The U.S. Economy: Stand by for more worse news

[Schmelzer]

The externalized benefits from education, in particular, are enormous - especially, say, the education of girls in poor countries. Likewise medical care.

The benefits are enormous. That's a difference.

Explicit road payments are always parasitic on an existing road system, taxpayer financed.

Maybe, but this does not change the point that today there are ways to avoid the common good problem for roads.

Except that they haven't hidden it - they have merely lowered the tax rates. It's still visible. They are spending hundreds of millions and hiring fancy lawyers simply to lower their tax rates on their visible income - which means they can't actually hide their income, as you claimed.

They can and do - not all but essential parts.

So when you said that high income tax rates were useless because the rich would simply hide their income, you were wrong.

No. With higher income taxes there will be more hidden. Economics 101.

The topic was personal income tax - it's levied on wages, tips, and compensation. If a company gives a guy a car or a plane, that's compensation, he owes income tax.

I have not said "gives him". It is a company car and remains a company car, he uses it for doing his job, as he uses his office or the worker uses the machine. As the chief of an international firm, he has to make business travel to the Caribbean hotel, this is his job.

Sorry, but there are hundreds, thousands such subtle tricks how one has to do the job of hiding income. You need good lawyers for this, of course, for the details. Errors can be costly - but errors are what the small guys do, those who cannot afford a large team of lawyers.

And that is no way hide big money anyway, it's trivial.

It is a way to hide all what you need to live a live in luxury. The big things one buys, in particular more firms, commodities and so on, can be hidden in this way too.

None of the rest of that has anything to do with personal income - it all falls under various business accounting rules, and that's another topic, of interest to shareholders and investors as well as the tax man.

Of course, this is what I mean if I say the income is hidden. It is no longer income, but something that "falls under various business accounting rules, and that's another topic". Bingo. And all this completely legal.

Having a luxurious office does not avoid personal income tax, for example.

Of course, there will be also some official income, and he will pay income tax for this. No problem. But if this is more than 15% of his real income, he is stupid and will not become superrich, and if he is superrich based on heritage, he will not long remain.

Meanwhile the critical, central benefit of an income tax in a modern industrial economy is its effect on economic inequality

Which is measured by evaluating how much income these guys have which is taxed. LOL.

 

[iceaura]

I have not said "gives him". It is a company car and remains a company car, he uses it for doing his job, as he uses his office or the worker uses the machine.

I addressed that in the part of the post you failed to to quote.

Sorry, but there are hundreds, thousands such subtle tricks how one has to do the job of hiding income

Of course there are. But clearly these guys are not hiding much of their income with them, because they are spending hundreds of millions on marginal income tax reduction.

"So when you said that high income tax rates were useless because the rich would simply hide their income, you were wrong."
No. With higher income taxes there will be more hidden. Economics 101.

But not enough more. As is obvious from the effort being expended on lowering those tax rates.

All effort spent on lowering tax rates is completely wasted, if one can simply hide the money. So we can see that they can't, in fact, hide enough of the money to make up for the higher tax rates - if they could, they would. Why would they spend hundreds of millions an years of effort on tax rate reduction if they could just hide the money?

They can and do - not all but essential parts.
- - -
Of course, there will be also some official income, and he will pay income tax for this. No problem. But if this is more than 15% of his real income, he is stupid and will not become superrich, and if he is superrich based on heritage, he will not long remain.

So you think they're just stupid, for not hiding their income but instead spending hundreds of millions on marginal tax reduction. How did they get so rich, if they are that stupid?

Of course, this is what I mean if I say the income is hidden. It is no longer income, but something that "falls under various business accounting rules, and that's another topic". Bingo.

Well, it's not hidden, and rich people don't get to spend it on personal stuff or use it as personal income. So what's your point? Do you understand the difference between the income of corporation and the income of rich people?

"Meanwhile the critical, central benefit of an income tax in a modern industrial economy is its effect on economic inequality"
Which is measured by evaluating how much income these guys have which is taxed. LOL.

No, it's not. You never read that book I linked for you, obviously. Or anything else, apparently.

The connection between higher income tax rates (and capital gains tax rates, of course) and lower economic inequality is one of those common sense things that science has backed up thoroughly.

 

[Schmelzer]

But clearly these guys are not hiding much of their income with them, because they are spending hundreds of millions on marginal income tax reduction.

You think so, really? I would bet politicians are much cheaper. This is what one can expect for getting a particular contract worth billions. And only because the competitors are ready to spend similar sums.

All effort spent on lowering tax rates is completely wasted, if one can simply hide the money.

Not completely. But what is your source for these "hundreds of millions", once you like to repeat this so often?

