Economy

People love to talk about how the 91% tax bracket didn’t cause stress so we should do it now too. Well, it applied to, literally, only a handful of moguls and celebrities.

One stat that always intrigued me, no matter what tax rates are, taxes collected are always right around 18% of GDP. If rates are high, people defer income or shelter it. If rates are low, people pay them. It doesn’t really mater what you do to rates (unless we go crazy), its always the same. A great recent example is the corp tax cut, it didn’t result in a huge dip in collections. We did see companies (like Medtronic) stop acquiring foreign businesses and make Ireland their headquarters to avoid high US corp taxes.

Deuces wrote:

<div class=”d4p-bbt-quote-title”>Beast wrote:</div>
, Have any of us seen a huge change in you way of life no matter who running the big show?

Obama really screwed our healthcare. Big one for us as a family cost.

I can agree with that!

39degrees wrote:

<div class=”d4p-bbt-quote-title”>Jon Jordan wrote:</div>

<div class=”d4p-bbt-quote-title”>Bass Thumb wrote:</div>
Unless the government raises taxes on large corporations and ultra-wealthy individuals, I don’t see a way out of this mess.

But this has never worked in the past. How could it work now? This is the worse thing the government could do to stimulate an economy. Smart, well to do individuals and corporations will simply take their money elsewhere.

-J.

Never worked before? Are you sure about that? The highest tax bracket in 1960 was 91%. Did all the smart well to do individuals and corporations take their money elsewhere in 1960? Now the highest tax bracket is 37%. Take a look at the history of US debt since Reagan and supply side economics was put in place in the 1980’s. The debt has been rising rapidly since then. With the exception of the Clinton Gingrich budget.

um this has been studied greatly. Not ONE person paid 91% in taxes. the tax code was full of so many credits and loopholes they showed that the effective rate of taxes paid was LESS than it was today for people in that bracket. When the tax code was changed to what it is today and they rid the books of those loopholes the wealthy were actually upset!

Beast wrote:

<div class=”d4p-bbt-quote-title”>Mr.Beads wrote:</div>

<div class=”d4p-bbt-quote-title”>Beast wrote:</div>
, Have any of us seen a huge change in you way of life no matter who running the big show?

Obama really screwed our healthcare. Big one for us as a family cost.

I can agree with that!

X3.

Remember that a 91% tax rate applies to the $$ earned after you made more than the highest amount in the bracket below that. I. E. If you paid 88% from $!50K to $175K and made $200K then you were taxed @ 91% for the $25K from 175 to 200.

The_Bladepuller wrote:

Remember that a 91% tax rate applies to the $$ earned after you made more than the highest amount in the bracket below that. I. E. If you paid 88% from $!50K to $175K and made $200K then you were taxed @ 91% for the $25K from 175 to 200.

Absolutely – that is the progressive tax system. No one would pay 91% on all the money they made in 1960. However, 91% was the highest rax tax bracket in 1960 and the highest bracket now is 37%. Similarly no one would pay 37% on all the money made now. Further, the studies i have seen show the effective tax rate for the super wealthy now is lower than the effective tax rate for the same group in 1960. Not the reverse as stated in prior posts in this string.

Didn’t Warren Buffett make a big deal how his secretary paid more Fed Income tax than he did.
I dont know if it was % or actual sum.

Apple split 4/1. Pretty good split!

riverruns wrote:

Apple split 4/1. Pretty good split!

How a stock split is like breaking a $20 bill
Suppose you have a $20 bill and break it into four $5 bills: You don’t have more wealth, just more bills. The same is true of a stock split, Stock splits “are cosmetic,” “They don’t say anything about the fundamentals.”

Yes, new Buffett purchase price came to more than $397.8 million and adds to the 925,008,600 Bank of America common shares that Berkshire Hathaway owned as of March 31, 2020. Berkshire Hathaway stake was already at 10.66% at that time, and it was the largest single stake held, with Vanguard (7.27%), BlackRock (6.25%) and State Street (4.00%) as the next largest stakeholders.

Weren’t we told the best way to improve an economy was with unemployment checks?

The_Bladepuller wrote:

Didn’t Warren Buffett make a big deal how his secretary paid more Fed Income tax than he did.
I dont know if it was % or actual sum.

It was %.

In other news I went to buy a car yesterday and tried to pay with percents but surprisingly they wanted dollars. Turns out percents don’t mean jack squat when you want to actually pay for some thing. They all want dollars.

