The Tax Thread

twofbyc

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i don't think that is the necessarily the case. i think more folks are getting to have a say in what constitutes thoughtful and reasoned and that can be messy for sure.
I can remember when America was great; can any of you?
I can remember when:
Anyone who wanted to work could get a job - and most gave “merit” raises every year (you know, “real” raises, not these COLA’s that keep your wages stagnant)
There was no health insurance - you just went to the doctor or hospital, and paid them what you could when you could
Colleges (public) were free in several states, to residents of those states
We built the greatest highway system in the world
Top tax rate was well north of 50%
Now, it’s like the wealthy built this great big cruise liner we all live on, but they refuse to maintain it; they’ll put fuel in it but that’s it. it’s all on us now, all the maintenance and upkeep. They got huge tax cuts that they are pocketing, and we can either sink or swim.
We had all these things; they were real. Now, some people suddenly forget how we got here and think we can go forward like this.
Sad, at times mind numbingly ignorant, yet this is who we’ve become.
Pogo was right.


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GrayTide

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I hesitate to join this discussion because of my loathing of the federal government, but will ask this as a start. What is the real funding responsibility of the federal government beside providing for the defense of the country and its citizens? That is my starting point.
 

uafanataum

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I hesitate to join this discussion because of my loathing of the federal government, but will ask this as a start. What is the real funding responsibility of the federal government beside providing for the defense of the country and its citizens? That is my starting point.
Well, when you tax someone their entire life and tell them that if they pay these taxes you will provide them a monthly paycheck and some form of health insurance when they retire then you owe them that. I am not saying it was originally the government's job bit they made it their job when they decided to take money from people and now they cannot stop.
 

GrayTide

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I agree with you on the payments for social security and medicare after all we did pay into or 40-50 years or more. The more I have thought about all of this, it seems most of what they do could be done at the state level, but what do I know.
 

uafanataum

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I agree with you on the payments for social security and medicare after all we did pay into or 40-50 years or more. The more I have thought about all of this, it seems most of what they do could be done at the state level, but what do I know.
If they were to delegate it to the states then the difference between Alabama and New York would be ridiculous. I think alot of other programs besides social security would be hard to get rid of not because the federal government is necessary but because they have existed for so long they are basically built into the U.S. economy. Ending them would cause a major shock and huge consequences. Maybe if they took a gradual approach with alternate programs to ease the pain...
 
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twofbyc

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I wouldn’t delegate anything to Montgomery; if you look at what they do, and still wonder why, then safe to say we’d probably never agree on the time of day.
Medicare is administered by the states and even that is inefficient; why can’t the plan I have in Alabama be valid and provide coverage in Alaska? Most don’t offer any out of state coverage.
I have no complaints with SS. I don’t think Alabama could manage it better than the feds, but I can’t compare other states.
I wouldn’t trust those jackasses in Montgomery to pick up my garbage, but IMO that’s all they’re fit to do.


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Bamaro

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Well, when you tax someone their entire life and tell them that if they pay these taxes you will provide them a monthly paycheck and some form of health insurance when they retire then you owe them that. I am not saying it was originally the government's job bit they made it their job when they decided to take money from people and now they cannot stop.
So far they have
 

bama_wayne1

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This didn't seem to fit well in any of the other threads, so I figured I figured I'd make a new one. Not sure how much weight I give this pollster, but the numbers do surprise me, and I think it's a discussion worth having.

Poll: A majority of Americans support raising the top tax rate to 70 percent

Q: Currently the top tax rate is 37%. Would you favor or oppose a tax proposal that would apply a 70% rate to the 10 millionth dollar and beyond for individuals making $10 million a year or more in reportable income?


GOP: 45% support (55% oppose)
Dem: 71% support (29% oppose)
Ind: 60% support (40% oppose)

Total: 59% support (41% oppose)
Charmin could you tell me if the total line listed here is a straight averaging of the different groupings or a real average of the aggregated votes in their populations? In my work life I don't usually see percentages by group average if the pool sizes for the groups are not equal.

ps. I'm not saying the numbers aren't correct just curious.
 
