 2014 at 9:31 pm

“We have the second highest taxes in the world.”

By what measure? The US revenue/GDP is around 60th of a large list of countries here:
http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

Corporate tax rates are supposedly high, but the loopholes are such that US receives much less of its revenue from corporate taxes than it used to. While the corporate tax rate on paper is 40%, the effective rate paid by large companies averages 12.6%, or about

U.S. corporate tax collection totaled 2.6% of GDP in 2011, according to the Organization for Economic Cooperation and Development. That was the eleventh lowest (or 17th highest) in a ranking of 27 wealthy nations.

http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/

Peter N August 16, 2014 at 10:20 pm

““We have the second highest taxes in the world.”

By what measure? The US revenue/GDP is around 60th of a large list of countries here:”
I was wrong. We have the highest business taxes.
http://taxfoundation.org/blog/us-has-highest-corporate-income-tax-rate-oecd

Steven H August 14, 2014 at 10:43 pm

“The point is that private industry is more efficient that government and if you take away money from private industry you take away the option to create jobs that create wealth.”

No, that is wrong. If you take away money from private industry in the INVESTOR class, especially in its upper realms, when that class is NOT efficiently creating jobs, you have zero impact on job creation, but you allow government to pay its bills and provide necessary social protections and functions.

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Steven H August 14, 2014 at 10:45 pm

As many have noted, if giving ever more money to the wealthy created jobs, we would currently be drowning in jobs. We are not, ipso facto, it does not.

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Peter N August 15, 2014 at 5:39 pm

“As many have noted, if giving ever more money to the wealthy created jobs, we would currently be drowning in jobs. We are not, ipso facto, it does not.”
You implying that money is being given to the wealthy to create jobs.
Who is giving money to the wealthy to create jobs?
Who is getting this money?

Steven H August 15, 2014 at 9:06 pm

Again: The wealthy are receiving more income and more wealth in raw dollars, real dollars, and percent of economy than they ever have over at least the last century. The rules of business and tax and trade, altered by political influence of the wealthy themselves, allow this larger than historically normal growth in income and accumulation in wealth.

Most of this money is not being used to create jobs. The larger percentage of income and wealth to the upper 1,0.1, and 0.01% do not correspond to increased jobs, but actually to higher unemployment and unstable markets. Therefore, removing it via taxation to pay bills will not decrease jobs, nor damage the economy, but is more likely to improve the economy,and decrease debt. And if we can decrease the income disparity, more jobs will be created as well, by building the middle class, both in increased wealth and skills.

Peter N August 16, 2014 at 10:30 pm

“Again: The wealthy are receiving more income and more wealth in raw dollars, real dollars, and percent of economy than they ever have over at least the last century.”
You are implying that the wealthy simply receive money. They don’t earn it or get a return on their investment for taking a risk.
Again, receiving money from whom?

You have the liberal vocabulary down pat. You always use words with negative connotations.

Steven H August 19, 2014 at 6:03 pm

Earn means to receive pay for effort. Look it up We all receive money when we work for it. There is nothing negative about that.

Earn has a second definition which means deserve. It is impossible to determine what we deserve, so the word earn is ambiguous.

That is why I often use the more correct word, receive.

Steven H August 18, 2014 at 7:06 pm

“I was wrong. We have the highest business taxes.”
No You’re still wrong. We have the highest business tax RATE on PAPER.
Effective rate is low low low. It doesn’t matter what the rate is if nobody actually pays that rate.

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Peter N August 18, 2014 at 8:11 pm

OK, smart ass. You know this how? Do you run a business? No and you don’t know.

We deduct things like rent, salaries, insurance, heating, electricity etc. The only thing we deduct that might not be typical is R&D costs but we must document this carefully incase we are audited.

You only pay taxes on profits but the tax rate but tax rate from 100K to 335K is 39%. What is flawed is that the tax rate actually falls to 35% above 335K. The 100K to 335K hits just about every business but seems to target individuals or sole proprietorships.

What is really sad that that the owners/shareholders effectively pay this 39% and then people like me must pay my personal taxes on that plus the Obama Care 3.8% investment tax.

Steven H, you are a broken record. You have no other solution than “Tax the rich, feed the poor until there are no rich no more” Alvin Lee.
We can live quite nicely with out you and others like you whereas you need others that can create wealth. If you don’t think you are getting your fair share of other peoples wealth then tough nuggies.

Steven H August 18, 2014 at 9:52 pm

Peter N.,
There was some informative data in your last post. And while I was not trying to be a S—- A–, you have once again fallen to that level of communication. Most of the data I had read was on large corporations who have low effective tax rates. The tax rates you quote on small business do indeed sound too high, and I appreciate your explanation, even with the unnecessary expletives. Pre-1980, (before “tax simplification”), corporate managers might be tempted to try their hand at small business because individual tax rates on their high desk job salaries were high, but corporate rates were lower. Now we seem to have it upside down. Perhaps we need to lower small business rates and raise individual rates to compensate for the lost revenue. And close the loopholes on the big businesses who really ought to pay most of the corporate taxes.

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Peter N August 19, 2014 at 6:52 pm

” Most of the data I had read was on large corporations who have low effective tax rates.”
Not on their profits. They are as shown. What you may object to is how companies are allowed to expense equipment, depreciate equipment and take R&D write offs. Retailers have very low profit margins so even if they sell a lot they don’t make much money. Some companies must retool every so many years and their capital equipment costs are high. You need to be able to read a profit and loss statement.

Steven H August 18, 2014 at 10:00 pm

“Steven H, you are a broken record. You have no other solution than “Tax the rich, feed the poor until there are no rich no more” Alvin Lee.
We can live quite nicely with out you and others like you whereas you need others that can create wealth. If you don’t think you are getting your fair share of other peoples wealth then tough nuggies.”
===
Well, Peter N., if that is what you think, then you have ignored about 80% of this thread. There have been a lot of solutions offered and discussed. I have offered a few and agreed with those from others. The fact that you won’t accept one more dollar of taxes on your income makes you the broken record not me. All you can do is talk about the moral failings of the poor and how parents need to be punished because they don’t care enough.

Go ahead and retire when the economy changes and you have to give up another precious 3 or 4% of your income to improve the country. Entrepreneurs in America are not a scarcity. You are not as irreplaceable as you think. Others will be happy to fill your shoes.

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Peter N August 19, 2014 at 1:52 pm

” There have been a lot of solutions offered and discussed.”
Only tax the rich by you.

“The fact that you won’t accept one more dollar of taxes on your income makes you the broken record not me.”
Why should I when it will be wasted and I pay more than my fair share already. I have seen other posts from JB and Peter basically saying the same thing.

Like Peter said recently. Taxes are my biggest expense by far. I pay enough.

“Entrepreneurs in America are not a scarcity.”
They are more scarce than they should be due to regulations and high taxes.

” You are not as irreplaceable as you think. Others will be happy to fill your shoes.”
I have a niche. It may be possible over time but it won’t come easy.

Aspiekid August 12, 2014 at 10:11 pm

The government creates jobs just like any private employer. It collects taxes for services needed by all, and hires people to provide those services.

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Normal Joe August 13, 2014 at 6:55 am

Actually, the government does create jobs in many ways, some direct and others indirect. Let’s take the most obvious to start with.

1. The business of governing, that is the daily activities necessary to fulfill core responsibilities as defined in the constitution and promulgated through regulations and guidelines. We have our paid elected officials. They have support staffs to assist them in fulfilling their duties. And, they are concentrated in Washington. These people need food, shelter, and transportation to meet their daily responsibilities. This takes shops, apartments/homes, and taxis/trains/automobiles. This is the support structure that grows in concert with the quantity engaged in this process. This stimulates the local economy which in turn creates jobs.

2. The USA has the second largest military in the world in quantities of personnel and the largest by total expenditures. The personnel are stationed in the US and abroad. Wherever there is a military base there is created a support structure to satisfy the needs of the personnel that are not satisfied by the government. This includes housing, personal services, food, and transportation. This is the main reason you find politicians worldwide lobbying to retain the military bases in their respective bailiwicks. This military serves as a hedge against piracy and political turmoil that threatens the world’s economy.

3. One area that needs dire attention is our aging transportation infrastructure. The infrastructure that supports the free movement of goods and services from where it is concentrated to where it is needed. Failing to address this growing need is a direct threat to the viability of our economy. When the government invests in maintaining this infrastructure it creates construction jobs, some lasting for years. These construction jobs brings workers that need to eat, drink, sleep, and even relax on their downtime all bringing an influx of money to the local economies again creating even more jobs.

What this scenario does point out is that without demand, there is absolutely no reason to invest capital in increasing capacity when there is no demand to take advantage of that capacity.

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Peter N August 10, 2014 at 9:42 pm

I don’t care what the libtards say. In the end it is those that are most adaptable to the current conditions that will do the best.

I didn’t make the rules. It is the way it has always been and the way it will always be.

You are all doomed unless you can find a solution where you make yourselves better instead of trying to make others poorer.

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Normal Joe August 11, 2014 at 10:21 am

Really classy there Peter N.

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JTM August 11, 2014 at 10:53 am

Yep, Peter N always keeps it classy. Wealth buys classiness. He also knows the best way to get “the other side” to listen to your argument is to put them down and perpetuate the idea of class warfare. He forgets at times that we are all truly on the same side, just coming at things from different experiences, thoughts, and beliefs. His feelings of superiority and indignation, get in the way of explaining things beyond “I’m rich, I built this, so I am therefor right”, kind of like “wealth makes right”, instead of trying to have a real discussion. He should run for office, he’d fit right in with the current groups that are uncompromising and instead prefer to blame the other party for everything wrong. He also seems to get easily offended at times while having no problem dishing it out from his end. Yep, classy all the way.

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Peter N August 11, 2014 at 11:38 am

I am not trying to be classy but I am not saying that wealth makes right or anything like that. I am saying that one must be able to adapt to the current conditions. So many cannot no matter how much money you give them. Can you find a solution that doesn’t involve taking from others?

BTW, inflation will not work quite the way you think it will. At the first hint of inflation the short term rates will go up causing a big increase in what the gov must pay to borrow. This will cause havoc and loans will be unaffordable due to high interest rates. Those that have money will try to buy hard assets. Those without money can’t do much but their credit card debt will be easier to pay off. The problem with this method is that the pain/uncertainty will last for years

What I think will happen is what happens in the Latin American countries. The dollar will be devalued by 3 to 5 to 1 overnight. The pain is over quickly. All those that have money in CDs and bonds get the shaft. So do lenders.

In the end it will not change anything except foreign made goods will be very expensive. Job growth may increase here but not that much because the unskilled workers still need to compete with machines.

“He also seems to get easily offended at times while having no problem dishing it out from his end.”
This is because what the libtards are proposing will directly affect me. I am not proposing anything that will affect you. There aren’t ANY solutions that will not hurt a lot. It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.

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JTM August 11, 2014 at 12:18 pm

I don’t think inflation is the answer. But, our great leaders often seem count on it and economic growth to get us out of our problems instead of making the hard choices. Inflation of the sort you mention could actually make it harder for machines to complete as machines take natural resources that will inflate at a faster rate than wages. If you look at developing countries, labor is often too cheap to replace with machines. I would rather we get spending/debt under control before the interest becomes completely unmanageable (if it hasn’t already).

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Peter August 11, 2014 at 3:23 pm

Actually agree with what Peter N says “may” happen The devaluation of the dollar could be swift. And next recession we can’t print money like we did this time. The irony is that this unwinding of things will hurt the average citizen worse than the rich.

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JTM August 11, 2014 at 3:48 pm

I don’t disagree either. Peter N seems to think liberals are the cause of all evil though, and that is just not true as many conservatives have done their damndest to get us here also. I don’t see how he is not going to get hurt in the cleanup, we all are. I also agree that the average citizen is most likely to get hurt the worst, those with assets that can weather the storm will come out better than the rest.

Peter N August 11, 2014 at 8:22 pm

“Inflation of the sort you mention could actually make it harder for machines to complete as machines take natural resources that will inflate at a faster rate than wages.”
While that is true I don’t people will stop using the machines that are already running and paid for. Like I said above. I do think more people will be hired but the devalued dollar will only bring their pay in line with foreign workers. Don’t expect any big changes for the better.

“Peter N seems to think liberals are the cause of all evil though, and that is just not true as many conservatives have done their damndest to get us here also. ”
If conservatives were ACTUALLY running things we wouldn’t have a debt. We wouldn’t have all those welfare programs and other programs not mentioned in the Constitution. States like Oregon and Massachusetts would be free to have their own health care systems but there would be no federal one. What is funny is that Oregon had a big head start on adapting to the Obama care program. The spent millions and failed. I could have run things better.

BTW, we moved our business from Oregon to Washington because of taxes. We voted with our feet. This is the same thing that big companies do but they can do it internationally.

“I also agree that the average citizen is most likely to get hurt the worst, those with assets that can weather the storm will come out better than the rest.”
So who’s fault is that? It isn’t the people with assets fault. They didnt need all those deficit causing welfare programs.

In the end those with assets may not do that well either when it comes to paying capital gains taxes on the property. What will be the cost basis?

Peter August 12, 2014 at 8:21 am

JTM – totally agree. I don’t see any real difference between liberals and conservatives on this issue. Both spend way too much money – both love getting involved in every international conflict they can – both make choices for their own personal and political party gain rather than making hard long-term choices. This is why I think we need a completely new political party or a true renegade to come in and put some sense into the discussion. Or at least someone who can negotiate. A lot of the back and forth on this site has illuminated those whose minds have been poisoned by the polarized rhetoric we hear on TV and radio. Both sides. You can see some people on both sides of the argument who can debate reasonably and others who are full of their party’s doctrine without any ability to understand other views or compromise to a solution. I bet you that Congress’ discussions sound a lot like a debate between Peter N and Steven H.

JTM August 12, 2014 at 9:11 am

Peter – AMEN! Unfortunately, the election process allows extremist groups like the tea party and individuals like the Kochs and Soros to have an out-sized influence on whom the rest of us even have a chance to vote for.

I’ve felt the same for a long time, a new party or two is needed, or maybe a disbanding of the current parties. Of course, many parties have come and gone over the years and even those minor parties with staying power never seem to be able to gain much influence. A great negotiator would even have a hard time gaining acceptance by those at the extremes and may not be able to make it to the point of getting on the final ballot due to lack of extremist support during primaries.

