Economic News

[ChapelHillSooner]

That baffles me because the core of the political divide in this country is rooted in money and how people want to spend other people's money. The term "fair share" that the left likes to throw around (its a top 10. Right behind bigot) has always rubbed me the wrong way. Who are people paying less than me to determine what my "fair share" is?

Going off on a tangent, I have been thinking a lot lately about the useful life of capitalism as it relates to the widening wealth gap in the country. How do you preserve it but slow down the increasing gap without tanking the economy? The most readily identifiable ways are taxation, revolution, and g'ment regulation. I'm thinking it may be possible to do it with some form of g'ment regulation tied to education. In any case, it can't go on indefinitely without dire consequences.

Most of the people I know who state what you said in the first paragraph are lower middle income or lower. They all think their taxes go to someone else yet that is far from the truth.

As for my opinion on your overall message, from someone who paid taxes for 15 years then had a severely autistic child who would put a financial burden on just about any middle class family, f’ you. Sometimes people do all the right things, save, pay taxes, and then get screwed over because life threw them a huge curveball. And it’s the ones who never got that curveball thrown their way complaining about paying their taxes. (Well them and the dumbasses who are on disability who think they are the ones getting screwed.)

Sorry my kid required one on one care at school. It is expensive. If he doesn’t get that then I am out of a job and our entire family is an even bigger burden on society. So f’ you with your fairness bullshit.

 

[Zoo_View]

Intel's stock tumbles after Trump says its CEO must resign

Intel’s shares slumped Thursday as President Donald Trump said in a social media post that the chipmaker’s CEO must resign immediately.

apnews.com

What kind of government tells businesses how to run their companies? I think it starts with "comm" and ends with "unism", but I can’t quite remember. Maybe our board conservatives can help me out, because I remember this used to be very important to them.

No private companies under communism.

You’re thinking of fascism.

 

[Zoo_View]

Most of the people I know who state what you said in the first paragraph are lower middle income or lower. They all think their taxes go to someone else yet that is far from the truth.

As for my opinion on your overall message, from someone who paid taxes for 15 years then had a severely autistic child who would put a financial burden on just about any middle class family, f’ you. Sometimes people do all the right things, save, pay taxes, and then get screwed over because life threw them a huge curveball. And it’s the ones who never got that curveball thrown their way complaining about paying their taxes. (Well them and the dumbasses who are on disability who think they are the ones getting screwed.)

Sorry my kid required one on one care at school. It is expensive. If he doesn’t get that then I am out of a job and our entire family is an even bigger burden on society. So f’ you with your fairness bullshit.

 

[BillOfRights]

No private companies under communism.

You’re thinking of fascism.

China has private companies with their version of communism, but fascism works, too.

I'm shocked that no board conservatives or Republicans have condemned this. I'm not shocked that board trumpsters think it's fine.

 

[Zoo_View]

China has private companies with their version of communism, but fascism works, too.

I'm shocked that no board conservatives or Republicans have condemned this. I'm not shocked that board trumpsters think it's fine.

I haven’t thought of China as a communist state since at least Tiananmen Square.

 

[BillOfRights]

 

[Huh?]

You left out the biggest problem. We are a consumption economy and taxes on consumption discouraged the one thing that keeps our economy afloat.

Everyone saving at the same time is terrible for the economy. Look at Japan. Or look at the Great Depression when people stopped consuming.

I seriously doubt economists have the view of consumption tax you think they do.

And if I seem a little harsh, well my son just shit his pants for the second time tonight so I am in that kind of mood. But I think your theory on consumption tax is complete bunk.

I'm sorry for what you're dealing with - that would put me in the same mood as well.

Please allow me to make three points:

First, it's economic orthodoxy that consumption taxes are more efficient, even with acknowledged drawbacks. That doesn't mean that the orthodoxy is unchallenged by any means.

Second, nations can't spend (consume) their way to prosperity any more than individuals can. Savings and investment - which can fund health care and education systems as well as buildings and R&D - is a key health metric for any country. Admittedly, we have had a savings glut over the past couple of decades due to wealth inequality and low interest rates, but the savings rate of our population outside of the top 5% remains low. I would argue that wealth inequality, which is exacerbated by our consumption economy, is a bigger problem than income inequality.

Third, consumption taxes work best in tandem with anti-regressive policies - e.g. exempting food and drugs, providing a tax credit for the first $xx of annual purchases - to mitigate their inherent regressivity. I also advocate reducing the regressivity of payroll taxes by removing the income cap. You can also increase the progressivity of the income tax system - you can either lower all marginal rates to account for the increase in consumption taxes or apply the additional revenue to deficit reduction. My general point is that there is a sound economic basis for tariffs, if applied carefully, reluctantly and consistently.

 

[dukeman92]

 

[sringwal]

That baffles me because the core of the political divide in this country is rooted in money and how people want to spend other people's money. The term "fair share" that the left likes to throw around (its a top 10. Right behind bigot) has always rubbed me the wrong way. Who are people paying less than me to determine what my "fair share" is?

Going off on a tangent, I have been thinking a lot lately about the useful life of capitalism as it relates to the widening wealth gap in the country. How do you preserve it but slow down the increasing gap without tanking the economy? The most readily identifiable ways are taxation, revolution, and g'ment regulation. I'm thinking it may be possible to do it with some form of g'ment regulation tied to education. In any case, it can't go on indefinitely without dire consequences.