Well, it's not hidden, and rich people don't get to spend it on personal stuff or use it as personal income. So what's your point?

You don't get it? My firm buys another firm. And makes no profit to tax, as the result. If I would be honest, the firm would have made a big profit, I would have paid income tax, and then bought this other firm. Ok, only half of it or so, because of the progressive income tax. But if the firm buys the other firm it is not personal income. It is even not income of the corporation, but an investment of the corporation:

Do you understand the difference between the income of corporation and the income of rich people?

I understand, of course, different rules for taxation. But the lawyers of the rich guy understand all these differences in a much better way.

No, it's not. You never read that book I linked for you, obviously. Or anything else, apparently.

I read enough to say that this was the main source of information about income inequality. Everything else was even more questionable and indirect.

If you think differently, I'm ready to continue. Quote a particular page, with explicit citations (too lazy to find it here again) to make your point.

 

[iceaura]

But clearly these guys are not hiding much of their income with them, because they are spending hundreds of millions on marginal income tax reduction.
You think so, really?

Yes. The effort to obtain marginal reduction in various tax rates - income, capital gains, etc - has been a major one, and an expensive one, for decades now in the US. They used to be much higher - 90% was the top bracket rate, post WWII. And even at that rate a great deal of tax revenue was obtained - enough to retire much of the war bonding.

Even at 90% for motivation the wealthy were unable to hide many millions of dollars of personal income. And that was before computers etc - when the IRS was auditing by hand.

You don't get it? My firm buys another firm. And makes no profit to tax, as the result.

So?

If I would be honest, the firm would have made a big profit, I would have paid income tax, and then bought this other firm

No. Corporate profits are not subject to personal income tax.

I understand, of course, different rules for taxation

You show no sign of understanding even the basic situation.

I read enough to say that this was the main source of information about income inequality.

You were mistaken in your presumptions about his methods. You presumed he simply accepted whatever was handed out in some tax tables as given, carelessly, because he used them as a source. You also mistook an argument about wealth inequality for an argument about income inequality. And you made a couple of other basic errors I forget at the moment.

If you think differently, I'm ready to continue. Quote a particular page, with explicit citations (too lazy to find it here again) to make your point.

Why should I go dig that out again, because you are careless and lazy? I handed you a decent, one package source of information, and you blew it off in oblivious ignorance; it's got a table of contents and an index and a literature list, it's pretty thorough, if I recall correctly there's a compact discussion of some stuff relevant to your carelessness in chapter 8 but I could be wrong, might be 6

- do some research, obtain knowledge, or quit making assertions that require you to have done it.

The relevance here, of course, is that wealth and income inequality is building up in the US, and if these guys like Piketty are right (and they make a strong case) that will suppress the US economy, drag down the prosperity of the country as a whole and especially the lower economic classes in it.

 

[Schmelzer]

Yes. The effort to obtain marginal reduction in various tax rates - income, capital gains, etc - has been a major one, and an expensive one, for decades now in the US. They used to be much higher - 90% was the top bracket rate, post WWII. And even at that rate a great deal of tax revenue was obtained - enough to retire much of the war bonding.

But the number "hundreds of millions" is simply your guess or so, not?

Even at 90% for motivation the wealthy were unable to hide many millions of dollars of personal income.

Of course, one would not be so stupid to hide it all. It is even not necessary. Once the taxes are reduced to around 10-15% of the real income, it is fine enough.

No. Corporate profits are not subject to personal income tax.

Which is, therefore, another place where personal income may be hidden.

You were mistaken in your presumptions about his methods. You presumed he simply accepted whatever was handed out in some tax tables as given, carelessly, because he used them as a source. You also mistook an argument about wealth inequality for an argument about income inequality. And you made a couple of other basic errors I forget at the moment. Why should I go dig that out again, because you are careless and lazy?

Nice to read a repetition of your claims, but this is, of course, irrelevant. And, by the way, false - because my point was never that "he simply accepted whatever was handed out as given". I have no doubt that he had made the best of what was available. Some plausible reasoning sometimes allows to improve such data. The problem is that what was available is not a good base.

If you want to make a point that he had something really better than the taxes paid, you have to present it. Not dig that out again, but the first time. Because I don't remember to have seen any quote about these better sources. "Somewhere in the book of Piketty" is not sufficient. I have seen such better sources nowhere in the book of Piketty, Your turn.

 

[iceaura]

But the number "hundreds of millions" is simply your guess or so, not?

They spend many billions on political influence (K Street alone is something like 9 billion a year), and the politicians they spend it on dedicate a lot of effort to giving them lower tax rates and larger tax breaks. If they aren't trying to get lower tax rates with their bribe money, their bribed politicians have been wasting a lot of effort on their behalf - for decades now.

