"You Can't Soak the Rich" - Dems take note.
 

A reoccurring theme in many of my posts is that rich people pretty much can plan the amount they will pay in taxes. If income tax rates are too high, rich people have the option of lowering current taxable income while still accumulating wealth and living lavishly. An economist Kurt Huser shows that tax revenues collected as a percentage of GDP pretty much remains constant regardless of tax rates. What happens is that when tax rates are lower GDP grows at a faster rate, hence everyone wins.

http://s.wsj.net/public/resources/im...0519194014.gif

What this means is that the worst thing Democrats could do for the average working American is roll back Bush's tax cuts.

http://online.wsj.com/article/SB1211...n_commentaries

If the folks in Washington would take note of the above graphic, perhaps they could learn to keep federal spending within the range of less than 20% of GDP. Given their unwillingness to do this, they have amassed a massive national debt.

You have missed the main point of taxation in the era of the nanny state. Everyone knows that raising rates does not automatically lead to more revenue, but politicians don't care. Since they know what is best for everyone, they use taxation to reward and punish, to pick winners and losers, to engage in social engineering, and in general to make life "fair." They see taxation as the great leveler.

Its getevenwithemism.

The democrats are all about promoting class and race divides.

Its better for votes to be the 'party of the working man' than 'the party for all Americans'.

I agree that raising taxes seems to be bad for GDP but in all fairness the wealthy should pay at least a little higher percentage of their income as the poor and middle class do to support our government. As it stands now lower income people who spend almost everything they make on goods and services probaby pay a higher percentage.

To the most working class people, making 25k/year, while the rich guy is making 100k is a better situation than making 35k/year while the rich guy makes 200k (or 2 mil, 20 mil, whatever).

They just have the idea that maybe someday they will be the rich guy.

But, I also support a major cut in government spending as well and reducing a lot of tax laws to make them straight forward and simple.

so you're using a supply side economist's work as data to demonstrate a supply-side hypothesis and you draw from it supply-side conclusions.

it's what we call a tautology.

roachboy, you are questioning the virtual horizontality of tax collections on the graph? Or have you simply come up with a way not to have to deal with the implications by discounting the source? If you question the accuracy of the graph, explain why. If not, explain why the conclusion is wrong. What you posted is a cop-out.

C'mon, you know better than that.

But if it lowers over all tax collected, all you are doing is a feel good measure, a little 'get even with them is'm. The government is already mostly paid for by the rich at income tax levels, and by mostly I'm talking just about all of it. It only matters where you decide 'rich' is.

Being a master of economics and money tell us oh roachboy, what should we be using?

One of your theories of government? Perhaps the one that leads to genocide and poverty, or maybe just one that leads to poverty?

i dont see this as a coherent discussion.
i dont see the possibility of a coherent discussion arising from it.
i am inclined to dismiss supply side economics out of hand.

i don't see the logic behind the op's central claim demonstrated by the data that is provided.

all i see is a repetition of conservative orthodoxy about taxation, followed by a series of the usual suspects making the usual non-arguments in support of the op's non-argument.

the only thing i question really is whether i should have bothered to post anything to this at all.

i question this even more now.

roachboy, what I see is a quantitative presentation in graphic form of a fact you find inconvenient to your worldview and prefer not to address. And you're bobbing and weaving any way you can to avoid addressing it.

Is the graph accurate or not? If it is accurate, is what it shows relevant? If it is not accurate, why not? If it is relevant, what is your response. If it's not relevant, why not? If the conclusions drawn from it are wrong, why?

This isn't so difficult. It's called "confronting reality."

if that's what you see, loquitor, you'd be wrong.
seriously--you are talking about a flat-rate tax advocate from the hoover institution whose papers on taxation are kinda wacky--i've been reading some of them while you've been working up your tiresome little post accusing me of whatever you imagine me to be guilty of---and are working off a wsj editorial that puffs this work up, imputes a false status to it because it supports supply side assumptions about taxation.

do a little research.
it's bizarre what you find when you actually bloody look.

But you still haven't explained whether you think the graph is wrong. Is it? do you have a source that shows tax revenues diverging signficantly from 20% in response to fiscal and tax policy changes? Put it out there, roachboy. so far all you have said is "consider the source."

FWIW, that proposition isn't new. I've seen that graph before, or one very much like it. Tax collections vary in a narrow band of about 18 to 22%, IIRC. It gets trotted out a lot.

I don't think you are considering the amount of taxes paid indirectly by consumers which are added to the cost of everything they buy by everyone in the production/distribution chain. The less you make the higher percentage of income you pay.

I just paid an extra 50 dollars a day for a hotel room in taxes, but that was all local tax.

Most of those taxes outside of the federal gas tax and those like it really have no part in the debate as far as I can tell.

Raising taxes on the rich will do nothing to fix any problem.

The Hauser graph (the Laffer Curve in disguise) IS a good example of poorly conceived supply-side econ. As some of you may guess, I believe supply side economics is about corporatism and the more fascist components of capitalism, not about beneficial and applicable economic theory.
The genie is already out of the bottle, and some individuals will continue to shift, hide and underreport, but of taxes are decreased they will be keeping even more. The idea of "if taxes on the rich decrease they'll magically become honest" is the worst kind of naïveté and speaks in volumes of the failures inherent in supply side.

The worst part, though, is that most of the idiots pushing ideas like the Laffer Curve don't even understand it (yes, I'm talking about Bush, Cheney and Santorum). Here's a question:
Did Reagan's tax cuts in the 1980s on the left side of the peak increase receipts?

Federal spending when Clinton left office was 18.5% of GDP...with tax cuts targeted to the working middle class and no runaway spending.

When I get in a discussion about economics, I always get the feeling that conservatives believe that liberals aren't educated on the subject. I find it gives liberals an upper hand.

Just something I find funny.

Edit: I'm more interested in finding out why under the Reagan supply side we saw a per capita revenue from personal income taxes raise about .05%, but under Clinton it rose an average of 6.3%.

BTW, under Bush the per capita increase has been about 2.3%. Under Obama? Smart money is on the mid 6s by 2012.

ace, we went 'round on this on October 12, 2006: (I tried to show ace, back then, that all of the "stimulus" he seemed to think was a positive result of Bush tax cutting, was instead a result of "MEW"...a rapid increase in the amount of "Mortgage Equity Withdrawal", made possible by a rapidly emerging residential real estate bubble that drove housing valuations dramatically upward, in a very brief period of time.....while dramatically increasing federal spending was adding $3-1/2 trillion to the national debt in just seven years.)

http://www.tfproject.org/tfp/showpos...0&postcount=44

ace, your post #39 on this thread....a PR piece from the white house that falsely touts spending cloaked in "off-budget" machinations as "deficit reduction", was thoroughly debunked in my post #31, on your thread:
http://www.tfproject.org/tfp/showthread.php?t=105663

.....4 months ago, when you tried to "offer it" here, the last time.

