The Reality of Money

  • Posted by a hidden member.
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    May 13, 2010 11:48 PM GMT

    My view of the world is that one's possessions are just that: the property of their owner. Most of us on RealJock own some type car or truck. You would raise hell if your county or city came to you one day and said, "we must have your car every Tuesday." In fact, were that to happen I suspect we would have one hell of a revolt.

    Today we live in a world where government expects more of some than it does others. By saying that, I do not mean one is not expected to pay more to support government when one has more income. That is not my point. What I am saying is that if I pay 30 cents of each dollar I posses then so should you.

    Earlier today I toured a business that has made me give much thought to the real facts that this unevenness can affect. The business employs 65 people, mostly low to mid-wage earners. The original cost to create each of these jobs was $2,969,230. At the moment the business is not repaying any of that original investment and in fact is loosing around $4,000,000 a year.

    Unless soemone steps in and spends another $20MM or so there will be no hope at all for ever breaking even. (This would not include any repayment of capital paid in.)

    In situations such as this one sees the impact of new taxes such as the 3.8% medicare tax used for healthcare reform as well as the increase in capital gains from 15% to 20%. Every time these taxes increase more individuals are removed from the group who have enough cash to salvage something as described above. Money invested to provide those initial jobs shrinks.

    Don't believe it? Ok. fine by me. But it will affect my decision and more importantly ability to keep these 65 people from walking the street with a cup in hand.

  • Posted by a hidden member.
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    May 14, 2010 12:29 AM GMT

    In think I get your argument - in spite of some of your reasoning !

    You're worried about progressive taxation (i.e. people with higher incomes paying a higher percentage of their income than people who earn less less). I don't share your worry. My bigger anxiety is that very stark income inequality creates a greater risk to social cohesion and ultimately to our economic well being than anything that comes from making the tax code more progressive.

    Over the past two decades every measure of income inequality in the US points to massive gains being made by the richest 1% of Americans at the expense of every one else. Real wages for the vast majority of Americans have been stagnant or gone backwards over the same period. This is unsustainable as it affects the ability of most Americans to educate their kids, to pay for healthcare, to save for retirement, etc.

    My own view is that our tax system should be more progressive than it already is, both by increasing ,marginal tax rates . In fact, I think we should be looking at addressing the country's structural deficits by means of a one-off wealth tax on people and trusts with net assets of over say $5m.

    I'm under no illusion about how unlikely this is to happen, but the idea has had some interesting adherents, including Warren Buffet, Donald Trump and Ted Turner.

    There are elements of both traditional economics and modern behavioral economics that point to the possibility that progressive taxation may not be as damaging to incentives for high wage worker and investors as Reagonomics (a.k.a. Vodoo Economics) would suggest.
  • Posted by a hidden member.
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    May 14, 2010 2:33 AM GMT
    To use your analogy on the city; taking my car once a week—if it meant that the city would save on public transportation and contribute to less waist I would do it. I’m benevolent that way. However, if you want to take my car so some CEO doesn’t have to pay for a town car—whole other answer.
    I believe you make a very good point and this business you speak of may indeed be in trouble due to over taxation. However, it has been my experience most business fail because of poor management. I spent part of a former life going from business to business showing them where they could save money and make money. Some were unwilling to take any constructive criticism. Some didn’t want to come off the golf-course long enough to hear what I had to say.
  • Webster666

    Posts: 9225

    May 14, 2010 3:31 AM GMT
    Most businesses fail.
    If you don't have what it takes to make your business successful, don't blame medicare or health care or anybody but yourself.