Of course, one would not be so stupid to hide it all. It is even not necessary. Once the taxes are reduced to around 10-15% of the real income, it is fine enough.

That is debunked by comparing the incomes declared before and after the 90% rate was lowered. As Piketty does, btw, not only in the US, but in France and Britain and other countries.

Or you could take a second, and realize that to get a 90% rate down to 10- 15% of their real income they would have to hide - completely hide, not reclassify etc - more than 4/5 of their real income, against a serious audit, every year for many years.

Which is, therefore, another place where personal income may be hidden.

As long as neither you or the company ever get audited, the shareholders and investors don't care, the certified accounting firms your company hires are willing to sign off on your shenanigans, the employees involved don't mind sticking their necks out for you, and the Board give you its blessing, you can do any fool thing you want. But if you get caught, it's a felony.

Nice to read a repetition of your claims, but this is, of course, irrelevant. And, by the way, false - because my point was never that "he simply accepted whatever was handed out as given". I have no doubt that he had made the best of what was available. Some plausible reasoning sometimes allows to improve such data. The problem is that what was available is not a good base.

Read the book, or shut up about it.

If you want to make a point that he had something really better than the taxes paid, you have to present it

No, I don't. I don't have to go back and dig up the book and distill his many pages of argument and lines of analysis and so forth, just because you're careless and lazy and want to make a stupid argument already debunked by the simple fact that rich people care a lot about tax rates in the US.

You are attempting to argue that the income tax rate does not matter to high income Americans, because they can "hide" their income anyway. And you don't even know the difference between corporate and personal income. Hello?

 

[Schmelzer]

They spend many billions on political influence (K Street alone is something like 9 billion a year), and the politicians they spend it on dedicate a lot of effort to giving them lower tax rates and larger tax breaks. If they aren't trying to get lower tax rates with their bribe money, their bribed politicians have been wasting a lot of effort on their behalf - for decades now.

In other words, you don't know anything specific. The problem with estimating all this is a very trivial one - bribery is illegal, but all this spending is essentially bribery. So, nobody will tell you the details for what was the aim of this spending. And even if somebody tells something, this is, most probably, camouflage.

That is debunked by comparing the incomes declared before and after the 90% rate was lowered. As Piketty does, btw, not only in the US, but in France and Britain and other countries.

You think so? Quotes please. Once, as I expect, the main method to reduce taxes are legal, using the many holes in the law codes, there is no reason at all to declare more income if the taxation becomes lower. This may reduce the really hardcore illegal things. But not the unproblematic legal methods.

Or you could take a second, and realize that to get a 90% rate down to 10- 15% of their real income they would have to hide - completely hide, not reclassify etc - more than 4/5 of their real income, against a serious audit, every year for many years.

This is what I expect. As I have explained, the main method is legal redeclaration. You have yet failed to explain me what is the problem to hide all the money I want to use to buy more firms and commodities (what else will a superrich buy for 4/5 of his income?) as investments of his own firms?

As long as neither you or the company ever get audited, the shareholders and investors don't care, the certified accounting firms your company hires are willing to sign off on your shenanigans, the employees involved don't mind sticking their necks out for you, and the Board give you its blessing, you can do any fool thing you want. But if you get caught, it's a felony. Read the book, or shut up about it.

LOL. The rich do not read the law books, they leave this for their lawyers. And once the lawyers do their job, they have not to be afraid of audits. The shareholders understand this game too, and do not object. They are comfortable with the shareholder value rising instead of getting high dividends too.

I don't have to go back and dig up the book and distill his many pages of argument and lines of analysis and so forth, just because you're careless and lazy and want to make a stupid argument already debunked by the simple fact that rich people care a lot about tax rates in the US.

Of course, you don't have to support your claims with arguments. Its your decision. You have to live with the fact that, in this case, your claims are ignored as unsubstantiated.

You are attempting to argue that the income tax rate does not matter to high income Americans, because they can "hide" their income anyway. And you don't even know the difference between corporate and personal income. Hello?

Of course, the difference between corporate and personal income is a triviality, it follows from the meaning of the words "corporate" and "personal". Or do you mean I have to know more details of tax laws? You are funny. The main point of the game is that the tax laws are made so complex intentionally. To allow to hide whatever one wants to hide. To know the laws is the job of highly paid specialists, lawyers.

Why I'm sure they can hide what they want? Because I know the tax laws are extremely complex. This makes sense for the superrich to hide their incomes. Else, it makes no sense. A simple flat tax without bookshelfes of exceptions would do the job much better. Then I know that they have the power. They can and do bribe the politicians, so that they have the laws they want.