These points in the OP, IMO, put the points in your last post, in proper context:
ace, anybody....even incompetent management.....can "increase" GDP (or....revenue) by 75 cents for every 1.15 dollars of combined "true" deficit spending and Mortgage Equity Extraction, added to the economy annually....

ace, this will probably be my last post related to our discussion here....the message that you telegraph to me in post #39 is a repeat of this, on the last post on your thread of four months ago:
http://www.tfproject.org/tfp/showthread.php?t=105663
......ace, when the Bush administration came into office, it brought an agenda that included two major "to do" items: ....removing Saddam from power in Iraq, and reversing the tax burden of it's wealthy patrons.

We see the results....dual fiascos... in Iraq, and in federal spending. Just as the stable and cost effective system of containing Saddam with a "no fly zone" and sanctions strategy had cost no downed aircraft in 12 years of allies "no fly zone" enforcement, and by Wolfowitz's estimate to congress in early 2003, about $30 billion.

The following table must be posted again, because it contains the federal treasury annual debt total....(that is why I call it "total") actually accrued.
The marketwatch PR piece that you posted in #39 here, continues part of the debt and some excuses. The following uses the same criteria for the last four presidents...."total debt".

It displays a parallel to what happened since 2001 in Iraq. A budget and taxation regimen that had produced a downward trend in deficits, from 1993 to 2000.... ($360 billion annual deficit, down to $18 billion, annually), and still afforded satisfactory GDP growth, was "revised" by the incoming Bush administration, and the results are similar to the "results" in Iraq:
IMO, ace, the Bush II era tax cuts have been a fiscal disaster, much like the decision to discontinue the "no fly zone" and sanctions to keep Saddam in what Cheney described in 2001, as "a box", and replace that policy with invasion and occupation.

MEW and a smaller deficit would, without budget busting tax cuts, have supported GDP growth. Temporary and more progressively designed tax cuts, (as in the 1993 tax cut compromise between Clinton and republicans in congress) in response to severe recession....which, thanks to the ramping of the housing bubble, never happened, should have been saved, along with large federal deficit spending, until an actual GDP decline, emergency.

What recession fighting "weapons" are left for the next presidential administration, ace? The one that took office in january 2001, had three key options available.... the option to lower interest rates, easy because there was no predicament of huge federal borrowing needs that forced higher interest rates to attract potential foreign treasury bond purchasers....

...the option to increase deficit spending for it's stimulative effect on GDP growth, either by temporarily cutting taxes, or investment in capital projects as the Japanese officials have done since 1990....or....when oil prices starting rising...by funding R&D and tax incentives for alternative energy investment, as Carter had done in the late 1970's.....

ace, you get the idea, I'm sure. The next administration has only one option,
lowering interest rates. Cutting taxes and increasing deficit spending are harder to do now than in 2001....before five years of vigorous tax cutting and when the deficit was no higher than $32 billion annually..........

It they try to lower interest rates, they run into the problem of how to attract buyers of $500 billion in annual treasury bill issuance, vs. just $32 billion in 2001. They also have the gnawing, deficit aggravating problem of servicing the interest on existing debt of $8500 billion, compared to only $5674 billion on Sept. 30, 2001....

NEW COMMENT, on May 21, 2008.,,, I'm going to look for 2007 tax revenue, 2007 MEW, and 2007 national debt increase. As far as national debt, we have the $32 billion increase for the 12 months prior to 2000 year end 9/30/00.

Stay tuned !

Okay, I'm back.... here is recent data:
Here is the amount the federal government spent in FY ending 9/30/07 that was greater than it's FY 2007 revenue:
http://www.treasurydirect.gov/govt/r...ebt_histo5.htm
09/30/2007 ____ $9,007,653,372,262.48
VS
09/29/2006 ____ $8,506,973,899,215.23

So, we have an "artificial" stimulus to the economy of $501 billion, in FY 2007 vs. just $32 billion, in FY 2000.
(Remember...the amount spent in FY 2000 that was greater than FY 2000 revenue, was just $32 billion....)

Here is a MEW graph, ace:
Moving forward, another year:
<h6>My point, ace... is that there is, and has been since FY 2001, massive fiscal stimulus from the sources of nearly $3-1/2 trillion in federal debt created from 10/01/00 through 9/30/07, accompanied by historically unprecedented stimulus from MEW....but even with that, these figures haven't grown impressively:</h6>
I do not understand how you can present a chart for discussion, as your OP does, that does not examine the catalysts for GDP growth, except to credit tax cuts as the principle driver. It is especially suspect to do so, during a period when the national debt increased from $5.65 trillion, to $9 trillion, and MEW was contributing to consumer spending in a suddenly upward spike

So if lowering taxes on those oh-so-burdened rich guys leads to higher economic growth, where's the economic growth? I see a recession.

In some thread a week or so ago, someone was touting Hayek and Friedmann over Keynes and Marx. Well, back in the days of Reagan and Thatcher, i'd hear that Keynesian theory couldn't explain/deal with stagflation, and that the Ronnie, Thatcher, and the Chicago boys had solved inflation. Only they didn't. It's back.

And besides the regressive taxes popular with the right and especially net "libertarians", ( = soak the poor) encourage people to cheat, steal, underreport, buy cigarettes in Indiana, and engage in other unproductive activities.

Host,

For a moment move away from national numbers and think about what your behavior would be if you were "rich" (you may be, I don't know). Then to illustrate the point, use two extreme marginal income tax rates of 90% and 10%. If you have choice, which you would have if you are rich, and you can earn an addition million dollars how would you uses tax management strategies?.

Under the first scenario of a 90% marginal income tax rate, what would you do? How much effort would you put into deferring the income? Accelerating expenses to off-set that income? Moving that income into non-taxed trusts? Moving that income into lower taxed entities or income streams, i.e. corporate tax may be lower, capital gains tax may be lower, municipal bonds may be tax free? At $1 million, the tax would be $900,000.

In the second the marginal income tax rate is 10%, the tax would be $100,000. How much less effort do you put into managing your tax burden here? How much effort relative to the $900,000 tax burden?

Hauser's law suggests that you would put in an effort in both scenarios to the point where your end tax burden reaches an equilibrium point. If that point is $90,000, you put in enough effort to reduce your $900,000 tax burden to $90,000 and you would do the same for your $100,000 tax burden. I know this is not a perfect representation of his data, but the total is the sum of the parts. At some point you have to look at individual behaviors.

Are you suggesting that in the 90% marginal tax rate scenario, that you would pay the tax without employing any tax management strategy?

