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#31
10-17-2007, 08:40 PM
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Re: Ron Paul on taxation?
[ QUOTE ]
[ QUOTE ] There is no surplus. Payroll taxes are no different than other taxes; it all goes to the same place: building aircraft carriers and giving money to super old people. [/ QUOTE ] There is a huge difference between payroll taxes and social security taxes. Payroll taxes are progressive, social security taxes are not. Payroll taxes are taken from all of your wages, social security taxes apply to only your first 92k. So, people making 1 million a year, pay social security taxes on the first 10% of their earned income, while middle class workers pay social security taxes on 100% of their earned income. Because of this inpropriety, and the fact that the social security surplus is a huge part of the total taxes, the middle income workers are being drained of their spendable income, as compared to the rich, and, it's the rich that benefit the most from a robust economy and the defense of this country, as their investments continue to double. If the social security surplus wasn't used to offset the deficit, Bush would not have been able to give the rich and the oil companies those huge tax cuts. Meanwhile, the riches 1%, earn 20% of all income in a year, while the bottom 50% earn 12%. [/ QUOTE ] How many time are the same GDF lies going to be repeated in this forum? SOCIAL SECURITY SYSTEM IS PROGRESSIVE DESPITE THE CAP ON SS TAXES. THE BENEFIT FORMULA IS FRONT WEIGHTED FOR LOWER INCOMES. THE CURRENT SURPLUS DOESNT PAY ANY DEFICIT. THE BONDS THE SSA BUYS ARE A DEBT OF THE GOVERNMENT LIKE ANY OTHER BOND. IT BECOMES A LIABILITY TO THE GOVERNMENT. IF YOU TAKE OUT A CAR LOAN FOR A $30,000 CAR FROM GMAC, YOU HAVE YOU HAVE A DEBT FOR $30,000 AND YOU HAVE A $30,000 CAR. YOUR NET WORTH IS UNCHANGED. IF YOU BORROW $30,000 FROM YOUR IRA AND BUY A $30,000 CAR YOU HAVE $30,000 LESS IN YOUR IRA AND A $30,000 CAR. YOUR NET WORTH IS UNCHANGED. THIS IS EXACTLY WHAT THE GOVERNMENT DOES WHEN THE SSA BUYS BONDS. What happens in the two scenarios when you pay interest? In one GMAC gets your interest payment...its out of your pocket forever. When you pay back your IRA you get the interest...you aren't really paying any interest at all on the loan! So why would you ever borrow from a third party? Only one reason...if you can earn more money on the $30,000 invested in your IRA than you are paying in interest to GMAC. How can the government invest the SS surplus to earn more than it is paying out in interest? Read some of the threads here about the Fed "artifically lowering interest rates" and the effects that has on allocation of funds to "business that wouldnt be viable at higher interest rates". Now translate that to government investing DIRECTLY in the stock market. Who decides what stocks to buy? Imagine the conspiracy theories about that. OK, invest in indexed funds. What mutual fund do you pick to earn the management fees? Imagine the conspiracy theories about that. The stock market goes down and the surplus is lost. Payroll taxes have to be raised to cover the losses. Imagine the conspiracy theories about that. Payroll tax rates are set to fund the system, including assumptions about future earnings of the surplus. If stock market earnings rates are used...rates that include a risk premium...tax rates would be lowered. But the risk premium is an insurance policy...it isnt "free money", so you are really just shifting the reduction in SS taxes to a future generation of taxpayers. The government cant do anything but "invest in itself" without creating enormous allocation and inter-generational problems. Im sick of people posting about things they dont have the first GD clue about. And most of them RP supporters...coincidence? I think not. The misguided and ill-informed following the ICP. If you really care about the issues, and not the rhetoric, here is the problem with Governments investing in the stock market Its even worse if youre talking about the SS system because it impacts nearly every worker, and the size differential in investments. 
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#33
10-17-2007, 10:34 PM
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Re: Ron Paul on taxation?
