Presidential jobs address, 9-8-2011

[LaserGuy]

-Dividends are one of the few things that are typically taxed at the full corporate rate, so overall the tax on dividends is quite high. Also, I doubt pure-dividend income is characteristic of people making $200,000/year. The Buffet thing is a very valid critique, but that deals with overall capital gains taxes opposed to just dividends.

- Donations to the Conservative Party (or any political part) are not deductible.

Corporate rate is lower than personal income tax rate, I believe, so dividends still work out to be a pretty good deal, especially compared to having income from the highest personal tax bracket, especially because of the rather significant dividend tax credit--if you make $58000/year in dividends and have no other sources of income, you won't pay federal income tax at all (but you'll have to shell out about 10% or so to your province). Donations for political parties count as tax credits. You get up to 75% of your contribution back in tax credit (but there's an upper limit of $1275/year). Charitable donations are similar, but there is no upper limit AFAIK.

[edit]

Where's the money coming from? Stevey said that if they got a bunch of free money, they'd work less - if everyone got this money, there'd be no one doing that work to pay for that money in the first place.

Well, yes, of course the system fails if nobody works. That's not the point. The point is to guarantee everyone a modest standard of living. If you want better than that, then you have to work; if you want to take some time to spend time with your kids or try your hand at writing a novel or starting a business or whatever, you aren't going to starve to death doing it, but your standard of living won't be as high as if you're working full time.

[Bubbles McCoy]

On a closer look, I think we may just talking past each other based off our own countries tax codes. Corporate tax rates have the same maximum as individual rates in America, and american political donations have no tax benefit.

[Dark567]

Unemployment is not high because people don't want jobs, unemployment is high because there aren't nearly enough jobs to go around, and the economy is shit because there isn't enough money flowing because so many people don't have any money because they don't have a job.

I personally know people, who are on unemployment, have been offered a job(the exact same job actually they had before they became unemployed), and refuse to take it because they would prefer to remain on unemployment and not work. I'm not sure its particularly prevalent, but it certainly happens.

[stevey_frac]

Well, yes, of course the system fails if nobody works. That's not the point.

That's my whole point, basically. You reduce incentives, and less people do less work.

[folkhero]

If it it made little to no difference to my financial well being to work an extra 10 hours a week, my work-life balance would shift strongly in favor spending more time at home with my son.

This sounds like a good thing to me.

Agreed. I'm not seeing a downside - someone else who does need or want them will do those 10 hours of work. That's the desired endgame, isn't it?

Ideal it might be, but for many occupations you can't just have 4 people working 30 hours a week and get the same productivity as 3 people working 40 hours a week. A person might take 10 hours a week just learning enough about a project before they can do anything productive, meaning more people working for less time each would be much less productive. In management, more people working less hours each would lead to increasing the number of bosses for their subordinates which would probably make work-experience more Kafkaesque and would increase the chance of conflicts between workers and management purely based on the increased numbers of personalities that might conflict. The more people working on a project increases the amount of time required to communicate between etc.. See the Mythical Man-Month.

The idea of full employment and 30-hour work weeks sounds awesome to me too, but I'm not sure it's very practical.

[aleflamedyud]

Ah, yes. Saying that middleclass people wouldn't want to continue to work harder makes it okay that you call poor people lazy. My mistake.

Damn straight?

If it it made little to no difference to my financial well being to work an extra 10 hours a week, my work-life balance would shift strongly in favor spending more time at home with my son.

I'd assume that most rational, feeling human beings to be the same, regardless of income? We work hard, for the money. If you take the money bit out of it...

Edit:

Also, i said 'reduced incentive to work'. Not lazy. They are different. Stop putting words in my mouth.

And given that we were talking about USAians, who are, statistically speaking, the hardest workers in the developed world, with the fewest vacation days and the most hours worked per week, how could some more time at home with the family be a bad thing?

This is just what I was talking about earlier: basic income provides income for doing the things that our economy doesn't monetize... like, for example, parenting. Which is better: you work 10 hours less, have a bit less money, but don't have to pay for childcare as much because you can take care of your own damn kid... OR, we do things the American Way, and you earn a larger salary that gets eaten up by paying for a nanny?