 

[iceaura]

In other words, you don't know anything specific.

But I do know some things general, such as orders of magnitude; so I can easily lowball an estimate of the effort the rich have applied to lowering their income tax rates - I can get my estimate so low, less than a tenth of what circumstances indicate is plausible, that nobody with a grain of sense would object to it. So I did - hundreds of millions of dollars, decades of media and lobbying and political effort.

Once, as I expect, the main method to reduce taxes are legal, using the many holes in the law codes, there is no reason at all to declare more income if the taxation becomes lower. This may reduce the really hardcore illegal things. But not the unproblematic legal methods.

None of those methods hide the money, as your arguments require.

This is what I expect. As I have explained, the main method is legal redeclaration. You have yet failed to explain me what is the problem to hide all the money I want to use to buy more firms and commodities (what else will a superrich buy for 4/5 of his income?) as investments of his own firms?

None of that money is hidden, none of the money used by a corporation to buy another corporation is personal income.

All of it is declared. All of that money would be on those books Piketty used - carefully - to analyze trends in the inequality of wealth, for example. What are you trying to say?

And once the lawyers do their job, they have not to be afraid of audits.

What you described was illegalities. Lawyers cannot make illegal actions legal. The list of American executives who been caught doing these things is long, and their high priced lawyers did not absolve them of worry about audits.

The shareholders understand this game too, and do not object. They are comfortable with the shareholder value rising instead of getting high dividends too.

Their shareholder value drops, rather than rises, when highly placed executives embezzle from the corporation. This does not make them happy. Review this, for example: https://en.wikipedia.org/wiki/Enron Notice that the shareholders were not happy, even after the finest lawyers money can buy had been brought in by the likes of Kenneth Lay.

Of course, the difference between corporate and personal income is a triviality, it follows from the meaning of the words "corporate" and "personal". Or do you mean I have to know more details of tax laws? You are funny

You do have to know what a corporation is and the basics of how they work, before delivering yourself of opinions on capitalism and socialism and income taxes in a modern industrial economy such as the US. Yes, you do. Unless you are content to make a fool of yourself in public from now to infinity.

Why I'm sure they can hide what they want? Because I know the tax laws are extremely complex. This makes sense for the superrich to hide their incomes. Else, it makes no sense. A simple flat tax without bookshelfes of exceptions would do the job much better.

Once again, you are basing certainty in judgment on ignorance of fact. In this case, in addition to not knowing even the basics of how tax laws work, and being dedicated to overlooking the meaning of the word "hidden", you don't know what a flat tax is. You're sure it makes sense, and would save bookshelves of laws, but you don't know what it is.

Your actual argument is as follows: the rich go to a lot of trouble to keep even a minor percentage of the wealth accruing to them from being subject to income tax, therefore the income tax does not afflict the rich regardless of what its rates may be, and there is no way to estimate what the real incomes of the rich are.

 

[Schmelzer]

But I do know some things general, such as orders of magnitude; so I can easily lowball an estimate of the effort the rich have applied to lowering their income tax rates - I can get my estimate so low, less than a tenth of what circumstances indicate is plausible, that nobody with a grain of sense would object to it. So I did - hundreds of millions of dollars, decades of media and lobbying and political effort.

Fine. But it is nothing but a guess.

None of those methods hide the money, as your arguments require.

What my arguments require is that the superrich do not have to pay the progressive taxes for their real incomes. With real incomes I mean that what is their income in common sense - what they own or control more than before.

None of that money is hidden, none of the money used by a corporation to buy another corporation is personal income.

If I own a company, and this company buys another one, then I become richer, and what I additional own is the value of this company. So, from common sense, this is income. For tax law, it is not income. Fine. This is what is important.

All of it is declared. All of that money would be on those books Piketty used - carefully - to analyze trends in the inequality of wealth, for example.

And can he use them to decide about income distribution? Not really. Who owns the corporation? Who knows? Piketty hardly knows. He may think that all the corporations are owned by the superrich. He would be wrong, because a quite large amount of savings of the middle class is today in stocks too. Is the company owned 99% by one superrich and 1% by the middle class or 10% by the superrich and 90% by the middle class? How wants Piketty find this out? He may have some plausible guesses, but not more.

What you described was illegalities. Lawyers cannot make illegal actions legal.

What is legal and what is illegal differs a lot between jurisdictions. I have given, as an example, some general ideas how to hide the real income in completely legal ways. Which ways are legal, which variants of my vague, general proposal will work, is something the lawyers have to find out. There are some others, half legal or illegal, but they are not really necessary in a land which is controlled for generations by oligarchs as the US. They have already enough ways to hide their income from progressive taxation in completely legal ways.