[ QUOTE ]
IF YOU TAKE OUT A CAR LOAN FOR A $30,000 CAR FROM GMAC, YOU HAVE YOU HAVE A DEBT FOR $30,000 AND YOU HAVE A $30,000 CAR. YOUR NET WORTH IS UNCHANGED. IF YOU BORROW $30,000 FROM YOUR IRA AND BUY A $30,000 CAR YOU HAVE $30,000 LESS IN YOUR IRA AND A $30,000 CAR. YOUR NET WORTH IS UNCHANGED. THIS IS EXACTLY WHAT THE GOVERNMENT DOES WHEN THE SSA BUYS BONDS. [/ QUOTE ] Except that the government doesn't buy cars. It makes payments that go to *consumption*. Those seniors have to actually *eat* the dog food they buy with their social security checks. They can't pile it up in their garage and call it an asset. So, no, absolutely not, the national net worth is emphatically NOT unchanged by social security debt. Even your non-analogous example is terrible though. A car is a rapidly depreciating capital asset. Presumably the cash in your investment account was an appreciating asset. Clearly when you cash $30,000 out of an IRA and buy a $20,000 car (had to pay $10,000 in tax and penalties, don't you know) and you drive the car off the lot, it's probably only worth $15,000 immediately, and the gap between what your appreciating financial capital in your investment account would have been worth and your depreciating physical capital (the car) grows exponentially over time. If you're going to accuse people of beings liars, you should at least get your facts straight. Also, your caps lock seems to be stuck.
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#34
10-18-2007, 01:19 AM
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Re: Ron Paul on taxation?
Ron Paul has said over and over and over that nothing he proposes can be done overnight. Programs have to be phased out. We have huge entitlements and we've created scores of people dependent on government, and according to Paul, those people will not be left hanging under his administration.
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#35
10-18-2007, 01:24 AM
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Re: Ron Paul on taxation?
[ QUOTE ]
If the social security surplus wasn't used to offset the deficit, Bush would not have been able to give the rich and the oil companies those huge tax cuts. [/ QUOTE ] You're confusing tax cuts and tax rate cuts. Bush didn't get taxes cut, he got the tax rate cut. The largest rate cut went to the lowest tax bracket, more of the total tax burden shifted to the rich, and actual taxes collected went up.
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#37
10-18-2007, 04:44 PM
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Re: Ron Paul on taxation?
[ QUOTE ]
[ QUOTE ] ...more of the total tax burden shifted to the rich... [/ QUOTE ] Could you elaborate on what you mean by this statement? [/ QUOTE ] It means as a total percentage of taxes collected, the rich are now paying a bigger share than they were before. no time to look up exact numbers, as I am walking out the door, but if you do a little checking, you will find that the top 10 percent of income earners pay about half the income taxes, and the top half of income earners pay about 90 percent. To say the "rich" are not paying their fair share is crap.
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#39
10-18-2007, 05:04 PM
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Re: Ron Paul on taxation?
[ QUOTE ]
[ QUOTE ] momentary hijack I'm wondering what people think when they hear this statement. What does it mean to you? [/ QUOTE ] Meanwhile, the riches 1%, earn 20% of all income in a year, while the bottom 50% earn 12%. [/ QUOTE ] I would be willing to bet he's not in top 1%! I see a normal Bell curve. Interesting to note that these figures are a snap shot in time, there is mobility between income classes. Many at the bottom are students and people starting their careers. Those at the top are often those with huge one time capital gains or those that are currently riding the wave of positive variance.
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#40
10-18-2007, 05:23 PM
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Re: Ron Paul on taxation?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] ...more of the total tax burden shifted to the rich... [/ QUOTE ] Could you elaborate on what you mean by this statement? [/ QUOTE ] It means as a total percentage of taxes collected, the rich are now paying a bigger share than they were before. [/ QUOTE ] I've engaged in similar discussions on this forum before here and here. I'll just quote my response from the first thread: [ QUOTE ] ...it was discussed that the total share of income tax paid by people earning more than $200,000 did go up between 2002 and 2004. But so did the number of people earning more than $200,000, as did the average income of those earning more than $200,000. Furthermore, filers earning more than $200,000 paid, on average, 4% less federal income tax in 2004 than in 2002, even though they earned on average 10% more. Similar trends can be found by looking at those earning more than $1,000,000 per year. [/ QUOTE ]
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