Ideal it might be, but for many occupations you can't just have 4 people working 30 hours a week and get the same productivity as 3 people working 40 hours a week. A person might take 10 hours a week just learning enough about a project before they can do anything productive, meaning more people working for less time each would be much less productive. In management, more people working less hours each would lead to increasing the number of bosses for their subordinates which would probably make work-experience more Kafkaesque and would increase the chance of conflicts between workers and management purely based on the increased numbers of personalities that might conflict. The more people working on a project increases the amount of time required to communicate between etc.. See the Mythical Man-Month.

This is all true. The right response isn't to say that we should forcibly implement cut hours (hence why I support basic-income rather than forcibly cutting people's hours), but that we should pay people some basic income in order to make salaries rise for those with 40-hour work weeks. When employers have to compete with other sources of sustenance, you'll still find people working 40 hours/week (just as some people work 50 or 60 hours/week now), but they'll have to be paid more.

And I fail to see what's so bad about hard workers getting more money.

[stevey_frac]

You once again fail to address any of my concerns. Your argument is essentially 'More money for the less fortunate is a good thing'. My argument is essentially 'No one wants to pay for that'.

Lets hit this from a different angle, once again, and see if we can use logic to penetrate your dogma.

If we give $10k to everyone in the U.S (833 / month, below poverty level I believe), that amounts to a $3,000,000,000,000 handout. This is larger then the entire amount of taxes collected, in any given year I can find the data for (Corporate + personal + estate ... etc.)

And that $10k figure is really really conservative compared to what I suspect you would like to see. You'd probably like to see double that.

Basically, your plan is totally, irreconcilably, financially unworkable, and would bankrupt the country in a handful of years.

[Garm]

Maybe we should just give 10k go those who are certifiably homeless, but then that'd be called welfare which we already have. Funny thing is, it'd be saving us money:

According to a University of Texas two-year survey of homeless individuals, each person cost the taxpayers $14,480 per year, primarily for overnight jail.

A study from Los Angeles, CA – home to ten percent of the entire homeless population – found that placing four chronically homeless people into permanent supportive housing saved the city more than $80,000 per year.

A cost study of rural homelessness from Portland, ME found significant cost reductions when providing permanent supportive housing as opposed to serving the people while they remain homeless. The study specifically noted a 57 percent reduction in the cost of mental health services over a six-month period, partly due to a 79 percent drop in the cost of psychiatric hospitalization.

A study of hospital admissions of homeless people in Hawaii revealed that 1,751 adults were responsible for 564 hospitalizations and $4 million in admission costs. Their rate of psychiatric hospitalization was over 100 times higher than their non-homeless cohort. The researchers conducting the study estimate that the excess cost for treating these homeless individuals was $3.5 million or about $2,000 per person.

It's times like this that make me wish our politicians could analyze data. Stop punishing the poor, it's costing us enough already.

[sourmìlk]

If politicians analyzed data, there would be no supply-side economists. The best you can do is vote for politicians whose baseless opinions happen to coincide with the data.

[stevey_frac]

stuff

I whole-heartedly agree. By all means, expand welfare. It's a great Keynesian lever, and it helps those who need it.

[Vaniver]

Garm: note the cost-comparison is to people spending nights in hospitals and jails. If people just want a warm bed, providing it more directly is cheaper than providing it as a part of a package, but also suggests the alternate solution of blocking access to the package. It's not "don't punish the poor!" so much as it is "why are you providing them costly handouts instead of cheap handouts?"

From the homelessness reduction programs I've seen that provide permanent housing, they need to provide around 10 people permanent housing to reduce the long-run incidence of homelessness by one person. (I would expect that number to vary based on the number of homeless people, and so some locations might have much lower costs.) I don't know if the studies you cite take those sorts of second order effects into account, but it seems like they could easily be significant (homeless people can think- if LA provides permanent housing to everyone who asks for it, then more homeless people may move to LA).

[Garm]

Garm: note the cost-comparison is to people spending nights in hospitals and jails. If people just want a warm bed, providing it more directly is cheaper than providing it as a part of a package, but also suggests the alternate solution of blocking access to the package. It's not "don't punish the poor!" so much as it is "why are you providing them costly handouts instead of cheap handouts?"