I think part of the disconnect is a lack of understanding of just how much the truly wealthy make. I’m not even talking about the 1%, but instead the 1% of the 1% of the 1% of the 1%. They truly have an unnecessary amount of wealth, as far as how more that they have then they, or their children, or their children’s children could ever hope to spend.

I got it, but I didn’t really get it, until I was introduced to this interactive chart about Elon Musk’s wealth. I don’t know if you have seen it before, but it is worth a look.

How Rich is Elon Musk? - Visualization of Extreme Wealth - Engaging Data

This visualization shows how rich Elon Musk is by comparing his extreme wealth to other large quantities of money and showing them on the same scale.

engaging-data.com

They have expanded the content on this website since I last visited - these are some other fascinating charts.

How much wealth do the world's richest billionaires have? - Engaging Data

This graph shows the relative wealth of the top billionaires in the world, organized by country or industry.

engaging-data.com

 

[sringwal]

At what point does an average person care more about power than money? Where do the two cross on a line graph? If we could improve education to a level of 50% above our current level of functional education how many generations would it take to reduce poverty by 50%?

Depends on what you mean by 50% improvement in educational level. How do you measure that? Rise in IQ scores? Literacy rates?

Because the first simply isn’t possible. The second sounds good, and potentially could have been manageable in the 90s, early 2000s, but shows a general lack of understanding of where we are today. Phones and other digital distractions have won. Almost nobody under the age of 18 reads anymore. You’d be shocked at how bad it has gotten. The goal now is to simply slow the bleed. We are moving rapidly towards a post literate society. The only question is “what comes after”?

Real talk? As someone who has been in education for the last 20 years - a lot of you have no idea how much of a generational gap there is over the last 20 years. And things have gotten so much worse since COVID.

Now is not the time to be cutting funding and fighting public schools. Because what is being asked of teachers and other educators simply isn’t realistic right now. And it is only going to get worse.

 

[superrific]

First, it's economic orthodoxy that consumption taxes are more efficient, even with acknowledged drawbacks. That doesn't mean that the orthodoxy is unchallenged by any means.

Eh, it's only more efficient at high income levels. Let's say there's an income level X, which is the minimum income needed for most Americans to think about saving. X is probably the cost of basic necessities plus basic life style choices. Like, nobody needs to go out to eat, but most families would prefer to go out once a month or once every two months than save that money. People like to go a ball game now and then. Or a movie.

The point is, when people make less than X, the efficiency is exactly the same. All incentives are the same, because all income is being spent. The income tax is probably more efficient, actually, in those circumstances.

And at higher incomes, where they can be more efficient, consumption taxes can't raise enough money. This is why, I think, all European countries with VATs also have income taxes. They get, roughly speaking, the same amount of revenue from income and consumption taxes.

The real advantage of a VAT, in my view, is that it is hard to evade.

 

[superrific]

My general point is that there is a sound economic basis for tariffs, if applied carefully, reluctantly and consistently.

I disagree. Tariffs are a horrible form of consumption tax because they are distorting. No common tax that I'm aware of is more distorting than a tariff. I don't know if NYC still has its "mansion tax" but that was incredibly distorting. It was, IIRC, 2% tax above a million and 0% below. Like, literally, you'd do better selling your house for $990K than $1.05M.

Tariffs combine all the worst features of tax regimes. They are regressive like consumption taxes. They are more economically distorting than income taxes. And they are hard to consistently enforce, are easily evaded, and are subject to all sorts of political fuckery.

 

[Huh?]

But tariffs are the most efficient way to ensure protection for (a) industries that are critical to national security (e.g. airplane manufacturing and (b) industries that are critical inputs to other manufacturing processes that can be affected by global supply disruptions (e.g. semiconductors).

Also, while free trade has worked extremely well for the economy as a whole over the last 40 years, it has not worked well for low-skilled and semi-skilled manufacturing workers. The communities that were reliant on these jobs (inner cities like Baltimore and rural communities) have been disproportionately affected. We talked a big game about retraining these workers and it didn't work because of a combination of underinvestment and unrealistic optimism about their retrainability. Going forward, we need to find a place for these workers in the economy, and AI isn't going to make it easier.

 

[superrific]

But tariffs are the most efficient way to ensure protection for (a) industries that are critical to national security (e.g. airplane manufacturing and (b) industries that are critical inputs to other manufacturing processes that can be affected by global supply disruptions (e.g. semiconductors).

I disagree. I don't know the literature relative to b), but the literature I do know -- on tariffs generally -- protection rarely works. Usually tariffs are the most efficient way to build inefficient industry. If you want to retain domestic industry, subsidies are considerably better. That way, you get exactly what you want and no more.

The issue of free trade and its relation to low skilled workers is complex and there is no clean answer. One factor that it often ignored is the fact that the jobs we lost to foreign competition are typically horribly unpleasant jobs. Think working in a fast food place is bad? Try a textile sweatshop or garment factory. That's what I find crazy about the coal mining industry. You would think people would be running away from coal mining jobs as fast as possible. They are dangerous and unhealthy and physically taxing. It's one of the worst things you can do to your body. It's questionable how well it pays after accounting for the risks of disability or death.