You are probably right, I just used this thread to once more point out that I believe the poor and middle class probably pay a higher percentage of their modest incomes than the wealthy to support our government. I don't think this is a view that is widely held.

We need to close the tax loopholes. No more writing stuff off on your business. It is ridiculous. I know people who save every receipt and write every thing off on the business. Including their vacations, there food for them and their kids, their ipods, anything they buy is written off. The government needs to crack down on that kind of evasion.

Rekna, what you just described is tax fraud. That's an enforcement issue, not a loophole issue.

There are very legitimate business expenses that are not loopholes - and if you eliminated them, the people who would suffer are the ones who work in restaurants and hotels. I do a lot of business over lunch, and I travel a bit for business. Yes, I treat those as business expenses; it does lead to business and more economic activity. I understand there are some people who begrudge others the "glamour" of living out of a suitcase alone in a strange city, but it's hardly a loophole (especially if the strange city is, say, Youngstown, OH or Flint, MI or Bristol, TN).

Perhaps individuals should be allowed to pay taxes only on what is left over after expenses like businesses?

I think some people are missing the point of Ace's graph. It isn't that people do illegal things when rates are high and stop cheating when they come down (though I'm sure there is some amount of that, but nothing huge). The point is that people structure their activities differently depending on whether it benefits them or not. Tax considerations always affect business decisions - both whether to do something and how to do it. Risks might be worth running at low tax levels that aren't worth running at high tax levels, for instance. Stuff that generates taxable income now rather than deferred a few years is preferable at a low tax rate. Higher rates encourage activity that generates paper losses. And so on and so forth. That's why that graph looks like that: higher rates suppress certain kinds of activity and lower rates increase that activity.

No one should be surprised that people respond to incentives.

Liq, do you remember what happened in the 80s when Reagan gave supply-side it's shot? Now compare that to the 90s when Clinton flipped supply-side on it's head.

FUCKING THING SUCKS! FUCK IT! :expressionless:

This is of course a reference to BillO flying off the handle and in no way represents Willravel's opinion of the topic at hand. It was made in jest.

People all have to live somewhere, ace. If you are correct, no wealthy people would live in western Europe, since their behavior would be influenced largely by tax considerations, France evidently is able to operate in a much more fiscally sustainable model than the US is, even with a relatively generous social benefits structure there.

Consider:
<img src="http://www.portfolio.com/images/feeds/blogs/corporate.gif">
Corporate tax revenue in the US has been declining.

<img src="http://www.portfolio.com/images/feeds/blogs/insurance.gif">
Surplus Social Security payroll collection has been rising, and then borrowed and spent by our government.

<img src="http://www.portfolio.com/images/feeds/blogs/both.gif">
Tax revenue trend with Social Security revenue subtracted....remove Social Security taxes collected, and the tax revenue trend seems to be moving down ace, not steady as Hauser claimed!

Host,

I noticed you avoided responding to a direct question regarding what your behavior would be, why?

Since you won't respond consider the liberal minded wealthiest man on the planet, Warren Buffet. Uncle Warren says his taxes are too low, he comments that his secretary pays a higher percentage of her income than he does. O.k., but let's look at billionaire behavior.

In 2007 his net worth increased $10 billion. I bet his income taxes paid did not change. Want to know why?

Warren Buffets' company pays him a modest salary, that did not change much. So his income taxes are based on a constant amount from year to year.
Warren Buffet's company doe not pay a dividend, which would be taxed as income.
Warren Buffet does not sell stock in his company, which would generate long or short term capital gains that would be taxed at the capital gains rate or as income.
Warren Buffet's children have their own wealth based on their investments in his company. They are already rich and don't need his estate after he dies. There most likely will be no estate tax.
Warren Buffet is giving billions to charity, namely the Gates Foundation. This is tax free. He seems to trust the Gates Foundation more than he trusts government.
If Buffet want to fly anywhere in the world, he owns a charter jet company. He gets the service at no personal cost. If he want a lifetime supply of free ice cream, guess what, he owns Dairy Queen.

Basically Uncle Warren can can do whatever he wants and have no personal income tax consequences. He manages his taxes. The joke is on everyone that buys into his false concerns about how little he pays in personal taxes.

On your point about France. If Uncle Warren wants to buy a home in France he will do it, one way or another, but I bet he will do it in a way that minimizes the tax consequences. It is the middle class and near "rich" who don't have choice and carry the real burden.

At least acknowledge that you understand this, so we can move on.

Will, I remember that when taxes were cut in '81 it ended a recession and was the beginning of a long, extended wave of prosperity that we are still in now. In the years since then, slowdowns have been quite moderate and infrequent. When I was growing up we had a recession every three years or so, and some of them were nasty. To a degree, the '86 tax simplification helped the process along. After Reagan's big cuts in '81 (which accompanied big spending cuts, though not enough to balance), there was a huge and sustained expansion. Compare to Carter, Ford, Nixon........

Clinton didn't turn supply side on its head at all. The small hike in '93 wasn't big enough to reverse the huge technology-driven growth in productivity and investment that was unleashed by the computer industry. Govt policy had very very little to do with the growth in the '90s. The peace dividend plus the computer industry drove the expansion. All the Bush cuts did was restore taxation levels to historical norms; the prosperity in the 90s boosted tax receipts way above normal expectations.

You're referring to the Reagan Recession (caused by the oil and energy crisis of the 70s coupled with some of the worst decisions to come out of the Fed), yes? The one where, in response to outraged citizens, President Reagan was forced to raise corporate taxes?
http://en.wikipedia.org/wiki/Tax_Equ...ty_Act_of_1982

Reagan raised taxes (to the tune of $100,000,000,000), like some sort of Democrat, in order to get the horrible and sudden recession under control.

Will, with all due respect, you were 4 years old at the time - I remember the thing; I lived through it. The so-called "Reagan recession" was caused by Paul Volcker raising interest rates almost to 20% in order to wring out from the system the stagflation that was caused by the cumulative damage done by Johnson, Nixon, Ford and Carter. It was deep and it was painful but it had precisely zero to do with Reagan; it was totally driven by monetary policy and moreover, the "malaise" started before the 1980 election. IIRC that recession was over by mid '82. By the time the tax cuts kicked in and worked their way through the economy, it was months later. What you're forgetting is that the tax cuts were enacted in '81 - and when that happened, the resulting wave of investment and risk started to show up in '82. You can look it up. That then accelerated when the tax code was rationalized in '86 and most tax shelters were killed off, which meant money was redirected to productive uses. The 80s also benefitted from Volcker having killed off inflation in '79-'81; it wasn't just the tax cuts, though the tax cuts were a huge part of it becaue they got rid of the economically distortionary decisionmaking that the tax code was causing.

