Obama's economic plan - Soak The Rich

[Texas]

(who moved the %$%&%$ buttons?)

I agree with Andrew Carnegie, that inherited wealth is a bad idea. I've told my kids that I think it is my responsibility to give them the opportunity to get a good education so that they can earn a decent living. After that, they are on their own. Don't expect Mommy and Daddy to fund you. I'm not saying that I wouldn't help them with the down payment on a house. But if they want a lavish lifestyle they will have to earn it on their own.

I've told mine I want to be a burden to them as long as possible. BTW I think you were right and I was wrong about the cost basis on an inheritance. I will post what I have found later.

 

[Tricky]

I agree with Andrew Carnegie, that inherited wealth is a bad idea. I've told my kids that I think it is my responsibility to give them the opportunity to get a good education so that they can earn a decent living. After that, they are on their own. Don't expect Mommy and Daddy to fund you. I'm not saying that I wouldn't help them with the down payment on a house. But if they want a lavish lifestyle they will have to earn it on their own.

I totally agree with you. Yet you would not be a good parent if you didn't use your resources to help them become self-sufficient. If you have the money, you will send them to good schools. If you have the money you will see that they have the opportunity to learn through things like travel and extracurricular activities. If you have the money, you will hire tutors if they need them. These are things that all good parents will give their kids if they can. But of course, not all parent's can. So even if you never will your kids a dime, you have given them lots of advantages. This is the proper way that wealth should be transferred.

Of course, poor kids can also get these advantages, but they have to work harder for it, and I'm okay with that. I am not so socialist (or unrealisitic) that I think all people will be given equal chances. Heck, it is only by chance that we were born into a country that such chances exist in abundance. The odds are against it. Life isn't fair. Personally, I consider that I was given great wealth by having a mother who read to me. Many kids don't have that. Quite a few have parents who are functionally illiterate. It isn't fair, but I will not feel guilty about this wealth I was given.

But if we want our country to continue to be "the land of opportunity", then we have to make sure that it is better than a lottery chance that any kid can achieve success. There are ways to do it, but they aren't free, and they obviously can't be funded by the people who need them most. One of the things I love most about the US is its altruism. I hope they will continue to be altruistic and not give in to rich whiners who are complaining about being taxed unfairly when the US system favors them overwhelmingly.

 

[BeAChooser]

What right does the government have to take 12% of my income at any income level and tell me it's for my own good, when I could take that 12%, stick it in a very conservative investment vehicle, and make far more than Social Security promises (plus have the right to pass it on to my children when I die). Why doesn't the government just require that, instead?

Let's just be honest. Social Security is WELFARE in disguise. If the government were honest, it would call it a WELFARE tax and let the people decide if they really want to support that.

And if they choose to support that, fund it with a flat end-use tax. Then the wealthy would have to pay for the toys they use and the poor could pay for what they use. And those who invest in growth (which is good for everyone and shouldn't be discouraged) would not be penalized. All would be fair. And we could get rid of an army of accountants and lawyers.

 

[Tsukasa Buddha]

What right does the government have to take 12% of my income at any income level and tell me it's for my own good, when I could take that 12%, stick it in a very conservative investment vehicle, and make far more than Social Security promises (plus have the right to pass it on to my children when I die). Why doesn't the government just require that, instead?

Let's just be honest. Social Security is WELFARE in disguise. If the government were honest, it would call it a WELFARE tax and let the people decide if they really want to support that.

And if they choose to support that, fund it with a flat end-use tax. Then the wealthy would have to pay for the toys they use and the poor could pay for what they use. And those who invest in growth (which is good for everyone and shouldn't be discouraged) would not be penalized. All would be fair. And we could get rid of an army of accountants and lawyers.

Erm, have you seen the stock markets?

And the system isn't like that. You are paying to help the seniors here today. As such, when you become a senior the young workers will pay to help you. It isn't an investment system. Another viewpoint would be to think of it as an insurance system.

But really, require people to invest their money? I mean, save I could see. And I would support a system like the Kiwi Saver program. But investing always comes with risks.