Snap wrote:

<div class=”d4p-bbt-quote-title”>The_Bladepuller wrote:</div>
Didn’t Warren Buffett make a big deal how his secretary paid more Fed Income tax than he did.
I dont know if it was % or actual sum.

It was %.

In other news I went to buy a car yesterday and tried to pay with percents but surprisingly they wanted dollars. Turns out percents don’t mean jack squat when you want to actually pay for some thing. They all want dollars.

God damn those dollars

I have used a lot of quarters at parking meters every month for over ten years. A couple of banks that I usually got rolls of quarters have stopped giving out rolled coins. At first they said just said they were out. The last time I asked they said they can’t give them out till the fed says they can. I thought that odd and disturbing, another push towards a trackable cashless society.

Coin shortage=true. Push towards cashless trackable society=false.
Coins are in short supply because cash transactions are down significantly. Places where cash is commonly used are shut down or doing business differently. Many retailers are doing dramatically more business online than in the past. Online shopping does not use cash. Restaurants are failing at an alarming rate. Those restaurants that are surviving are more reliant than ever on takeout orders, commonly placed online. The payment option is a card. Laundromats are closed, toll road use is down substantially, people are not taking change from fast food drive throughs, etc. A significant portion of the coins in circulation are sitting in Mason jars, pants pockets, bowls… There’s no conspiracy or dark motive, just a change in the way we do business.

I see it a bit differently, the sooner we get everyone back to work, the more revenue that will go into government coffers, taxing the ultra rich isn’t the answer, they are a necessary evil, they are more likely to create jobs, never seen a poor man hire anyone to work yet, there is a need to cut tax loopholes along with welfare scams. everyone is entitled to a hand up, it was never intended to be a way of life. In any case there is no such thing as a quick fix.

I have never understood that theory. If we taxed the ultra wealthy (latest proposal is over 10 million I think) would they stop creating jobs? Would they hide money overseas? (they already do). Bezos’ net worth increased by 13 billion dollars the other day. If he got to keep a little less of that would he stop trying to grow Amazon? Average ceo pay has grown by 940% since 1978 while regular workers have gone up by 12% on average. Something has to change because the current path of economics is unsustainable.
[/quote]
FTE, if you believe the average worker is making only 12% more now than 42 years ago, I can see why you have your belief system. The US Census Bureau lists 400% over that period.

shady5 wrote:

FTE, if you believe the average worker is making only 12% more now than 42 years ago, I can see why you have your belief system. The US Census Bureau lists 400% over that period.

It’s inflation adjusted obviously

Reef W wrote:

<div class=”d4p-bbt-quote-title”>shady5 wrote:</div>
FTE, if you believe the average worker is making only 12% more now than 42 years ago, I can see why you have your belief system. The US Census Bureau lists 400% over that period.

It’s inflation adjusted obviously

Yes, inflation! Kind of like mortgage rates of 3% today vs. 9% then. Now you go ‘armchair economist‘ and refer to the price of a general market basket of goods between those periods. And then I’ll ask how you like gas prices of course stating $1.90/ga in today’s dollars in 1978. And then you quote home prices, then I note how you have a new truck, 19’ boat, and 3500 sq ft. home when your parents were just trying to keep the patches in your brown cords in ’78.

shady5 wrote:

Yes, inflation!

So… You were basically agreeing with him? 395% inflation and you quote 400% without inflation.

shady5 wrote:

And then you quote home prices, then I note how you have a new truck, 19’ boat, and 3500 sq ft. home when your parents were just trying to keep the patches in your brown cords in ’78.

I’m not under any illusion that members of this forum are “average” economically. We’re all pretty well off to have those things.

Reef W wrote:

<div class=”d4p-bbt-quote-title”>shady5 wrote:</div>
Yes, inflation!

So… You were basically agreeing with him? 395% inflation and you quote 400% without inflation.

<div class=”d4p-bbt-quote-title”>shady5 wrote:</div>
And then you quote home prices, then I note how you have a new truck, 19’ boat, and 3500 sq ft. home when your parents were just trying to keep the patches in your brown cords in ’78.

I’m not under any illusion that members of this forum are “average” economically. We’re all pretty well off to have those things.

