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[wxfree]

CNN's web site has the leading headline "The stock market keeps dropping."  That's true, but it looks really orderly to me.  They're sizeable but not enormous drops.  I wonder if crashes are becoming more likely, or at least easier to get, because of the increase in computerized trading and the increase in access to information and ease of ordering trades.  If more people, and computers, can get in on the selling more easily, that might make it more likely that instead of a nice, orderly retreat we get huge sudden drops.  Because of that, I take the current nice, orderly retreat as a good sign.  It may be that, at some point, panic sets in.  Jim Cramer on CNBC has been hoping for panic selling because he believes that will help to get everyone's tensions out and help stabilize the market.  So far, it looks like a nice and steady pullback, which could lead toward a crash or could be a good thing and set up the next bull run.

[tradephoric]

The wars certainly had a lot to do with the deficit, but the surpluses just before were not an ongoing and normal situation.  When the 2001 tax cuts were being debated (ask your parents about it, they probably got a government check that year because the tax cut was made retroactive to the beginning of the year and they sent rebate checks) there was talk of future surpluses as far as the eye can see, which justified the tax cut.  People like to predict that whatever is happening now will keep happening forever.  That prediction is always wrong, but we keep doing it.

Great point.  In January 1999 the CBO estimated that there would be a 381 billion dollar surplus by 2009 using baseline assumptions.  They just assumed the trend of government surpluses in the late 90s would continue indefinitely (and in a straight line).  We all know what happened next and instead of a 381 billion dollar surplus in 2009 there was a 1.4 trillion dollar deficit.   

THE ECONOMIC AND BUDGET OUTLOOK: FISCAL YEARS 2000-2009
https://www.cbo.gov/sites/default/files/106th-congress-1999-2000/reports/eb0199.pdf

[hbelkins]

I don't know if we're headed toward an all-out crash just yet, but the tyrannical act of pardoning the corporate aristocracy from having to contribute their share of taxes really isn't good for our deficit.

You do realize that there's really no such thing as corporate taxes, right? That those expenses get passed down to the eventual consumer/purchaser?

Put America on the market?  And sell it to whom?

Yeah, when your tax plan explodes the deficit by heavily favoring the rich in the cut, that does make funding needed government programs difficult.  The Republican Administration can't say they need to cut programs now when they caused the lack of funding in the first place.

Tax the rich.

Totally nailed it IMHO.

You mean further tax those who are already paying the vast majority of taxes?

[tradephoric]

Every FAANG stock is officially in bear market territory.  Facebook is leading the decline with a 40% drop from its 52 week high.  Of course after an incredible run up in these stocks over the past few years a correction isn't surprising.  However, if the NASDAQ breaks below 6600 (February's low) then the selling pressure could intensify.  We really aren't that far from seeing a break below those levels.

The five most important tech stocks are getting slaughtered, with each down more than 20% from highs
https://www.cnbc.com/2018/11/19/every-faang-stock-is-now-in-a-bear-market.html

By the way any predictions where the DOW closes today?  Lately we have been getting some significant selloffs in the final hour of trading.  That brings me to another interesting index to consider known as the smart money flow index.  The theory is that "dumb money" trades early in the day while the "smart money" trades at the end of the day.  So if the market constantly rises in the morning and sells off at the end of the day that's a bearish indicator.  TBH there have been a lot of false negatives with this indicator in the past but it is interesting to see that there has been a big drop in this indicator throughout 2018.

[1]

Put America on the market?  And sell it to whom?

Yeah, when your tax plan explodes the deficit by heavily favoring the rich in the cut, that does make funding needed government programs difficult.  The Republican Administration can't say they need to cut programs now when they caused the lack of funding in the first place.

Tax the rich.

Totally nailed it IMHO.

You mean further tax those who are already paying the vast majority of taxes?

Yes. Here are some example numbers (these aren't the actual tax rates):
$40,000 - 15% = $34,000
$40,000,000 - 30% = $28,000,000

If the rich are taxed more, while the middle class has the same tax rate:
$40,000 - 15% = $34,000
$40,000,000 - 50% = $20,000,000

It doesn't matter that much whether someone gets $20M or $28M per year; they're still really rich. On the other hand, decreasing $34K even to $32K (an increase from 15% to 20% tax) would make it harder to live, and there are many more of those people.

[paulthemapguy]

I don't know if we're headed toward an all-out crash just yet, but the tyrannical act of pardoning the corporate aristocracy from having to contribute their share of taxes really isn't good for our deficit.

You do realize that there's really no such thing as corporate taxes, right? That those expenses get passed down to the eventual consumer/purchaser?