JTM August 12, 2014 at 9:32 am

Peter N – “Don’t expect any big changes for the better.” – Umm, I don’t, I seriously don’t and don’t see why you would try to make this out as my viewpoint. Workers will be fighting against machines for jobs far into the future, but the investment in new machines will be lessened as the advantages will be decreased.

“So who’s fault is that? It isn’t the people with assets fault.” – Again, isn’t what I said, not my viewpoint.

“If conservatives were ACTUALLY running things we wouldn’t have a debt. We wouldn’t have all those welfare programs and other programs not mentioned in the Constitution.” – We have many of these because the Great Depression, many have been implemented/increased by Republicans. Obamaphones may as well be called Reaganphones, Bush Jr gave us Medicare part D, etc. A quote about Part d “It was widely believed that if the federal government used its buying power to pressure drug companies to cut drug prices, the cost of providing drugs to Medicare recipients would be substantially reduced. But forcing down drug prices would diminish the drug companies’ profits and Republicans were adamantly opposed to that.” yep, looks like the Dems are evil and wanting to give away tax dollars to corporations by paying multiples of other countries for the same drugs, wait, oops.

” I could have run things better.” – Maybe, maybe not, a lot of people think they could do better. It is why many get into office in the first place.

“It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.” – Neither did I nor most anyone else. Our great leaders from BOTH parties screwed things up, this is decades in the making, they’ve known for decades while all sorts have been in office, nothing has been done. We will all pay and pay higher because of their unwillingness to do something sooner.

Steven H August 12, 2014 at 7:00 pm

“There aren’t ANY solutions that will not hurt a lot. It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.” — Peter N.

The true basis of all of Peter N. philosophy, finally revealed. He doesn’t care if OTHER innocent parties get nailed to the wall. Just so he doesn’t have to relinquish a penny of his own.

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Peter N August 12, 2014 at 8:58 pm

“He doesn’t care if OTHER innocent parties get nailed to the wall”
Who do you think is innocent? Those pigs that feed at the government trough?

I don’t think I have made it any secret that I believe in what the tea party and libertarians stand for.. Less government, less meddling in people’s personal business like health care but more personal responsibility. I don’t see this happening.

I think people should be allowed to be stupid and irresponsible as long as it doesn’t affect others. Unfortunately even our elected officials are stupid and irresponsible or we wouldn’t be in the mess we are in.

Even Peter calls the tea party extreme but it will take extreme measures to save the country if it can be saved at all.

If you keep doing the same thing you will keep getting the same results.

Stevendad August 10, 2014 at 9:43 pm

MOR: we owe $2.6 trillion to Soc Sec trust fund. Chump change to you I’m sure, but part of the deficit.

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Peter August 10, 2014 at 9:47 pm

Corrected above as well. 16% of the debt.

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JTM August 11, 2014 at 8:38 am

Yes, it’s owed TO the trust, SS payments haven’t caused the debt to increase. Big difference there.

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Peter August 10, 2014 at 9:45 pm

http://www.washingtonpost.com/blogs/govbeat/wp/2013/12/12/the-d-c-suburbs-dominate-the-list-of-wealthiest-u-s-counties/

I think one of the ironies of this discussion is what has happened in the DC area – where I live. This area now has 8 of the 13 counties with the highest income. Real estate values and overall wealth have risen dramatically. Personally, I have seen my income rise dramatically during the last 15 years (particularly in the last 6). Many others around me are all sharing the same good fortune. A normal 4-bedroom house within 5 minutes of the Beltway will easily go for $1 million. The MEDIAN income is over $100k. Literally every govt employee I meet with makes at least this. Those that contract or work directly with the govt make 2 and 3 times this. This growth in the DC area is surely contributing to the income inequality we have been discussing. The whole area is in the 1% – or at least the 5%.

Why has the DC area seen such a boom? Because government spending is out of control. We have seen such a rise in spending that our local economy has exploded. We haven’t seen any of the recessionary turmoil that places like Vegas, Cleveland and others have seen. Because the careers and incomes of the people in the DC area are either directly funded by the spending (debt) of the US Govt or are benefactors of the growing wealth in the area. Kind of ironic isn’t it?

Even with all this, I want the spending under control. It can’t be sustained.

What many of you fail to miss when you attack me is that I stand to lose far more personally if government spending is cut dramatically. This would be way worse for my personal situation than higher taxes. It is honestly not even close…..

But it needs to be done. And we can all make a list do all the things and say “what do we cut.” and scratch our heads….but it will take sacrifice. From all of us.

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Average Joe August 12, 2014 at 5:01 pm

One of the ironies of this discussion is the oft assertion that government doesn’t create jobs. The increase of incomes and life styles are both directly and indirectly linked the the business of government. If one were to use the California Gold Rush as an example, many people went to California to make it rich. Many did. But most made it on servicing those that came to prospect for gold. Only a very few made any money prospecting, but the support system set up to supply the needs and comforts of those with gold in their eyes made a real killing. This is why states fight vigorously to keep military bases, they understand how they affect the local economy. The same holds true overseas. The local economies know beforehand whenever it is Uncle Sam’s payday. The same argument can be made for increasing wages for the lowest 40%. That money would make it’s way back into the economy driving local economies and demand creating more jobs. There are those who claim that wealth is created. I argue that it is accumulated. The wealth of a nation is a testament to the success of it’s society on the whole. This top heavy behemoth is tottering on collapse. The question for all is do we do it with the full knowledge of what has worked in the past and do it easy, or do we insist in doing it the stupid way and let it just happen to us and make the suffering more painful than it needs to be.

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JB August 13, 2014 at 8:15 am

Every gov’t job is more taxpayer dollars out of my pocket. There are thousands of unnecessary jobs in gov’t, but since there is zero accountability, someone will just decide to open a gov’t agency and get funded. The Pentagon is the largest office building in the world. A 5% cut would be easy. Many jobs could be done by the private sector. That might just be a re-allocation of resources, but they will at least have to make money to survive. No gov’t agency is tasked with making money, but losing billions isn’t a solution either. The USPS should be out of business. They lost $2B dollars last quarter yet they keep trucking along. Not cutting a day of delivery or cutting the levels of authority. They do have to prefund the pension, which is really what is killing the system. They must deliver to every address in the US. Fedex and UPS only have to deliver if they have something to deliver. Junk mail doesn’t pay enough to keep the system afloat.

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Peter August 13, 2014 at 9:46 am

Very true. If UPS lost $2b I promise they would make some changes. It is interesting how people look at the government jobs and pay so differently than corporate jobs and pay. Maybe it’s because government jobs aren’t predicated on the underlying entity actually making a profit.

Just kind of notincing a theme here – how the same people who want basic wages to be higher in the corporate world seem to abhor Federal spending cuts (meaning wages should remain high with the government even if the entity is losing money). Therefore everyone across the board makes more money, which in turn is good for the economy.

However, we have to pay for these wages – either in higher revenues (which I know some believe will happen if we just pay everyone more as they will have more to spend). So the ONLY way to do this is to reduce the pay of the high wage earners. On a corporate level, it means paying higher level people more equal to the rank and file. On a Federal level it means a higher progression to our tax rates than even the higher rates we have now (2014).

Obviously, I don’t agree with this although I see how people might come to this conclusion.

My questions about this theory –
1) Who is to say what is enough? If you pay everyone $20/hr to answer the phone, after a while this becomes the norm. Then people will want $25/hr. Same thing with tax rates on the wealthy.
2) Does this truly feed the economy?
3) Does it constrain innovation and the entreprenurial spirit? For instance, I know many people love supporting small business – mom/pop shops. Why would anyone open their own business when pay is so good with the private and public sector? Why take the risk?
4) Is this the playing field that we really want in America?
5) And who is to say that if we do see increased revenues that we won’t just spend more? Politics are all based on year-over-year comparisons. They all love to say “we reduced spending by 5% from last year” or “so-and-so cut $1b from the education program”. So if we bump up Federal spending (i.e. govt employee wages) to much higher levels, there will be a political push to keep increasing these.

The one thing I know for sure about people is that in general, most have a capacity to spend between 95 and 115% of their income. No matter what it is. The whole theory is predicated on this – that the middle class will spend the money and fuel the economy. Problem is, by doing that – they still need raises. They still aren’t planning for the long-term.

This approach doesn’t solve the true problem which remains the “I want it now” disease that dominates our politics, our personal financial planning and our general culture. It just kicks the can down the road.

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JTM August 13, 2014 at 10:07 am

It’s not just “I want it now”. Boomers fought hard to keep SS and medicare. That is why politicians never properly fixed SS. It could have been fixed decades ago without big changes, but the risk of having to answer for doing what what needed and losing their job stopped congress. Now we will all pay a much higher price, rich, poor, young and old (mostly young). We need to start asking more of our politicians. We need to ask them to make the hard decisions, to stop following some silly ideology and do what makes sense. Ideology is a great starting point, but ideology doesn’t work in reality.

The USPS is a total other problem. They could fix a lot of expenses and generate more revenue, but they are not allowed to because people keep telling their congressman they need it to stay the same. They can’t live without delivery 6 days a week, etc. Quite silly really.

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Stevendad August 10, 2014 at 10:35 pm

MOR:
Several ways to reduce deficit:

Make large corps pay back govt benefits paid to their employees. Walmart $8.6 billion alone, although not all Federal. Let’s say $20 billion.

Yes, stop foreign aid. $20 billion.

Become energy independent by encouraging leasing and drilling on Federal lands. $1 trillion industry in US. So increase by 25%, $250 billion. Let’s conservatively say gov gets 25% in leases,payroll and income taxes and corp taxes: $50 billion.

Meanwhile, energy independence reduces need for patrolling Persian Gulf. Say $10 billion, though that’s likely low.

Leave countries with vibrant economies that have over six decades of US presence (Germany, Japan and S Korea). Save another $50 billion or more.
So far $150 billion. I am not the CBO, but regardless, a lot of money.

Still not worth taking a piss for I’m sure.

Stop growth of non defense discretionary departments. Zero growth for 2 years (they grow 5% per year per several Congressmen), then inflation. $700 trillion times 5% $35 billion for 2 years, then $21 trillion.

Tax securites for top 1% of wealth holders. I guarantee they know exactly what they own already, so no record keeping whining. So let’s take $75 trillion, $40 trillion owned by very wealthy, more than half in securities, so $20 trillion times 2 percent is $400 billion a year. Maybe Warren Buffet, with a billion in new taxes, will pay taxes a bit closer to his secretary. Property and auto taxes are paid now so exempt them. These do demonstrate that taxes on property are acceptable.
Means test Soc Sec and Medicare to reduce these to zero for top 2% (income) and 50% for top 10%. That should save 6% of $1.2 trillion ($72 billion).

Pass tort reform and drop 10% of medical costs in defensive medicine by giving doctors and hospitals “safe harbors” against law suits if they “checked the boxes” on appropriate protocols. That is likely low. $75 billion.

Now at $725 billion, $400 B in revenue and $325 B in reduced spending.
This will also save $15 B($725 x 2% or so) in interest year one, $30 in year two and so on.

I know, still not significant to you.

The reality is none of this will happen and the 48% who pay taxes now without much or any roll back of Bush tax cuts might get soaked. Raising taxes 10 to 20% to the “2%” wouldn’t cut it. At that level, they are paying 60 to 75% in total state, Fed and local income taxes in some locales, much less payroll and property and sales and everything else taxes. Still not enough money can be generated. If they don’t expatriate with their skills and capital. There is a modest chance this overall will happen.

Or we inflate our way out of debt (my personal theory), paying old debt with less valuable dollars and crush the poor and screw the bondholders. This is the course we are on and, since nothing can get done by Congress, where we are likely headed.

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JTM August 11, 2014 at 8:32 am

Stevendad – Thank you. Problem is, there are many more who just say cut my taxes by cutting spending on the lazy, drug addicted poor and call those with differing opinions names like libtard instead of offering real solutions.

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JTM August 11, 2014 at 10:09 am

And yes, inflation is the most likely solution, not real growth.

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JB August 11, 2014 at 11:18 am

Why do we need a National department of Education when every state has their own set of standard? Why do we really need TSA when the airlines could pay for it and charge us the same ticket tax? Why do we have the CIA, NSA and FBI. Just make one alphabet department that does it all.

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JTM August 11, 2014 at 11:39 am

Those are all good questions, questions that our ‘leaders” need to start answering instead of laying blame on the other party.

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Peter August 11, 2014 at 3:24 pm

Great points. Although the FBI is really different from the other two agencies you talked about, much could be combined.

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Man-of-Reason August 12, 2014 at 5:01 am

Usually, such agencies are created because they are more efficiently organized and coordinated, or have greater authority and thus are more effective, or are simply less expensive to operate due to the economy of size. Medicare for example, is 16% less expensive to operate by the government on average than private Medicare Advantage plans due to less administrative overhead.

Your questions are valid and are asked continuously by many in government bureaucracies in order to increase efficiency and decrease costs. It’s an ongoing process just like in private industry.

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Ken August 12, 2014 at 6:22 am

MOR — Thoughts on this article from the New England Journal of Medicine? It seems to indicate that Medicare has higher, not lower, operating costs as compared to private Medicare Advantage plans.

http://www.nejm.org/doi/full/10.1056/NEJMp1114019#t=article

JB August 11, 2014 at 7:02 am
JTM August 11, 2014 at 9:49 am

And … if you go back through each and every president you likely find instances of the similar waste and things that didn’t work out as expected. What’s your point?

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Normal Joe August 11, 2014 at 10:18 am

Hindsight is almost always 20-20. If we constantly dwell on past events that can not be reversed, how can anyone have any ability to see into the future? Absent from any of these analyses was the net effect if no automobile sales occurred. If I remember correctly, the auto industry was in it’s worst doldrums of modern history and without this program may have more than likely not sold any automobiles off the lots that subsequently folded up shop.

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JB August 11, 2014 at 11:14 am

We have bought one car in the last 4 years. I bought a car in 1998, bought my current car in 2010. My wife hasn’t bought a car since 2001 and probably won’t buy another one until late next year. If people like us were the majority, Big Auto would sell 7,000,000 cars a year instead of 15,000,000. People that lease cars keep them in business.

