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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Or a simple way to fix it. (832 comments)

As I stated in my other post, I am not proposing the fair tax, it is most aggressive and does exactly what you say it does. I am proposing a tax system that shifts the burden upwards so that the more income one makes, the more taxes one pays. Fair tax usually is a consumption tax, which is a glorified sales tax. Almost all fair tax proposals includes some kind of payment to the poor to help them out with it. However, if it were truly fair, there wouldn't be a need for this payment.

In the 1960s, when the US had some of its greatest increases in GDP, the tax rate was pretty high. What drove the economy was the purchasing power of the middle class. However, since the 1980s, tax law has shifted more and more of the tax burden onto the middle class, pushing many downward and for those who remain, they have less spending ability because of the higher tax burden. As such, the economy has faltered and for the most part has been sustained by consumer debt to make up for the reduced purchasing power. However, debt financing can only go so far before it catches up to you, like it has now, which is why we have companies reporting record profits, paying record dividends and high unemployment.

The mantra "Don't tax the job creators" is a fallacy. Taxing the wealthy doesn't hurt jobs, if the tax burden is lifted from the middle class. Demand for goods and services creates jobs and most of that demand has come historically from the middle class. Policy in the US should be to restore the middle class, at least if we want a strong economy. No "job creator" is going to higher people if there isn't a demand for the goods and services that the employees provide. On the other hand, they will regardless of the tax burden if there is somebody to consume those goods and services. That's the whole idea behind supply and demand.

The "fair tax" is anything but fair. We need to return to a system that taxes people based on their ability to support the needs of the society they are in. That is the system that built America and made it strong.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Or a simple way to fix it. (832 comments)

How is that increasing the burden on the middle class? It actually balances the burden between middle class and wealthy so that Warren Buffet's secretary no longer pays more taxes than he does.

It's increasing the burden on the middle class because it's decreasing the burden on the poor and on the wealthy. Tax revenues aren't going to appear out of thin air, they're going to have to come from the middle class. The Fair Tax would effectively eliminate any taxes paid by Mr. Buffet, as he only actually spends a tiny, negligible proportion of his income, and that is the only portion of his income that would be taxable under a consumption tax. Proportionally, his secretary spends a much greater share of her income (nearly all of it), so unless she's hovering very near the poverty line, a larger proportion of her income would be going towards taxes.

It is not decreasing the burden on the middle and upper classes. If anything, the lower to middle middle class will see a slight decrease. The upper middle class will be about the same as they are now. The upper class, however, will see an increase because the many loopholes and deductions that allow for them to have a lower effective tax rate than the middle class would be eliminated.

Let's say Buffet's secretary makes $60,000/yr and is in a family of 4. Deduct the $36,000 from that for the poverty level plus 25% portion and she pays tax on $24,000. She is being taxed on 40% of her income. Say one of his managers makes $200,000 with a family of 4, after removing the poverty level, she is taxed on $164,000 on 82% of her income. Buffet, making millions would be taxed on virtually all of his income. But the reality is that everybody gets the same poverty level allowance, so everybody gets the same break.

That is also the main reason such a proposal is unlikely to pass -- the upper class is the ones that politicians cater to and it is unlikely they will go for a plan that increases their taxes, no matter how fair it might be. (It also explains the overwhelming support for the "fair" tax by the upper class, because it actually reduces their tax burden further).

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Or a simple way to fix it. (832 comments)

I'm interested in protecting the middle class. The poor don't need to be taxed and by removing them reduces the government subsidy required to help sustain them. The wealthy, because of the way are tax code is written often have a very low effective tax rate, so currently, it is the middle class with the biggest tax burden. Going to a system, like I (and many others) proposed, balances out the tax burden between the wealthy and the middle class so they both have the same tax burden.

You don't need a sliding scale if the tax rate is applied to all income instead of just wages. A sliding scale is the sign of a system that has built in inequities. However, with the current system, that favors the accumulation of wealth, if I am paid wages of $100,000, I am taxed higher than somebody who has the brunt of their income in the form of realized gains. Base taxes on all wealth and it doesn't matter how the money is made. That is part of the design behind consumption taxes except that you can shelter consumption taxes by investing it instead of spending it. Unfortunately, the middle class can't afford to set aside that much of their income to avoid paying taxes on it.