The list of American executives who been caught doing these things is long, and their high priced lawyers did not absolve them of worry about audits.

There are always losers. The guys who want to much and take unreasonable risks. The point being?

Their shareholder value drops, rather than rises, when highly placed executives embezzle from the corporation. This does not make them happy.

You obviously have not got the point. The point is not at all embezzling something from the shareholders. It is transforming a profit, which is paid as a dividend and leads to income to be taxed, into an increased value of the firm by investment (buying other firms or whatever). Which increases the shareholder value. But does not lead to taxed income. The shareholders are comfortable with this. They also become richer without paying income tax for this.

You do have to know what a corporation is and the basics of how they work, before delivering yourself of opinions on capitalism and socialism and income taxes in a modern industrial economy such as the US.

And I know, of course. You now look like joepistole who seems to believe his own polemical claims.

Just a hint: Whenever somebody claims "you don't know what X is" any reasonable person ignores this as cheap polemics anyway. So this is nothing I would have to care about. You want to present yourself joepistole-like? Fine, I have no problem with this.

Your actual argument is as follows: the rich go to a lot of trouble to keep even a minor percentage of the wealth accruing to them from being subject to income tax, therefore the income tax does not afflict the rich regardless of what its rates may be, and there is no way to estimate what the real incomes of the rich are.

No. learn to read. The first part is your argument. I do not take it seriously.

Here is what I think. The state has to offer a lot. All the taxpayers money. To get them, you have to bribe the politicians. Unfortunately, other guys also want all these money, and want to buy them too. So you have to pay a lot to get the money, of the order of what you get. Paying them only 1 000 \$ to get 1 000 000 000 \$ does not work. But 100 000 000 \$ may work. This is about your original order of magnitude spend by firms for politicians. But this is about completely different things. It is about things where a single, particular firm gets all the money. It is not at all about general taxes where the whole class of the rich has some profit. The "lot of trouble" exists only in the imagination of the left. The left sheeple, to be accurate, because the left politicians are paid by the firms too. Yes, even those who favor higher taxes.

The game is simple. The rich have the power, if high progressive taxes would be a problem for them there would not be such taxes. It is that simple.

 

[iceaura]

What my arguments require is that the superrich do not have to pay the progressive taxes for their real incomes. With real incomes I mean that what is their income in common sense - what they own or control more than before.

We can start a different discussion on capital gains taxes, if you want - the rich dislike them as well, and have been more successful in lowering their rates (because regular people don't realize what they are). They are not progressive, in the US - you are correct. But only the rich pay them, for the most part.

Meanwhile, your notion of "common sense" varies considerably from reality in this matter. The rich in the US pay income taxes on their wages, tips, and compensation. When the taxes are progressive - which they were for fifty years, and still are to a small extent - they pay progressive income taxes. They cannot hide very much of this income, legally. So they strongly object to income taxes, and work very hard to lower their rates and reclassify as much of their income as they can.

You obviously have not got the point. The point is not at all embezzling something from the shareholders. It is transforming a profit, which is paid as a dividend and leads to income to be taxed, into an increased value of the firm by investment (buying other firms or whatever).

But that profit is not payed as a dividend, and so is not received as income. The shareholders cannot spend it on themselves. It's not in their pockets. So we aren't talking about that. Why is this confusing to you?

None of that would be personal income, so it's not relevant here. You were talking about rich people hiding their personal income to avoid paying income taxes on it. The rich man taking money belonging to the corporation for his personal use, and not claiming it as income, would be one such example. That would be embezzling. It would lower the value of the corporation, to the distress of the shareholders if discovered. It is illegal.

Just a hint: Whenever somebody claims "you don't know what X is" any reasonable person ignores this as cheap polemics anyway

And when someone points to exactly what you are saying that reveals your incomprehension - such as confusing corporate and personal income, and declaring the difference between them to be a triviality, in the middle of a discussion of income taxes - you are not interested. So your hints look like willful attempts to maintain the ignorance you require to hold the opinions you hold.

But this is about completely different things. It is about things where a single, particular firm gets all the money. It is not at all about general taxes where the whole class of the rich has some profit. The "lot of trouble" exists only in the imagination of the left.

You seem to think that because one motive for influence exists, the others do not. That's why I lowballed the estimate - less than 10% of what would be plausible. So you could prattle about the other stuff they lobby on without touching my argument.

Look: There are a lot of rich people in the US who do not receive government money or contracts who nevertheless pay big bucks into PACs and lobbying firms and so forth, and the politicians they bribe spend a lot of their time and rhetoric trying to lower income tax rates and bitching about the IRS and so forth. The rightwing rich in the US, as a class, dislike the progressive income tax a lot, and want it lowered or abolished, and spend big money trying to accomplish that, and have been partly successful over the decades. This is just a fact.

