Pack93z
  • Pack93z
  • Select Member Topic Starter
11 years ago
And interesting read.. nothing is really "new" in the thoughts or point, but it is tangibly presented with a figure head that most in the nation may recognize outside of politics.

The last three paragraphs is the main driving point.


Mickelson has a point on taxes 

(CNN) -- Phil Mickelson, aka Lefty, is thinking of leaving California and perhaps America because, according to his own reckoning, he is facing tax rates of 62% or 63%. Mickelson, probably the second-most-famous professional golfer in the world after Tiger Woods, later backed off from his initial comments about making "drastic changes."

Reports suggest that Mickelson earned more than $60 million in 2012. In that sense, he appears to be doing better than the Romneys, and perhaps you are not all that sympathetic to him.

The Romneys (remember them?) paid so little tax. In 2011, Mitt and Ann Romney paid federal taxes of $2 million on reported income of $14 million, for an effective tax rate of 14%, all roughly. The Romneys even had to foreswear taking all of their available charitable deductions to make their tax rate seem so high for appearance's sake.

It does bear noting that Mickelson is doing something to earn his $60 million. Whoever is paying him that much believes that he is worth it. Who are we, really, to argue?

Mickelson's instinctive reactions to high tax rates, even if his math may be a bit muddled, are sound and sensible ones. Tiger Woods certainly agrees with him.

But that is not the problem in the story. Lefty faces such seemingly inescapably high tax rates that he might just pack up his golf bags and leave home. Mitt pays so little tax that he has to ignore the law to pay a higher rate for appearance's sake.

How can this be?
The Mitt-Lefty paradox has a simple explanation: In America, we tax work. And highly. We do not tax capital or wealth much at all. Indeed, if you have wealth already, taxes are essentially optional under what I call tax Planning 101, the simple advice to buy/borrow/die.

In step one, you buy assets that rise in value without producing cash, such as growth stocks or real estate. In step two, you borrow to finance your lifestyle. In step three, you die, and your heirs get your assets, tax free, and with a "stepped up" basis that eliminates all capital gains. That's it.

Romney, with a personal fortune estimated at $250 million (his five kids have another $100 million) has figured this out. When he pays taxes, at all, he does so at the low capital gains rate.
Not so with Lefty.

Not so with Lefty.

He is a wage-earner, albeit a very highly paid one, and he's going to pay over one-half of his income in taxes if he stays in California. We may not be shedding any tears for Lefty any more than we feel for Gerard Depardieu, who recently left France for Russia to escape taxes, or for the Rolling Stones, who many moons ago left England and recorded Exile on Main Street from France.

Yet one fact not making news is that it is still the case that the highest marginal tax rates in America do not fall on the highest incomes, like Lefty, but on certain of the working poor, many of them single parents, who are being taxed at rates approaching 90% as they lose benefits attempting to better themselves.

It's a "poverty trap" that works just like the severe marriage penalties for the lower-income classes. But the working poor do not have the options of going to Canada, Russia or France.
Lefty has a point -- high tax rates create disincentives. If the rates are high enough, people react by moving. This should not surprise us: American companies have been fleeing our shores for years, in droves. Ask Mitt.

But this should worry us, for two reasons.

One, the fact that the high incomers do flee jurisdictions, or flee from the productive activity of working, is a bad thing for the U.S.

Two, the very risk that the rich and famous might leave, aided by the appearance that some do, holds tax reform hostage. We have struggled to raise rates at all on the rich, blocked by the mostly mythical Joe the Plumber as much as by the realities of Mickelson or the Rolling Stones. When we do finally raise rates, as we did at the fiscal cliff, we do so on the wrong rich, in the wrong way. Lefty's taxes went up, Mitt's need not.

The problem -- and it is the same problem as with Mitt's taxes -- is that we are taxing the wrong thing, in the wrong way. In sum, we tax work, not wealth. This is backward.


"The oranges are dry; the apples are mealy; and the papayas... I don't know what's going on with the papayas!"
Zero2Cool
11 years ago
I'd rather pay taxes on items/services paid for, than have it deducted from my salary. Currently, 26% of my salary goes straight to taxes. I get about (judging from this years taxes) 2% of that back on my return.
UserPostedImage
Since69
11 years ago
Capital gains tax is currently, I believe, right around HALF what income tax is. Should be the other way around, if you ask me.
UserPostedImage
Porforis
11 years ago

Capital gains tax is currently, I believe, right around HALF what income tax is. Should be the other way around, if you ask me.

