Pence is hell bent on destroying Indiana

[IndyDave1776]

I'd like to address one particular fallacy in the discussion here-- the idea that a tax burden is "shifted" when someone gets an increase or a cut.

Cutting someone's taxes does NOT translate into an increase for someone else-- that's a fallacy. One reason it's fallacy is that it assumes a pie of fixed size and a static economy. If there is one defining feature of an economy, it is that it is NEVER static. As long as people are alive and try to meet their needs and wants, there will be a dynamic economy.

It also doesn't account for the change in a number of people in that class.

Remember when the "Bush tax cuts for the Rich" went through in 2001 and 2003? We were told that this was an unfair handout to the wealthy. Yet the data indicate unequivocally that "the rich" actually paid a LARGER share of the total federal tax burden than before the tax cuts went into effect. In fact, if you look at the share of all federal revenues paid by the top 20% (IRS uses quintiles as unit of analysis), you'll find that there is no period under President Bush after 2001 where that share was lower than the previous year. It went up EVERY year.

Was their "burden" increasing? Or was it that they were making more money and had more taxable income?


Who among us would complain about having a $500k income because of the tax that went along with it?

You reminded me of this e-mail I received a while back:

Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100. If they paid their bill the way we pay our taxes, it would go
something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day
and seemed quite happy with the arrangement, until one day, the owner threw
them a curve. 'Since you are all such good customers, he said, 'I'm going to
reduce the cost of your daily beer by $20. Drinks for the ten now cost just
$80.

The group still wanted to pay their bill the way we pay our taxes, so the
first four men were unaffected. They would still drink for free. But what about
the other six men - the paying customers? How could they divide the $20
windfall so that everyone would get his 'fair share?' They realized that $20
divided by six is $3.33. But if they subtracted that from everybody's share, then
the fifth man and the sixth man would each end up being paid to drink his
beer. So, the bar owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the amounts each
should pay.
And so: The fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant the men began to compare their savings.

'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

 

[Tsigos]

I think CTS is trying to argue that we all benefit from having a more educated populace because our economy becomes more productive.

His argument fails, though because
1) The local education doesn't necessarily translate into local economic output-- people move-- sometimes a lot, and sometimes far away.
2) It's FAR from a given that a person graduating from a local government school has meaningful job skill that would contribute to the local economy.

i don't see how his argument "fails" based on the things you cite.

1) Some people move away. Many stay. Some also move into our communities from other areas.
2) It has been pretty well documented that those lacking a high school education will generally not be able to get hired for anything more than a minimum wage job.

 

[CTS]

The fact of the matter is that we need jobs. The United States is in as big a war as we have ever been in over global leadership and the way out is good jobs and GDP growth. The ONLY way we're going to get those jobs and outpace our competitors (who have radically different ideals) is for individuals to innovate and open up new markets like we did with the internet boom. Is there a better way to educate our kids than the public school system? Most definitely. However it's what we have now, and while there is already a large shift underway to more charter and private sector schools, we still need our public school system.

Good book for anyone interested in our current economic situation:

The Coming Jobs War: Jim Clifton: 9781595620552: Amazon.com: Books

 

[Hohn]

You reminded me of this e-mail I received a while back:

I don't see the connection-- seems non sequitur perhaps?

 

[IndyDave1776]

I don't see the connection-- seems non sequitur perhaps?

The connection I saw started with the poor drunks, even the one who went from paying on $1 to drinking for free crying because the rich guy got the biggest absolute break in spite of getting the smallest percentage break and paying the overwhelming majority of the bill, much like what you described about a tax cut for one person not necessarily translating into an increase for someone else (or presumably any other 'unfair' situation).

 

[Blackhawk2001]

It seems to me that the people who have the most children are the same ones who live off the Government and are the biggest tax burden to everyone.

Really? Are you talking about my church member neighbors who have six kids and are paying $3500 apiece to send the two oldest to Catholic schools while still paying for Government Schools from which they get no benefit?

 

[Hoosier8]

That's easy, they just up the value of your property, the values aren't really based in reality anyway. There is no way in hell I could sell my home for the "appraised value" they pull out of their a**. That is why IMO the so called 1% cap was a sham.

Actually, they are assessed based on a number of things but if you disagree with the assessment, you can get it changed. They overvalued my house so I got an appraisal and used that to protest the assessment and that is what they are using now. Some properties are undervalued.

 

[HoughMade]

Really? Are you talking about my church member neighbors who have six kids and are paying $3500 apiece to send the two oldest to Catholic schools while still paying for Government Schools from which they get no benefit?

I've only got 4 kids not attending public schools while I still pay for them. I'm way behind.

 

[Hohn]

The connection I saw started with the poor drunks, even the one who went from paying on $1 to drinking for free crying because the rich guy got the biggest absolute break in spite of getting the smallest percentage break and paying the overwhelming majority of the bill, much like what you described about a tax cut for one person not necessarily translating into an increase for someone else (or presumably any other 'unfair' situation).

With all respect, I think those are very different things. I think you may have conflated the story of the guys eating out and paying like we pay taxes with things I actually wrote.

My point is that taxes are not zero-sum. As long as the economy isn't static (which it isn't) and the government can borrow (which it DOES aplenty), there's no actual correlation between what one person pays and what someone else pays. Cutting taxes on the rich doesn't make the poor guy's taxes go up, nor vice versa.

The root problem, imo, is that human being tend to define prosperity in relative terms. Despite that fact that "the poor" in America have the highest standard of living of any nation's "poor"-- and, in fact, higher than the standard of living of even JD Rockefeller himself 100 years ago-- that's never good enough. Because even though "the poor" in America have multiple TVs, Air conditioning, refrigerators, etc, somehow they are still defined as poor.

Won't be long until having a smart phone older than 18 months will qualify a person as living in abject poverty.

Here's an interesting study on that:

What is Poverty in the United States: Air Conditioning, Cable TV and an Xbox

 

[Hohn]

I actually wrote on op-ed OPPOSING the cap on property taxes on Conservative grounds before it was rammed through the statehouse.

The problem with capping property taxes is that local authorities then become beholden to the State for funding. Do you have more influence of city or State politics? Personally, I'd prefer to have center of funding (and spending) be as local as possible.

I'm no fan of property taxes or taxes in general. But I think that keeping the power local trumps a property tax cap. Now what will happen when the local politicians want to overspend? They won't be restrained by local funds, but rather will go spending like drunk sailors, expecting a bailout from the State that they will probably get. Everyone attempts to live at the expense of others, and elevating the spending and taxing authority is a huge enabler of that.

That's why it is the FEDERAL gov't that is most out of control.

 

[indiucky]

Some folks are born silver spoon in hand,
Lord, don't they help themselves, oh.
But when the taxman comes to the door,
Lord, the house looks like a rummage sale, yes,

But it ain't me
It ain't me
I ain't no fortunate son...


I always thought that song was about Al Gore for some reason....

 

[ATOMonkey]

Newsflash. Taking more is not "saving", no matter the reason.

You didn't get the memo on new government math. Tax reductions are now known as spending increases.

Tax increases are now revenue increases or spending reductions.

You're welcome.