 

[boloboffin]

What right does the government have to take 12% of my income at any income level and tell me it's for my own good, when I could take that 12%, stick it in a very conservative investment vehicle, and make far more than Social Security promises (plus have the right to pass it on to my children when I die). Why doesn't the government just require that, instead?

The Constitution, Article 1, Section 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;

What's stopping you from sticking 12% of your income in a very conservative investment vehicle right now?

Let's just be honest. Social Security is WELFARE in disguise. If the government were honest, it would call it a WELFARE tax and let the people decide if they really want to support that.

I refer you again to Article 1, Section 8, especially the clause "provide for the ...general Welfare."

Why do you hate America?

And if they choose to support that, fund it with a flat end-use tax. Then the wealthy would have to pay for the toys they use and the poor could pay for what they use. And those who invest in growth (which is good for everyone and shouldn't be discouraged) would not be penalized. All would be fair. And we could get rid of an army of accountants and lawyers.

And when the destitute gather on the street, the wealthy can then use their personal militias to scatter them in good conscience.

 

[Meadmaker]

On the subject of social security, why don't we just say that we, as a society, will not let old people become poverty stricken? If you are beyond working years, we'll make sure that you have food, a roof, and medical care, and we will do so even if you were not a responsible and investment savvy person when you were between the ages of 20 and 65. We can work out details on how to pay for it, and surely the rich will end up paying more than the poor, but it is the only moral way to do it.

It's all very well to talk about people investing their own money and all that, but if that is our approach to retirement security it would mean telling someone who can't walk without a walker that her nursing care bills are her own problem and she should have made better investments when she was young. I, for one, won't do that.

But investing always comes with risks.

So does saving, actually, but that's another story.

 

[technoextreme]

A millionaire need not earn over $250k per year. They only need to have more than a million dollars. That may be inherited or earned over a lifetime of work. Check your math.

Oh, and according to Wikpedia, you are in the upper 1.5%. Upper middle class? Where the heck do you think the middle is?

Million dollars or million dollars in assets? Because if it's a million dollars in assets then you are wrong.

 

[gdnp]

And those who invest in growth (which is good for everyone and shouldn't be discouraged) would not be penalized.

Does that include growth in China, India, and the rest of the world? Isn't that what has brought us high gas and food prices? Deforestation? Pollution? Water shortages? Global warming?

I think future generations will look back on our times and say, "people thought growth was good for everyone? What were they thinking?"

 

[Damien Evans]

Payroll tax on incomes above $250,000

"The payroll tax is now applied to all income up to $102,000 a year, which covers the entire amount for most Americans. Under Obama's plan, the tax would not apply to incomes between that amount and $250,000. But all annual income above the quarter-million-dollar amount would be taxed under his plan."

If I understand this:

Income $0 -> $102K taxed at 12.4%
Portion of income in range >= $102K and < $250K 0%
Portion of income >= $250K taxed at 12.4%

It would be at least consistent if Obama proposed taxing all income at 12.4%. I don't know why there is a gap from $102K to $250K? This proposal plays into the stereotype that the democrats are the party of wealth envy. I'm shocked I tell ya, shocked!

Change that's like the same old stuff from the Carter era, only it's now.

Wow, 12.4%, boohoo. Our lowest income tax rate is higher than that.

ETA: Ah, hang on, payroll, not income tax. Nevermind.

 

[gdnp]

Wow, 12.4%, boohoo. Our lowest income tax rate is higher than that.

ETA: Ah, hang on, payroll, not income tax. Nevermind.

In any event, the lowest income tax rate is 0, since a sizable portion of the population earns income and pays no federal income tax. In fact, if you include the earned income tax credit, it is negative: the federal government pays you money.

 

[Damien Evans]

In any event, the lowest income tax rate is 0, since a sizable portion of the population earns income and pays no federal income tax. In fact, if you include the earned income tax credit, it is negative: the federal government pays you money.

I was deliberately excluding the zero rate. At the moment, I can't personally complain about tax, since I earn about $5000 pa, give or take a few hundred, and get $230 a fortnight from the government in youth allowance. Hence, I pay no tax but get money from them, plus they don't care about my job anyway, as it's classed as a hobby. (I'm a basketball umpire)

Of course, this will all change soon when I either get a job or go back to university.