Originally Posted by: Since69 



Money one invests is already taxed as income tax, then taxed again as capital gains. If you invest $100 (which was already taxed at your income tax rate), get a 1% return which is taxed at the short term rate (whatever your income tax rate is), you've officially been taxed twice. The long-term capital gains rate is lower but the investment is still taxed twice.
DakotaT
11 years ago
Capital gains taxation is legalized tax evasion put into law by the puppets of wealthy men. I think I've been trying to explain these concepts for about three years. The other change in Federal taxation should be the cap in place on Social Security tax.
UserPostedImage
Porforis
11 years ago

Capital gains taxation is legalized tax evasion put into law by the puppets of wealthy men.

Originally Posted by: DakotaT 



I've read this 4 times and it still makes no sense. Would it be better if capital gains was not taxed? That being said, I'm all for just tying all (short and long-term) capital gains tax to one's income tax rate and calling it a day.
Wade
  • Wade
  • Veteran Member
11 years ago
For all its popularity, "work v. wealth" is a false dichotomy.

Without wealth, we could not generate income; without income, we cannot increase wealth. Without an increase in wealth, we'll never increase income. Without an increase in income, we cannot .... etc., etc., etc.

It's that damn labor theory of value again.

It's one of those horrible ironies that intellectual history is full of. Because of the the persuasiveness of his popular writing, Karl Marx, more than any other single person in history, is responsible for the deep seated belief in the idea that all value is produced by human "labor". (He wasn't the originator of the idea -- John Stuart Mill and even Adam Smith got this wrong -- but it was the compelling rhetoric that Marx brought to bear through the Manifesto and his other polemical writings that is responsible for its entrenched status in popular consciousness. If you scratch them deep enough, you'll discover that its a notion shared by both the wealthy that libierals want to tax for everything and the wealthy who don't want themselves to be taxed: value is created by the workingman, the farmer with dirt between his fingernails, the man who hits little white balls and the man who tosses big round balls through a hoop.

But it is so wrong it would be laughable if it weren't agreed to by so many.

The amount of value created by that workingman, that farmer, that golfer and that basketball player? That depends critically on the tools and ideas they can bring to bear in their trade. Without his hammer and his computer, the workingman couldnt do much rooting in the shit like a pig. Without his tractor and his combine and his accounting spreadsheet, the farmer would be rooting in the same shit. Without his 9-iron and the machine that makes dimples, the golfer would be wandering around in the woods tossing pinecones. Without the pneumatic engineering technology that makes a basketball inflatable and bouncy, and the basketball player would be limited to tossing the workingman/farmers' shit at the hole made by the golfer's arms.

Wealth doesn't come from labor alone. Wealth comes from the application of previously accumulated wealth [called "capital"] to, and the use of said wealth by, labor. Wealth without labor is valueless, but we haven't had productive labor without wealth since ... ever. Labor without wealth to put to use is the caveman who hasn't got fire or a sharp stone or a club.

Taxing the worker screws up the incentives to work. That's true as far as it goes. And its true whether you're a ditchdigger being taxed or a pro golfer being taxed.

But taxing wealth screws up the incentives to put labor to work more productively. And it screws up the incentives to look for ways to make labor more productive.

There is no such thing as a tax that does not screw up incentives to produce.

Capital and labor are not substitutes. They are not "one or the other". They are not things we add together in different ways, making A bigger and B smaller in order to change the quality of national prosperity.

Capital are complements. They don't operate by addition and subtraction but by multiplication and power laws.

Income = Labor (L) times Capital (K). If taxes on work (L) increase ("income tax"; "consumption tax"; "sales tax"), income falls. If taxes on wealth increase, income falls. Labor is screwed regardless.

[So are the forces of capital, more often known as "the rich." But no one except the rich cares if the rich get screwed.)

There is, IMO, no such thing as a tax that benefits labor.