Really, Will, you're just cherry picking stuff from history books (which I understand because you're not old enough to actually remember what was happening). What do you think caused the boom of the 90s - (i) a tiny adjustment of marginal rates or (ii) a combination of the peace dividend (resulting from Reagan pushing the USSR over the economic cliff) and a huge increase in productivity driven by technology, coupled with low energy prices?

All this means is that you read the WSJ when it was happening. No information from that time was lost. Jeez, you act like it was ancient Egypt and all of the records were lost in a sandstorm or something. What we have now, in 2008, is a more complete historical context which includes long term effects.

You're way above using ageism fallacies, Liq. If I didn't know any better, I'd think someone else was posting in your account.

I'll address the rest of this when I get home from work.

it's the difference between agenda-driven research and the freshness of memory, Will.

right there is much difference in reading about something than actually living it.

while it is sucky to read the gas crisis of the 70s, it was very painful to actual live it and sit in the car as a kid fidgeting and waiting in a very hot vehicle.

And one is not necessarily more accurate than the other.

So what you're telling me is that none of the information you got in the 80s was biased, but all of the information I have now is? You're digging a deep hole there, Loq. It may be time to admit you're down there before you hit China.

no I wasn't stating anything about accuracy, but the emotions and feelings are much different.

You can't compare how you fell when you read something about the holocaust versus if you actually lived it.

Cynth makes a very good point: I wasn't in the holocaust. I want to make sure everyone is 100% clear on that point.

Agreed.

IMO, this pretty much sums up the fallacy in ace's Hauser's law chart.

Hauser attempts to make a direct correlation between the decline in the marginal tax rates of A SINGLE GROUP (the top tax payers) with the steady rate of TOTAL tax revenue as a percent of GDP.

http://s.wsj.net/public/resources/im...0519194014.gif

A more honest chart would compare the decline in the marginal tax rates of the top taxpayers with the revenue as percent of GDP derived from taxes from that income group.

As host's chart points out, the relatively steady rate of tax revenue as a percent of GDP is due more to the increase revenue from FICA taxes over that extended period of time.

I would recommend this post from CondeNast Porfolio.com. It takes a good look at Mr. Ranson's article and Mr. Hauser's Law.

http://www.portfolio.com/views/blogs...ts-wsj-edition

Yep...that sums it up.

I particularly agree with the conclusion:

Hauser's Law, which is really the Laffer Curve by another name, depends on very Democrat-friendly programs for its validity.

Where would Hauser be w/o Social Security/Medicare taxes?

Would it be appropriate to rename ace's chart Hauser's Flaw rather than Hauser's Law.

I think so.

No, it's not an issue of bias. It's an issue of having had an awareness of multiple factors going on at the same time, as distinct from readin about something and reconstructing it. The conclusions gleaned from the latter process are highly dependent on the reader's choice of sources and assignment of significance.

And btw, Will, by your logic the Bush I tax hike should have triggered prosperity like the Clinton tax hike did. But it didn't. In fact it was partly responsible for Bush's loss in '92 and partly responsible for the 91-92 slowdown.

As far as the total tax burden thing goes: what the federal government has been doing with SS money is reprehensible. But if it treats SS contributions as taxes, which it does now and always has, then it's fair to consider them as taxes when assessing how much gets taken out of the economy as taxes. The money flows out of private hands anyway, and is part of the gross burden no matter how you slice it. If people have an incentive to plan their affairs (which most people do) and the ability to do so effectively (which rises as you go up the income ladder) then there is certainly a correlation between top rate and total tax burden. It's not totally linear, of course, but it's there.

The other thing is, people (me included) who think SS is getting a raw deal from the govt should be screaming about taking the thing out of the govt's hands, where politicians can put their hands on it, and putting it into regulated investment accounts where it can't be touched. People would be MUCH better off with mandatory retirement contribution accounts and a choice of vehicles than with the current Ponzi scheme. At the very least, if you have a superstitious belief that retirement MUST be handled by the govt, you should be agitating to take it off the regular budget. Right now the govt is stealing from future generations.

To those of you who don't accept Hauser's graph. I agree that you can not perfectly correlate top marginal tax rates with total taxes collected. The complexity of our tax code would not allow for that type of a clear correlation. But, I think there is something to be gained and that is that the top marginal tax rate is not correlated to total taxes collected. Kinda circular, isn't it. Well some believe that if you raise marginal tax rates on the rich, total taxes collected increase. This is clearly false. Hauser's graph shows that. So as Democrats obsess over top marginal rates, you folks know better, Right?

Second, the point of my OP is that you can not "soak" the rich through income tax policy. No one has responded to that yet, in fact many of you have turned tail and have run as far as you can from responding to that point. No one has addressed the issue that a guy like Warren Buffet can accumulate an additional $10 billion in wealth and pay no additional taxes on it. Buffet is not the only one who does it, check in with the Kennedy's, Kerry, Gore, Pelosi, etc., etc., etc. Rich people manage their income tax burden, social security taxes cap and Medicare taxes are an accepted cost but also managed.

Let me ask a question, especially for those outraged by CEO salaries.

Let's say we have CEO - A who is paid a $4,000,000 per year salary with the same benefits package as all of his employees. He/she pays income tax on $4,000,000 income and pays for what he/she consumes with after tax dollars.

Let's say we have CEO - B who is paid $250,000 per year salary, gets the rights to stock options, deferred compensation and other perks, net values of $4,000,000. He/she consumes mostly with pre-tax or non-taxed dollars.

Which is better for the government from a tax collection point of view? Don't you actually want CEO taxable income to be high or at least an accurate reflection of their total compensation in current dollars?

Here is something on the subject easy to digest. Keep in mind the average Joe's compensation is pretty simple, W2 income where taxes are taken out before Joe gets his portion. CEO's and their companies spend, who knows how much in money, time and other resources to come up with compensation packages that are tax efficient.

http://www.marvquin.com/blog/ceo-sal...sation-defined

Again, I am beginning to think the value of the information shared is being lost on some of you. For me this exercise was valuable because I think I have a better understanding of Warren Buffet. I think he uses the rules to his maximum advantage, doesn't try to change public perception, actually goes along with public perception, while he smiles all the way to the bank. Goodness, the man is brilliant.

Go ahead raise the top marginal income tax rate to 100% if you want.

The statistics I quoted are valid.
Bush had to clean up the massive debt that Reagan had amassed (something like $220B, which is paltry compared to today). But, if you remember, he decision to raise taxes falls on the collective shoulders of the Democratic Congress. Reagan's policies had created a more partisan air in Congress and with it Democratically controlled, Bush 1 was basically screwed either way.

1990-1991? The S&L market collapsed due to what I would consider the eventual fault of capitalism (but that's for another thread). The fact is that the late 80s/early 90s recession was technically worse than the great depression, but somehow the effect was no where near as bad.