A flat tax on all income (no exemptions or deductions), whether you include a poverty break or not, is the fairest system. Everybody pays the same percentage of what they have.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Or a simple way to fix it. (832 comments)

That does sound like a great way of shifting a large portion of the tax burden to the middle class. I'm not sure why you think doing so would "fix" anything, unless you feel that the existence of a middle class is problematic.

But it doesn't because the poverty level amount is first deducted from everybody's income. Then anything above that amount is taxed at the same percentage. No deductions, no exemptions,etc. If you make $10,000 above the poverty level amount, you are tax x% on that 10,000. If you make $1M over that poverty amount, you are taxed x% on that $1M. The middle class person making just $10,000 over the amount pays 1% of the amount the person making $1M over does.

How is that increasing the burden on the middle class? It actually balances the burden between middle class and wealthy so that Warren Buffet's secretary no longer pays more taxes than he does.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

Consumption taxes are a form of sales tax and are most regressive. Income taxes are the least

Payroll taxes, such as FICA, are far more regressive than a typical sales tax, with the normal exemptions for necessities. Bill Gates is not talking about replacing income taxes with consumption taxes. He is talking about replacing payroll taxes.

But regression/progression is only one factor in taxation. Another important factor is what behavior it drives. Consumption taxes drive less consumption and more saving. Payroll taxes drive lower workforce participation and less job creation.

Payroll taxes, like FICA are regressive only because their is a cap above which they aren't withheld. Lift the cap and they are no longer regressive. Problem solved. In addition, Social Security would be solvent. If they had indexed the cap back in the 1970s as was proposed, the first $275,000 of wages would be subject to it.

As for the behavior, you are correct that consumption taxes lower consumption which lowers demand for goods and services which then lowers wages and the number of jobs to produce those goods and services. Hardly seems desirable. As for payroll taxes causing lower workforce participation and less job creation, that is false. Do you really believe that companies base their hiring off of payroll taxes? Companies base their hiring decisions from the goods and services the public demand. The employee's share of payroll taxes comes from the employee, themself. The employer's share, is fica/medicare and is 7.65%, it's a cost of labor. Lowering it won't create more hiring, raising it will cause a decrease of jobs in the shortfall but as middle class workers have more purchasing power, so they demand more goods and services, hiring increases to supply those goods and services.

Jobs are a result of demand for goods and services. The biggest driver of that demand, outside of military spending, is the middle class. It is a falacy to think that business owners and corporations are job creators. They are not. They simply fulfill the demand for the goods and services by hiring. GM isn't going to hire workers if there is nobody to purchase the vehicles those workers would produce.

Consumption taxes are just another form of sales tax, with the difference being when the tax is paid. As such, since the poor will use all of their income for consumption whereas the wealthy only a fraction of it, it is extremely regressive. That's why most schemes to implement it include various hacks to give money back to the poor. The result is that the middle class end up paying the brunt of their wages in a consumption tax while the wealthy still only pay a fraction. Taxing all of income, with no deductions, would be the fairest system. If you receive money (or the equivalent benefit of money), it is taxed.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Who consumes more? (832 comments)

A tax on consumption hits those hardest who consume the most: the middle and lower classes.

Why do you think the middle and lower classes consume the most? I think observation and evidence suggest that people with more money, tend to consume more. (And it's a lot more, so not-close that I don't understand why there's any disagreement on this point.)

Perhaps I'm missing something. What is it?

It is true that somebody making $250,000/yr will probably consume more than a person making $25,000/yr. The problem is that there are a lot more people making $25,000/yr than $250,000/yr. The average per capita income in the US is around $42,000 as of 2012. So, yes, Bill Gates consumes more than most Americans. The problem is the cumulative spending of the 99% who aren't at his level, far outweigh the 1% who are.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

Wealth accumulation (by and large) is not the big issue with income inequality. The bigger issues are the access to better education, better security, better health care, etc that wealth provides is as it creates a negative feedback loop.

Economies are driven by the purchasing power of the middle class. Wealth accumulation leads to a decreasing middle class and an increasing lower class. Therefore, the bigger issues you mention are a direct result of wealth accumulation.

