Comments on: How to target untaxed wealth http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/ Sat, 21 Jun 2014 15:30:06 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: tmc http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-758 Tue, 18 Dec 2012 21:22:53 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-758 well put trevorh.
I think the global corporations will ask for national autonomy within the next decade. Just say’in….

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By: AdamSmith http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-757 Tue, 18 Dec 2012 21:12:20 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-757 One newborn baby (Baby #1) inherits a trust fund at birth, where he will own one thousand rental apartments units for his entire life, managed by the trust.

Another newborn baby (Baby #2) inherits nothing at birth, except the poverty of his parents, who are always behind on their rent. During his entire life Baby #2 will pay, as the American average now is, 60% of his monthly earnings from labor, for his rent, to Baby #1.

Baby #1 is what is called a rentier, someone who receives automatic income without having to work.

This is what the estate tax is all about. This is why I think Larry Summers is correct to raise the issue of the estate tax. America used to have an estate tax, but it has been written away to obscurity by the wealthy.

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By: trevorh http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-756 Tue, 18 Dec 2012 20:32:19 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-756 One more note: if the intention is to target certain kind of gain that is escaping the tax system because of certain loop hole, then it is a good thing to do and is a different story.

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By: trevorh http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-755 Tue, 18 Dec 2012 20:29:42 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-755 The problem with redistribution ideology is that it is highly addictive.

Once you get into the negative feedback loop of redistribution that is the zero sum game of take from one and give to another, it is so hard to get out. You dig yourself deeper into the hole every time and come up with even more sophisticated redistribution scheme.

With the ever more sophisticated redistribution scheme, you need even more human resources to keep this zero sum game going smoothly.

The end result is always the same, more and more people doing things that don’t generate net gain value. Less and less people actually contribute. The redistributors then become the new elites, the powerful, the rich.

Remember, the more you play the redistribution game, the more the wealthy, the fortunate play the defensive game and everyone gets hurt. You think you can tax their wealth? Well, they will move their wealth in private, in defensive mode. The situation gets worse.

Imagine what happens when most of the public companies go private so the owners can pass the ownership of their companies to their children while depressing the real valuation to minimize tax?

The proper way should be about how to help the unfortunates change their lifestyle, their attitude (and even their DNA), how to educate them and create an environment so they can generate value, accumulate capital and hold on to capital.

I wish there would be a better way to run a society while keeping it in balance.

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By: tmc http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-754 Tue, 18 Dec 2012 19:50:28 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-754 Gordon, I agree with Adam, and yourself on virtually every point. I also think Mr. Summers is sincere in this piece and agree with him. But like you, I believe he is omitting additional goals. That’s what a Sophist with Guile does. They use expert language skills and information to persuade others to do something they would not want to do. I was really just pointing out that Mr. Summers has a tricky tongue. I don’t like the idea of taxing accumulated wealth. But, I could easily be convinced of an income cap of some kind, or a personnel holdings limit.

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By: AdamSmith http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-753 Tue, 18 Dec 2012 17:24:19 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-753 @Gordon2352 – You make many sensible points.

My only point is that the ideas presented here by Larry Summers appear to me to be very practical and capable of making a big impact.

Now, whether his words are a subterfuge to installing a VAT, I cannot say. Nothing surprises me anymore along those lines.

But until I see evidence otherwise, I have to take him at what he says. And that leads me to believe he is being forthright.

Just as I have to take your words as stating your own true thoughts.

By the way, thanks for your link above to The Guardian cartoons. I very much enjoyed that.

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-752 Tue, 18 Dec 2012 17:20:30 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-752 I mentioned above the reason we will not survive is because of the massive amount of debt we are currently carrying — and which is increasing constantly — due to our efforts to bail out the wealthy class.

This article proves my point:

Bernanke’s Balance Sheet Ensures Disaster

by Michael Pento
December 18, 2012

http://www.prudentbear.com/index.php/gue stcommentaryview?art_id=10742

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-751 Tue, 18 Dec 2012 15:33:56 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-751 As I said, don’t take my word for it.

Here is a nice summary — from Reuters leading article today — of what I have been trying to say in terms of what the wealthy are saying versus reality, plus the amount of control they exert over the government.

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The Unequal State of America: The economics paper that rattled Washington

By Deborah Nelson

WASHINGTON, D.C. | Tue Dec 18, 2012 7:12am EST

(Reuters) – The work of government economists is often so dry that the public never hears of it. And then there’s the work of Thomas Hungerford.

An employee of the Congressional Research Service, Hungerford in 2011 published a paper that found that after-tax income inequality rose 11.2 percent between 1996 and 2006.