The game is simple. The rich have the power, if high progressive taxes would be a problem for them there would not be such taxes. It is that simple.

And any aspect of reality in conflict with that stupidity you simply deny. When Trump wins the rich man's Party nomination, it will be what the rich wanted all along - right?

 

[Schmelzer]

But that profit is not payed as a dividend, and so is not received as income. The shareholders cannot spend it on themselves. It's not in their pockets. So we aren't talking about that. Why is this confusing to you?

I'm not confused. The rich want to spend their income to buy firms. Because a car, a plane, a yacht, a swimming pool and something to eat they already have, but a firm gives more power and more profit. This is done without paying progressive income tax, and without even paying corporate tax, because this is formally investment. The part of their income they want to spend for bread and butter is the part which will be officially declared as income. The part they want to buy firms from will be declared as investment by the firm, and not taxed.

If you don't name "personal income" the part of the income which the superrich use to buy more firms (which is, for the really rich, the greatest part of the income), your choice. But this suggests that you are quite confused.

The rich man taking money belonging to the corporation for his personal use, and not claiming it as income, would be one such example.

He buys a firm. It is owned, then, by the corporation. Which he owns. That means, he can do whatever he likes with that firm. All what he would be able to do if he would have bought it from his taxed income. But it does in no way distress the shareholders, if there are any other. Their shareholder value increases.

You seem to think that because one motive for influence exists, the others do not. That's why I lowballed the estimate - less than 10% of what would be plausible.

So what? This is your personal guess, based on your belief what is plausible. Fine. This does not mean it is a number I have to take seriously. And so your argument you have started from this assumption appears quite weak.

Look: There are a lot of rich people in the US who do not receive government money or contracts who nevertheless pay big bucks into PACs and lobbying firms and so forth, and the politicians they bribe spend a lot of their time and rhetoric trying to lower income tax rates and bitching about the IRS and so forth.

You really think the rhetoric of the politicians matters?

This is just a fact.

You are already in joepistole mode? Don't forget about all the politicians from the left who talk about increasing tax rates. They also get paid from the lobbies. You don't know? You believe that Hitlary is not for the rich?

 

[joepistole]

I'm not confused. The rich want to spend their income to buy firms. Because a car, a plane, a yacht, a swimming pool and something to eat they already have, but a firm gives more power and more profit. This is done without paying progressive income tax, and without even paying corporate tax, because this is formally investment. The part of their income they want to spend for bread and butter is the part which will be officially declared as income. The part they want to buy firms from will be declared as investment by the firm, and not taxed.

Oh contraire, you are greatly confused. That isn't how the world works outside of Mother Russia. That isn't how it works in the West. The world isn't as corrupt as your beloved Mother Russia. In the West, there is this thing commonly refereed to as the rule of law. Taxes are not based on what "they want to spend for bread and butter". It's based on a multitude of factors and circumstances. And there isn't just one form of taxation, there are multiple forms of taxation. Taxation isn't as simple, nor is it as corrupt or as haphazard as you seem to think it is. It all gets back to this notion of the rule of law which is an alien concept in your beloved Mother Russia.

If you don't name "personal income" the part of the income which the superrich use to buy more firms (which is, for the really rich, the greatest part of the income), your choice. But this suggests that you are quite confused.

He buys a firm. It is owned, then, by the corporation. Which he owns. That means, he can do whatever he likes with that firm. All what he would be able to do if he would have bought it from his taxed income. But it does in no way distress the shareholders, if there are any other. Their shareholder value increases.

Well that depends, assuming the fictitious owner owns 100% of the company, then he/she can do whatever he or she wants with it. Minority share holders do have some rights too. Additionally, corporations with are, with a few exceptions, taxed as separate entities. If companies provide owners "fringe" benefits as you suggest, that income is taxable to the owners. So it isn't "tax free income" as you have asserted. As you have been repeatedly told, the world isn't like Mother Russia. This gets back to Mother Russia's corruption problem.

So what? This is your personal guess, based on your belief what is plausible. Fine. This does not mean it is a number I have to take seriously. And so your argument you have started from this assumption appears quite weak.

You really think the rhetoric of the politicians matters?

The rest of the world isn't like Mother Russia.

You are already in joepistole mode? Don't forget about all the politicians from the left who talk about increasing tax rates. They also get paid from the lobbies. You don't know? You believe that Hitlary is not for the rich?