From the homelessness reduction programs I've seen that provide permanent housing, they need to provide around 10 people permanent housing to reduce the long-run incidence of homelessness by one person. (I would expect that number to vary based on the number of homeless people, and so some locations might have much lower costs.) I don't know if the studies you cite take those sorts of second order effects into account, but it seems like they could easily be significant (homeless people can think- if LA provides permanent housing to everyone who asks for it, then more homeless people may move to LA).

Good points. Sadly there's not a lot of context behind those numbers. I was just poking around for the cost of homelessness. I think it's an interesting trade off between paying a bunch of money upfront to support these people and waiting until something crappy happens and then taking care of them.

As for the "punishing the poor" line. It might be a bit over the top but I'd use it again. We're talking about cutting programs like SNAP but can't close a tax loop hole that allows a yacht to be declared a house on tax returns.

[Dark567]

I remain of the opinion the only decent tax reform that could ever come would be "jettison everything and start over with a system with no deducations". I don't even care if its flat/progressive/negative. Any of those, without any loop holes and deductions will almost certainly be better then what we have now.

[kiklion]

Garm: note the cost-comparison is to people spending nights in hospitals and jails. If people just want a warm bed, providing it more directly is cheaper than providing it as a part of a package, but also suggests the alternate solution of blocking access to the package. It's not "don't punish the poor!" so much as it is "why are you providing them costly handouts instead of cheap handouts?"

From the homelessness reduction programs I've seen that provide permanent housing, they need to provide around 10 people permanent housing to reduce the long-run incidence of homelessness by one person. (I would expect that number to vary based on the number of homeless people, and so some locations might have much lower costs.) I don't know if the studies you cite take those sorts of second order effects into account, but it seems like they could easily be significant (homeless people can think- if LA provides permanent housing to everyone who asks for it, then more homeless people may move to LA).

Good points. Sadly there's not a lot of context behind those numbers. I was just poking around for the cost of homelessness. I think it's an interesting trade off between paying a bunch of money upfront to support these people and waiting until something crappy happens and then taking care of them.

As for the "punishing the poor" line. It might be a bit over the top but I'd use it again. We're talking about cutting programs like SNAP but can't close a tax loop hole that allows a yacht to be declared a house on tax returns.

Kinda funny, but what about the people who live on a yacht? A good friend of mine in H.S, his parents sold their small house in a poor neighborhood and bought a small yacht. Changed their address to the marina where they were docked and their kids were able to go to a 'good' school in a 'good' neighborhood.

[Enokh]

Someone I work with lives on a refurbished fishing trawler, which is really awesome. She's also really good at hiding her emotions, because she never even cracks a smile when I refuse to talk to her in anything other than pirate lingo.

[Garm]

Garm: note the cost-comparison is to people spending nights in hospitals and jails. If people just want a warm bed, providing it more directly is cheaper than providing it as a part of a package, but also suggests the alternate solution of blocking access to the package. It's not "don't punish the poor!" so much as it is "why are you providing them costly handouts instead of cheap handouts?"

From the homelessness reduction programs I've seen that provide permanent housing, they need to provide around 10 people permanent housing to reduce the long-run incidence of homelessness by one person. (I would expect that number to vary based on the number of homeless people, and so some locations might have much lower costs.) I don't know if the studies you cite take those sorts of second order effects into account, but it seems like they could easily be significant (homeless people can think- if LA provides permanent housing to everyone who asks for it, then more homeless people may move to LA).

Good points. Sadly there's not a lot of context behind those numbers. I was just poking around for the cost of homelessness. I think it's an interesting trade off between paying a bunch of money upfront to support these people and waiting until something crappy happens and then taking care of them.

As for the "punishing the poor" line. It might be a bit over the top but I'd use it again. We're talking about cutting programs like SNAP but can't close a tax loop hole that allows a yacht to be declared a house on tax returns.

Kinda funny, but what about the people who live on a yacht? A good friend of mine in H.S, his parents sold their small house in a poor neighborhood and bought a small yacht. Changed their address to the marina where they were docked and their kids were able to go to a 'good' school in a 'good' neighborhood.