Spending of tax receipts may. Maybe if we put the money in the hands of the king, the king will do better with it than the rich barons because the king is an entrepreneurial genius and the baron is a wastrel who does nothing but hang out with whores and gamblers. Maybe the government is a brilliant, entrepreneurial king who only needs capital to get those peasants to be happy, productive people. Maybe the barons are all as useless as the third generation of British aristocracy. That's a different disagreement for a different thread.

But the power of taxes is not to create. It is never to create. It is only to destroy.


And do not be conformed to this world, but be transformed by the renewing of your mind, that you may prove what is that good and acceptable and perfect will of God.
Romans 12:2 (NKJV)
Wade
  • Wade
  • Veteran Member
11 years ago

I've read this 4 times and it still makes no sense. Would it be better if capital gains was not taxed? That being said, I'm all for just tying all (short and long-term) capital gains tax to one's income tax rate and calling it a day.

Originally Posted by: Porforis 




I think what he was trying to say was that "lower rates of tax for capital gains is a ....etc."

Of course ALL tax rules are written by wealthy men for wealthy men. Some of them are just better at conning non-wealthy people out of their money.

And do not be conformed to this world, but be transformed by the renewing of your mind, that you may prove what is that good and acceptable and perfect will of God.
Romans 12:2 (NKJV)
DakotaT
11 years ago

I've read this 4 times and it still makes no sense. Would it be better if capital gains was not taxed? That being said, I'm all for just tying all (short and long-term) capital gains tax to one's income tax rate and calling it a day.

Originally Posted by: Porforis 



It means capital gains is taxed too low. Yeah, I agree with you, capital gains should be taxed at the 39% rate.
UserPostedImage
DakotaT
11 years ago

For all its popularity, "work v. wealth" is a false dichotomy.

Without wealth, we could not generate income; without income, we cannot increase wealth. Without an increase in wealth, we'll never increase income. Without an increase in income, we cannot .... etc., etc., etc.

It's that damn labor theory of value again.

It's one of those horrible ironies that intellectual history is full of. Because of the the persuasiveness of his popular writing, Karl Marx, more than any other single person in history, is responsible for the deep seated belief in the idea that all value is produced by human "labor". (He wasn't the originator of the idea -- John Stuart Mill and even Adam Smith got this wrong -- but it was the compelling rhetoric that Marx brought to bear through the Manifesto and his other polemical writings that is responsible for its entrenched status in popular consciousness. If you scratch them deep enough, you'll discover that its a notion shared by both the wealthy that libierals want to tax for everything and the wealthy who don't want themselves to be taxed: value is created by the workingman, the farmer with dirt between his fingernails, the man who hits little white balls and the man who tosses big round balls through a hoop.

But it is so wrong it would be laughable if it weren't agreed to by so many.

The amount of value created by that workingman, that farmer, that golfer and that basketball player? That depends critically on the tools and ideas they can bring to bear in their trade. Without his hammer and his computer, the workingman couldnt do much rooting in the shit like a pig. Without his tractor and his combine and his accounting spreadsheet, the farmer would be rooting in the same shit. Without his 9-iron and the machine that makes dimples, the golfer would be wandering around in the woods tossing pinecones. Without the pneumatic engineering technology that makes a basketball inflatable and bouncy, and the basketball player would be limited to tossing the workingman/farmers' shit at the hole made by the golfer's arms.

Wealth doesn't come from labor alone. Wealth comes from the application of previously accumulated wealth [called "capital"] to, and the use of said wealth by, labor. Wealth without labor is valueless, but we haven't had productive labor without wealth since ... ever. Labor without wealth to put to use is the caveman who hasn't got fire or a sharp stone or a club.

Taxing the worker screws up the incentives to work. That's true as far as it goes. And its true whether you're a ditchdigger being taxed or a pro golfer being taxed.

But taxing wealth screws up the incentives to put labor to work more productively. And it screws up the incentives to look for ways to make labor more productive.

There is no such thing as a tax that does not screw up incentives to produce.

Capital and labor are not substitutes. They are not "one or the other". They are not things we add together in different ways, making A bigger and B smaller in order to change the quality of national prosperity.

Capital are complements. They don't operate by addition and subtraction but by multiplication and power laws.