If, instead of accumulating wealth, it was spent, then the goods and services provided would create more jobs. The demand to fill these jobs, will increase the wages paid to get good workers. The increased pay the workers receive will stimulate even more demand for goods and services.

Wealth accumulation is not the solution. It is the cause of the problem.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

Never mind this being the stupidest idea on earth, we already have a wealth tax, and it has a name: inflation

How does inflation fund government services to the general populace? Genuinely curious. I like taxes, I get a benefit from them. I don't see much benefit from inflation (that I am aware of but I am ignorant of much macroeconomics).

Funding government services and managing inequality are separate problems. That doesn't mean that you can't address both with a single solution, but it's a good idea to keep in mind that they are separate so you don't insist on sub-optimal solutions merely because they target both problems if better solutions address the problems separately.

They are separate, but closely related. If there was a more equitable system in the US, then the government wouldn't need to fund social programs like they do now. Most of the increases in social programs over the past 25 years are because of the inequity that is in place.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Where will they go? (832 comments)

Whereas on a tax on capital, on wealth, does precisely that: it targets wealth inequality directly, reducing the top heaviness of the system.

Never mind this being the stupidest idea on earth, we already have a wealth tax, and it has a name: inflation.

(Hint: enacting a wealth tax will result in those that have money and mobility immediately moving to another nation that does not have a wealth tax.)

Pray, tell, what country will the wealthy go to? For the wealthy, the US has a pretty low effective tax rate. That's probably one of the reasons that the wealthy from other countries try and come to the US. If you are wealthy, you can't beat the low effective tax rate, the health care system and the other perks that come your way in the US.

So again, what country do you think the wealthy will flee to and why aren't they doing so now, if things are so bad?

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

A tax on consumption hits those hardest who consume the most: the middle and lower classes.

Real sales/VAT/consumption taxes are almost never implemented with a flat rate. Necessities are usually exempted, which disproportionately benefits lower incomes. Many jurisdictions also implement a personal or household threshold, so you get a flat refund, which makes a bigger proportionate difference to lower income households.

Consumption taxes are not perfect, but they are both more progressive and have less harmful consequences than the tax system we have now. Taxing payroll is very regressive, and discourages work and job creation. It is about the dumbest possible thing to tax. Bill Gates is right. Replacing payroll taxes with consumption taxes would reduce inequality, encourage people to work be more productive, encourage people to invest in America, and reinvigorate our economy.

Consumption taxes are a form of sales tax and are most regressive. Income taxes are the least, if they don't have all the loopholes like the US tax code does. Wasn't it Warren Buffet who complained because the tax system allowed him to pay less taxes than his secretary. The real solution is to fix the income tax system, so that those who have more are expected to fund the society more, versus switch to a more regressive system that says that those who have less fund the society more.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

Flat tax is usually a way to make the middle classes bear the main burden of tax. The poor get exempt, the rich get ways to avoid it and we get to pay for the shit.

It's already bad enough, there's no need to make it even worse.

By definition, if there are ways for the rich to avoid the tax, say through deductions, etc., then it isn't truly a flat tax.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Re:Let me get this right (832 comments)

I'd go for that, and it would be somewhat "progressive" too...in that rich people tend to buy MUCH more expensive items, and more of them.

Untrue.

Taxes on consumption are regressive, not progressive -- the "poor" spend a greater part of their income than the rich.

Moving to taxes on consumption would just increase wealth inequality.

Exactly! While not an actual sales tax, fair tax/consumption tax functions like one and is extremely regressive.

4 days ago
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Bill Gates: Piketty's Attack on Income Inequality Is Right

Dcnjoe60 Or a simple way to fix it. (832 comments)

Why not change the income to be on household income and then deduct from that income whatever the poverty rate is for that size family times some percentage, say 25%. That way the poor and those upto 25% above the poverty level aren't taxed at all. Then everything above that is taxed at 20% with no deductions, etc.

If the poverty level for your size household (say parents plus two kids) is $22,000, then the first $27,500 you earn is tax free, everything about that is taxed at 20% If the family in question has family income of $40,000, they would pay $2,500 in taxes (40,000 less 27,500 at 20%). If the family in question had family income of $100,000, then they would pay $14,500 in taxes.