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Peter August 11, 2014 at 3:26 pm

No need to be defensive of Obama here. Just pointing out a recent example of waste. There are lots of them. Why do we have 11 aircraft carriers when no other nation feels the need to have 2? And oh yeah – we are building another one. And the case was made for it by saying it provides jobs.

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JTM August 11, 2014 at 3:55 pm

Exactly, and not defending Obama, don’t think he has done a great job. He was elected almost solely because he was the opposite of Bush and he was a feel-good choice. Romney would have had my vote and others if he didn’t have such an extremist running mate.

JB August 11, 2014 at 11:11 am

The gov’t doesn’t need to be manipulating the car market. If 4,000,000 people today decided to drive their cars for 2 more years, the auto industry could collapse again. Most cars will go for 15 years, EASILY. Just because you are getting 5 more MPG doesn’t mean doodlysquat if you paid $35,000 for a car you didn’t need to just to get some money from the gov’t. And all the fuel efficient cars are causing the gas tax revenue to drop, putting our roads and bridges in danger. Just let people drive gas guzzlers if they can afford to. If they can’t put gas in the car, then I guess they can go buy a used car at a now inflated price instead of a new car. Thousands of people buying cars in private sales denies the car dealers revenue. Some people like Tesla don’t even want dealerships. Drive the car, order it, have it delivered. There shouldn’t be a car loan more than 4 years. If you can’t save money for a car and pay cash, then you are buying too much car. How you would like the gov’t to impose that rule? Or to say your car purchase can’t be more than half of your income. How many people making $45K are buying $35K cars because they get 0% interest for 72 months. These people need to be taught some financial lessons. Cash for Clunkers accomplished NOTHING…

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JTM August 11, 2014 at 11:36 am

Yes, they didn’t need to do it. They were trying to spur auto sales and decrease consumption of fuel. Of course, the study pointed out that many of those sales were for cheap, econo cars, not those for $35k, and that was part of the reason it actually hurt auto sales. In the long run, many of these people will likely realize savings due to the low priced vehicle and the savings on fuel and maintenance. The government of course knew that fuel taxes would go lower as a result, they have been for a while because of higher CAFE standards and the dramatic increase in fuel costs after 9/11.

I agree about buying a vehicle, many purchase beyond what they should. Of course, putting a 4 year limit is going too far, especially since vehicles are lasting much longer with fewer issues. The longevity is one of the reasons why 6 year loans are becoming more standard. Another reason is the low low interest rates, they make the cars significantly cheaper when people buy based on monthly payment. Unfortunately, many purchase by monthly payment, they don’t worry about the upfront price. Most people are not financially savvy, unfortunately we don’t teach it school.

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Peter August 11, 2014 at 3:28 pm

They need to teach financial management in schools just like they teach art, PE or math.

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Stevendad August 11, 2014 at 11:17 am

I’m not sure inflation is a solution, but is the default if we don’t do anything.

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JTM August 11, 2014 at 11:22 am

Exactly, in our current do nothing government, that is the “solution” to everything.

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JTM August 11, 2014 at 12:09 pm

For all you wealthy on here who continue to complain about how your taxes only seem to rise, this is a recent phenomena and due mostly to the expiring of Bush tax cuts. You are still paying less than 2000 and less or equal to almost anytime you ever have before that(excluding Bush Sr years). If your income has dramatically increased over the years, obviously the tax increase is more because of that than the government changing tax rates.

This not to argue whether tax rates are too low or too high, but to argue that rates just keep going up is not true, it’s a short time period if you want to take that view. The Bush cuts were never designed to be permanent, though they’ve been extended many times.

Here is a nice calculator for the years 2000-2014:
http://www.moneychimp.com/features/tax_brackets.htm

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Peter August 11, 2014 at 3:31 pm

Totally agree. But when people say “we need to raise taxes on the wealthy” it is fair to say…”we just did”. It just isn’t ever enough for some folks. Why don’t we stay with what he have just done – which is significant – for a while.

And don’t forget when you are saying rates in the top brackets are lower than 2000 to remember that we have several surtaxes (one to pay for ACA) that actually make the rates higher than what you see on paper. Effective tax rates in top brackets are much higher than they were in 2000 due to this and loss of deduction.

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JTM August 11, 2014 at 4:02 pm

I’ve no problem keeping rates where they are. I think they are fairly reasonable and not stopping investment. I’m worried about the debt and decreasing taxes will make that worse. I’m trying to be realistic, we need to pay for what has already been spent and interest in future years is going to become onerous even if we can get rid of the deficit. That is what worries me about the fools that threaten to not push up the debt ceiling, if we default our interest costs will skyrocket.

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Stevendad August 11, 2014 at 1:06 pm

JTM: Again, Bush tax cuts had no effect on most of the top 2% of earners as they were/ are paying the Alternative Min Tax. We received nothing. Everyone else did. So don’t blame us or act like we got this great deal.

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JTM August 11, 2014 at 1:34 pm

Not blaming you or thinking you got a great deal. Never said that, not even close. Wasn’t my point at all, just that rates are similar now as to before Bush and have been similar or higher before. it has been pointed out several times on here that tax rates just keep rising on the rich, when it’s simply not true as we are really just coming off historic low tax rates. Would you rather we went back to the 80s or before!?!?!?!

If you are getting hit by AMT, how have your rates changed? They’ve been the same for decades with the limits moving up gradually and regular tax rates don’t matter if you are hit by AMT.

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Stevendad August 11, 2014 at 1:40 pm

Zero change in AMT. The rise in exemptions only has to do with triggering tax, not exempting income. 26%, starting from dollar one.

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JTM August 11, 2014 at 1:57 pm

Yes, I understand a bit how it works. So, that being the case, how does anyone getting hit by AMT for the past decade argue that their tax rates are going up? And, for those with income too high to hit AMT, how can they complain that rates they pay are the highest ever? I’m only asking for reasonableness among the rhetoric. I’m not arguing. I’m asking for answers to better understand, but so many on here would rather whine and argue their opinion than give facts. You, Stevendad, actually provide support for your opinions, so I’m obviously not trying to hit at you.

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JB August 11, 2014 at 1:54 pm

Rates went up another 3.8% for the Obama investment tax as well.

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Stevendad August 11, 2014 at 2:50 pm

Right 3.8% Obamacare. My gripe is you NEVER hear that a huge proportion if the 2% got NO benefit from Bush tax cuts. Middle class got and still has their benefit. Sometimes, it’s not the taxes but the rhetoric that irritates me. What is a fair share any way? Again, what moral imperative or constitutionally granted right gives people money for existing?

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JB August 11, 2014 at 2:56 pm

I can’t contribute to a deductible IRA or a Roth IRA. That isn’t fair. That is a tax increase in stealth mode.

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Peter N August 11, 2014 at 3:23 pm

“Right 3.8% Obamacare.”
I got hit hard with that one and that is after my company provides health insurance for our employees and the company pays all the premiums. I have to pay the equivalent of a years health insurance for some one else.

” Again, what moral imperative or constitutionally granted right gives people money for existing?”
Ditto.
I still like Thomas Sowell’s “What is your fair share of other people’s money?”

We don’t get an answer from the( I’ll classy this time ) liberals .
The liberals have no respect for those that actually produces wealth. You can see it through out this thread.
This is why I am bitter.

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Peter August 11, 2014 at 3:33 pm

That is true of some people on here but not all. Think several people who want to take more from the wealthy have been very reasonable and respectful in articulating their opinions. Of course, not all…

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JTM August 11, 2014 at 3:39 pm

Peter N – I am not a liberal, I give and take from both sides because I don’t feel either has all the answers and each some good ideas. I try to be practical and realistic. There is only so much that can be made up by cuts to spending without hurting the economy overall. Likewise, there is only so much that can be taxed without hurting society as a whole. In the end, with our do nothing government, we will most likely all end up paying far more than if they would just get their @#$! together and stop kowtowing to some extremist groups.

This deciding one has all the answers and not wanting to budge or truly listen to what someone else has to say because their viewpoint is different, that is why I’m bitter. I’m sure if you and other conservatives would actually listen to some of those “libtards” or those of us in the center instead of immediately shutting down and complaining taxes are too high already and the poor just need to get educated and work harder, there could be some positive discourse. Until you have more to say than that, you add little if anything to the discussion.

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JC August 16, 2014 at 7:31 am

You think it’s wrong that you should have to pay for 1 more persons healthcare. Someone like a paraplegic person who went through the “disability insurance” that you constantly complain about having to pay but which only pays about 10% of that persons debt due through no fault of his own. Or would you just rather that because you believe that he is no longer useful to you, he should just die or be euthanized so you can keep your extra 3.8%.

Try this scenario: You stop paying all taxes. But to keep from paying taxes ever again you must pay for the education, training, health, livelihood, defense, infrastructure, transportation, life, liberty, and pursuit of happiness etc. for every one of your employees directly, from birth to death. Think you can do it?

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Peter N August 16, 2014 at 11:10 pm

“Try this scenario: You stop paying all taxes. But to keep from paying taxes ever again you must pay for the education, training, health, livelihood, defense, infrastructure, transportation, life, liberty, and pursuit of happiness etc. for every one of your employees directly, from birth to death. Think you can do it?”
Easily.

Normal Joe August 17, 2014 at 9:24 am

The real question is “will” you do it?

Peter N August 17, 2014 at 9:54 am

Would I be allowed to have a mini gun for defense?

I don’t see why you think this is so hard to do. I, the company and employees pay more in taxes than the services they use. The employees and the company already pay a lot in property taxes. The company already pays 100% of the health care premiums.

Education isn’t a problem. We already compensate employees fees for college courses.

I really don’t understand this question. Where do you think the gov’s taxes come from? You seem to be implying companies don’t pay their own way and free load off the government. Some may but the gov only taxes and imposes obstacles on small business.

Peter N August 17, 2014 at 10:25 am

After thinking about this a little more. I would be like a mayor of a small community with one important difference. All the people would have jobs. I could fire or kick out of the community anyone that doesn’t pull their weight. Mayors of real cities can’t do that.

Normal Joe August 17, 2014 at 1:03 pm

First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands. This is not liberty or living for your employees whom you could dispatch like a proverbial beheading whenever the mood suits you if the rest of the world did not function by your rules. Based on many of your posts on this forum, it would be hard to think otherwise.

Second, as a former Mayor of a small community, I would like some of what you are smoking. Did you say you lived in Colorado?

Peter N August 17, 2014 at 2:39 pm

“First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands.”

Read the whole thread. It wasn’t my suggestion. It was JC’s idea and it pertained to taking care of the employees in the company. You are taking things out of context. Since my company creates wealth and are taxed accordingly we would have no problem taking care of other needs if taxes would disappear. The company doesn’t have any free loaders.

“First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands. ”

This is a libtard example of using words with negative connotations again. You use the word serfs to plaint a bleak picture when you know they are free to leave when they want. My ‘serfs’ are well paid to keep turn over low. I use the term ‘tribal knowledge’ a lot because a lot of us have been around so long.

BTW, as a small business owner you do have some responsibilities for the ‘serfs’. Due to Obama Care we had to change our health insurance. Our previous health insurance was pretty good but it didn’t meet all the requirement for Obama Care. The new insurance does not cover a cancer drug that one of our employee’s wife needs. The company is paying for that drug directly out of pocket. It is expensive. The goal is to take care of our own very well. We can do it without the government using force.

The ‘serfs’ here can leave as they please but they don’t because it is the best deal around. And yes, we have ‘beheaded’/fired some employees. I think every company has found people that don’t fit in and pull their fair share.

The conservative media had better wise up to how the liberal press frames questions and uses words with negative connotations like serfs. They do it all the time.

Normal Joe, if I told you the whole story you would be jealous of our ‘serfs’.

JTM August 17, 2014 at 6:50 pm

Peter N – You complain about libtards using pie terminology. Fact is conservidunces do the same. And don’t try to paint all/most media as liberal, it’s simply not true, not today. The silliness of the far right is as well represented as that of the far left.

Man-of-Reason August 18, 2014 at 7:50 am

Peter N,
Without taxes, there would be no government. Without government, there would be no law. There would only be anarchy. Do you really want to live a “Mad Max” existence?

In every civil society, government spending usually aids half of the people disproportionally more than they spend while the other half benefit less. (Call it redistribution if you want, but that’s IS the function of governments) Hopefully, those who are aided are those most in need, but that isn’t always the case, and our .01% at the top are now aided by various laws to accumulate a a growing share of the wealth while many more than half are seeing their wages and net worths deminish.

Were you ever to advocate that you could provide all services privately that the government now provides, you would appear very foolish indeed.

Peter N August 18, 2014 at 9:11 am

“Or would you just rather that because you believe that he is no longer useful to you, he should just die or be euthanized so you can keep your extra 3.8%.”
I didn’t say anything like this but the tax is outright thievery.

So to turn this around.

I resent you, and others like you, forcing your liberal religion on me, taking my money and confiscating my property and threatening force if I don’t comply. That is the kind of thing ISIS would do.

Peter N August 18, 2014 at 10:47 am

“Peter N,
Without taxes, there would be no government. Without government, there would be no law. There would only be anarchy. Do you really want to live a “Mad Max” existence?”
Another example of libtard exaggeration. I never said I wasn’t willing to pay taxes for those things listed in the Constitution. It is all the un-Constitutional taxes that take from me and give to some one else I object too.

“In every civil society, government spending usually aids half of the people disproportionally more than they spend while the other half benefit less. (Call it redistribution if you want, but that’s IS the function of governments)”
So when the Constitution was written the US was not a civil society?

” Hopefully, those who are aided are those most in need, but that isn’t always the case, and our .01% at the top are now aided by various laws to accumulate a a growing share of the wealth”
Hey, blame Obama and the Federal Reserve. They bailed out the failing companies, bought votes, made money cheap so there is no where else to put it but in the stock market and the stock market is only high because there is no other place to invest money. Even banks find it more profitable to invest the money than to loan it.

“while many more than half are seeing their wages and net worths deminish.”
We have been over this over and over again. If these people were good enough so they could run a successful business on their own or someone could make a good ROI by hiring them there would be no problem. Basically they don’t have the skills for the new technical economy.

