Socialism

[AWPrime]

I thought we were talking about taking money from one tax bracket and shuffling it to another? That levels the playing field but it hardly produces additional wealth when you deal with the net effect.

Depends on how its done, if its in a form of an investment then its alright.

National investments is one of the primary tasks of any government.

 

[Ratiocination]

That doesnt explain how capitalism is intrinsically right-wing.

I never said it was.

 

[Grizzly Bear]

I would say China and Mexico are better examples of capitalism's ugliness. But Iceland?

China became the third largest economy because it made reforms that incorporate elements of a free market system... I don't know what world you live in that says anything about them serving as an example of runaway capitalism, I'd argue it's just the opposite. http://en.wikipedia.org/wiki/Economy_of_the_People%27s_Republic_of_China.

Friedmanite twaddle based on the false assumption that capital itself can create wealth.

What world are you from?
And out of curiosity and to avoid making unnecessary assumptions about you, what philosophy would you want me to read up on regarding your political idealism?

Want to see ugly capitalism? Chile, Iraq and Iceland.

As Venezuela is to socialism in failure. Chavez capitalized his economy on his oil revenues, and the complete nationalization of the industry is killing their economy.

 

[Suddenly]

A head of househould with a gross income of $200,000 would have paid 90% income tax in 1958 ???
It would have meant he'd only have a net income of $20,000 !

These seem very odd numbers to me. Surely the rich would have fled a country with such tax law ...

The 90% only applies to income in excess of 200K, and in a time where available tax deductions were far more widespread, so even that amount is slightly deceptive.

In 1953, the rate of taxation for the first $2,000 was 22.2% and it went up from there until it maxed out at 90%, which was a cut from the max wartime tax rate of 94% in 1944 and 1945.

Everybody paid that rate for the first $2K, whether that person made $1800 or $1,800,000.

Today, we are talking about increasing the rate of taxation on the marginal amounts of roughly 3%. If we take the $250K as a cutoff (oversimplifies things a bit), income in excess of $250K is taxed at a whopping 3% more than before.

So if you make 250K, nothing changes from before. If you make $251K you are going to pay a whopping $30 more than before, and so on.

In the 80's, the top tax rate plunged from 70% to 28% in 1988, but this also included severe restrictions on deductions and represented a whole new era as to how income tax worked. If people think things are tricky now, they have no idea...

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This overhaul of the tax system in the 80's arguably was the thing that started the Reagan era economic boom. The goofy deduction mess created during the 70%+ top rate days, those with capital wound up making investment decisions to avoid tax more than creating wealth, which caused a ton of waste and poor asset allocation. Getting rid of that mess allowed capital to be invested where it had the most return, which improved efficiency.

The rate was set too low at the time and had to be increased, and those increases/decreases really didn't change much. It was more about the broad stroke of reform from the 80s. The low rate was also deceptive as since the Reagan administration represented a huge increase in national debt with a tax cut, it was hard for the economy to not improve... Which gives an idea as to how screwed up things are now.

The difference as to economic development between a top rate of 28% and 35% is meaningless compared to the difference between a top rate of 75% that can be avoided by doing goofy things with money and a rate of 35% without those same restrictions. The gain in efficient asset allocation is staggering...

 

[Thunder]

The only people who think Obama is a Socialist..simply haven't the foggiest idea what Socialism really is.

When Obama starts talking about abolishing all private property, taking over all major commercial/industrial/natural resource industries, doing away with representative democracy, and fixing all prices, THEN you can start calling him a Socialist.

Until that time...he is at least a Liberal-Democrat and at most....a Social-Democrat.

 

[Darth Rotor]

McCain compared Obama to European socialists as if somehow that's an insult?

Yes, and it is, once you bother to compare the tax rates in Europe with the tax rates in the U.S.

DR