Income = Labor (L) times Capital (K). If taxes on work (L) increase ("income tax"; "consumption tax"; "sales tax"), income falls. If taxes on wealth increase, income falls. Labor is screwed regardless.

[So are the forces of capital, more often known as "the rich." But no one except the rich cares if the rich get screwed.)

There is, IMO, no such thing as a tax that benefits labor.

Spending of tax receipts may. Maybe if we put the money in the hands of the king, the king will do better with it than the rich barons because the king is an entrepreneurial genius and the baron is a wastrel who does nothing but hang out with whores and gamblers. Maybe the government is a brilliant, entrepreneurial king who only needs capital to get those peasants to be happy, productive people. Maybe the barons are all as useless as the third generation of British aristocracy. That's a different disagreement for a different thread.

But the power of taxes is not to create. It is never to create. It is only to destroy.

Originally Posted by: Wade 



Wade, my 9th grade English teacher use to say a good piece of writing should be like a girls skirt, long enough to cover the subject but short enough to make it interesting.

Your whole theory of a world without taxes is really interesting in fairytale land - but in the real world civilizations just needs shit paid for by public funds.
UserPostedImage
Users browsing this topic
    Fan Shout
    Zero2Cool (9h) : Chase Young to sign $13M contract with Saints
    Zero2Cool (9h) : Yosh to Panthers what noooo. Wait he didn't do crap
    wpr (18-Mar) : I say that he is technically HER BIL as he married her sister. I checked it out, he's considered my BIL as well. Sad.
    Mucky Tundra (18-Mar) : wpr, I assume its your BIL via marriage to your wife? If so, I can figure out where the smarts in the family went ;)
    wpr (18-Mar) : Mucky my B-I-L is Bare Stupid. I could write a book.
    Mucky Tundra (18-Mar) : As a teenager in Rockford IL I would get heckled by adults in public for wearing GB gear
    Mucky Tundra (18-Mar) : if you think the online ones are bad, try *living amongst* them
    Mucky Tundra (18-Mar) : Never doubt wprs loyalty. Poor guy is surrounded by Bears fans in Northern IL
    wpr (17-Mar) : pass Martha. Thanks for the invite though.
    Martha Careful (17-Mar) : blog * as the same ugly Illinois colors were adopted by the Baer
    Martha Careful (17-Mar) : WPR, perhaps you should be joining the Bears fans blog has the same ugly Illinois colors were adopted by the Bears
    Mucky Tundra (17-Mar) : Ah a fellow U of Illinois hater. I can respect that though I imagine it's for different reasons
    Zero2Cool (17-Mar) : BTW. I didn't catch the game. I just hate Illinois.
    Mucky Tundra (17-Mar) : They're your Big Ten Chumps and you will like it!
    Zero2Cool (17-Mar) : No, not for the record. Referee's handled that BS. Orange team was trash ass
    Mucky Tundra (17-Mar) : *Your* Big Ten Chumps for the record
    Zero2Cool (17-Mar) : No, not Big Ten Champs. IL is big ten CHUMPS
    wpr (17-Mar) : Big Ten Champs
    wpr (17-Mar) : !!!
    wpr (17-Mar) : INI
    wpr (17-Mar) : ILL
    Martha Careful (17-Mar) : Wisconsin with an outstanding on in the men’s Big Ten basketball tournament. Let’s hope it continues in the NCAAs
    Zero2Cool (17-Mar) : Almost like taking QB in 2020 even if you don't need one is good move.
    Mucky Tundra (16-Mar) : 2021 QB Draft class looking like a real clunker
    Mucky Tundra (16-Mar) : A conditional 6th rounder? I remember Bears fans arguing they'd get a day 2 pick at worst lol
    dfosterf (16-Mar) : So I got the no extension part right and the have to wait on the CW physical wrong