Inflation, or changes in CPI, is a suspect measure to say the least. If any of us have only 12% more purchasing power than 42 years ago, you’re doing something wrong. If you have your kids ask their friends how many airplanes they’ve been on, states/countries they’ve vacationed in, what their 529’s look like, etc., I think you’ll get the point. When is the last time you drove by a high school parking lot (when in session)? Try not to mistake it for a new car dealership. The argument is the average person is where they were financially 42 years ago and I don’t see that.

Jon Jordan wrote:

<div class=”d4p-bbt-quote-title”>Bass Thumb wrote:</div>
Unless the government raises taxes on large corporations and ultra-wealthy individuals, I don’t see a way out of this mess.

But this has never worked in the past. How could it work now? This is the worse thing the government could do to stimulate an economy. Smart, well to do individuals and corporations will simply take their money elsewhere.

-J.

All you need to do is look at corporate tax rates during and after WW2 .Yes it did work .

Shady, the family that has a boat and goes on vacation is not the “average” family. It might be the average suburban family in the twin cities I guess. In the 60s you could support a family of 3 on minimum wage. Now you wouldn’t be able to support yourself. This country has 40 million working poor. Wealth gap is unsustainable, all I am saying.

I doubt what worked in WW II will work today. ever notice that most of our elected officials leave office multi millionaires from a job that doesn’t pay that kind of salary? do you honestly believe that they will vote on anything that would make them give up more of their slice of the pie? but many feel they we should tax the big corporations that are putting the most people to work, it makes no sense.

Which is why they should be incentivized to either pay their employees better, give them better healthcare, or face the tax penalty

I was gonna post again but……………naw.

Carry on.

Fish To Escape wrote:

Which is why they should be incentivized to either pay their employees better, give them better healthcare, or face the tax penalty

What!? You mean us average folk get taxed even more to help pay for all the government programs to help the poor bc they don’t get paid enough by big Corp to make a decent living? And big Corp funnels money to the top and out of local economies?! Liar! Shame upon you!

Seriously tho, any more economy opinions?

I picked up some tp at the store today and I am happy for that.
The rest is over my head but I got my bottom covered. 8)
When someone figures this stuff out maybe do some good with it instead of sitting on it.

Fish To Escape wrote:

Shady, the family that has a boat and goes on vacation is not the “average” family. It might be the average suburban family in the twin cities I guess. In the 60s you could support a family of 3 on minimum wage. Now you wouldn’t be able to support yourself. This country has 40 million working poor. Wealth gap is unsustainable, all I am saying.

Very true. The wealth gap is ever-widening too.

The working poor issue is evidenced by Walmart being the number one employer in the United States by almost a 3:1 margin from number two, Amazon. These are largely low-paying jobs. A huge percentage of Walmart employees are dependent on federal taxpayer-funded subsidies, food stamps, Medicaid, etc. costing us billions of dollars a year. People are quick to use falling unemployment rates (pre-Covid) to prove points, but how many of these ‘job creators’ are creating jobs that provide workers with a livable wage? Not many.

Bass Thumb wrote:

<div class=”d4p-bbt-quote-title”>Fish To Escape wrote:</div>
Shady, the family that has a boat and goes on vacation is not the “average” family. It might be the average suburban family in the twin cities I guess. In the 60s you could support a family of 3 on minimum wage. Now you wouldn’t be able to support yourself. This country has 40 million working poor. Wealth gap is unsustainable, all I am saying.

Very true. The wealth gap is ever-widening too.

The working poor issue is evidenced by Walmart being the number one employer in the United States by almost a 3:1 margin from number two, Amazon. These are largely low-paying jobs. A huge percentage of Walmart employees are dependent on federal taxpayer-funded subsidies, food stamps, Medicaid, etc. costing us billions of dollars a year. People are quick to use falling unemployment rates (pre-Covid) to prove points, but how many of these ‘job creators’ are creating jobs that prove workers with a livable wage? Not many.

The BLS shows the median salary (less skewed by excessively high salaries than the mean) of the 147 million Americans employed in 2019 as $19/hr.(~$40k per year). Not exactly living high, but definitely livable, especially with two wage earners in a typical household. Obviously there are many jobs in the aforementioned fields that pay less, but it’s going to be difficult to increase those wages significantly as they’re largely “unskilled” roles. Is anyone going to pay $25 for a Big Mac meal to enable higher wages, especially when the majority of fast food patrons are the low income folks?

That said (above), I do think the Walton’s could share the love (i.e. their billions $) a little more with their employees….