Sure, whatever, that's fine. Right now you need to spend 7 nights on the thing and then can declare it as a house. There has to be some way to define it as a main residence. Or we could just remove the house/mortgage tax deduction all-together.

[Dark567]

Or we could just remove the house/mortgage tax deduction all-together.

No, we can't try to discourage housing bubbles. /Sarcasm

[Thesh]

I say just set an upper limit on most deductions to no more than the lesser of 25% of your income or $100,000. Some exceptions can be made to things that effect actual income (investment losses come to mind, especially for people who invest for a living).

[sardia]

Hate to interrupt your debate, but here's something that's on topic:
http://www.nytimes.com/2011/09/20/us/po ... ml?_r=1&hp
He'll veto any legislation that doesn't increase taxes. As the title says, less compromise, more partisan. Not that partisanship is always a bad thing.

[netcrusher88]

less compromise, more partisan

You're a funny guy.

I mean, yeah, that statement is empirically true, if only because the GOP has again decided that to them, "everything's on the table" means "revenue is off the table unless it's going down". But it's hard to say it's a particularly accurate statement when it's coming back just a tiny distance from "compromise ALL the things!"

[KnightExemplar]

Hate to interrupt your debate, but here's something that's on topic:
http://www.nytimes.com/2011/09/20/us/po ... ml?_r=1&hp
He'll veto any legislation that doesn't increase taxes. As the title says, less compromise, more partisan. Not that partisanship is always a bad thing.

I dunno, I feel like compromise has constantly put Obama (and the democrats) in a bad position in the past few years. Last time there was an attempt to compromise, the US lost its AAA credit rating and we didn't even get a decent deficit reduction plan. Its probably too late to set expectations though, Republicans are used to getting what they want, and Obama has folded too many times in the past.

[sardia]

I find it a shame that he used up, and then publicly stated repeatedly that the Bush taxcuts should only go to the non rich. If he had kept the option open to just let the "temporary" tax cuts expire, then the GOP would have to come to him, not the other way around. Though that's what liberals get for voting for a moderate conservatives, Democrats, instead of a real liberal party that doesn't exist.
Note: I'm labeling the GOP as extremist conservative and the Democrats as merely conservative.

[Velict]

So, apparently people want to raise taxes.

[Thesh]

Hell, I hate taxes, and I want to raise taxes. Sometimes you actually have to look at the situation at hand and decide what the best course of action is, as opposed to blindly following ideology.

[KnightExemplar]

Hell, I hate taxes, and I want to raise taxes. Sometimes you actually have to look at the situation at hand and decide what the best course of action is, as opposed to blindly following ideology.

I'm pretty sure everyone hates taxes.

[Thesh]

Except for the members of the ultra-left-wing socialist party known as the Democrats.

[CorruptUser]

I don't hate taxes, so long as I see it as being justified. Tax rise to hire new teachers, replace the police force's aging fleet, repair streets, acceptable. Tax rise to prop up doomed companies like GM or Chrysler*, or banks that didn't do their due diligence**, or wasting money to screw the poor***, unacceptable.

*The consensus in the Actuarial world is that within 10 years, no major company will produce cars in the US, due to the exponentially rising cost of UAW benefits (Toyota workers in the US aren't part of UAW, yet). Assuming the trends continue for the next decade without any radical reforms, of course.

**NINJA Loans, anyone?

***Cash for Clunkers comes to mind; no used cars for you!

[Lucrece]

Taxes are not bad if you're seeing a return. The issue is with corrupt as fuck states like Florida which, if they were to raise taxes, its residents would still see little return. In Scandinavian countries taxes aren't just liked because of some uncanny predisposition to "liberal" policy, given that most parties support them, but that the citizens see themselves reaping the rewards. There's some much fraud and theft going on among politicians and the upper echelons of class (including upper middle class) against lower middle class and poorer people. It's a free for all and with that kind of mentality it's not like you will have a fairly equitable society.

[Zamfir]

People in Scandinavian countries don't like taxes either, and they also complain about corrupt politicians and the upper class robbing people, and about the dirty socialists taking all the money and giving it to lazy people and foreigners. The equilibrium might be different, the principles are basically the same.