JTM August 12, 2014 at 4:06 pm

Looked it up. That 3.8% isn’t anywhere near as onerous as it sounds as it doesn’t apply to earned income, only investment income. So, unless the majority of your earnings are from investments, it will not come close to 3.8% of total income. Not sure how this would effect those like Romney with carried interest. No judgement, just clarification, as I’m sure others (like myself) don’t know this and could otherwise be led to believe it’s on all income.

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JB August 12, 2014 at 5:16 pm

Never said is applied to earned income, It is just an extra tax on those that have saved money. Why does investment income have to be taxed for Obamacare? I don’t advocate cigarette taxes, alcohol taxes and sin taxes, but if you eat healthy, you shouldn’t have to pay for other people’s insurance. Why not use the money for roads and bridges? It is an arbitrary tax that only affects the rich. I paid an extra $600 last year. Many people probably paid more. Why not just take part of the budget and allocate it to obamacare, why have a special rich person tax when most of the people paying the surcharge aren’t on obamacare. Those that aren’t rich say we have the money to pay it and again, that isn’t the point. why discriminate on the rich. everyone should have a share in it. I am all for usage taxes and fees like tolls. Use the product, pay the tax. Rental car taxes are the most onerous, but only paid by those renting cars. Same with the hotel taxes.

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JTM August 12, 2014 at 9:06 pm

Never said that you implied that. Just wanted to clarify for others as it was unclear to me exactly what the tax covered. Yes it is arbitrary unfortunately that’s the best one can hope for with today’s congress.

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Peter August 12, 2014 at 9:36 pm

Great point and an important distinction.

Stevendad August 11, 2014 at 6:57 pm

Steven H.
There is free school. In my state college is free for families who make less than $50K.

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JTM August 12, 2014 at 9:40 am

What state? I’m guessing it’s only for those considered instate? Most states I know of it’s no where near free, costs just continue to skyrocket due to actual increased costs, decreased government funding, and easy loans. If education is necessary, we should provide an easier path than current. I know of many who don’t feel they could ever afford college, it’s not the work involved or ability to learn holding them back.

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JTM August 12, 2014 at 10:07 am

I also feel any free schooling(degrees or trade) should be tied to achievement. If you aren’t making the grades, you don’t deserve a free ride. I could also see a tiered approach tied to income, less help for those who should be able to afford it, but to me more education is the real goal.

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Steven H August 17, 2014 at 8:27 pm

I generally agree that students need to show they are working to maintain their grades. But I want to be careful not to make this a thinning exercise to only reward the top 10% or 20% students. We need programs that educate and reward 95% of students (assuming 5% will slack off).

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Steven H August 12, 2014 at 7:47 pm

That’s generous and forward-thinking for your state. Other states should follow. I know mine used to have very reasonable in-state tuition but it has gone up a lot in the last 3 decades.

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JB August 11, 2014 at 7:24 pm

If you actually have to qualify to get into a vocational college and the gov’t pays for it once you finish with a job waiting, I am OK with that. What I don’t like is the Liberal Arts colleges charging $30K a year for degrees without job prospects. What does a History degree get most? Or an Art degree? You don’t need college to learn about Art and History or German Polka….

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JTM August 12, 2014 at 9:47 am

A college degree shows you have the ability to learn, it’s not just about learning job specific skills. When I was hired years ago, I was the only one with a related degree (comp sci), among the others were poli sci, liberal arts and business degrees. Actually, having a broad background can help, it helps you think outside the box and innovate. But I don’t expect you to understand that is possible or even likely.

Vocational degrees are a bit different though, to. They should work with businesses to be up to date with what is needed currently and in the future. Businesses should be happy to help in any way they can as they who benefit greatly.

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Steven H August 12, 2014 at 8:35 pm

Agreed. I met a guy with a music degree, with one college class in programming and one in finance. I met him at my college co-op job for a utility, where he was programming to generate the financial projections for the division. He was diverse in his knowledge and skills, and quite successful.

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JB August 11, 2014 at 7:27 pm

If gov’t gets out of the way, tax revenues will increase based on sales and income. The gov’t does NOTHING and gets tax revenue from alcohol and cigarettes and now pot. Less Police expenses more revenue. There are layers of govt jobs enforcing the rules for booze. Just get out of the way and you will get your taxes without having the expenses of people making sure every drop is accounted for. The Moonshiners aren’t going to make the gov’t bankrupt.

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Stevendad August 12, 2014 at 2:58 am

Steven H. Yes,I read the whole article. The overtone is a threat. He said it, but you brought it to the table. France was a great leader in thought and innovation before thr French Revolution. They have NEVER caught up since. And they were nearly bankrupted after Napoleon stepped into the power vacuum. Remember how about a quarter of America was bought for $3 million?
Maybe EVERY unemployed couldn’t find a job, but it would be a great start. You never responded to a FREE education being available to the poor in my state. It is astounding to me they don’t all take advantage of it. Tell me what is stopping them from going to college But that would require hard work and self responsibilty. The US is constantly in need of importing talent in IT and medicine. Do you ever hear the business side of the immigration debate?

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Steven H August 12, 2014 at 7:58 pm

1) I doubt that actual revolution would happen here. More like a voter revolt.

2) I just saw your post about free education in your state for families under $50K income. Do you know how many use this and what the limitations are? I imagine there is a high school GPA requirement, and possible enrollment limits. These may be some reasons that not everyone participates.

3) Hard work and responsibility is also a skill that needs to be taught. That is something our grade school system does not necessarily focus on, and which needs to be taught at ALL economic levels, along with ethics. Schools used to have civics classes on community responsibility and pride. I’d like those to be re-instated.

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JB August 12, 2014 at 8:15 am

part of the problem in the IT world is people were getting overpaid and now they anchor to their old salary and won’t take a job that pays less. Guess what, that higher paying job might not come around. Take a job hopefully in your field and start over again. it is better than being unemployed. I have never been overpaid, but have always gotten a raise when I have changed jobs. It was usually a better job with more responsibilities. I have only done a lateral job once with same pay due to being let go of a company. Longer story, but I busted my boss abusing her Purchase card.

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Peter August 12, 2014 at 8:42 am

That’s a great point too….happening everywhere in the “real world”. People unemployed because they are waiting for their jobs to pay what they used to.

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Ken August 12, 2014 at 8:57 am

I can’t find the original thread to the question about proposed fixes to the fiscal mess. Too many posts to wade through, I guess…. so I will respond here.

We now have a federal debt approaching $18 trillion. It seems to me that given this situation we cannot continue business at usual. Even with the nice breakdown provided by someone showing mandatory versus discretionary spending, and how much of the budget goes where, I think that in order to solve the debt crisis in the long term I think all parts of the budget should be fair game, and in particular parts considered “mandatory”, which often are ignored.

1. Defense. We spend more than 10 times as much as the next highest spending country. Having said that, there’s a reason for it, namely that for decades other countries haven’t paid their fair share to defend themselves, and have shifted that cost and responsibility to the U.S. We should shift some of it back.

2. SS As much as I think means testing punishes a lifelong series of prudent personal economic decisions, I think that in order to save the system, means testing seems like a reasonable proposal. Maybe increasing the full retirement age…. again….too. Then we need to plug the loopholes in SS where benefits are paid to people who don’t need them, such as year-long payments to parents of premature infants. What is that???

The whole thing with spousal and survivor’s benefits bothers me a bit, too. Seems like a vestige from a bygone era which assumed that there was only one breadwinner. And in the case of spousal benefits, that spouse oftentimes never have paid a dime into the system, yet in many cases received tens of thousands, or maybe hundreds of thousands, in benefits over a liftetime. Maybe over time we move to a system where in order to get any benefits, you have to qualify for them on your own (?). Current beneficiaries grandfathered in, but future beneficiaries gradually grandfathered out as of a certain date. I know there as down sides to that, but it seems like a solution that could fly. You get benefits only if you, yourself, paid into the system.

And what’s this with cost of living adjustment thing for SS? Does anyone else in society get COLA from their pension, assuming they even have one? How about reducing or eventually eliminating that?

Well I guess I’ll stop there for now. Defense and entitlements are the two big hitters in the budget. So that’s where some real headway could be made, if we wanted to.

What we can’t afford is more of the same rinky dink, “temporary”, “incremental” adjustments that affect .0000001% of the budget …. or “cuts” that are just a lower-than-expected increase in next year’s budget …… with politicians then patting themselves on the back for how much they “saved”.

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Peter August 12, 2014 at 9:27 am

Totally agree. One comment on social security….. I’m not sure if I agree with eliminating COLAs. Federal government retirements, military pensions, and state and local government pensions all have COLAs with them. The corporate world has largely moved away from pensions. This could severely impact a retiree who would see their purchasing power dwindle every year.

I’d rather move the retirement date WAY back. Possibly to 72-73 years old. People live so much longer than before and are much healthier at 65-66 than they were years ago. They are capable of working. Retirement at 62 is a very, very early age in today’s world – and a “privelege” not a right or even a “floor”.

While the supporters of the ACA will say that every American has the right to affordable health care – this is a different argument. Why should every American have the right to retire?

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JTM August 12, 2014 at 10:01 am

Defense spending, totally in agreement there. We spend too much and other countries not enough. It also gets us into trouble, creates enemies where we don’t need them. The world would be better if we kept to ourselves a bit more.

Means testing for SS, again, I agree. I don’t like it as I will likely get hit for saving, but to keep it solvent it seems inevitable. Moving back retirement again seems inevitable as it keeps more payers longer and decreases benefits paid out, though hopefully not as far back as Peter suggests. Eliminating COLAs also would be hard to do, especially since most increases are eaten up by medicare before they even get to the retired. Spousal benefits should not be eliminated. Why do you want to penalize a woman(generally) for staying home to care for their family? This should not be discouraged.

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Peter August 12, 2014 at 10:21 am

re: spousal benefits

True, but the way it works now is kind of stupid…. Assume my wife and I are the same age and both work. When we turn 62, I can elect to take social security and she can elect to take half of mine (rather than taking her own). This allows her to defer her benefit to age 70. Then at 70, she stops taking 1/2 of mine and takes the larger benefit. This gives us both much more money in the long run than if we both took it at 62.

Of course in my case my wife doesn’t work, so basically my social security benefit in retirement will be 1.5x since she will get the spousal benefit. I suppose I could see this being eliminated. We have lived off of one income for years, why should we need two in retirement? I don’t know that eliminating spousal benefits is as bad as you think. Certainly we do need it in the event of death, however.

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JTM August 12, 2014 at 11:13 am

I get what you are saying, and I (like most) don’t know much about the special benefits and tricks to get more. Reform of these types of giveaways sounds appropriate. As long as there we are not discouraging people to properly care for their families, I’m good. A dual income life is fine for those that choose, but there should not be a penalty for having a single provider home. This will only become magnified with the other changes that are likely with SS.

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Stevendad August 12, 2014 at 9:52 am

Ken: A reprise of my ideas of revenue and cost cutting changes that make a difference and don’t directly cut entitlements. Criticize, change or whatever.

Several ways to reduce deficit:

Make large corps pay back govt benefits paid to their employees. Walmart $8.6 billion alone, although not all Federal. Let’s say $20 billion.

Yes, stop foreign aid. $20 billion.

Become energy independent by encouraging leasing and drilling on Federal lands. $1 trillion industry in US. So increase by 25%, $250 billion. Let’s conservatively say gov gets 20% in leases,payroll and income taxes and corp taxes: $50 billion.

Meanwhile, energy independence reduces need for patrolling Persian Gulf. Say $10 billion, though that’s likely low.

Leave countries with vibrant economies that have over six decades of US presence (Germany, Japan and S Korea). Save another $50 billion or more.
So far $150 billion. I am not the CBO, but regardless, a lot of money.

Stop growth of non defense discretionary departments. Zero growth for 2 years (they grow 5% per year per several Congressmen), then inflation. $700 trillion times 5% $35 billion for 2 years, then $21 trillion.

Tax securites for top 1% of wealth holders. I guarantee they know exactly what they own already, so no record keeping whining. So let’s take $75 trillion, $40 trillion owned by very wealthy, more than half in securities, so $20 trillion times 2 percent is $400 billion a year. Maybe Warren Buffet, with a billion in new taxes, will pay taxes a bit closer to his secretary. Property and auto taxes are paid now so exempt them. These do demonstrate that taxes on property are acceptable.

Means test Soc Sec and Medicare to reduce these to zero for top 2% (income) and 50% for top 10%. That should save 6% of $1.2 trillion ($72 billion).

Pass tort reform and drop 10% of medical costs in defensive medicine by giving doctors and hospitals “safe harbors” against law suits if they “checked the boxes” on appropriate protocols. That is likely low. $75 billion from Medicare and Medicaid.

Now at $725 billion, $400 B in revenue and $325 B in reduced spending.
This will also save $15 B($725 x 2% or so) in interest year one, $30 in year two and so on.

The reality is none of this will happen and the 48% who pay taxes now without much or any roll back of Bush tax cuts might get soaked. Raising taxes 10 to 20% to the “2%” wouldn’t cut it. At that level, they are paying 60 to 75% in total state, Fed and local income taxes in some locales, much less payroll and property and sales and everything else taxes. Still not enough money can be generated. If they don’t expatriate with their skills and capital. There is a modest chance this overall will happen.

Or we inflate our way out of debt (my personal theory), paying old debt with less valuable dollars and crush the poor and screw the bondholders. This is the course we are on and, since nothing can get done by Congress, where we are likely headed.

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Peter N August 12, 2014 at 11:13 am

“Or we inflate our way out of debt (my personal theory),”
We can only inflate our way out of the severe debt to a lessor debt. The congress will always spend more than it takes in to buy votes.

I would like to raise the pay for congress to $1M or more but the debt is taken out of their pay first. Then they would spend money as if it was their own.

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Stevendad August 12, 2014 at 12:28 pm

Oklahoma tuition is free for households making less than $50k. Program is called OLAP.

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Steven H August 12, 2014 at 8:29 pm

Thanks.