I'm not sure how you can expect the tax hikes to perform miracles.
If you'd like we can study what happened to SS under Reagan, Bush 1, Clinton, and Dubuyuh. That may shed some light on your concerns about it's mismanagement.

Actually the S&L market collapsed due to regulatory bungling, bait-and-switch by the federal govt and a few shady operators. I worked on some of the clean up from that mess and it was ugly.

Bush raised taxes because he was politically boxed in. The purported huge debt was not, as a percentage of GDP, all that big. But irrespective of the REASONS, if your theory is that raising taxes leads to prosperity a la Clinton in '93, you still have to explain Bush I.

SS is now and has been for many years a Ponzi scheme.

Sorry Will, but that is totally incoherent.

If Hauser can make broad sweeping conclusions in his chart, I wanna do the same:

Call it Dux Deduces...that supply side economics is a FAILED economic theory...each time it was applied (1981-1989, 2001-2008) with massive tax cuts, US national debt as a percent of GDP rose significantly:

http://zfacts.com/metaPage/lib/National-Debt-GDP.gif

It is as clear as black and red.... as income tax rates are adjusted down on the top wage earners, national debt increases as percent of GDP.

Further supported by a 2005 CBO study (pdf)

Wait, can you clarify who you're blaming?
I just did. Applying the model can't work when outside circumstances, such as the S&L collapse, corrupted the market and caused a recession.

That is the worst, most inaccurate statement you have made YET on this site! It's appalling. Yuck. How CAN you say that democrats promote race divides....isn't Obama a black man? You won't ever see a black person or woman running for Prez on the Republican ticket.

Nope, never. :no:

And which party gives more to those who earn less, it sure isn't the Republicans! They always protect the rich. Hence the oil crisis. Those guys are all Republicans.

I could go on & on but I'm certain you are a Republican droogy & it's not worth my time.

Your attempts at confusing Hauser's data is pretty funny. I think you can understand the point, but you choose to attempt to add confusion because you don't seem to agree with the implications of the data.

To be clear, all Hauser's graph is showing is that there is no correlation between top marginal income tax rates and tax revenues as a percentage of GDP. However, there is a correlation between tax revenues collected and GDP. If you grow the economy, you can grow government spending without amassing debt.

I will give you a hint. If you want to prove something that contradicts the implications of Hauser's graph - you need to show there is no correlation between tax revenues and GDP. Which you can not do. Or, you need to show that high marginal tax rates are more correlated to GDP growth than the inverse. You can not do that either. And since we know you can not do it, please find your most liberal minded, anti-supply side economist and have him or her join the discussion then perhaps we can move away from the humor. "Dux Deduces", ha, ha, ha, you are pretty funny.:thumbsup:

{added} Just to show I read your link.

Here is a tidbit from the CBO analysis:

Why would they assume that??? Perhaps to make the math easier?

Well, damn, ace....I guess that means no Nobel Prize for economics for Dux Deduces.

I knew I should not have been as simplistic as Hauser.

correlation is not causation, ace.
you can show correlation between any two variables and even produce a nifty graph that makes it appear o-so-objective.

but your entire information source is a wsj editorial.
you are defending a hopeless economic theory.
this does not speak well to credibility of your arguments.

i was hoping to find hauser's paper in which this model was developed, but so far my intermittent net access (one of the real treats of moving house) has gotten in the way--from what i have found, however, i am more than suspicious of everything about the infotainment you provided.

so do you have the research behind this ace?
have you looked into how the modelling was done, what the methodology was?
if so, care to explain it? or post a link?

because so far as i can see, all you've got behind your supply-side cant is an editorial that presents NO information that you believe because it fits with your metaphysical understanding of markets.

if you don't have the information, and given that anyone can generate correlations using a regression analysis or any number of other relatively simple statistical models, and that no chart bit in a wsj editorial without any reference to method, without any reference to context can possibly be seen by anyone--not even a believer like yourself--to prove fuck all, i don't really see what you've got to be so cocky about, nor do i see on what basis you get to set the criteria for refutation of hauser's "law"--PARTICULARLY given that there is already information in the thread that takes it apart.

do let me know when you find that data, ace.

Perhaps one for humor or loyalty to your party's empty rhetoric.

What I did was A) show the correlation or lack of correlation and B) I gave an analysis of real world behavior that supports my conclusion. I have not seen nor have I done the math or research to show causation, nor have I been saying there is causation. At this point, I could still be wrong in my conclusion. However, no one has taken a serious approach to contradict my conclusion. Hauser's chart, is real data put in graphic form. The graphic supports "supply side" economics. Real world activities support "supply side". "Supply siders" know there is a point where marginal tax rates will have a big impact on GDP if reduced and a point where marginal tax rates will have no impact on GDP if reduced. There is a theoretical equilibrium point, given the complexities of our economy we will never know what that point is exactly.

I am not sure what takes Hauser's chart apart, please show me. All he does is show marginal tax rates (factual data) and tax revenues as a percentage of GDP (factual data).

i could just as easily correlate the number of letters in your posts with the fluctuations of the price of oil, present it in a little graphic and make the same claims about it. that you can plot two lines and juxtapose them, and claim they both are "real world data" means nothing, ace. you should know this. i'm surprised that you're even trying to make these claims float.

as for what's not there---read host's or dc's posts above.
look at the blog entry linked above--all operating at a level of reduced information, but enough to show that the lines hauser draws are more interesting for the process of isolating them than they are for what they say, particularly in relation to each other, and even more as the basis for the claims that are reproduced in the wsj edito by some guy.

(it's hard to tell much about him, btw, as his company's website requires you to subscribe to find out much of anything about it. they are freer with their press releases, but they're press releases.)


on your more curious claims:

supply side exists as a body of pseudo-theory, that is real-world information.
the performance of american neoliberal regimes influenced by supplyside has been abysmal. there's already information in the thread--nice objective seeming graphics, if you like, that makes that case. ignoring it and repeating that "supply side is real world data" is meaningless.

everything is real-world data.
your posts are. my posts are. everything anyone writes is. all information in the world. not necessarily information about the world, but in it.

there's a difference.

I'm blaming a bunch of people. But basically, my memory of what happened with the S&Ls was that the govt had a soft spot for local banks that lent people money to buy homes with. That's what S&Ls were. [What you should be thinking now is "There is nothing new under the sun."] IIRC (and this is public record, so if you really want to check you can - I don't have the patience for it right now) the accounting rules were changed to permit purchasers of S&Ls to treat goodwill as an asset for purposes of calculating capital for regulatory purposes, which of course purchasers did. Then the govt decided, well, maybe that wasn't such a good idea after all, and it changed the rules again, which suddenly left a bunch of S&Ls undercapitalized due to accounting changes. All of a sudden there is a crisis. At the same time you got some slick operators who understood that you can do some nifty things with goodwill and creative accounting. So in effect the S&L crisis was a massive case of governmental bungling, with a bit of Enron thrown in for good measure.