Yes, unfortunately for you, facts do matter, and you have none. Lobbyists are not all bad. They help inform elected officials. Not all lobbies are cut from the same cloth. When they cross the line, that becomes bad (e.g. Billy Tauzin). And as you have been repeatedly told, the West and in particular the US isn't like Mother Russia. They don't get paid by lobbyists. Unlike your beloved Mother Russia money for votes is illegal in the US and other Western and many other countries throughout the world.

Money is donated to political action committees and campaigns. It's not something I support. But at least we know it, and can change it if enough of us decide to do it. It's called democracy.

 

[iceaura]

I'm not confused. The rich want to spend their income to buy firms. Because a car, a plane, a yacht, a swimming pool and something to eat they already have, but a firm gives more power and more profit. This is done without paying progressive income tax, and without even paying corporate tax, because this is formally investment. The part of their income they want to spend for bread and butter is the part which will be officially declared as income. The part they want to buy firms from will be declared as investment by the firm, and not taxed.

As long as you cannot distinguish corporate from personal income in your analysis, you will remain badly confused.

For example, one of the benefits of raising income tax rates on the rich is their tendency to then avoid taking as much money as income, and instead keeping it invested in - loaned to - various corporations. Your characterization of that as "hiding income" mistakes both the nature and the intent of those tax rate hikes.

You are also confusing what is essentially a loan - an investment in a corporation - with ownership of a tangible thing.

He buys a firm. It is owned, then, by the corporation. Which he owns. That means, he can do whatever he likes with that firm.

1) He can't have the firm buy him a house, or a car, or a diamond ring. He can't have the firm pave his personal driveway, or finance his children's college education. He would have to declare all that stuff as compensation, for tax purposes.

So what? This is your personal guess, based on your belief what is plausible. Fine. This does not mean it is a number I have to take seriously

No one is saying you have to gather information or think about it. You can call my informed estimates "guesses" and loudly claim your right to ignorance in your opinions, of course. But why?

You really think the rhetoric of the politicians matters?

I have seen the time, effort, and rhetoric various bribed and ideologically bent politicians devoted to pushing tax cuts through the US Congress pay off, big time. They very much succeeded in lowering those tax rates, obtaining those tax breaks, etc. And the rich profited handsomely, thereby.

Don't forget about all the politicians from the left who talk about increasing tax rates. They also get paid from the lobbies. You don't know? You believe that Hitlary is not for the rich?

Hillary is not from the Left. She does not advocate increases in income or capital gains tax rates (she does advocate spreading the transition from short term to long term capital gains rates over four steps in four years, rather than the one step jump at two years currently in place, and that could work as an increased rate for careless or emergency-motivated sellers of investments, but the low and high rates remain as they are).

The bribed politicians who advocate substantially increasing income tax and capital gains tax rates do not get bribed by the same lobbies as those who advocate abolishing the income tax and the IRS.

And not every politician is bribed. Although the recent Court rulings on bribery as speech have brought great pressure to bear on the honest, even now not every politician has simply abandoned governance in favor of shilling for the wealthy. This is visible in their rhetoric.

And so forth. You keep posting this silly stuff because you lack real world information.

 

[Schmelzer]

For example, one of the benefits of raising income tax rates on the rich is their tendency to then avoid taking as much money as income, and instead keeping it invested in - loaned to - the corporation. Your characterization of that as "hiding income" mistakes both the nature and the intent of those tax rate hikes.

Nice try. First, who cares if you don't like how I name this. The point is that the superrich like to buy such things like firms, so they do it anyway. They will not buy more hamburgers, because they cannot each that much, but buying more firms they can forever, until they own the whole world.

Increasing progressive taxes may have such side effects. It means I can buy a firm without paying taxes but a hamburger only with high progressive taxes. But is this good or bad? If they invest, this makes the rich even richer. The poor does not have such a strong tax incentive to buy stocks instead of hamburgers. Good idea for increasing the inequality?

1) He can't have the firm buy him a house, or a car, or a diamond ring. He can't have the firm pave his personal driveway, or finance his children's college education. 2) A very small percentage of the aggregate corporate ownership in the US is in the hands of one person, who has total ownership. Almost all such firms are small LLCs

Which is what you think. What happens in reality is unknown. Ok, about the diamond ring I agree. About everything else I have my doubts. These are the things which heavily depend on the legislation relevant for that particular firm. Of course, we do not talk about "his" house, car, driveway. They will be owned by the firm, and part of the working place of the chief. At least formally. And it is not uncommon at all that firms pay for improvements of the education of their workers.

Then, nobody cares about 100%. 51% is sufficient to elect myself as the director or how this is named.

You can call my informed estimates "guesses" and loudly claim your right to ignorance in your opinions, of course. But why?

Because I believe they are wrong, but, given your style of discussion, do not think it makes sense to explain you why. I would receive nothing but name-calling as a response.