People who run corporations have their own money.  They have their own money paid out by the corporations they run, and they pay themselves exorbitant amounts even if their employees are all making minimum wage?  Tell me I don't have to actually explain that to you.

Put America on the market?  And sell it to whom?

Yeah, when your tax plan explodes the deficit by heavily favoring the rich in the cut, that does make funding needed government programs difficult.  The Republican Administration can't say they need to cut programs now when they caused the lack of funding in the first place.

Tax the rich.

Totally nailed it IMHO.

You mean further tax those who are already paying the vast majority of taxes?

The first law of money ought to be the first law of thermodynamics--it isn't created or destroyed, for the most part.  It's transferred through transactions; it's given and taken.  When you've taken billions out of America with no regard for public interest and stored it overseas, that's a huge chunk of change that was taken from the public interest.  That money could be benefiting people like you and me.  When some people have 1 million times the amount of money than others, you have to ask yourself how much (spending/bribing) power is too much for one person to have.  One percent of the people in America own more wealth than the bottom 90 percent.  I personally can't be satisfied with that.  They pay the vast majority of taxes because they have the COLOSSAL majority of the funds to begin with.

[Rothman]

Keep in mind the rich usually pay the lower tax percentage on capital gains rather than their salaries as well.

[kphoger]

Just so everyone understands, there are fewer than 100,000 Americans making more than $30 million a year.  In order to be in the top 1% of earners in America, your annual income only needs to be about $400,000.  There's a decent chance you know at least one person who fits into that category, so it's important to think of them whenever you discuss how to get more money out of the "filthy rich".

Furthermore, the top 1% may own more wealth than the bottom 90%, but the top 1% also already pays more income tax than the other 99% combined.  To say that they're not "paying their share" is a flat-out lie. 

[jemacedo9]

This is the ol' percentage vs dollar comparison.

Do rich people pay more (or the same) in dollars than poorer people.  Most likely.
Do rich people pay more (or the same) in percent of total income than poorer people?  Not as likely as in dollars (depending on which income bracket you are looking at).

Which is more "fair"? This is a conversation that will continue to go in circles until the end of time.

[kphoger]

This is the ol' percentage vs dollar comparison.

Do rich people pay more (or the same) in dollars than poorer people.  Most likely.
Do rich people pay more (or the same) in percent of total income than poorer people?  Not as likely as in dollars (depending on which income bracket you are looking at).

Which is more "fair"? This is a conversation that will continue to go in circles until the end of time.

The rich pay more in both dollars and percentage.  Our country has a progressive tax code, which means that, the more money you make, the higher your tax bracket—hence you pay a higher percentage of your income in taxes.

[tradephoric]

Here is the top marginal tax rate in America compared to other major economies.  For a period in the 60s America had a higher tax rate than the UK, France, and Germany until Kennedy dropped it from 90% to 70%.  It wasn't until Reagan when the top tax rate dropped all the way down to 28%.  The idea that anyone would have to pay 70% or 90% in taxes makes me want to throw up in my mouth a little.   

[jemacedo9]

This is the ol' percentage vs dollar comparison.

Do rich people pay more (or the same) in dollars than poorer people.  Most likely.
Do rich people pay more (or the same) in percent of total income than poorer people?  Not as likely as in dollars (depending on which income bracket you are looking at).

Which is more "fair"? This is a conversation that will continue to go in circles until the end of time.

The rich pay more in both dollars and percentage.  Our country has a progressive tax code, which means that, the more money you make, the higher your tax bracket—hence you pay a higher percentage of your income in taxes.

Initial tax liability per the tax tables, yes. However, that's not necessarily true when you include tax deductions, income deductions, etc. The chances of a richer person paying less of a final percentage of tax because of these deductions is greater than someone not as rich, until you let to the much lower income brackets, who also have poverty-related credits and deductions.

[kphoger]

The idea that anyone would have to pay 70% or 90% in taxes makes me want to throw up in my mouth a little.   

How about the 60% in Sweden for people greedy enough to earn more than $75,000 per year?

[NE2]

This thread has taken a hard right turn. Fuck you people.

[kphoger]

This is the ol' percentage vs dollar comparison.

Do rich people pay more (or the same) in dollars than poorer people.  Most likely.
Do rich people pay more (or the same) in percent of total income than poorer people?  Not as likely as in dollars (depending on which income bracket you are looking at).

Which is more "fair"? This is a conversation that will continue to go in circles until the end of time.

The rich pay more in both dollars and percentage.  Our country has a progressive tax code, which means that, the more money you make, the higher your tax bracket—hence you pay a higher percentage of your income in taxes.