Rising capital gains and dividends among the wealthy were the main driver of the widening gap, he concluded, accounting for 72 percent of the increase.

Tax cuts, he found, accounted for the rest. The cuts had an especially big impact because income from capital gains surpassed salaries for the top 1 percent of earners over that period.

This September, the CRS followed up with a 65-year retrospective by Hungerford on whether tax cuts for the rich help the economy.

“Analysis of such data suggests the reduction in the top tax rates (has) had little association with saving, investment, or productivity growth,” he wrote.

“However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

Landing in the last weeks of a tight presidential race in which tax cuts were a big issue, the report caused a stir in Washington.

Senate Republicans pressed the CRS to retract the document. They also objected to a 2011 report by two other CRS economists that reached similar conclusions about the impact of tax cuts on the economy.

The analyses overlooked contrary evidence and were being misused by partisans, Senate staff told a top CRS official.

Over the objections of Hungerford’s superiors, the service temporarily withdrew his September paper. “I stand by my report,” Hungerford told Reuters.

Last week, the service re-issued the report with the same conclusions as the old, but adding new mention of a study with contrary views.

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DUH!

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-750 Tue, 18 Dec 2012 15:21:10 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-750 @ tmc —

I suggest you read my comment above to AdamSmith, since both of you seem to be of the same opinion regarding Summers’ article — taking it at face value, which is exactly what he intends — and “look this gift horse in the mouth”.

The same goes for your feelings about the wealthy class. They are NOT a “necessary evil”, at least not to the extent of their present amount of wealth.

It is a historical fact that when the disparity in wealth reaches this level it tends to distort society and create social upheaval.

This country, government and wealthy class is NOT an exception to the rule.

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/12/17/how-to-target-untaxed-wealth/#comment-749 Tue, 18 Dec 2012 15:00:21 +0000 http://blogs.reuters.com/lawrencesummers/?p=289#comment-749 @ AdamSmith —

You state, “So I agree with Larry Summers. I say the wealthy should be taxed and shown the same mercy they show the working class.”

I think you missed the point of my comment above where I mention Summers is not telling the whole truth about tax reform.

He is lying by ommission, and doing quite a good job of it.

The wealthy WANT tax reform! Why would they want that after spending decades creating the labrinthine network of tax loopholes for themselves?

As I said, they intend to CUT their “income” taxes literally in half and shift the massive shortfall that creates onto the middle class and poor by implementation of a VAT, which works basically like compound interest instead of simple interest on a loan.

A VAT (i.e. Value Added Tax) is a tax charged MANY times at MANY levels before reaching the consumer, not at all like the simple state sales taxes we have now. It is not easy to explain in this venue, but it is insidious in terms of collecting money for the government.

For an independent explanation, which I thought was quite good, please read the comment by “Acetracy” above. What he is saying in somewhat more technical terms than I did, is that the wealthy want to shift even more of the taxes from passive investment (i.e. their MAIN sourced of income, like Romney, onto the salary/wage workers in America.

This would cut their “income” taxes nearly in half from what they are today.

That WILL create a tremendous shortfall in revenue, far greater than the $1 trillion per year we have now, which they intend to fill with a VAT sales tax, which “AceTracy” does not mention, but is a fact from many other reputable articles I have read.

The other main leg of their tax reform plan is to implement a “flat” tax, which as I said is anything but flat. Only the name sounds good. But mathematically it basically reverses the progressive tax structure we have today into a regressive one, which will generate a huge amount of additional income for the wealthy class.

THAT is what Summers is NOT telling you in his article.

By your other comments, you seem to think the wealthy class is, or will be, reasonable at some point — unfortunately, history is NOT on your side.

The US is at a critical juction, where we must realize what the wealthy class is doing through their wholly-owned subsidiary (i.e. the US government) and somehow stop them before it is too late.

No matter what happens at this point, the US economy WILL crash because of wealthy excess — just as it did in 1929 — and the only question now is how bad will it get.

Right now we can’t think in terms of “recovery” — with $16 trillion in debt and going into the hole at the rate of $1 trillion per year, it is far too late for that — but only of “damage control”, and we are quickly running out of time for even that measure to work.

We NEED to stop listening to people like Summers because they are not telling the American people the truth about anything.

The wealthy class want to take us back to the good old day, their good old days, but at our expense. Think of what this country was like prior to the Great Depression when no one but the wealthy class had ANY security at all and the American people were living in 3rd world country conditions. THAT IS A FACT!

They want Social Darwinism back again (i.e. survival of the fittest), and they intend to survive at your expense, just as they did before.

Don’t take my word for anything. Check it out for yourself in terms of taxation and where this country is heading.

All I am asking is that you think for yourself.

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