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Stevendad August 12, 2014 at 6:36 pm

Steven H. The stories are over and over. Roofing, fast food cooks, simple construction. All double digit per hour pay. They ARE NIT isolated. Please give solid proof they are as you tout over and over. The concept of work life balance is all about moving into a career in a mid level position that pays well and doesn’t require more than 40 hours a week. Anything less is not worth the trouble to a big group if our population. No sacrifice, no paying dues, no moving for work, no working your way up. I want it now, at good pay and regular hours. Even physicians we interview are like this. If you don’t think the under 45 cried thinks differently than those older, you are delusional.

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Peter August 12, 2014 at 9:46 pm

This is very true. Any of us who employ people have seen a shift in the general attitudes of the workforce. It is palpable. The way I would explain it though isn’t the lazy and unwilling angle Steven H keeps harping on. I think it is just the instant gratification needs of our current society. People – for whatever reason – don’t seem willing to invest in anything with a slow burn…..whether it is a career, health and fitness, or in our politics. Not sure why this is – maybe an offshoot of the technological revolution? Maybe it is the way this generation was raised? The odd thing is that is not just the younger people – it is sort of creeping into society at large.

Personally I think our leadership – and by that I mean Obama – has fed into this mindset too much with his rhetoric. I for one was really excited when he got elected. Whether he could actually get policy change or not, I thought he could be an inspiration to people to achieve the American Dream. Instead, he became quickly frustrated with Congress and Washington (and rightfully so) and turned to partisan, divisive language and politics. I don’t mean to imply that the mindset of the American worker is Obama’s fault – far from it – but wish he would do more to inspire people rather than add to their self-victimization. People are capable of so much more than they give themselves credit for.

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Peter August 12, 2014 at 9:48 pm

There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand. I stuffed envelopes until 1 AM making $20k a year but all the while knew I was impressing my employer with my work ethic and would pay off for me later. The stories of people doing stuff like that today seem very scarce.

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Steven H August 17, 2014 at 7:57 pm

There used to be more of a loyalty bond between employers and employees. Perhaps it still exists in smaller companies … perhaps in yours … but in most large companies it is gone. When I first went to work for a large multi-national after college, the first month was spent in training and touring local facilities. There was a retirement plan. There was an employee club with many free or low cost activities. There were employer sponsored opportunities to pursue higher degrees. It all felt like a club and like the company had an interest and an investment in me, the employee. It spurred a certain amount of loyalty and willingness to accept less now, because I felt like I could be rewarded later.

There are fewer of those company “extras” these days, and so it is not surprising that there is less employee loyalty and more demand for what can be given now instead of promised later. People don’t trust the companies to follow through on those later promised opportunities.

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Peter August 19, 2014 at 7:57 am

This is true but not entirely the fault of the companies. People hop from job to job now more than ever. This has increasingly been the case for decades. Simply a culture change which has some good and bad repurcussions. Very different times.

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JTM August 13, 2014 at 8:52 am

It’s not about wanting it now without working for it. Many may ask for 40 work weeks, but that is in knowing that we will most definitely be asked to work more especially if we are salaried. The corporate world has changed also. Management often views employees as numbers, not people. And government only cares about the voting power of boomers, screwing the later generations. What is wrong with wanting some work life balance when often you don’t feel your work is valued? When companies are willing to cut your pay (or job) without notice to make their numbers, not just survive? Sure those under 45 think differently, the world is a different place, but it’s no more about instant gratification for us than our boomer parents (they raised us after all).

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Steven H August 12, 2014 at 8:28 pm

Stevendad,

I can’t provide proof regarding stories that you and Peter are describing to me. That makes no sense. I’m just saying that you and Peter are providing stories that are individual and not statistical.

Nevertheless, your first-person account of people you interview for work is more credible than third-person stories about welders, or accounts from decades back. And Peter’s account of employment problems from his industry lacked details.

All that said, let’s play devil’s advocate here, regarding your applicants. If the market, somewhere, is not offering the conditions they demand, then where are they getting the ideas to demand them? Are they really lazy, or have they perhaps accumulated even more debt than your generation, and see more need to pay back quickly? Do they rely more than your generation on a second income and so their home life is more strained? I am not making assertions here, just raising possibilities. I know that engineers at the beginning of my career could look forward to company retirement plans, regular annual pay increases and SS retirement guarantees that felt secure. Young engineers have their 401Ks, no company-funded retirement plan, less assurance of pay raises over inflation, and little confidence in the SS system. And yet I have not seen the sloth or unwillingness to work extra hours you describe. If it’s not generational sloth and laziness, then is there some other reason that explains what you see? Are the returns in the medical profession less than what they were, relative to the large educational investment? Are the applicants truly asking above market wages and work conditions? What’s going on? I’m just reluctant to jump to generational sloth as the primary and only problem here.

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Stevendad August 12, 2014 at 9:40 pm

I’ve lived in OK almost my whole life. It is odd such a conservative state has free tuition and mandatory preK, both very liberal agenda items. But, I think ur illustrates that states cn do the right thing (usually) without Uncle Sam telling them what is best.

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JTM August 13, 2014 at 8:41 am

Which also illustrates that both sides have good ideas, that the best results are by working together for the common good. Federal government does get too involved at times, but it’s usually because of some perceived problem that is not being handled properly in many areas. If it were left to states, we’d likely still have slavery in some form.

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Stevendad August 12, 2014 at 10:04 pm

Steven H:
Numerous sociologists, economists and historians not an attitude in gen X and millenials. I’d suggest you read the 13th Generation by Strauss and Howe. Also Ty follow up the Fourth Turning. They talk about how generations en masse think due to different rearing due to external forces. Gen X (born 11/23/63 to 1/12/81 in my book) is sometimes rash and impulsive and not much for protocol. But they are pragmatic and accept that they are going to get screwed. Millenials (1/1981 to 9/11/2001) are destined to rebuild after the cataclysm in about 2020. Perhaps it’s your revolution. They feel entitled to a good life with or without sacrifice. Those after 2001 are still children and yet to be named. Regardless, each group has a different psyche from us Boomers. The above books really go through how in some detai. Less duty to man kind but more appreciation for what theyet. Less dedication to job and more to self and family. Not judging, that may be better. But clearly different.

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JTM August 13, 2014 at 8:33 am

I am Gen X, right in the middle of it. I would agree a bit. We have been told since grade school that we are screwed, the SS will not be there for us unless congress makes changes, changes they are not willing to take for fear of losing their jobs by pissing off boomers. Boomers who kept giving themselves more knowing it was the following generations who would pay, of course that’s what their parents did to. Congress has continued to get worse, more polarized, not better. Also, from a young age, we were told there is no longer such a thing as a company man, corporations no longer care about employees, just near term profits, that seems to continue to hold and be getting worse. It’s hard to make a career when you can’t feel secure in your job and feel your employer doesn’t really care they just need a warm body. We also learned while watching more and more mothers enter the workforce and we became latchkey kids, that money and career isn’t everything, there are more important things that create more happiness. It just leaves more opportunity for those who care more about money. What is wrong with that? We still have many who work hard, start businesses and create wealth, but our priorities are different. These priorities were helped set in place through our experiences and guidance of our boomer parents, many of whom told us to follow our dreams after the big companies torched theirs in the name of profit after many years of service, or went bankrupt and they lost their pensions.

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Peter August 13, 2014 at 9:20 am

I’m right in the middle of Gen X too. I agree – I definitely have a more cynical attitude which is one of the stereotypes of Gen X. However, that made me think from a young age that anything I got in life I was going to have to do myself – I never thought about waiting for government, my parents, a corporation, or anyone else really helping me or giving me anything. In a lot of ways I think this has made me work harder – knowing it’s all on me.

Totally agree about your comments about corporate America and the changing culture – part of why I knew even in high school that I wouldn’t be able to function in that environment and would need a career where I was “my own boss”. I did get very lucky in that the first path I chose was the right one for me. So many of our generation are still searching and I feel for them…much harder to do all the things we have talked about when you have a family to take care of. And you are so right – it is all about the search for happiness and finding that balance.

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Steven H August 17, 2014 at 7:32 pm

Thanks for the reference and summary. Not sure when I can get to it in my reading list, but it sounds like good research.

What I get from this is that attitudes of the workforce have changed, and that the unfilled jobs in earlier posted examples (or at least the recent ones about the welders and wire tie-ers and finance planning recruits) must be, by definition, due to lower than market wage offerings, and not some moral deficiency in the labor pool.

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Peter N August 12, 2014 at 11:09 pm

http://www.foxnews.com/politics/2014/08/11/liberal-mayors-slam-obamas-economy/?intcmp=latestnews

Obama may be over stating his success but he is not at fault. The liberal mayors are too stupid to realize what is happening. What do they expect Obama to do? He can’t make people smarter. Only the people can do that.

The jobs that were aren’t anymore. Can it be any plainer? It is technology and the global economy that are changing things faster than people can adapt.

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David H August 13, 2014 at 5:19 am

I have a question that I can’t seem to find an answer to. Does anyone know what the total taxable real estate number is in the United States? My home is $3500, and my office complex is $15,000. But is there anywhere that totals all of the property in this country?

Thanks

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JB August 13, 2014 at 8:06 am

What do you mean? Is there a cap on the real estate taxes you pay based on value?

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JTM August 13, 2014 at 9:08 am

Tax rates vary greatly by city, from 0 to 2.5% or more of assessed value. Are you looking for the value of properties or the total taxes collected for real estate? Total property value will most likely be the easiest to find.

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Stevendad August 13, 2014 at 9:12 am

JTM: I thought I said Gen X may be right. However, my point is they ARE different. Steven H sees the young unemployed only victims of Greed and malice by the wealthy older generations. From a pure business standpoint, they are not as desirable.

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JTM August 13, 2014 at 9:44 am

I agree, just explaining my thoughts as a gen Xer. Every generation has different experiences they draw on. My grandparents were greatly effected by the depression and you can see it in how they lived and today’s youth are starting to show who they are.

It irks me when some (not saying you) play off the youth as lazy and wanting everything now, their may be some truth, but not much more than older generations that have taught them this and created the tech that allows it, they really just have different ideals formed through what has happened around them. Older generations always seem to feel the younger is more privileged and lazy, yet they forget they are the teachers. Society is ever evolving, we will make it through if we work together.

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Peter August 13, 2014 at 9:50 am

Yeah when I say that people want everything now I didn’t mean to single out youth. It is our culture across the board. We need some leadership to change this – basically the opposite of what the current President has been doing.

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Steven H August 17, 2014 at 6:43 pm

How is the “culture of wanting everything now” any different than the “culture of having more than anybody else and not wanting to give some back”?

I know. You pay a lot in taxes. And taxes were just raised recently. And you think I am telling you that you don’t need/deserve the money you worked very hard to earn. That’s not it. You earned your money, because you were dealt a random hand in life, you played by the rules, worked hard, and obtained your fair winnings. Fine.

I am just saying that it is no more selfish for people in today’s culture to ask for what they feel they deserve, than it is for you or anybody else to try to retain what you feel you deserve. Why? Because people feel like they are getting the short end of the stick. You think you are getting attacked and treated unfairly re taxes. They see income and wealth escalating for a few people and stagnating for others. And as much discussion as is on this thread about the reasons for the income disparity being due to the moral, ethical, or intelligence failures of the unemployed, under-employed or lesser paid, most of the actual people being maligned feel pretty strongly that they have been studying, working and struggling just as hard as anybody in any generation. You can always point to a few lazy ne’er-do-wells, but you would be wrong to paint the whole group of unemployed, under-employed and low-paid in one such dismal color.

You defend your position very well. Can you see theirs, without generally disparaging the group of them in some way as unworthy? Do you understand WHY the majority of the country might look upon the wealth and income of the various stratas of the 1% with disdain? Do you understand that when people talk about rebalancing the economy and lessening the income disparity, it is not envy, and not greed, and not a desire to grab something undeserved, but instead a natural longing to get what they feel they have earned (deserved), but have not yet earned (received)?

I am not asking you to agree with my perspective or theirs. I am just asking if you understand and empathize with it.

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Peter August 19, 2014 at 7:19 am

I have never disparaged the group you refer to. I have many friends and family members as a part of this group as well – so I know better than to paint a whole group with one brush. If you read back, you’ll see that it is you that is doing that, not me. You speak for how “the people” feel – I am only speaking for myself and other people I have personal relationships with. When I talk about “lazy people”, I’m just referring to those that I have seen with my own eyes. Neither of us have any idea what percentage of the struggling fall in this category. I have seen many hard working people struggling as well. It’s not black and white.

That said, I am the last thing from selfish financially. I am not part of a ‘culture of hoarding what I have earned’ as you describe. I gainfully employ many people and am very generous with them. I give heartily to charity. I tip very, very generously.

My #1 biggest expense is Federal taxes. And it is the most wasted portion of my budget thanks to the incompetence of the people making the decisions. I just don’t want more of my money to go down this rabbit hole.

I understand “their” perspective, but I don’t understand yours. I don’t see how someone who is struggling can point at others as the reason for their plight. I empathize with anyone who has been dealt a bad hand or who is struggling – but I never EVER will understand any perspective that blames others and makes oneself a victim. It is just not the way I think and find that sort of victimization hard to sympathize with.

Steven H August 19, 2014 at 5:48 pm

Sorry Peter, but it seems egos get bruised too easily here. Yours, mine, everybody’s. We have to be able to state some generalizations in these brief posting spaces without having to insert an exception in each post for each individual poster present. When you say “There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.” it does SEEM as if you are painting most of a class of people with one brush, but I know you are making a generalization, and not applying it to me or every single person. When I say “culture of having more than anybody else and not wanting to give some back”, I think it is obvious that I am applying it to those who actually oppose paying back to society, which is not necessarily you or anyone else that the boot does not actually fit. It is a generalization that I think applies to many in the 1%. I realize the need to speak respectfully but geez!, can we not be so brittle?

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Peter N August 19, 2014 at 6:41 pm

““There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.”
I agree otherwise people wouldn’t keep getting voting for politicians that promise them what they can’t deliver without ruining the country. Few think any further ahead than their next hand out. The unions will vote for those that allow them to keep their jobs no matter what the cost and the politicians are only too happy to buy their votes with other people’s money.

Responsible politicians don’t get heard because they propose tough solutions.