I'm just throwing out those percentages, somebody would need to figure the proper balance between the poverty rate percentage and the tax rate, but basically such a proposal is a flat tax for those above some point. Basically, nobody is taxed on the minimum amount to live but everything else (wages, interest and dividends, capital gains, etc.) is taxed at the same rate.

4 days ago
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The Cult of Elon Musk Shines With Steve Jobs' Aura

Dcnjoe60 Re:Really? (181 comments)

I don't disagree with your definition. However, with the Tesla, what is he innovating? There have been all electric vehicles prior to his. The technology he is using isn't being used differently than in those other vehicles. Yes, he is looking at building his own infrastructure, but that has been done before, too. That's not to dismiss what he is doing by any means.

I also agree that the hyperloop is invention, not innovation. While it appears similar to a train or monorail, it really isn't. I would also agree that Arthur C. Clarke was a visionary but only because of his ability to invent and/or innovate, not because of his ideas.

While being a visionary does include conceiving the possibilities, it is more than that. Jules Vernes is a visionary in that limited sense, but Musk is more than that. A real visionary is more than a dreamer but one whose dreams can change society. Take Japan and electronic devices. Many of those circuits were invented in the US by US engineers. Many Japanese companies were innovative in their production techniques to bring the cost down through mass production. However, only a handful of companies, not just Japanese were visionary on how those cheap circuits could transform society.

Take the iPhone - prior to Jobs, there were mobile phones and there were data organizers and even phones that let you put your calendar and get your email and the like. The reason the iPhone was so successful as compared with other smart phone type devices was not the innovations that Jobs made but the vision he had with what could be and then choosing the various innovations to make that vision a reality.

Somebody at Xerox was inventive and/or innovative in coming up with the mouse and GUI, but they didn't have the vision to see where Apple and Microsoft would take it.

So yes, Musk is unique in that he is both visionary and innovator/inventor, but it is the visionary part that makes him notable.

about a week ago
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Statisticians Uncover What Makes For a Stable Marriage

Dcnjoe60 Re:Rude relatives (445 comments)

Have you ever told them how these questions make you feel?

When the behavior got out of hand, yes I did. For the most part they respected it though I doubt their opinions actually changed.

Not to be a therapist, but it's not about changing their opinions, but getting them to quit trying to change yours. It's not that you are right and they are wrong or vice-verse, but instead they respect your views and you respect theirs. It's not about winning, but instead understanding.

about a week ago
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The Correct Response To Photo Hack Victim-Blamers

Dcnjoe60 Re:How are they not a victim? (622 comments)

"If your local bank gets robbed and you can't get accessed to your funds for a week, aren't you still a victim?" - If your local bank gets robbed there is Federal Deposit insurance that protects you in the event of a loss. As long as you have less than $250,000 in each individual account you are protected against loss. These are two entirely different issues.

"Or are you proposing that people don't put money in banks?" - No. I am proposing that people take reasonable precautions. Putting your nude photos on a phone is akin to having a safely deposit box and leaving it unlocked.

"Like a bank, these online storage services have a fiduciary responsibility to their customers" - Online storage services do NOT have a fiduciary responsibility to their customers. Why? Because those customers are not paying for the service. At least those that are using the free versions of Dropbox, etc. Now, if they are paying for the storage then you would have a stronger argument.

Point 1 - yes there is, at least in the US FDIC insurance. That does not mean you have access to your missing money immediately. If you are making an expensive purchase on the afternoon your bank is robbed, you most likely will not have the funds available.

Point 2 - All of the safety deposit boxes I know of cannot be put back in an unlocked state. So, I don't think storing the pictures online is the same thing at all.

Point 3 - Weren't these photos taken from Apple's iCloud? I'm pretty sure the accounts in question were paid accounts, but even if the free version, there is a legal contract between the user and the company. It's called terms and conditions, but is still a contract (in which you even agree to hold them harmless). As such, they still have a fiduciary responsibility to protect your data.

about a week ago
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Statisticians Uncover What Makes For a Stable Marriage

Dcnjoe60 Re:Rude relatives (445 comments)

As for rude relatives, well, you can't choose your relatives, but you can choose whether or not to be around them.