Initial tax liability per the tax tables, yes. However, that's not necessarily true when you include tax deductions, income deductions, etc. The chances of a richer person paying less of a final percentage of tax because of these deductions is greater than someone not as rich, until you let to the much lower income brackets, who also have poverty-related credits and deductions.

(2015 numbers)
Average tax rate, bottom 50% = 3.59%
Average tax rate, top 1% = 27.10 %

Don't fool yourself into thinking the top 1% is dropping their tax rate by more than 23% just by claiming deductions.

[Mark68]

Here is the top marginal tax rate in America compared to other major economies.  For a period in the 60s America had a higher tax rate than the UK, France, and Germany until Kennedy dropped it from 90% to 70%.  It wasn't until Reagan when the top tax rate dropped all the way down to 28%.  The idea that anyone would have to pay 70% or 90% in taxes makes me want to throw up in my mouth a little.   

Even though the top marginal rate was 90% in the 50s and 70% in the 60s, the economy was still expanding at a high rate, with only a couple of minor setbacks. Nobody actually pays the top marginal rate, anyway, given the proliferation of tax attorneys and certified public accountants. These fields wouldn't exist unless people with money didn't feel the need to find every tax loophole they can.

Besides, with these tax rates, the federal government actually had the wherewithal to fund and build Big Things--you know, things like the space program and the Interstate Highway System. IMHO, the reason why we now have crumbling infrastructure, why we are falling behind in education, and why we haven't taken the necessary steps in new technologies (including green energy) is attributable to the squeezing of government revenue.

Our government (starting with the Reagan Administration) has made the conscious choice to stop doing things well. One of the few things that the US can still do well is kill people--that and make it easy for the non-rich to be fleeced and stigmatized by the rich.

Of course, that's a feature and not a bug. It's essentially the Kochs, Adelsons, and Waltons of the world saying, "We've got ours, screw you!" But that can only work for so long before the economy tanks due to the lack of consumer purchasing power (you can only borrow for so long) and/or the people get completely fed up and demand change.

Call me a cynic, but I'm guessing the former happens before the latter.

[kphoger]

the proliferation of tax attorneys and certified public accountants. These fields wouldn't exist unless people with money didn't feel the need to find every tax loophole they can want to keep the income they're legally entitled to keep.

That might have been what you meant to say.

[kalvado]

Look at it from the other direction:


There is no significant reduction of spending as %% of GDP.
Of course, US spends only 37% of GDP as government spending; Sweden is at 49% and Finland is at 57%.
But those numbers tend to keep growing, and I am not sure what would happen once they exceed 100%...

[Mark68]

the proliferation of tax attorneys and certified public accountants. These fields wouldn't exist unless people with money didn't feel the need to find every tax loophole they can want to keep the income they're legally entitled to keep.

That might have been what you meant to say.

Actually, it is not.

Those who benefit from society should contribute to it. It's part of the social contract.

Ayn Rand be damned.

[bing101]

https://www.cnbc.com/2018/11/20/stock-market-dow-futures-negative-as-tech-stocks-sink.html


The Headlines in this article is pointing in that direction.

[kphoger]

the proliferation of tax attorneys and certified public accountants. These fields wouldn't exist unless people with money didn't feel the need to find every tax loophole they can want to keep the income they're legally entitled to keep.

That might have been what you meant to say.

Actually, it is not.

Those who benefit from society should contribute to it. It's part of the social contract.

Ayn Rand be damned.

They do, as previously noted—even more by the dollar and by the percentage point than those who earn less.

[NE2]

They do, as previously noted—even more by the dollar and by the percentage point than those who earn less.

Stop trying to justify policies that benefit horrible people. It makes you one of them.

[kphoger]

They do, as previously noted—even more by the dollar and by the percentage point than those who earn less.

Stop trying to justify policies that benefit horrible people. It makes you one of them.

What policies?  A policy of not making rich people pay even more more of their earned income to the government than the rest of us?  And, for the record, the wealthiest people I personally know right now are some of the nicest and most generous.

[kphoger]

This should get locked before the end of the next week.

Good to know that we still have over a week before this thread gets locked.

Ain't no WAY this thread will last a week.
I'm one of the most active ones in the conversation right now, and even I think it should be locked by the end of the day.

[Tonytone]

They do, as previously noted—even more by the dollar and by the percentage point than those who earn less.

Stop trying to justify policies that benefit horrible people. It makes you one of them.

Its a game NE2. We can only work to change this & the people that approve of this will see their fate.


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