Steven H August 17, 2014 at 5:57 pm

The unemployed are victims of the economic crash to the degree that there are about 10.2 million job seekers for only 4 million jobs. You can still be a desirable, competent applicant but be out of luck because of the stats. You are trying to paint all of the unemployed as morally deficient. I am saying there are not enough job openings.

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Steven H August 18, 2014 at 7:15 pm

From a pure business standpoint, there are 2.5 times more job seekers than jobs. 4million jobs and 10.5 million people seeking those jobs. More job seekers than jobs in every industry, skilled and unskilled. It doesn’t matter if you get a new skill. There are already more people than openings in that market.

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Peter N August 18, 2014 at 8:28 pm

“It doesn’t matter if you get a new skill. There are already more people than openings in that market.”
So? You have no chance without the skills. You would call the people that make it lucky but without the skills there is no opportunity to be lucky.

Why not create a job? I have pointed out that in other countries people do what they need to. They sell food they grow or things they make at market.

Do you think these people should just give up and sit on the sofa collecting unemployment,drinking beer and whining?

BTW, there are technical jobs where there aren’t enough people to fill them.

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Steven H August 18, 2014 at 9:42 pm

“BTW, there are technical jobs where there aren’t enough people to fill them.”

I have heard mixed messages on this.
Explanations are all over the map.
Here is one that sort of takes your perspective:

http://moneymorning.com/2013/07/29/u-s-unemployment-three-million-jobs-in-america-are-waiting-to-be-filled/
“There is another side to the U.S. unemployment problem: Believe it or not, there are three million jobs going unfilled.
Employers can’t seem to find the right match for more than 200,000 manufacturing jobs alone.”

And others have different explanations, blaming business itself to veering degrees:
http://online.wsj.com/news/articles/SB10001424052970204422404576596630897409182
“With an abundance of workers to choose from, employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time.”
“Some of the complaints about skill shortages boil down to the fact that employers can’t get candidates to accept jobs at the wages offered. That’s an affordability problem, not a skill shortage. ”
“Unfortunately, American companies don’t seem to do training anymore. Data are hard to come by, but we know that apprenticeship programs have largely disappeared, along with management-training programs.”

http://www.forbes.com/sites/realspin/2013/05/31/there-are-4-million-u-s-job-openings-why-are-the-positions-unfilled/
“An objective look at the job market, however, clearly shows that while technology is increasingly deployed in higher-level recruiting efforts, it is underutilized in services and support sectors – such as retail – that require less specific skill sets and tend to have high turnover among predominantly low-wage positions. These jobs should in theory be relatively easy to fill, but many businesses are failing to recruit well-qualified candidates – and too many jobs remain open.”

http://www.wtsp.com/story/news/features/2014/08/14/job-openings-how-to-get-hired/14048343/
“Not all jobs posted will be filled. Sometimes businesses post jobs with no intention of actually filling them. They’re looking for applicants to put in their files so that they have a supply of candidates when a job does open up. ”
“Companies often look for a “perfect fit” that doesn’t exist. With unemployment being high, many employers expect that the perfect candidate will just show up at their door. The problem is, it’s rare to find a person who’s exactly right, with all the relevant skills. People who can do everything an employer is looking for want to move to a higher job to further expand their skills. Therefore, there’s a lack of fit.”

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Peter August 19, 2014 at 7:10 am

Yet there is 6% unemployment. Strange since we have 3x as many people looking for jobs as jobs themselves.

I love the idea that people are sitting at home in protest of low wages. Not sure how my kids and wife would feel if I did that.

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Steven H August 19, 2014 at 5:51 pm

“I love the idea that people are sitting at home in protest of low wages.”
That is a broad generalization that is quite insulting and I doubt applies to very many people. What logic or data do you have to back that up?

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Stevendad August 13, 2014 at 10:10 am

My working 50 to 60 hours a week has taught my children NOT to do this. You learn from examples. Generally doing the same…or the opposite.
Gen X is getting screwed 4 ways: Debt, Soc Sec, Medicare and Obamacare (we need to recruit the young to pay for the old). I personally the over 65 tax break should be eliminates and guven to the under 30 group.
I am a Boomer and have rare skills that make me a good living. My concern is for America and Americans, not myself. I am not stupid and wanting to pay more taxes, however! 45 % or more is enough. (total)

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Steven H August 17, 2014 at 6:06 pm

“My working 50 to 60 hours a week has taught my children NOT to do this. You learn from examples. Generally doing the same…or the opposite.”
Agree absolutely. When you and I started out, we felt like working those extra hours would get us somewhere. Gen Xers probably feel less confident in that reward down the road, and so are less willing to sacrifice their entire existence to their job.

Gen Xers are getting screwed with Debt. I’m not so sure about the other three. Without Medicare and SS, they would also have to worry about supporting their parents. ObamaCare is still proving itself, and is a big benefit to many, including my 28 yr old daughter, who could not afford insurance otherwise, even though she has a full time job.

In order to stop screwing the younger generations with Debt, we need the Grand Bargain: a compromise on social programs to make them sustainable, AND MORE REVENUE. I know. Taxes already went up. I heard. But we still need to close the gap, and more taxes will need to be raised.

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JB August 13, 2014 at 11:04 am

Same sex marriage and pot legalization are the two issues pitting states against the Federal gov’t. Some laws should be state by state and some should be Federal. I think most criminal activities like stealing, killing are Federal, but State to State there are many different laws.

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Steven H August 17, 2014 at 5:52 pm

Pot legalization is handled by states. The conflict with feds is that feds have been treating pot as illegal even if the state legalizes. I agree the states should get priority on this, and the Feds need to leave state residents alone when the state has legalized.

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JB August 13, 2014 at 11:21 am

Here is the problem from the City/County/State/Federal side. I am paid by the taxpayers. I don’t get a raise every year, I have a basic office, we don’t have a ton of benefits to being a gov’t worker. I did get a raise by coming to the County. I have only been here two year. I am guaranteed a promotion when my boss retires in 18 months. (Whole other story, but it part of the job I do). Our county doesn’t give across the board raises just because you breathe. Our “CFO” does want to pay like the private sector, but not just willy nilly to everyone. Our tax clerks and other JP clerks aren’t paid a ton and they haven’t recevied raises in a few years. We have 4 County Commissioners that oversea 4,000,000 people and they just a raise after like 6 years to $160,000 a year. That is a not a “large” salary compared to the number of people they represent. My wife makes more than that I make about 1/2 as much. Our County Treasurer makes about $120K. In the Corporate world depending on the company, he might be a bit underpaid. But here is the issue, a private company can increase revenues by puttting out a better product or a product people want, like Ipad, Iphones etc. the more they sell the better. We in the county don’t produce anything. 99% of us are in Admin positions making sure the taxpayers are getting services. We have a budget. It is the property taxes that every homeowner and business pay. None of us want to pay anymore than we have to. Housing prices keep going up and some people have to move due to increased property taxes. On the other hand, rising home prices mean the County can do a few more things. We can hire more law enforcement or build roads/bridges, maintain parks, etc. We have a fixed amount of money.

The Federal gov’t can keep printing money. We can’t. So, many public sector employees are not paid well, but we have really good pensions. That is what most people hate with the police and firemen and that is the “scare tactic” politicians use to cut budgets. There are plenty of ways to streamline processes. Law Enforcement is I think our biggest expense at like $450 Million dollars. It costs a ton to process and keep prisioners, especially the ones that need medication.
And yes, I see plenty of people that need to move on, but they are milking the system until they retire. I know that 3 people in my department are retiring within 2 years and they won’t be replaced.

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Peter August 13, 2014 at 12:23 pm

Very different on the state, county and local levels. They actually operate (usually) within a budget – novel concept! And yes, they can’t print money and incur unlimited amounts of debt like the Fed can.

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JB August 13, 2014 at 2:10 pm

Our County should be debt free in about 5 years. Not many counties have that aspiration.

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Stevendad August 15, 2014 at 5:59 am

Steven H:
Nice treatise about anecdotes, but your answer is tangential. I asked you to give some facts that support that a significant proportion of those on assistance are not gaming the system with no real goals of bettering themselves. There is a huge percentage on SNAP for over 5 years. Not a temporary hand up to me.

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Steven H August 15, 2014 at 9:46 pm

“fraud levels in SNAP appear to be as low as with the other “pure welfare” programs we just touched on: “Payment error” rates — money sent in incorrect amounts and/or to the wrong people — have declined from near 10 percent a decade ago to 3 to 4 percent today, most of it due, again, to government error, not active fraud. The majority of food-stamp fraud appears to be generated by supermarkets “trafficking” in the food stamps. Beneficiaries intentionally ripping off the taxpayers account for perhaps 1 percent of payments.”

http://www.theatlantic.com/politics/archive/2013/08/just-how-wrong-is-conventional-wisdom-about-government-fraud/278690/

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Steven H August 15, 2014 at 9:49 pm

The data I just provided is sparser than I would like, but informative. Of course, no one has stats on recipients’ intentions “to better themselves”.

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Steven H August 15, 2014 at 10:06 pm

Regarding Gen Xers, generational sloth, and markets.
There seems to be more consensus than I expected about changes in work attitudes of either the whole society at this time, or of just the upcoming generation. Some are describing this as “I want it now” others as “work-life balance”.

If there is a change, it is now part of the equation. While I am certainly in favor of improving education, skills, ethics, civic-mindedness, and the work ethic among the young, middle and old of society, we also have to recognize that whatever we have in the employment pool now is part of the equation, and part of the market.

If you believe that markets are objective and set salaries objectively, it seems foolish to me to complain that workers are not flocking to fill certain jobs at the advertised wage and condition, and then to state that the wage and condition is enough and that the employment pool is flawed. Markets say that the job will be filled when the wage/conditions are raised to the market price. If the job is not being filled, the wage/condition must be below market.

I hear the objection that any job at any pay must be better than no job. That is not always true, for a variety of reasons. Taking a job removes opportunities for getting a better job. I hear the complaint that poor are getting government assistance, and if they were starving without assistance, they would be more desperate to take any job. That is probably true. But that is not the society we choose to create. It is better to force the market rates up a bit for low end jobs, so that people can support themselves with those jobs. It is not really good for society to allow wages to sink to poverty and sub-poverty levels.

If people are not taking jobs at a given wage level, it must be below the market wage, right? If anyone objects, can they explain how it can possibly be otherwise?

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Steven H August 15, 2014 at 10:09 pm

Also, the folks demanding work-life balance and higher wages may finally be objecting to the sub-historical income percentages we have been talking about on this thread. They are using their negotiating power to increase wages and do their part in decreasing income disparity. Negotiation is one of the market forces. So perhaps the market is trying to finally correct itself to a more stable income slope.

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JB August 16, 2014 at 7:03 am

If people stop buying Iphones, those at the top of Apple won’t be getting raises or more stock options. Consumers control CEO wealth to an extent on certain products. If people shop Target instead of WM in droves, same thing.

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Steven H August 17, 2014 at 5:48 pm

In most cases, people don’t shop to vote approval or disapproval of company policies. They shop for convenience, quality and price. There are some exceptions. (I know people who used to shop at Hobby Lobby and now refuse to, for political reasons.) Consumers don’t control squat about CEO pay unless there is a concerted political movement to do so.

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Stevendad August 16, 2014 at 7:38 am

JC. So those who pay no or negative taxes should not get any benefit? Is taht your argument? We don’t disagree with paying taxes, just the amount. Soc Sec, Medicare are forms of insurance, so no gripe there. Medicaid, SNAP are not. That is more of a bone of contention. Your disabled example likey gets most from the former.
By the way, since you all believe so much in charity for others, step up to the plate and donate all your income up to 60% (including taxes) and live on 40%. It is so utterly simplistic and condescending to decide what others can or cannot afford.

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Normal Joe August 16, 2014 at 6:35 pm

I could live quite well on 40% of $300,000. That would be an increase of 160%.

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Stevendad August 17, 2014 at 5:06 am

Normal Joe: My point is YOU live on 40% of what YOU make now. I am arbitrarily deciding you can afford it. What if a high earner is paying $100k to care for an aging/disabled parent? Can they afford ANOTHER tax increase? Again, it is very simplistic and condescending for you to decide what other people can afford.

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Peter August 17, 2014 at 8:42 am

Or if someone lives in SoCal, NYC or DC area….. Either way I hate this argument – what do you “need”? Not really the point

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Normal Joe August 17, 2014 at 10:05 am

I think you missed my point that we all have our areas of comfort. I have not proposed that anyone give more than an equal share, a percentage of income after taxes. By taxes I would include all Federal, State, and Local levies supporting government activities such as sales and use, income, and property tax on real estate and personal property. Including all this strata will likely show that the bottom 60% pay a larger percentage of tax to income than the upper 40%. I am looking for data that would disprove this assertion.

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Steven H August 17, 2014 at 9:14 pm

Joe, I don’t think you will find data to show “that the bottom 60% pay a larger percentage of tax to income than the upper 40%”. Upper incomes clearly pay higher effective tax rates, as they should under a progressive system. You might look at these stats, as they show taxes by quintile
http://www.heritage.org/research/reports/2008/11/how-wealth-is-spread-distribution-of-government-benefits-services-taxes-by-income-quintile-in-us
although Heritage Foundation has a strong right political lean, so keep that in mind. I think their tax to benefit ratios are absurdly contrived, but the raw tax info may be useful.

Look at Tax Foundation and taxpolicycenter.org, and the Emmanuel Saez income tables for more data. Saez doesn’t break up data by quintile but tax policy center does.

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Stevendad August 17, 2014 at 2:55 pm

NJ: 47% pay no income taxes. Sales taxes can be up to 16%,as low as zero, average 9%. Of course this only applies if you spend all your income on stuff, not rent or car or house payments. Property tax of 2.5% (high range) on median home of $150k is $3750. Soc sec and Medicare are 7.65%. Typically this might get to 20%. The other 13% pay a little more, but bit much. So this gets nowhere close to 60%. My 26 (Fed AMT) + 5.25(state) + 15.3(empl taxes) +4 (sales and use) + 3 (property) comes out about 53.55%. Enough for me. I suggest you calculate yours and give the percentage under 60 to charity. I don’t feel you need it…

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JTM August 17, 2014 at 7:15 pm

I have to cry foul at using 7.65% for the low end and 15.3% for your tax rate. Yes it makes the difference greater, but it’s disingenuous, especially when a big portion cuts of at $120k.