 

[Tricky]

Million dollars or million dollars in assets? Because if it's a million dollars in assets then you are wrong.

Yeah, the terminology for these sorts of things is wonky. I basically mean a million dollars in liquid assets. Cash, savings, bonds, or really anything you could quickly and easily convert to cash.

But of course, the exact numbers aren't really that important. As I say, I consider myself rich, though I earn less than $100k per year and my only real assets are my house and my 401K. But I have the freedom to buy things if I want them. I have money that I can give to charities (though in practice, it's usually relatives) and I never need to worry where my next meal is coming from. That makes me about as financially rich as I need to be. I have other kinds of non-financial richness too.

More people would trade places with me than not. I think that makes me very rich.

 

[Suddenly]

Yeah, the terminology for these sorts of things is wonky. I basically mean a million dollars in liquid assets. Cash, savings, bonds, or really anything you could quickly and easily convert to cash.

But of course, the exact numbers aren't really that important. As I say, I consider myself rich, though I earn less than $100k per year and my only real assets are my house and my 401K. But I have the freedom to buy things if I want them. I have money that I can give to charities (though in practice, it's usually relatives) and I never need to worry where my next meal is coming from. That makes me about as financially rich as I need to be. I have other kinds of non-financial richness too.

More people would trade places with me than not. I think that makes me very rich.

Like happiness, being rich usually comes from within. It is all about having sane expectations in life. Those that insist that everything be perfect usually are going to be strapped for cash and unhappy no matter their situation.

 

[Tricky]

Like happiness, being rich usually comes from within. It is all about having sane expectations in life. Those that insist that everything be perfect usually are going to be strapped for cash and unhappy no matter their situation.

Can we find a way to tax that?

 

[Pookster]

I'm not sure what I think about Obama's plan, but it does represent a pretty significant philosophical change in what Social Security is supposed to be.

As I understand it, it is supposed to be a program where the government sets aside some of your money so that you'll have it when you retire and are no longer able or willing to work. Now, I know that SS is actually a "pay as you go" system where the money taken out of my paycheck goes to people on Social Security now. The money I get when I retire will come from those still working.

Social Security is supposed to be about income deferral, not income transfers.

Also, it seems pretty obvious that the rationale behind the "donut hole" is political. I would expect a significant chunk of the voting block is in that $100k to $250k range. The number of people in the $250k+ range is probably much smaller.

I'm not certain we're still discussing social security, but it's been a "pay as you go" system pretty much since the beginning. The money we pay today is to fund current and near-future retirees. Simply speaking, the surplus that is there now is from overpayments that were built into the system during the 80's to cover the growing number of anticipated baby boomer retirees. Some believe it won't now. It all comes down to how the economy performs in the coming years. It could end up being no problem at all.

 

[Lonewulf]

Like happiness, being rich usually comes from within. It is all about having sane expectations in life. Those that insist that everything be perfect usually are going to be strapped for cash and unhappy no matter their situation.

How does it "come within", when many rich just inherit their daddy's big fortune?

Actually, is there any way people can quantify this and demonstrate that, in the majority, the wealthy all provide for themselves? I'm not talking about a few anecdotes or a handful of people or even 100 specific rich people, I mean the overall picture?

Besides, it seems to me that success is as often luck as it is "skill" or "personal ability". This does not scream "from within" to me.

 

[Suddenly]

How does it "come within", when many rich just inherit their daddy's big fortune?

Actually, is there any way people can quantify this and demonstrate that, in the majority, the wealthy all provide for themselves? I'm not talking about a few anecdotes or a handful of people or even 100 specific rich people, I mean the overall picture?

Besides, it seems to me that success is as often luck as it is "skill" or "personal ability". This does not scream "from within" to me.

You miss my point entirely.

There are people that have inherited absurd amounts of money or who have earned absurd amounts who do not consider themselves rich beacuse they expect more from life than they can afford. If they had a lousy 10 million more they could afford a much bigger private jet. I know a guy that was let go from his 2 mil/yr job and is complaining that the best he can do now is in the 300K range and that isn't enough to make ends meet....