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CharminTide

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Charmin could you tell me if the total line listed here is a straight averaging of the different groupings or a real average of the aggregated votes in their populations? In my work life I don't usually see percentages by group average if the pool sizes for the groups are not equal.

ps. I'm not saying the numbers aren't correct just curious.
From the article, it sounds like the total reflects everyone polled, and is not just an average of those three groups.
 

cbi1972

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If they were to delegate it to the states then the difference between Alabama and New York would be ridiculous. I think alot of other programs besides social security would be hard to get rid of not because the federal government is necessary but because they have existed for so long they are basically built into the U.S. economy. Ending them would cause a major shock and huge consequences. Maybe if they took a gradual approach with alternate programs to ease the pain...
The difference between New York and Alabama is enormous in most aspects, and getting rid of government programs is easier than I thought. All you have to do is run out of money and the ability to borrow more.
 

uafanataum

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The difference between New York and Alabama is enormous in most aspects, and getting rid of government programs is easier than I thought. All you have to do is run out of money and the ability to borrow more.
It's easy to make the decision if you are unaffected by it. It's hard for those that are affected by it. Also, most of the people that would be affected by it are not in positions of power and have no ability to stop that change. Most of the people with the ability to make huge changes to government are millionaires and will still sit in their comfortable offices, eat nice food, send their kids to nice schools, and get top tier healthcare when they are sick.
 

Bamabuzzard

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This didn't seem to fit well in any of the other threads, so I figured I figured I'd make a new one. Not sure how much weight I give this pollster, but the numbers do surprise me, and I think it's a discussion worth having.

Poll: A majority of Americans support raising the top tax rate to 70 percent

Q: Currently the top tax rate is 37%. Would you favor or oppose a tax proposal that would apply a 70% rate to the 10 millionth dollar and beyond for individuals making $10 million a year or more in reportable income?

GOP: 45% support (55% oppose)
Dem: 71% support (29% oppose)
Ind: 60% support (40% oppose)

Total: 59% support (41% oppose)
I know this isn't the sports board but this tax law would still impact the people within the professional sports realm. I wonder how this would impact professional sports contracts? For instance, currently there are some NFL and MLB players making approximately $20-30 million per year. This would materially alter the value of their contracts. Assuming (as some have suggested be done) a lot of the "loop holes" are closed to keep the rich from lowering their taxable income. For example, Aaron Rodgers currently makes $34MM/year. Under this tax law, $24 million of the $34 million is taxed at 70%. So, of that $24 MM, Rodgers is pocketing $7.2 MM and paying $16.8 million to the government. The value of that contract is still the same to the team (the Packers). But drastically changes for Rodgers.
 
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CharminTide

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I know this isn't the sports board but this tax law would still impact the people within the professional sports realm. I wonder how this would impact professional sports contracts? For instance, currently there are some NFL and MLB players making approximately $20-30 million per year. This would materially alter the value of their contracts. Assuming (as some have suggested be done) a lot of the "loop holes" are closed to keep the rich from lowering their taxable income. For example, Aaron Rodgers currently makes $34MM/year. Under this tax law, $24 million of the $34 million is taxed at 70%. So, of that $24 MM, Rodgers is pocketing $7.2 MM and paying $16.8 million to the government. The value of that contract is still the same to the team (the Packers). But drastically changes for Rodgers.
Well, I can't really speak to that. One tricky thing about this conversation is that it's hard to know what Aaron Rodgers is paying in taxes now. There are so many loopholes and ways to reclassify or shelter income that it's never truly possible to know what someone pays in taxes unless they tell you. And not knowing what their present tax burden looks like makes it hard to analyze any changes.

I'd wanted to shove this in the thread somewhere, and here is as good a place as any since you brought up the 70% figure. That number wasn't just pulled out of the air by AOC. It's actually a percentage that was calculated by Nobel Prize winning economist Peter Diamond and Emmanuel Saez (LINK). In essence, they ran a bunch of calculations to find the inflection point where taxing high income raises revenue, but doesn't create such a burden on the rich that it disincentivizes participation in the market. An analogy could be drawn to cigarette taxes. Some localities tax cigarettes so much that they create enough of a financial incentive for people to quit that these localities actually start to lose tax revenue due to behavioral change. Diamond and Saez wanted to find that same optimization point and get as close to it as possible without going over and creating that disincentive. Their number was 73% (AOC rounded down). Coincidence or not, that happens to correspond with the highest tax brackets during the post WWII golden age that older folks wax poetic about.