Using RE/property taxes as a proportion of income is just about impossible. Using sales tax is also quite hard and generally skews higher with lower incomes ad they spend a higher percentage of income on taxable items.

Otherwise, yes, higher incomes Pay a higher rate. I think we have established this already. It’s why so many wealthy are complaining on here even though they are still historically low. Again, not suggesting they should go higher, just pointing out facts.

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JB August 17, 2014 at 3:05 pm

Let’s face it. If you make $1,000,000 a year and you keep your expenses down to $100,000 a year, you have $600,000 a year in disposable income. It doesn’t help the economy to keep it all in the bank. 2nd homes, high end shopping, nice cars drive the luxury market. It did crash a bit in 2007-2009. For every $300M yacht that is built, there are permanent jobs to keep those ships afloat and going. 50 less of those ships out there is a ton of jobs. Pilots for Gulfstream jets are paid well. You have mechanices to service those jets and ships. So don’t tell me the rich don’t create jobs. They do. If you make $30,000 a year you are spending all of your money. That is life. You can’t make everyone middle class. There will always be people on both sides of the bell curve.

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Steven H August 17, 2014 at 7:03 pm

“You can’t make everyone middle class. There will always be people on both sides of the bell curve.”

“So don’t tell me the rich don’t create jobs. They do.”
The point is that there is very little trickle down when you have disparity like today. Are you telling me that pay levels don’t matter? What do you suppose would happen if you gave the lower paid 90% of Americans a 25% pay cut and transferred all of that money to the upper 1%? Don’t do it right away. Do it slowly, over a few decades, by suppressing pay of most folks and increasing rewards for high wage jobs. Do you suppose all of those jobs created by the increased incomes to the 1% and the trickle down and the investment opportunities to create new businesses would help the economy overall? Or do you suppose that the lower wages for most people would prevent there from being a sufficient market to create as many new profitable businesses? Might you imagine that the rich would still do quite well as the economy of the rich thrives even though GDP growth is less? Because the buyer of that $300K yacht gives his money to a company where the CEO gets paid well and those “tons of jobs” of people who build and maintain the boats are low-paid. And that CEO buys luxuries that benefit the upper management of other companies and provides a pittance to the tons of workers in those other companies. And then there is lots of unspent income to pass on to the next generation.

You probably disagree with my above portrayal of the economy. I’m sure you and I see things differently. But can you at least acknowledge that there can exist SOME level of disparity where the increased income to the wealthy and decreased income to the majority is less productive for the overall economy?

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Steven H August 17, 2014 at 8:14 pm

“You can’t make everyone middle class. There will always be people on both sides of the bell curve.”

The point is not about the perpetual existence of poor,middle and upper classes. The point is how poor, and how rich and how much in the middle. Talking in generalities about how rich people can create some jobs and how individuals can always improve themselves by being better than the next guy completely avoids the substance of the conversation: Specifically what income curve is most efficient for the economy and most beneficial for society?

My assertion is that today’s income curve is sub-optimal for both the economy and for the majority of society. GDP growth is below what it could be, employment is below what it could be, the potential of our country is not being realized. The conversation here should be about how we can improve this little corner of time and space we live in, not some fatalism about the perpetual existence of rich and poor people.

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Allisonfaye August 18, 2014 at 8:17 am

I am not sure how you come up with $700k in after tax income from $1m, but I assure you it is much lower than that when you factor in Obamacare taxes and state taxes. (unless you are a small business owner and write off a lot of expenses)

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JTM August 18, 2014 at 8:35 am

Obamacare taxes only matter on investment income, which is for the most part taxed at 20% and no employment taxes, so, it actually makes it much more likely to stay under a 30% effective tax rate. For earned income, yes, it would be much harder to have that type of tax rate when all taxes are considered. This is why those in the 400k-1m range are hurt the most, much of their income is earned from a job, the higher earners generally have the bulk of their income from investments, not earned income and are protected from the rate increases.

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JB August 18, 2014 at 8:59 am

http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs

Why should my investment income have to help pay for ObamaCare? It is directly targeted at the rich and nobody else. It is an extra 3.8% tax because the rich have more investment income.

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JTM August 18, 2014 at 11:24 am

IDK, you tell me. I was only explaining it. Though the stories of people like Romney paying about the same percentage in taxes as the rest of us pay just in employment taxes likely has something to do with it.

I was only pointing out the fault in Allisonfaye’s logic. The obamacare tax on investment only has an effect on investment income, which is generally taxed at a much lower rate and one could end up with a total rate near 30% much easier than from earned income that has no obamacare tax attached. Her point is less valid because she included the obamacare statement. An investment tax rate of 23.8%(without employment taxes) is a lot less than an earned income tax rate of 39.6% (plus employment taxes). Not hard to figure out, right?

If we are going to have a discussion about taxes, we need to use real facts and scenarios, not just throwing out something that sounds good for whatever side you’re on. But many don’t understand taxes at all, not even our legislators, especially when it comes to marginal vs effective rates and the like.

Steven H August 17, 2014 at 6:09 pm

By the way, I found this interesting and relevant to these discussions. This is a counterpoint to all of the posters who think the unemployed are morally deficient, and just need to get a skill:

<>

Figure B shows the number of unemployed workers and the number of job openings by industry. This figure is extremely useful for diagnosing what’s behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.2 and 7.6 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (finance and insurance), there are still more than 20 percent more unemployed workers than job openings.

http://www.epi.org/publication/jobs-60-percent-job-seekers/

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Steven H August 17, 2014 at 6:11 pm

My headline disappeared for above article:

“Today’s weak labor market is not because workers don’t have the right skills”

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Stevendad August 17, 2014 at 8:29 pm

NJ. OK, lots of variables. I pay self employment. I get a “break” at $120k but also benefits capped. I make up for the rest in 401k. I’ll venture that there aren’t 100 people who are in lower 60% that pay 53%. Clearly, I pay double in taxes what you make. Just lucky, I guess. The doctorate and post doc and 60 hour weeks have no relationship.

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Stevendad August 18, 2014 at 9:37 am

For all who wish to redistribute income. Please find the redistribution clause in the US Constitution.

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Man-of-Reason August 18, 2014 at 11:40 am

Gosh, I thought that the framers of the constitution always had the intention to redistribute wealth. They were men of reason after all, unlike the plutocrats of today wh self serving lay “invest” in politics and politicians. Here’s what they said:

“Many of the opposition [to the new Federal Constitution] wish to take from Congress the power of internal taxation. Calculation has convinced me that this would be very mischievous.” –ThomasJefferson to William Carmichael, 1788.

“Taxes should be proportioned to what may be annually spared by the individual.” –Thomas Jefferson to James Madison, 1784.

“Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.” –Thomas Jefferson to James Madison, 1785.

Tariffs (taxes)

“The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied… Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.” –Thomas Jefferson to Thaddeus Kosciusko, 1811.

Welfare

“The poor who have neither property, friends, nor strength to labor, are boarded in the houses of good farmers, to whom a stipulated sum is annually paid. To those who are able to help themselves a little, or have friends from whom they derive some succor, inadequate however to their full maintenance, supplementary aids are given which enable them to live comfortably in their own houses, or in the houses of their friends. –Thomas Jefferson: Notes on Virginia, 1782.

But, quick, if you can rewrite history, maybe no one will notice.

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JB August 18, 2014 at 11:15 am

The bailouts started under Bush. Get your propaganda correct.

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Stevendad August 18, 2014 at 12:22 pm

MOR:None of that is in the Constitution. Clearly should be a function of the states by that document. Income tax not started until about 130 years later. It was not originally progressive, but had very high exclusions. Then the Roosevelt years was raised and both parties took the money and ran and are still running. Lincoln said a man should build his own house and not tear down another’s. (paraphrased) Lots of great Americans can be quoted for it against. It still does not put that concept in the Constitution as a Federally appointed power. Again, you can continue to raise taxes that will not be enough as Congress will continue to increase spending. Must have restraint at some point. Or just get the Liberal Progressives together and with the great popularity of your ideas and change this to a Communist or Socialist state. Most people do not believe as you do. Just a very vocal minority who are disproportionately heard due to the press and academia.

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Steven H August 18, 2014 at 3:39 pm

Stevendad, I disagree that it is a vocal minority that wishes to keep the social programs that have been instituted in the last century. Quite the opposite. It is a very vocal minority who have been opposing them (upper 1% plus Tea Party). Support for SS, Medicare and Medicaid is very strong. Even the overly-maligned Obamacare gets majority support in polls that ask whether we should keep it and fix it, vs. scrap it.

There are Supreme Court decisions that you and I each disagree with, but we have to accept. I think the Citizens United decision was a travesty, and will likely be overturned in the next decade. The taxation/public welfare decisions are opposed by small government conservatives but they have been upheld for many decades and are unlikely to be reversed. Whether are not you judge them to be Constitutional becomes irrelevant, because the Supreme Court says they are, and the vast majority of the US population has become comfortable with the resulting society.

All of the quotes and points that MOR brought up are relevant because they defend the principles that were upheld in those later Supreme Court cases. It becomes difficult to say that the Constitution was never intended to support progressive taxation and public welfare programs when the authors of the document supported these ideas. Yes there were worries about big government, but also many worries about centralization of income and wealth. For instance, Jefferson (who was admittedly a small government guy) proclaimed that the rich are like animals eating the poor (paraphrasing) and that the farmer (common worker) should have his children educated at the expense of the rich with no cost to himself.

Just about 35 years ago, and for the previous 35 years, the upper 5% earned (received) about 22% of all income. Now that percentage goes to just the upper 1%, a 5x increase in centralization of income. This is dangerous, and is not what the founders intended with their Constitution. This disparity cannot be due just to some moral failing of most Americans or job skill mismatches or the sudden acquisition of intellectual superpowers by the elite 1%. It is a structural change to the economy due to the nation’s tax, trade, banking, business, monopoly and labor laws.

One last quote to alleviate your concerns about how the Constitution gets applied over time.

“Some men look at constitutions with sanctimonious reverence, and deem them like the ark of the covenant, too sacred to be touched. They ascribe to the men of the preceding age a wisdom more than human, and suppose what they did to be beyond amendment…But I know also, that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times.” – Thomas Jefferson

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Man-of-Reason August 18, 2014 at 4:20 pm

I’m sorry SD, I don’t ever recall the income tax not being progressive. Lincoln’s income tax to fund the Civil War taxed only the wealthy, and so did the first income tax after the constitutional amendment in 1913. After that, it achieved “another method of silently lessoning the inequality of property (income & net worth) by exempting all below a certain point, and taxing the higher portions of property in geometrical progression as they rise”, just as Jefferson advocated.

We know that income taxes are constitutional, and the Supreme Court has ruled against every challenge of those who believe otherwise, which is it’s constitutional mandate. The constitution also states that the government is to “provide for the general welfare” of Americans, which is very broad and can include those areas that many on the extreme right call “socialist”.

¾ of the states with the consent of their populations ratified the constitutional amendment creating the federal income tax. I still believe it’s necessary just as Jefferson did, and I don’t believe a majority of Americans believe otherwise as you’d like to believe.

So far as “states rights”, the South lost that argument in 1865.

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JB August 18, 2014 at 12:28 pm

Let’s say you are going to start a new country. How did the country pay for stuff before the 1900′s? Taxing stuff made vs income taxes? Taxing beer and alcohol increases the price thus only those that buy the product pay the taxes. Gas taxes the same way. Would you want a 100% usage tax? Fireman show up to your house to put out a fire and you get a bill the next week? How would all those firemen get paid? Same with the Police. Do you just tax everyone a few hundred bucks a year? If you enroll your kid in school, should you just fork over a check for a few thousand dollars?

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Steven H August 18, 2014 at 8:10 pm

Fail to see your point. Are you advocating for tax by sales and usage only? And the 100% usage tax discussion makes no sense.

Income tax could be explained as a sort of usage tax. If you make a million dollars using the economic, social, and physical infrastructures of the country, you have clearly “used” those assets more than someone who earned $100K, so you get a correspondingly greater usage tax. The progressive rate is simply to counteract the destabilizing centralization of income and wealth that is inherent in capitalism. Or to keep the rich from eating the poor, as Jefferson might put it.

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JB August 19, 2014 at 6:38 am

If a company can’t find qualified workers the salary goes up to attract viable candidates. WalMart requires no skills to work a cash register. A machinist has skills and if nobody is applying for a job, the salary must be increased. Nobody is a slave in this day and age. We don’t have a feudal system of kings and peasants. Anyone has the ability to increase their education and get a better job. Motivation is holding them back.

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Steven H August 19, 2014 at 6:22 pm

What you described is indeed how the markets are supposed to work. Two problems:

1) There is some indication that the alleged “skills gap” often mentioned is actually a reluctance of business to apply the principles you just stated – they don’;t want to offer the wages that will actually attract the existing talent. That talent is going elsewhere for better wage, or is holding out (a negotiation tactic) for the market wage. (See the articles I posted in response to Peter above – search page for “online.wsj”)

2) Motivation is not the issue when there are 2 to 3 times as many people searching for jobs in each industry – skilled AND unskilled – as there are jobs available.

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Peter N August 19, 2014 at 7:05 pm

“1) There is some indication that the alleged “skills gap” often mentioned is actually a reluctance of business to apply the principles you just stated – they don’;t want to offer the wages that will actually attract the existing talent. ”
This is absurd. If a company can make a good ROI on a person’s skills they will hire him or her.

“2) Motivation is not the issue when there are 2 to 3 times as many people searching for jobs in each industry – skilled AND unskilled – as there are jobs available”
Yet, the jobs go unfilled. The reason why is that the employers have doubts about being able to make money off the employee’s efforts. It is that simple. Some people are simply unemployable.

Peter N August 19, 2014 at 2:07 pm

“Income tax could be explained as a sort of usage tax.”
Your thinking is all backwards.
You get paid to do or create something. This doesn’t necessarily mean you are using anything. People should be taxed on using resources. If A uses twice the resources as B to produce the same thing then A should pay more. You should penalize B the same as A.
Put it another way. If A and B use the same resources but A is much more productive, why do you want to tax him more? This discourages being more efficient with resources.