[sardia]

Edit: I'm tired.
Uhhh =\
On a side note, I wonder who will respond positively to the President's speech hardening his defense of social security and higher taxes. You know, besides democrats.

[Zamfir]

Sardia, what in heaven's sake are you trying to say?

[aleflamedyud]

You once again fail to address any of my concerns. Your argument is essentially 'More money for the less fortunate is a good thing'. My argument is essentially 'No one wants to pay for that'.

Lets hit this from a different angle, once again, and see if we can use logic to penetrate your dogma.

If we give $10k to everyone in the U.S (833 / month, below poverty level I believe), that amounts to a $3,000,000,000,000 handout. This is larger then the entire amount of taxes collected, in any given year I can find the data for (Corporate + personal + estate ... etc.)

And that $10k figure is really really conservative compared to what I suspect you would like to see. You'd probably like to see double that.

Basically, your plan is totally, irreconcilably, financially unworkable, and would bankrupt the country in a handful of years.

Yes, I've seen the math. That's why we need to close tax loopholes and just plain raise fucking taxes. If we had a freaking wealth tax or '50s-era income taxes and did away with the various forms of military-industrial corruption (which go above and beyond the on-the-books defense budget, which is ALREADY uncannily high), we wouldn't be having such a problem paying for one of the only two social programs we really need (the other being single-payer health-care, which would save us money over our current privatized system).

[stevey_frac]

What part of 'A less aggressive form of your plans costs 3 trillion dollars, and the total amount we make in taxes is 65% of that" are you failing to understand?

This isn't a 'close the tax loopholes', or 'reduce military spending' kind of thing. It's a 'Tax everybody into the ground' kind of thing.

[Arrian]

I don't hate taxes, so long as I see it as being justified. Tax rise to hire new teachers, replace the police force's aging fleet, repair streets, acceptable. Tax rise to prop up doomed companies like GM or Chrysler*, or banks that didn't do their due diligence**, or wasting money to screw the poor***, unacceptable.

- Why should we have to raise taxes to support our capital infrastructure? That's why business budgets include depreciation as an expense, cause that shit has to be replaced eventually. Replacing police cars, roads, and government monuments aren't, on their face, a good reason to raise taxes. Their maintenance should have been accounted for from the get go. That replacing them could be considered a good reason to raise taxes is a great example of how misleading cost estimates are for government projects. If a public company used the same style of accounting as the government uses, its officers would go to jail.

So, no, I don't think replacing infrastructure should be acceptable as a reason for raising taxes. At the least it would require a mea culpa from the government, a change of their accounting standards, and a change in the way government project cost estimates are made to include lifetime maintenance and replacement estimates, as well as the estimated life of the project.

- Hiring new teachers, is that a "It's worth it because it's for the children," reason, or "It's OK because it's for a cause I agree with," reason or is it a "It's OK because it's a good investment and will pay off in the future," reason? Nothing I can say about the first two possibilities, I'm not going to argue with your opinions and priorities. But if it's for the latter, you might want to question your assumptions.

Government spending per pupil on education (in real, constant dollar terms) has more than doubled, "[rising] from $3,400 in 1965 to $8,745 in 2001." (See point 5.). But despite that massive increase in funding, educational achievement has been essentially flat for 40 years.

So while there may be some places where more money can improve educational outcomes, there is no solid argument linking raw spending numbers to general outcomes. The fact of the matter is that we don't have ANY empirical model that consistently links anything (at least nothing the government can control) to long term educational outcomes, not spending or class size or teacher abilities, I'm pretty sure even the effects of Head Start are gone before the kids get out of grade school.

Again, color me unconvinced for a need to increase taxes in order to improve education.

- Bailouts for private firms and programs that hurt the people they were intended to help? I'm 100% with you on that.

- Finally, isn't the idea of raising taxes based on the assumption that there has been some failure by which revenue hasn't kept up with spending? But that's fallacious thinking, after all, tax revenue has been a pretty constant, between 17% and 21% of GDP since at least 1952 (excepting 2009 and 2010, but I think that was due to stimulus-related tax cuts. I'm looking at table 1.3.)