Now, is that inflection point going to be the same for Aaron Rodgers and Bill Gates? Maybe, maybe not. Does it account for those with a limited earning window versus those with more sedentary jobs who can work well into their 80s? Not really. But CEO and athlete compensation would probably be reconsidered if these changes come to pass. And IMO, it's a pretty good starting point.
 

Bamabuzzard

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Well, I can't really speak to that. One tricky thing about this conversation is that it's hard to know what Aaron Rodgers is paying in taxes now. There are so many loopholes and ways to reclassify or shelter income that it's never truly possible to know what someone pays in taxes unless they tell you. And not knowing what their present tax burden looks like makes it hard to analyze any changes.

I'd wanted to shove this in the thread somewhere, and here is as good a place as any since you brought up the 70% figure. That number wasn't just pulled out of the air by AOC. It's actually a percentage that was calculated by Nobel Prize winning economist Peter Diamond and Emmanuel Saez (LINK). In essence, they ran a bunch of calculations to find the inflection point where taxing high income raises revenue, but doesn't create such a burden on the rich that it disincentivizes participation in the market. An analogy could be drawn to cigarette taxes. Some localities tax cigarettes so much that they create enough of a financial incentive for people to quit that these localities actually start to lose tax revenue due to behavioral change. Diamond and Saez wanted to find that same optimization point and get as close to it as possible without going over and creating that disincentive. Their number was 73% (AOC rounded down). Coincidence or not, that happens to correspond with the highest tax brackets during the post WWII golden age that older folks wax poetic about.

Now, is that inflection point going to be the same for Aaron Rodgers and Bill Gates? Maybe, maybe not. Does it account for those with a limited earning window versus those with more sedentary jobs who can work well into their 80s? Not really. But CEO and athlete compensation would probably be reconsidered if these changes come to pass. And IMO, it's a pretty good starting point.
I think there's no way to even begin to project people's behavior/reaction to it. It probably depends on the individual/industry. I'm just curious as to what people who are in the sports/entertainment industry would do, if anything. This is purely speculation, but I wonder would Aaron Rodgers ask the team to increase his salary in order to recapture the net value of the contract before the tax increase? If the team were to do this (which we have no idea if they would or not) and this became common practice across the league to compensate other players in Rodgers' situation. It would mean the team would have to decide to either eat the additional cost, or pass the cost down to their consumers. Either way, somebody at some point in the transaction is going to have to be the one to absorb the increase.


Crimsonaudio, any thoughts on how or if this would impact your industry (music industry) as a whole?
 
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CharminTide

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I think there's no way to even begin to project people's behavior/reaction to it. It probably depends on the individual/industry. I'm just curious as to what people who are in the sports/entertainment industry would do, if anything. This is purely speculation, but I wonder would Aaron Rodgers ask the team to increase his salary in order to recapture the net value of the contract before the tax increase? If the team were to do this (which we have no idea if they would or not) and this became common practice across the league to compensate other players in Rodgers' situation. It would mean the team would have to decide to eat the additional cost, or pass the cost down to their consumers. Either way, somebody and some point in the transaction is going to have to be the one to absorb the increase.
Well there is historical data for some industries, since the top tax rate used to be even higher than 70%. But that doesn't work for the NFL, since the average NFL salary in the 1970s was something like 150k (in 2018 dollars) compared to 1.5 million today. Personally, I doubt he'd be able to convince the Packers to up his contract even more, and if every team is under the same salary constraints (who knows how the cap would change), I doubt anyone else would either. But if he's not satisfied with the highest contract in NFL history, Aaron Rogers is free to do more State Farm commercials.
 

92tide

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Well there is historical data for some industries, since the top tax rate used to be even higher than 70%. But that doesn't work for the NFL, since the average NFL salary in the 1970s was something like 150k (in 2018 dollars) compared to 1.5 million today. Personally, I doubt he'd be able to convince the Packers to up his contract even more, and if every team is under the same salary constraints (who knows how the cap would change), I doubt anyone else would either. But if he's not satisfied with the highest contract in NFL history, Aaron Rogers is free to do more State Farm commercials.
he could raise chickens, then trade them for some bootstraps
 

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