The case I worked on had to do with what happens if the govt seizes a bank that it had no legal right to seize - does the old owner get the bank back? a claim for damages? both? up the creek with no paddle? Stuff like that happened, and Congress never considered what might happen if the bureaucrats it was empowering abused their power - which is pretty typical of how government operates; it can't think of everything and usually doesn't. It did keep lawyers occupied, though. :D

Roachboy, is it your position that people don't respond to incentives? At its essence, "supply side" is just a jargon reference to the concept that incentives matter. And they really do.

Yes and no. The recent problem was the responsibility of the lenders and the lend-ees. The government didn't really facilitate the sub-prime thing. The government does bear some responsibility for the S&L, though.

I did get that "when will people learn" feeling though, so I get what you're saying. Ultimately the investor does have to take responsibility for his or her investment.
I'd call it equal measures of governmental mismanagement and sheyters taking advantage of people who probably shouldn't have been investing in the first place, but ultimately it's not really a big deal. We both agree on the fundamental causes, which is all that matters.

I still believe my point still stands regarding the change in economic policy under Bush1. Saying that removing supply-side policies didn't work during the 1991 recession is a refusal of looking at the big picture, something you claimed to have a particularly better handle on due to your age and involvement in all this. In all honesty, you probably do know more about it than I do, but I suspect that your normal biases (biases that we all have in one way or another) are coloring your memories a tiny bit. We clearly both come from different schools of thought on the subject.
I can imagine.

Actually, Will, our views are sort of mirrors: you think the 93 tax hike caused the subsequent prosperity, and that if not for the S&L crisis the 91 tax hike would have also. My view is that, although both tax hikes were small, so that the effects were marginal, the 91 tax hike did harm the economy; the S&L crisis by itself wasn't enough to do it, but there was an accumulation of things, including the normal cycle of business after 7 years of prosperity. The 93 hike was small, and was so overwhelmed by the huge rush of technology-driven productivity and investment (plus the uptick from the start of the recovery) that it ultimately had almost no effect at all on the larger economy.

Well the S&L is just the biggest of the causes of the recession. The deficit, unemployment, poor GDP performance, etc. all contributed.

BTW, the totally incoherent thing was me referring to the 1987 stock market collapse, which was technically larger than the crash in 1929.

depends what you're measuring, will.

that is not an accurate restatement-as-a-question of my position.
the celtics are losing, so i'm not going to address the stuff about supply side at the moment. displacement in action, it'd be, methinks.

The Dow Jones dropped over 22% in one day in 1987, as I recall. That same drop happened over two days during the 1929 crash.

But in the '29 crash it kept dropping, and within two years (or thereabouts) bottomed. The day after the '87 crash the Dow recovered something on the order of 350 points, and there was no economic downturn until years later. That's why it depends what you're measuring.

You know, I grew up in the late 80's and early 90's, and my grandfather, who I dearly miss, grew up in the 20's and was shipped off to war in Europe at the age of 19.

From the stories he told me, I'm surprised a country boy from Arkansas lived long enough to be shipped off to war.

Will, the late 80's and early 90's weren't any where near the great depression. It doesn't matter how you measure it.

You can lose sight of the forest amongst all the trees.

I'm honestly not smart enough to contribute to a discussion about economic theory, but when it comes to my money, I know how to spend it better than the government does. I'm no where near rich, and probably never will be, but I know the same principle would apply if I ever was.

In one way, the way I measured it, it was worse. The math is simple.

I was demonstrating that the market in the late 80s was effected greatly, so much so that the tax hike wouldn't and couldn't have compensated for it. I was not suggesting that the 80s recession was tantamount to the 20s depression.

Just a quick question: you suggest that you know how to spend your money better than the government... how much would you be willing to spend on the military? Roads? Fire protection? Police? Regulatory bodies like the FDA, which can prevent poisons from being sold in our food?

Let's not pretend that the government's jobs are simple.

Tell you what, Will. Limit the govt to the functions you talked about, and then you might have a point. Otherwise, yes, I know how to spend my money better than the govt. Starting with Social Security.

You're a master at framing a debate, I'll give you that.

If anyone feels like they aren't being taxed enough and they should contribute more, I doubt the IRS would turn away a personal check. Feel free to make a donation. I'd pay more taxes to support fundamental societal needs like roads, fire protection, and police. Beyond that I want to work for myself, not for the collective.

I simply was suggesting that if you think you're paying to much taxes, you should be sure you're willing to do without those things your taxes pay for, good and bad.

I'd absolutely LOVE not to pay for the Iraq War. I'd love not paying a certain president's salary. Still, more than that I feel the responsibility of making sure that I contribute to police and fire pensions. I feel the responsibility of paying to make sure that highways are maintained and are safe to drive on. I even feel the responsibility to help build and upkeep local parks and such.

All of us are being taxed to much, plain and simple. The government tax free day this year is going to be some time in July. The average American going to work on Monday is still working to put $$ in the pockets of the government.

That's ludicrous.

Will, you're ducking...............

Bush won in 2004. What makes you think a majority won't do privately what they did publicly?

Moreover, what constitutes something the government should be doing vs. what it shouldn't? I suspect that my preferred government would look different than yours. We may agree about police, roads, and parks, but what don't we agree on? And what happens if one of us gets our wish? The other would be just as unhappy if not more so under the new government. I'm guessing you're a libertarian (clearly a wild guess), but I'm a democratic socialist. That could make for some awkward concessions on either side.

absolutely right - but then you have to justify vesting power in the government each time you do it. The problem I have with the left-leaners is that they naturally assume every social issue has to have a governmental solution, which is precisely wrong. Some problems might, but deciding which is which requires thought and analysis, not reflexive responses.

loquitor...it is actually the left-leaners and the center....the majority of the country?

Although I wouldnt go as far as to say either group (left or center) believes it applies to "every social issue."

Its reinforced to some degree by a recent survey from the Pew Research Center....hell, even a growing number of conservatives have seen the light:

So your assumption is that we believe that all social programs should rest with the government by default? Why would we assume that? Could it be because there's very rarely profit in social programs, and as such they simply wouldn't get done in the free market? Will I ever stop asking questions?

Is it your assumption that social problems are necessarily remediable by government programs? Are you sure that many government programs don't exacerbate social problems? Are you sure that market forces won't solve many of the problems you perceive without creating sclerotic, inflexible, antidemocratic bureaucracies? Have you considered that many programs place self-perpetuation as a goal ahead of any useful societal purpose? Are you convincingly able to discount the law of unintended consequences, which arises because planning will never be able to anticipate and account for the effects of its implementation?