We aren't running WWII level deficits because tax levels are lower than they were in the 50s, we are running massive deficits because spending has skyrocketed since the 50s. We've been cheating by increasing government spending without paying for it. These deficits are entirely due to increased (one might say profligate) spending, not revenue shortfalls. I'm not even convinced that increased revenue would be used to reduce the deficit since there doesn't seem to be much correlation between revenues and expenses recently, (a quick Excel regression shows an R² of only 0.24 between revenues and expenses between 1990 and 2007. I stopped at 2007 to keep the stimulus from confounding the statistics.)

So again, I'm not convinced that we need to raise taxes to account for our spending. Indeed, looking at recent government behavior, the spending rate will just continue to grow and we'll get no deficit reduction from the raised taxes.

Here's the 1950s revenue, expenditures and deficit as % of GDP:

Year | Revenue | Expenses | Deficit/Surplus
1950 | 14.4 | 15.6 | -1.1
1951 | 16.1 | 14.2 | 1.9
1952 | 19.0 | 19.4 | -0.4
1953 | 18.7 | 20.4 | -1.7
1954 | 18.5 | 18.8 | -0.3
1955 | 16.5 | 17.3 | -0.8
1956 | 17.5 | 16.5 | 0.9
1957 | 17.7 | 17.0 | 0.8
1958 | 17.3 | 17.9 | -0.6
1959 | 16.2 | 18.8 | -2.6
1960 | 17.8 | 17.8 | 0.1

Compare that to the 2000s:

Year | Revenue | Expenses | Deficit/Surplus
2000 | 20.6 | 18.2 | 2.4
2001 | 19.5 | 18.2 | 1.3
2002 | 17.6 | 19.1 | -1.5
2003 | 16.2 | 19.7 | -3.4
2004 | 16.1 | 19.6 | -3.5
2005 | 17.3 | 19.9 | -2.6
2006 | 18.2 | 20.1 | -1.9
2007 | 18.5 | 19.6 | -1.2
2008 | 17.5 | 20.7 | -3.2
2009 | 14.9 | 25.0 | -10.0
2010 | 14.9 | 23.8 | -8.9

It boils down to a question of "how much spending do you want?" If you think we should have a significantly higher rate of government spending than we historically did, much higher than the "golden years" of the 50s with a chicken in every pot and a Ford in every driveway, then yes, raise taxes. But if you have any other opinion, even that spending should be somewhat higher than historically, we should first cut spending. Our current spending is WAY out of line with any other non-war period in our history, even with liberal or progressive priorities, you should probably look at cutting spending before raising taxes since our tax rates are on the high side of the historical average.

[aleflamedyud]

What part of 'A less aggressive form of your plans costs 3 trillion dollars, and the total amount we make in taxes is 65% of that" are you failing to understand?

This isn't a 'close the tax loopholes', or 'reduce military spending' kind of thing. It's a 'Tax everybody into the ground' kind of thing.

Actually, the USA has higher per-capita government spending than lots of other countries that are both considered fiscally solvent (or at least, fiscally better-off right now) and provide more social support for citizens. Now admittedly, if you just want to add $10k to per-capita spending, you're going to have to raise quite a lot of taxes (though it could mainly be done through raising capital-gains tax and, if necessary implementing an idle-wealth tax), but a basic standard-of-living for all could also be handled in more fiscally efficient, economy-of-scale ways (just like universal health-care works better than just giving everyone money to buy insurance).

[stevey_frac]

What part of 'A less aggressive form of your plans costs 3 trillion dollars, and the total amount we make in taxes is 65% of that" are you failing to understand?

This isn't a 'close the tax loopholes', or 'reduce military spending' kind of thing. It's a 'Tax everybody into the ground' kind of thing.

Actually, the USA has higher per-capita government spending than lots of other countries that are both considered fiscally solvent (or at least, fiscally better-off right now) and provide more social support for citizens. Now admittedly, if you just want to add $10k to per-capita spending, you're going to have to raise quite a lot of taxes (though it could mainly be done through raising capital-gains tax and, if necessary implementing an idle-wealth tax), but a basic standard-of-living for all could also be handled in more fiscally efficient, economy-of-scale ways (just like universal health-care works better than just giving everyone money to buy insurance).

Granted. But that is a entirely different proposal then what we started with.