The bribed politicians who advocate substantially increasing income tax and capital gains tax rates do not get bribed by the same lobbies as those who advocate abolishing the income tax and the IRS.

Sure? I'm not.

Lobbyism and bribing works not only in one direction - the firm wants something, writes a las, bribes the politicians, and gets the law. Sometimes politicians write laws unfavorable for some rich, and wait for bribes to stop their proposals.

And not every politician is bribed.

There may be, indeed, some exceptions. Ron Paul or so.

You keep posting this silly stuff because you lack real world information.

Oh, sounds like you are an educated person, instead of joepistole's "facts" you say "real world information". Sounds better, indeed. Everything else is similar.

 

[joepistole]

Nice try. First, who cares if you don't like how I name this. The point is that the superrich like to buy such things like firms, so they do it anyway. They will not buy more hamburgers, because they cannot each that much, but buying more firms they can forever, until they own the whole world.

Increasing progressive taxes may have such side effects. It means I can buy a firm without paying taxes but a hamburger only with high progressive taxes. But is this good or bad? If they invest, this makes the rich even richer. The poor does not have such a strong tax incentive to buy stocks instead of hamburgers. Good idea for increasing the inequality?

Which is what you think. What happens in reality is unknown. Ok, about the diamond ring I agree. About everything else I have my doubts. These are the things which heavily depend on the legislation relevant for that particular firm. Of course, we do not talk about "his" house, car, driveway. They will be owned by the firm, and part of the working place of the chief. At least formally. And it is not uncommon at all that firms pay for improvements of the education of their workers.

Then, nobody cares about 100%. 51% is sufficient to elect myself as the director or how this is named.

Because I believe they are wrong, but, given your style of discussion, do not think it makes sense to explain you why. I would receive nothing but name-calling as a response.

Sure? I'm not.

Lobbyism and bribing works not only in one direction - the firm wants something, writes a las, bribes the politicians, and gets the law. Sometimes politicians write laws unfavorable for some rich, and wait for bribes to stop their proposals.


There may be, indeed, some exceptions. Ron Paul or so.

Oh, sounds like you are an educated person, instead of joepistole's "facts" you say "real world information". Sounds better, indeed. Everything else is similar.

Well, here is the problem, you are on the wrong side of the facts again comrade. It really is that simple. You take what you have observed in Mother your Russia and say, hey, this is how the rest of the world operates, and it isn't. Because the world doesn't operate the way your beloved Mother Russia works is the reason why the rest of the world isn't the backward mess Mother Russia is. The rest of the world and in particular the West isn't the corrupt mess one finds in Mother Russia. While the West isn't perfect, it is light years ahead of your beloved Mother Russia.

 

[krash661]

Well, here is the problem, you are on the wrong side of the facts again comrade. It really is that simple. You take what you have observed in Mother your Russia and say, hey, this is how the rest of the world operates, and it isn't. Because the world doesn't operate the way your beloved Mother Russia works is the reason why the rest of the world isn't the backward mess Mother Russia is. The rest of the world and in particular the West isn't the corrupt mess one finds in Mother Russia. While the West isn't perfect, it is light years ahead of your beloved Mother Russia.

i almost had " liked " your comment-- it was this little line that destroyed it: " The rest of the world and in particular the West isn't the corrupt mess one finds in Mother Russia. "--from this i have to say--do you live under a rock or are you actually this clueless(as you have clearly shown)?

 

[joepistole]

i almost had " liked " your comment-- it was this little line that destroyed it: " The rest of the world and in particular the West isn't the corrupt mess one finds in Mother Russia. "--from this i have to say--do you live under a rock or are you actually this clueless(as you have clearly shown)?

I didn't say the West didn't have a corruption problem. But it isn't even remotely equivalent to Russia's corruption problem.

 

[krash661]

I didn't say the West didn't have a corruption problem. But it isn't even remotely equivalent to Russia's corruption problem.

" The rest of the world and in particular the West isn't the corrupt mess " --shrugs.. it appears, clearly you are--even tho used the words of " one finds in Mother Russia. "--which from this i have to then say: " or are you actually this clueless(as you have clearly shown)? "

 

[joepistole]

" The rest of the world and in particular the West isn't the corrupt mess " --shrugs.. it appears, clearly you are--even tho used the words of " one finds in Mother Russia. "--which from this i have to then say: " or are you actually this clueless(as you have clearly shown)? "

LOL, the fact is the West isn't the corrupt mess that Mother Russia is.

 

[krash661]

LOL, the fact is the West isn't the corrupt mess that Mother Russia is.

again, " which from this i have to then say: " or are you actually this clueless(as you have clearly shown)? " "