    Zero2Cool (16-Mar) : Bears are trading Justin Fields for a 2025 6th-round pick that goes to a 4th-round pick based on playtime, per sources.
    Zero2Cool (16-Mar) : Former Packer Jarrett Bush opens Wisconsin’s first blow dry bar in Green Bay
    dfosterf (16-Mar) : If the Bears are not doing a deal with Washington, they also cannot trade Fields until Williams physical with them. All hail Caleb Williams!
    dfosterf (16-Mar) : The talent is undeniable, but the (advertised) haul is obscene.
    dfosterf (16-Mar) : If the Bears are cutting a deal with the Commanders, in either scenario, cannot happen until williams passes a Commanders physical
    dfosterf (16-Mar) : My guess is no to the Fields extension, but yes to the trade back with the Commanders.
    dhazer (15-Mar) : I think the Bears do a Love extension and they will trade out of the 1st pick and take the haul
    Martha Careful (15-Mar) : that might make sense
    Zero2Cool (15-Mar) : Justin Fields to Steelers?
    Zero2Cool (15-Mar) : Kenny Pickett. Eagles. Done.
    Zero2Cool (15-Mar) : They can claim best two WR tandem.
    Mucky Tundra (15-Mar) : Aaron Donald retiring
    dhazer (15-Mar) : Campbell signing with 49ers
    dhazer (15-Mar) : I love how the Bear Fans are now claiming they have the best skill players in the NFC North lol
    Zero2Cool (15-Mar) : Vikings made a move to get a 2nd first round pick
    Mucky Tundra (15-Mar) : That's a not a bad deal for the Bears
    Zero2Cool (15-Mar) : Bears have traded for WR Keenan Allen sending Chargers a fourth rounder.
    Martha Careful (15-Mar) : *signs
    Martha Careful (14-Mar) : MLB Devon White science with the Eagles
    Mucky Tundra (14-Mar) : But that was before FA started
    Mucky Tundra (14-Mar) : Dhaze, I thought Kurls would be their #1 target when I read that he was an Amos comp (jack of all trades guy)
    dhazer (14-Mar) : I would like to see the Packers target 2 more FA still available Kamren Curl Safety and Chase Young edge
    Martha Careful (14-Mar) : wow...didn't see that coming
    Zero2Cool (14-Mar) : AJ Dillon re-signing with Packers.
    Please sign in to use Fan Shout
    2023 Packers Schedule
    Sunday, Sep 10 @ 3:25 PM
    Bears
    Sunday, Sep 17 @ 12:00 PM
    Falcons
    Sunday, Sep 24 @ 12:00 PM
    SAINTS
    Thursday, Sep 28 @ 7:15 PM
    LIONS
    Monday, Oct 9 @ 7:15 PM
    Raiders
    Sunday, Oct 22 @ 3:25 PM
    Broncos
    Sunday, Oct 29 @ 12:00 PM
    VIKINGS
    Sunday, Nov 5 @ 12:00 PM
    RAMS
    Sunday, Nov 12 @ 12:00 PM
    Steelers
    Sunday, Nov 19 @ 12:00 PM
    CHARGERS
    Thursday, Nov 23 @ 11:30 AM
    Lions
    Sunday, Dec 3 @ 7:20 PM
    CHIEFS
    Monday, Dec 11 @ 7:15 PM
    Giants
    Sunday, Dec 17 @ 12:00 PM
    BUCCANEERS
    Sunday, Dec 24 @ 12:00 PM
    Panthers
    Sunday, Dec 31 @ 7:20 PM
    Vikings
    Sunday, Jan 7 @ 3:25 PM
    BEARS
    Sunday, Jan 14 @ 3:30 PM
    Cowboys
    Saturday, Jan 20 @ 7:15 PM
    49ers
    Recent Topics
    5h / Green Bay Packers Talk / beast

    13h / Green Bay Packers Talk / dfosterf

    15h / Green Bay Packers Talk / beast

    18-Mar / Around The NFL / Mucky Tundra

    16-Mar / Random Babble / Martha Careful

    16-Mar / Green Bay Packers Talk / TheKanataThrilla

    15-Mar / Green Bay Packers Talk / dhazer

    15-Mar / Green Bay Packers Talk / dfosterf

    14-Mar / Green Bay Packers Talk / beast

    14-Mar / Random Babble / Zero2Cool

    14-Mar / Green Bay Packers Talk / dfosterf

    13-Mar / Random Babble / Zero2Cool

    13-Mar / Green Bay Packers Talk / Martha Careful

    13-Mar / Green Bay Packers Talk / Martha Careful

    13-Mar / Green Bay Packers Talk / beast

    Headlines
    Copyright © 2006 - 2024 PackersHome.com™. All Rights Reserved.