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Steven H August 19, 2014 at 6:53 pm

The nations’ infrastructure IS a resource. The roads carry your material in and goods out. The internet allows marketing and information exchange. The stability of the country is insured internally by sound courts, laws, and police and externally by military. Globalization is made possible by worldwide communication (internet and communication infrastructure) but is also a trade policy established by government (misguided in its implementation IMHO, but still a policy that benefits businesses). Business would be impossible without this infrastructure. Those who benefit the most, economically, from its existence should pay for most of it.

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JB August 19, 2014 at 7:01 pm

So if Mr. Vanderbilt took his railroad money and built the railroads without the gov’t, the gov’t still benefits in the taxes created by the Railroads making money. Roads are paid for by gas taxes so the gov’t isnt funding road construction with money out of thin air. There is a budget for roads and bridges, which is part of the Ways and Means committee. They don’t have unlimited funds.

Stevendad August 18, 2014 at 12:33 pm

JB. Lets just make our rich neighbor pay for all that stuff. I am too victimized to pay for any thing myself.

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Steven H August 18, 2014 at 3:43 pm

Cynicism does not suit you, Stevendad. You are too smart for such small thoughts.

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Stevendad August 18, 2014 at 5:05 pm

MOR and Steven H.
I get aggravated no one else wants sacrifice. The Supreme Court has indeed usurped the Constitution. I guess the states will pay for the signs ofn150 years ago forever.
I still havent seen:
Any plans for sacrifice by ANYONE but the 2%.
Why citizens of Alaska and Florida, Nebraska and New York have the same needs.

BTW I maintain Soc Sec is a forced savings plan, not a wealth transfer. So far. The rich are capped on FICA, but also taxed on benefits. Medicare is just a huge group insurance plan. Of course, the rich pay disproportionately. They pay taxes all the way up on income, but receive the same or less benefits.

Of course there are inly two results I see: The liberals are as without movement as are the conservatives. Thus:1) we will have revolution with the heads of the rich on pikes. It seems this may satisfy some of the left. I am sure you will find a way to justify stealing and slaughter. Remember the French have never regained the power they lost in their revolution . Or 2) there will be stagflation and the poor, who own no real assets, will be crushed. Maybe both.

You have moved zero and offered up nothing in the way of sacrifice in 6 monhts. So you truly are greedy, trying to take from those who have lawfully earned.
I’m out.

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Steven H August 18, 2014 at 7:59 pm

Sorry to lose your voice Stevendad. Maybe you will see this and maybe not. But there are compromises that have been offered. You have offered some ideas which are good. But you are being as stubborn as I am. You oppose every mention of more taxes on the rich, when those taxes probably won’t even fall on your plate, but on new marginal rates at the 1 mill, 10 mill and maybe 100 mill levels. You oppose higher minimum wage (apparently on philosophical grounds) and contrive a scheme much more complicated involving fines for employers that would create MORE government involvement and that would ultimately not work. Peter has compromised on several points, admitting that tax rates need to be higher as long as social programs are also brought in line, and MOR and JTM have done a good job at negotiating the middle ground. I have tried to get away from language I initially used about rich not earning their money. It is earned, in that is received legally according to law and contract. Peter and I both have said it is impossible to determine exactly what is deserved (the alternate meaning of earn) and that markets determine that data point. Where Peter and I differ (I think) is that I believe the rules of the market are arbitrary and determined by government policy, and that they need to be changed back to something like they had been in more stable economies, and then the market formulas would select different salaries at all levels.

I think once the economy picks up some speed, taxes may be increased on everyone to finish closing the gap. But there is no reason to demand a lot of sacrifice of the lower 90% because they are already earning (receiving) about 25% less than history suggests that they earn (deserve). Whether or not you want to admit it, you are very fortunate. As are most of the regulars on this forum, who seem to be in the upper 10% if not the 1%, o.5%, or 0.1%. I doubt anyone here is in the Forbes 400, but we are all doing well. Most of our problems are “First World Problems”.
https://www.youtube.com/watch?v=bwvlbJ0h35A

Clearly there is a debt gap. Clearly we cannot politically close that gap only with taxes, or only with program cuts. Economy growth is the best way out, but we need to apply both of the other techniques as well. Even though we just raised taxes. We also just had sequestration. Ideas discussed here about improved training, more free or sponsored schooling for the poor and unskilled, are all steps in the right direction. On my end, I need to not demonize the rich. On the other end, there is still (by some) too much demonization of the poor and unemployed. Many HAVE skills, HAVE intelligence, HAVE motivation. If there are deficiencies in the labor force, there are even more in the economic structure itself.

We need cooperation of businesses and colleges, more enforcement of monopoly laws, entrepreneurship clubs in high schools, simpler rules and processes for starting small businesses, higher minimum wages, more rigorous welfare to work processes, lower corporate tax rates and fewer corporate tax loopholes. We need a lot of things. Sacrifices by everybody. But you also have to recognize the significant sacrifices in lost wages, lost jobs, lost mortgages, that have already been forced on most of the population. And it really isn’t just their own fault.

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JB August 19, 2014 at 6:33 am

What issues will more money given to the gov’t solve? They need less money so they can make better decisions on the money they have. Starve the beast. Most people working for the govt can find jobs in the private sector is necessary.

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Peter August 19, 2014 at 7:27 am

Interesting point. I do reject the idea that the government getting more money solves anything. No matter how much they have, they will always spend more $1.25 for every $1.00 for political gain.

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Steven H August 19, 2014 at 6:14 pm

“I do reject the idea that the government getting more money solves anything. No matter how much they have, they will always spend more $1.25 for every $1.00 for political gain.”

Peter, you are usually quite sensible, but your statement above is absurd. Think about it. Most on this thread (including you, if I recall correctly) have already agreed that it is politically remote if not impossible to bridge the debt gap with only cuts. If that is true, then how do you bridge the debt gap without also increasing revenue?

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Peter N August 19, 2014 at 7:16 pm

I could bridge the debt gap with only cuts. It would be simple. I would simply take a look at what the gov spends money on that isn’t mentioned in the Constitution. Those things that aren’t deemed necessary in the Constitution but are truly necessary I would force the states to ratify an amendment. If the states didn’t think what I thought was important then so be it but I would do it according to the Constitution and the procedures specified within.

This would allow states like Oregon and Massachusetts experiment with their own health care system. This is the way it should be.

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Steven H August 19, 2014 at 6:11 pm

“What issues will more money given to the gov’t solve? They need less money so they can make better decisions on the money they have. Starve the beast.”

JB, the attempts to starve the beast are what drove debt so high. If Reagan and the Bush’s could not starve the beast, with their tax cuts, what will adding more debt with even more revenue cuts solve. Nothing.

We CAN bridge the debt gap, and it can’t happen by starving the beast. You have to add revenue (economic growth plus some reasonable tax increases) and constrain spending.

Philosophical policy like starving the beast, that ignores the arithmetic of economics, is what got us into this mess.

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JB August 19, 2014 at 6:58 pm

No, the war in Iraq drove the debt in the early 2000′s. We had a surplus in the 90′s. Now, I don’t think the gov’t should be making a profit. They can adjust taxes if revenues far exceed spending, but we did spend less at one point in relation to the revenue coming in. That probably drove the Bush tax cuts, but it was a trillion dollars in tax cuts. The few billions here and there is an aircraft carrier or nuclear submarine.

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Peter August 19, 2014 at 7:26 am

Steven H – in case you missed my response above to seeing your perspective:

I have never disparaged the group you refer to. I have many friends and family members as a part of this group as well – so I know better than to paint a whole group with one brush. If you read back, you’ll see that it is you that is doing that, not me. You speak for how “the people” feel – I am only speaking for myself and other people I have personal relationships with. When I talk about “lazy people”, I’m just referring to those that I have seen with my own eyes. Neither of us have any idea what percentage of the struggling fall in this category. I have seen many hard working people struggling as well. It’s not black and white.

That said, I am the last thing from selfish financially. I am not part of a ‘culture of hoarding what I have earned’ as you describe. I gainfully employ many people and am very generous with them. I give heartily to charity. I tip very, very generously.

My #1 biggest expense is Federal taxes. And it is the most wasted portion of my budget thanks to the incompetence of the people making the decisions. I just don’t want more of my money to go down this rabbit hole.

I understand “their” perspective, but I don’t understand yours. I don’t see how someone who is struggling can point at others as the reason for their plight. I empathize with anyone who has been dealt a bad hand or who is struggling – but I never EVER will understand any perspective that blames others and makes oneself a victim. It is just not the way I think and find that sort of victimization hard to sympathize with.

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Steven H August 19, 2014 at 7:51 pm

This is a repeat because my reply ended up in the wrong spot.

Sorry Peter, but it seems egos get bruised too easily here. Yours, mine, everybody’s. We have to be able to state some generalizations in these brief posting spaces without having to insert an exception in each post for each individual poster present. When you say “There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.” it does SEEM as if you are painting most of a class of people with one brush, but I know you are making a generalization, and not applying it to me or every single person. When I say “culture of having more than anybody else and not wanting to give some back”, I think it is obvious that I am applying it to those who actually oppose paying back to society, which is not necessarily you or anyone else that the boot does not actually fit. It is a generalization that I think applies to many in the 1%. I realize the need to speak respectfully but geez!, can we not be so brittle?

End of rant.

Now, you do seem to be generous in your dealing with employee, and tipping generously is also a high indicator of respect for the labor of others. This is all good.

What I don’t understand is the disconnect between people saying that debt is way too high, but you can’t give government any more money because it does no good. It worked in the 90′s. Taxes went up (marginal rates more than today, but I realize other surcharges and exemption changes make an apples to apples comparison difficult) and Debt/GDP went down. In the 50′s, 60′s and 70′s, taxes were considerably higher than today or the 90′s and Debt/GDP went down. It is working now. Taxes went up and deficits have dramatically declined. Under Reagan and Bush and Bush2, taxes were lowered or kept low and debt went up. Way, way up. It seems to me that an unbiased observer would say that LOWERING taxes does no good and raising them to sustainable levels makes all the difference.

“I never EVER will understand any perspective that blames others and makes oneself a victim.”
So if your taxes are raised, you won’t blame others and make yourself out as a victim? Maybe you won’t but others here will. They already have been. I’m not trying to be snarky, but ALL of us complain if we think we are being taken advantage of. That’s not a characteristic limited by party or income. Half of the posts here (not necessarily yours) are complaints from the richest people in all creation acting like victims because “others” are trying to get some of THEIR money. That is exactly the same as blaming others and making yourself a victim. We’re just trying to pay the bills, for gosh sake.

I didn’t get on this blog to make people mad. I got on here to see what people thought about some data computations that I had seen and some that I originated myself based on economic data and spreadsheets of others. The facts that I thought (and still think) are significant that (a) our disparity curves are historically extreme and only matched by time periods of impending economic crashes, (b) the shift in income shares is roughly equivalent to a 25% pay cut for 90% of Americans and a 100% pay increase for the 1%, with smaller percentages among the lower tiers of that group, and percentages of 500% or more in the upper tiers (0.01% and above).

As a data analyst, I thought, and still think, this is hugely significant. But I expressed myself poorly when I got here, thinking that provocative language would get the point across. Instead it dulled and distracted from the message. That was my mistake.

So, setting aside the emotional response of thinking that I, or anyone else is blaming you or making themselves a victim, how would you feel as a worker at say the 75 percentile level (about $80K?), if you felt that your job was exactly what you wanted to do with your life and fit your skills and demeanor, but that your pay increases seldom got higher than inflation, and that you realized (or believed, anyway) that government controlled tax and business policies were largely responsible for keeping your pay 25% below what it might have been under previous policy, while managers and CEOs and financial gurus were reaping huge pay increases, not just from their already profitable professions, but from the shifts in policy that encourage and allow managers to suppress pay of subordinates while boosting their own.

I’m not making this up, or trying to dramatic or accusatory. This is how I think the economy has changed and I am not alone. And it really truly has nothing to do with blame and victimization. It has to do with honest assessment of changes in the economy, a detached view of human motivation, and observations that are completely consistent with the principles of self-interest. It is just data. But its direction still disturbs me.

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Peter N August 19, 2014 at 8:36 pm

It isn’t about egos. It is about your disrespect for the freedom of others and your willingness to tax(enslave) others even though you have no solution. This thread has been good for me as now I know there is no reasoning with the libtards.

“So if your taxes are raised, you won’t blame others and make yourself out as a victim?”
When you force one person to work for another that is slavery. I think the slave has a right to call himself a victim.

“I didn’t get on this blog to make people mad.”
Actually this has been quite enlightening. Now I know there is no need to negotiate or compromise with libtards. Regardless on how you may change your tune I know what you really feel and what you would do if given a chance.

“, but from the shifts in policy that encourage and allow managers to suppress pay of subordinates while boosting their own.”
What policy? Make stuff up why don’t ya.

“I’m not making this up, or trying to dramatic or accusatory. This is how I think the economy has changed and I am not alone.”
The economy has changed but those without skills have not. They have not adapted. If you subsidize poor you will only get more poor and make the problem worse. You think you are being a humanitarian but you and the libtard philosophy are condemning more to more of the same.

In the beginning there was the law of nature and in the end it will be the same. In between is just an aberration but it will end shortly.

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JB August 19, 2014 at 12:17 pm

Why are companies leaving California in droves? High taxes will make a prudent person move to lower tax states. Just like companies are merging with international companies with lower taxes. Why pay more than you have to when your services are getting worse and worse.

http://finance.yahoo.com/news/how-much–100-is-worth-in-your-state-152310027.html

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JB August 19, 2014 at 12:18 pm
Peter N August 19, 2014 at 2:15 pm

Good article. I wonder what Steven H’s solution to this would be. California is another Detroit on a much bigger scale. The politicians are going to run California into bankruptcy by failing to make the tough decisions to get the budget in order by cutting social programs. As it is the “cans” are leaving and the “cannots” will be left holding the bag just like in Detroit. The gov is not helping at all by allowing illegal immigration.

Japan will probably go down the toilet first. California will drag down the US with it soon afterwards.

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Allisonfaye August 19, 2014 at 2:57 pm

Maybe they can just increase taxes on high income earners again.

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Steven H August 19, 2014 at 7:58 pm

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