I wish real life relationships were actually that simple. My parents have asked rude questions about marriage time tables, whether we would have kids, etc. Stuff that is none of their business and I find the questions quite rude. Sure I could break them off and say I'm never going to see them again but that seems a little extreme for a well intended but impolite inquiry. There are relatives I generally avoid but I'd need a better reason for my parents, in-laws, grand parents or sibling.

What I don't get is why everyone that has kids automatically assumes every other person wants to have them too. They simply cannot imagine that you wouldn't want the burden of raising another human being. I'm sure it's a lovely experience and all but people get really pushy and intrusive about it.

Have you ever told them how these questions make you feel? Saying "When you say things like that, it really hurts me and makes me want to stop visiting?" They may believe they are helping you, when in reality, they are hurting you, but unless you actually tell them, how will their behavior ever change?

about a week ago
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The Correct Response To Photo Hack Victim-Blamers

Dcnjoe60 Re:Her argument is specious and sexist (622 comments)

She claims she had to take the pics because her boyfriend would look at porn if she didn't

So she is claiming her boyfriend put some sort of pressure on her to take these pics whether he did or not.

She is claiming to be the victim over and over in this narrative, first by her boyfriend, then by society, then by thieves.

When does the self-victimization end and how does pointing out the issues with one's choices constitute victim-blaming? Haven't we ever heard of constructive criticism?

Too bad you posted as an AC, or I would have modded you up. The real questions is why do these apparently successful young women feel the need to take these photos? It's okay for your boyfriend to beat off to your photo, but not somebody else's? That smacks of low self-esteem. The real question Vanity Fair and CNN and the like should be asking is why young women, particularly those that are apparently successful and wealthy, are succumbing to the pressure to take nude photos of themselves? Are they that insecure and starved for attention? If so, what does the culture do to contribute to that?

about a week ago
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The Correct Response To Photo Hack Victim-Blamers

Dcnjoe60 How are they not a victim? (622 comments)

it's a long forgotten attribute called taking responsibility for your own actions. If someone wants to take nude photos of themselves then go for it. But don't go whining when the photos get leaked.

How stupid can these people be?

They take a nude photo and store it on a cellphone that can easily be compromised or stolen - mistake #1
Then then store the photo on some "cloud service", or email it, or otherwise create copies of the photo that they can no longer control - mistake #2
Choose weak passwords that can easily be guessed - mistake #3

These days it seems that everyone wants to be a victim. Why? Because it provides a built in excuse for fucking up. Cast the blame on someone else rather than own up to your own mistakes.

Actually, this is nothing new. In the days before digital cameras, the "thefts" occurred at the drug store or wherever the film was being processed. It was more difficult to disseminate the stolen pictures to millions of people, but they were stolen just the same.

As for being a victim, well, technically they are. In hind sight, was it foolish to store said photos on-line. Yes, it was, but that doesn't mean they weren't a victim. If your local bank gets robbed and you can't get accessed to your funds for a week, aren't you still a victim? Or are you proposing that people don't put money in banks?

Like a bank, these online storage services have a fiduciary responsibility to their customers. That responsibility was breached and the customers who had their photos stolen (nude or otherwise) were harmed by that failure. How are they not a victim?

about a week ago
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The Correct Response To Photo Hack Victim-Blamers

Dcnjoe60 Re:Two things (622 comments)

First, I don't see how the hair splitting over what you have to do vs what you choose to do matters. You have the right to make choices, the right to not have your property and effects violated by others. The people doing it are wrong.

Secondly, I think the fact that we equate looking upon a nude photo with sex is a good amount of the problem here. Its really our own overprotective prudishness and nudity taboos that even give rise to this in the first place.

Nobody equates looking upon a nude photo with sex. On the other hand, there are many people who look at a nude photo and the person in it as an object of sex. Whenever we objectify people, we devalue them. The old expression about "Why buy the cow when the milk is free" when used in relation to people living together is a prime example. Once people, usually women, are an object, they aren't a person anymore.

Yes, the people who stole the photos were wrong. However, I don't leave my tablet on the front seat of my car, either. Just because the doors are locked, it is far too easy to bust a window to get at it. The thief doesn't have the right to my property, but if I really value that property, then I will take steps to secure it.

I am sure the individuals in this scandal thought they had done exactly that. The reality is that until better security is in place for on-line services, it's a simple matter of breaking the glass to get at the valued contents.

about a week ago

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