Will I ever stop asking questions?

What has a greater chance of success, a market that doesn't even try, or a government who tries?
And if I can name one that doesn't? The public library system, for example? If we vote for Democrats, then their programs are democratic. Of course the US isn't a democracy, so I fail to see the relevance.
According to whom?
A variant on Murphy's Law? Comon, you can do better than that.

What harmful effects could come from providing libraries to the public?

loquitor...I would never suggest that government social programs are not without abuse or unintended consequences.

But I would also suggest that the vast majority of the tens of millions of Americans who benefit from these programs every year do so in a responsible manner and quietly go about their lives with a little more dignity until they no longer need a government safety net.

I honestly cannot think of any country, any time in history, that cared for its citizens most in need by relying on market forces. What makes you think such an approach would work?

the best social program is a job. Governments don't create jobs. Not real ones, anyway. That's how.

You'll also have to define "most in need." Short of a debilitating handicap, pretty much everyone is able to do some kind of work.

A job with no health insurance wont help with a serious illness of a child....a minimum wage job wont put food on the table.....

Or someone who is living from paycheck to paycheck and recently let go because of downsizing and suddenly finds himself between jobs....how does he pay next month's rent w/o unemployment comp?

Wow. I should really reconsider being a public defender, what with it not being a real job and all. I wish they'd told me it wasn't a real job on career day.
What about people born into extreme poverty? I'm assuming you've seen Bowling for Columbine. Do you remember the situation in Flint, Michigan?

will, you keep defaulting back to core govt functions to defend social programs. That's bait-and-switch. Cut it out, it's intellectually dishonest and beneath you.

People born into extreme poverty have been making it out of poverty for a long time, will. Being born poor isn't a lifetime sentence. And putting people in the tender hands of govt isn't the way out, either. Or have the last 40 years of evidence not shown you anything?

The last 40 years, since the Great Society programs, demonstrated to me that the emergence of a growing black middle class was, in large part, a product of those programs.

BTW, blacks are also twice as likely as whites to work in government jobs...for city, state, or federal government.

Public libraries are not a core government function. If you want core, I'll be glad to discuss the military and schools. I just figured we were discussing less core programs.

Some people born into extreme poverty have the intellect or opportunity to pull themselves from said poverty, but what about people who can't? You're aware that there are plenty of very hard working people who never make more than $13,000 a year.

loquitor...arent you also playing bait and switch?

Why not respond to my post:

A job with no health insurance wont help with a serious illness of a child....a minimum wage job wont put food on the table.....

Or someone who is living from paycheck to paycheck and recently let go because of downsizing and suddenly finds himself between jobs....how does he pay next month's rent w/o unemployment comp?

I really am trying to understand the compassionate libertarian position that minimizes the need for a government social safety net.

add:
It is not just social safety net programs for minorities (those subject to years/decades of discrimination) or poor/working class white families.

Forty years ago (your time frame), more than half the seniors in the country had no health insurance. That crazy Great Society government social program, Medicare, with all its faults, has made a huge difference in the quality of life for seniors.

Do you think "market forces" would provide affordable health care to seniors?

I am confused by your response. Perhaps, if you were more specific I would understand. First, are you questioning the fact that there is no correlation between high marginal tax rates and taxes collected as a percent of GDP? That was the point of the Hauser's graphic. Some people think high marginal tax rates are justifiable because of increased tax revenues. Hauser's graphic suggests that GDP growth leads to higher tax revenues. Some people justify their interest in rolling back the Bush tax cuts because they think that when Bush lowered high marginal tax rates on the "rich" that it adversely affected taxes collected and GDP (or the strength of the economy). Perhaps there are good reasons to support the roll-back of Bush's tax cuts, but perhaps this common reason given is not a good reason.

I think there is evidence that suggests that wealthy people, i.e. Warren Buffet can amass big increases in net worth, while not being impacted by marginal tax rates. Are you questioning this evidence?

I looked at their posts and the links, and found nothing that countered the conclusions I made relative to Hauser's data. That is why I asked you to help me see it.


My understanding of "supply-side" seems different from yours. In my view there is clearly a "suppl-side" sweet spot when it comes to tax policy. There is a range where it has a big impact and a range where it would have no impact.

Again, I ask what would your behavior be under a 100% marginal tax rate compared to a 10% marginal tax rate. If your employer offered you overtime at 1.5 times your normal salary, but after taxes your net take home from that effort was $0, what would you do? what would you do if it were 90%. If we lived in a situation where productive people face 100% marginal rate wouldn't production reach a theoretical peak much sooner at a 100% marginal tax rate situation compared to a 10% rate? Would that be good or bad for GDP? Then if taxes collected as a percentage of GDP always averaged about 20%, would that be good or bad for tax revenues?

You can certainly help me understand your objections to Hauser and to my views regarding supply side, or you can repeat how I lack objectivity, logic, reason, or whatever you think about me personally. Your choice, just keep in mind, I don't care what you think about me, I am interested in the argument.

Also, it was the author of the WSJ editorial who introduced "Hauser's Law", I think it is the author who wants to elevate Hauser's graphic. I don't see that as the issue. To me the point is the lack of correlation between marginal tax rates and taxes collected as a percentage of GDP.

Wrong. The growth of the black middle class was as a result of the civil rights laws, which removed to a large degree artificial obstacles to individual rights and pursuit of self-improvement for people of disfavored groups. That's not a social program. It didn't GIVE anyone anything, it just removed an artificial and unjustified disability so that they could EARN on their own on the same terms as anyone else. People in the black middle class didn't get there because of AFDC.

As for why blacks are more likely to work in govt jobs, I would guess there are a lot of interesting sociological explanations for it. But that doesn't make govt employment into a social program - or are you suggesting that govt work isn't real work, or that black civil servants somehow aren't earning their pay?

The lesson of the last 40 years that I'm talking about is the huge increase of crime and virtual destruction of the intact urban black family as a result of disincentivizing fatherhood (as distinct from breeding and leaving) and work. The link of the Great Society programs with the social dysfunction of the 70s and 80s was pretty well documented. They were enacted with the best of intentions (to use your word, "compassion"), and with wonderful logic behind them - and ended in disaster. I wrote about it here; go have a read.

The black middle class grew as a result of both the civil rights laws and social safety net programs.

Children who do not go to school hungry (through food stamp/nutrition programs) or have access to early leaning programs (like Head Start) or a better living environment (through housing assistance programs) are more likely to learn and succeed.

Sgle mothers who are given assistance (through AFDC/TANF) while they (and many young unemployed black males) learn a skill (through CETA and other federal job training programs) are far more likely to succeed.