There are those that make much more modest amounts of money that live within their means and feel wealthy because they do not live hand to mouth and do not covet their own jet or island in the Pacific, or a bigger car or bigger house.


Sort of like happiness. I've known (later proven) wrongly convicted prisoners serving life sentences that were as happy as anyone else, and millionares that are totally miserable all the time.

Wealth, like happiness, has more to do with a person's personal expectations and definitions than with a solid number. These things come from within.

 

[Lonewulf]

You miss my point entirely.

You're right. I did. This seems to be a recurring problem. I do not see why I continually misread what other people say. I will endeavor to think more on what I read before I respond, and see if this solves my continual problems in comprehension.

 

[Tricky]

You miss my point entirely.

There are people that have inherited absurd amounts of money or who have earned absurd amounts who do not consider themselves rich beacuse they expect more from life than they can afford. If they had a lousy 10 million more they could afford a much bigger private jet. I know a guy that was let go from his 2 mil/yr job and is complaining that the best he can do now is in the 300K range and that isn't enough to make ends meet....


There are those that make much more modest amounts of money that live within their means and feel wealthy because they do not live hand to mouth and do not covet their own jet or island in the Pacific, or a bigger car or bigger house.


Sort of like happiness. I've known (later proven) wrongly convicted prisoners serving life sentences that were as happy as anyone else, and millionares that are totally miserable all the time.

Wealth, like happiness, has more to do with a person's personal expectations and definitions than with a solid number. These things come from within.

What you say is intellectually true, and I subscribe to it, but it is also true that it is easier to be happy when your basic, and even not-so-basic needs are satisfied. Ya know, Maslow's heirarchy an' all that. And of course, we should not ignore the wisdom of Ogden Nash.

Bankers Are Just Like Anybody Else, Except Richer​

This is a song to celebrate banks,
Because they are full of money and you go into them and all you hear is clinks and clanks,
Or maybe a sound like the wind in the trees on the hills,
Which is the rustling of the thousand dollar bills.
Most bankers dwell in marble halls,
Which they get to dwell in because they encourage deposits and discourage withdrawals,
And particularly because they all observe one rule which woe betides the banker who fails to heed it,
Which is you must never lend any money to anybody unless they don't need it.​

I know you, you cautious conservative banks!
If people are worried about their rent it is your duty to deny them the loan of one nickel, yes, even one copper engraving of the martyred son of the late Nancy Hanks;
Yes, if they request fifty dollars to pay for a baby you must look at them like Tarzan looking at an uppity ape in the jungle,
And tell them what do they think a bank is, anyhow, they had better go get the money from their wife's aunt or ungle.
But suppose people come in and they have a million and they want another million to pile on top of it,
Why, you brim with the milk of human kindness and you urge them to accept every drop of it,
And you lend them the million so then they have two million and this gives them the idea that they would be better off with four,
So they already have two million as security so you have no hesitation in lending them two more,
And all the vice-presidents nod their heads in rhythm,
And the only question asked is do the borrowers want the money sent or do they want to take it withm.​

Because I think they deserve our appreciation and thanks, the jackasses who go around saying that health and happiness are everything and money isn't essential,
Because as soon as they have to borrow some unimportant money to maintain their health and happiness they starve to death so they can't go around any more sneering at good old money, which is nothing short of providential. ​

 

[Suddenly]

What you say is intellectually true, and I subscribe to it, but it is also true that it is easier to be happy when your basic, and even not-so-basic needs are satisfied. Ya know, Maslow's heirarchy an' all that. And of course, we should not ignore the wisdom of Ogden Nash.

Or to paraphrase Milo Bloom: "money can't buy you love, but it does improve your bargaining position." It is true that having a bit of money can make it easy to be more content, but to quote Bud Fox in "Wall Street": "I didn't know how poor I was until I started making a little money."

I deal with absurdly poor people on a regular basis who are happy as heck though, although they don't consider "basic needs" beyond calorie sufficency and a roof that doesn't leak too much. Add in a television, stolen cable, a shotgun and a deer hunting license and the rest is cream cheese...