Medicaid had a dramatic impact on the health of millions of children and families living in poverty. Medicare has significantly improved the quality of life for millions of seniors.

I raised the issue of blacks in goverment jobs because you suggessted that government work wasnt real work:

Governments don't create jobs. Not real ones, anyway....(#77)

It is a matter of perspective...you appear to focus on the negative outcomes of the Great Society programs...I acknowledged that there were abuses and unintended consquences...however, those who benefited far outweigh those negative outcomes.

I have read many analyses of the social progams and their impacts on the poor, working class, and seniors... and based on what I read here, I think you minimize the substantial positive benefits of those programs.

I would encourge you to read some of the work of the Joint Center for Political and Economic Studies (particularly Eleanor Holmes Norton, the current congresswoman for DC.) and the Urban and Brooking Institutes.

And I will read your analysis when I have time.

Not if the family structure has been gutted by dependency. There are so many studies on this that I could use then as kindling and have plenty left over. Plenty of poor people succeed in school without govt help, starting with my own parents. The key wasn't that the govt was giving them stuff - the key was that they had intact and supportive family. (Just so you understand, I'm not advocating letting people starve, but there's a difference between supporting charity and creating an entrenched bureaucracy with an interest in its own perpetuation.)

Well, you don't know what the health outcomes would be without Medicare/aid. What I can tell you for certain is that the availability of free govt money for health care has thrown the pricing structure of health care so far out of whack that we now have a crisis. Subsidies as an economic matter will almost always result in higher prices. And Medicaid is the program that ate state govt, and is a regular generator of extreme corruption and fraud. If we got the govt out of the health care business I can guarantee you that prices would go down and access would be pretty much unaffected (in fact, I think we should make noncatastrophic health insurance illegal, so that you pay for your own treatment. That's guaranteed to keep prices low. But that's a post for another day.) I can also tell you that I have a lot of friends who are doctors, and to a wo/man, they all say that they could drop prices significantly and work fewer hours and still make the same living if they didn't have the mountains of paperwork and regulations to deal with. So who really benefits from the programs? Answer: bureaucrats and public sector unions - the kinds of people who provide political support for legislators who appropriate tax money.

OK, touche, you picked up on some infelicitous wording from me. Look, working in an office is honorable work, whether for the govt or anyone else. So yes, govt jobs are real jobs in the sense that people work and do stuff and earn money for it. But let's not pretend that govt jobs are economically productive or creative the way private sector jobs are. They don't create wealth, they just shuffle it around. I'm not arguing against shuffling it around here - there is a place for some amount of shuffling, that's what we have govt for - but govt jobs don't create wealth or new economic opportunities. They are at best symbiotic to the economy.

Depends what you're measuring, for what purpose and over what time frame. I think it's fairly demonstrable that govt giving stuff away has almost always made problems worse by making them economically feasible - if the govt subsidizes something, it is sure to get more of it. You can't outthink the law of unintended consequences. That's what my post that I linked to above is about.

I think you are falling into a fallacy of comparing programs temporally instead of as against alternative scenarios. As I said before, the best social program for kids is an intact family and the best social program for adults is a job. Creating new bureaucracies is not a recipe for benefitting anyone except public sector union bosses. There are very few people (mainly the handicapped) for whom the only alternative to govt support is misery.

Ther'es lots more I can write but I think that's enough for now. Back to work.

loquitor...you make it sound so simple.....the best social program is creating a job for every adult.

Who could argue with that?

BUT....When has this country, through "market forces", ever created a job (that pay a livable wage) for every adult?

Thats why you are a libertarian and I am a liberal.

Um, how about the last 15 years, when we have had unemployment at or below 5%? If you look at Keynesian economics, they always assumed full employment at 94% of the work force. We have been above that pretty consistently the past 15 years.

How many of those jobs paid below a livable wage?

I guess I should be thankful that a majority of Americans understand the need for (and support) government safety nets for those most in need.

What is a "livable wage"?

loquitor..I just dont buy the libertarian argument....

If left to "market forces", every American will have a job that pays a decent, livable wage....and every family is stable with two parents.

And if anyone or any family is still without adequate food, shelter, health insurance, basic job skills, etc., its because those pesky government social programs are responsible for driving up the cost of such basic necessities...and not part of the solution.

Sorry guys...the discussion ends here for me.

Libertarianism has been at the root of every thriving society. Excessive centralized control has been at the root of every thriving society that has materially declined.

No need to apologize for not being able to support the opposing view. We understand.

ace....libertarianism has never worked anywhere..anytime in history...without having a large, disenfranchised and disregarded lower class living on the edge of society and without basic necessities or living at the mercy of the "monied" class.

no, dc_dux, it's the left-wing caricature of libertarianism has never existed. But the libertarian impulse -- the idea that people do best when left alone to follow their own muse or dreams -- is PRECISELY what has led to most human progress. There has been more relief of poverty due to libertarianism and the corollary economic system (capitalism) than by ANY OTHER SYSTEM EVER INVENTED. You and I are having this conversation because of capitalism. If we had to depend on socialism for computer innovation, we'd still be using pneumatic tubes.

dc_dux, your complaint is that the benefits of capitalism don't distribute evenly, and indeed they don't. I'd rather have everyone decently housed and fed, even if some others lived in luxury, than have everyone be equal and miserable. Wouldn't you?

I thought you were done.

Just to be clear here is a definition of the concept:

http://dictionary.reference.com/browse/libertarianism

If we look at the historic basis of great societies and cultures at the basis there were the above concepts. You think this is incorrect?

Low income. Poor education. Poor housing. Poor health. All caused by capitalism, all are the genesis of the cycle of poverty.

I know it's frustrating, but you have to admit that without a larger umbrella of control some people will be taken advantage of and will be left behind. Capitalism, unchecked, leads to corporatocracy, which is a form of economic fascism.
That's a false choice.

ok, ace....you want to play semantics.

No "free market" concept, as loquitor suggested, has ever worked anywhere..anytime in history...without having a large, disenfranchised and disregarded lower class living on the edge of society and without basic necessities or living at the mercy of, or exploited by, the "monied" class.

will, of course its a false choice.

Semantics is definitely the problem. If I am responsible for myself with freedom and everyone else is to, who is subjecting anyone to anything? No one.

After the formation of a formal government structure that restricts freedoms, do you get what you reference. The more restrictive the government control, the more forced impoverish do you get.

Restricting freedoms is not an absolute term. There are billions of shades of gray. Being in a society restricts freedom. Even in anarchy, there are some freedoms that you must give up.

As for:
It's a parabola, actually. The best place to be, for the common man, is having some governmental control and some liberty. Complete liberty means we're at the mercy of those who have more money, complete government means we're at the mercy of those in government.