Question re: Warren Buffet paying 10% tax

[worldwidetraveler]

I agree that the capital flight question may be much beyond my ability to grasp how to control it, exactly. But, I do know that we, as a country, do NOT want to get into a position in which we are "competing" for companies in some race to the bottom bullshit. In any event those are more reasons to have infrastructure in America in order that companies want to locate here. Though, I am NOT going to argue with you, here b/c currently, I do NOT have some kind of comprehensive plan that would accomplish being able to control capital... currently, the USA seems to be of the belief that it is of the US interest to paper international companies.... take the TPP for example, which is only going to do more to screw american workers to compete with the wages of low paid asian workers.

A lot of those IT jobs that went overseas eventually came back. I believe it was a quality issue.

Instead of trying to control things, it would be much better if the US developed a competitive edge. No different then what businesses have to do. Higher taxes and strict laws won't do it. Not in today's world.

It could be higher qualified workforce (pushing kids into certain fields by offering loans or some incentive for that field of study), lower corporate tax rates that would take out places like Ireland, easier accounting or tax laws, better infrastructure like you suggested, access to funding for expansion (one of the reasons IT companies still start here is because of funding) etc...

 

[Feisbook Control]

Firstly, anyone who truly thinks increasing taxes would solve any problem needs to look at this.

This isn't even an ideological issue. It's a practical issue, a matter of incentives. When approximately 50% of the population of the U.S. is grabbing all that they can with both hands at the bottom end, when those at the top are "too big to fail", those in the middle will react too, but not how people might expect.

There is a whole movement of people, including a fair number of people at this forum, I suspect, actively engaging in this. Unless you're willing to create a complete authoritarian state (which, ironically, would lead to massive wealth disparity), the horse has already bolted. Some of us do indeed realise what a sucker's game being in the middle class is, but our response is a big dose of unintended consequences. What's 50%, 60%, 70% (take your pick, hell, make it 100% tax) of 0? Just like with fat, obnoxious chicks, we're looking around and saying, "Nah, screw this for a game, I'm outta here". That is the destruction of the middle class because the incentives on being a productive, successful member of society (particularly male) just aren't there in many Western nations anymore. There are greener pastures and we're heading for them. I swear that every time someone mentions these (quasi-)socialistic ideas Singapore and others get 100 new applicants for opening bank accounts or getting a passport.

 

[JayJuanGee]

Read a book called the millionaire next door..it will open your eyes. Most rich got rich because of their individual work,effort and frugality.

It's one thing to argue how individuals can prosper within a society, and another thing to argue how to set up the society to allow for such prosperity. I don't disagree with aspects of your post regarding potential problems with majority rule, but we need to attempt some semblance of democracy, rather than moneyocracy. So, the current problem, is that there is too much money in politics that is calling the shots in too narrow of a way.... and we need policies and practices in order to benefit society as a whole to create jobs for the shrinking middle class.

A lot of those IT jobs that went overseas eventually came back. I believe it was a quality issue.

Instead of trying to control things, it would be much better if the US developed a competitive edge. No different then what businesses have to do. Higher taxes and strict laws won't do it. Not in today's world.

WWT: Generally, I agree with you that the US has potential to attract and retain brains, yet you are NOT going to trick me into agreeing to LOWER taxes as the solution... NOT...

America still has potential for broad appeal, including a decent research and higher education system... except to the extent that research and education system will be run to the ground too, if we do NOT continue to build and invest in it which is a political govt priority b/c private sector is NOT going to do those kinds of investments on their own... additionally, investments in medicine also can be innovative in america... .

 

[worldwidetraveler]

WWT: Generally, I agree with you that the US has potential to attract and retain brains, yet you are NOT going to trick me into agreeing to LOWER taxes as the solution... NOT...

ha! Well I tried.

America still has potential for broad appeal, including a decent research and higher education system... except to the extent that research and education system will be run to the ground too, if we do NOT continue to build and invest in it which is a political govt priority b/c private sector is NOT going to do those kinds of investments on their own... additionally, investments in medicine also can be innovative in america... .

Healthcare should be interesting to watch after Obamacare takes hold.

The city I am from was built on the back of car manufacturing. That was shut down and now the major employers is healthcare and a service industry. It wasn't a good replacement for the city and the city seems to be slowly dying.

 

[JayJuanGee]

Firstly, anyone who truly thinks increasing taxes would solve any problem needs to look at this.

This isn't even an ideological issue. It's a practical issue, a matter of incentives. When approximately 50% of the population of the U.S. is grabbing all that they can with both hands at the bottom end, when those at the top are "too big to fail", those in the middle will react too, but not how people might expect.

There is a whole movement of people, including a fair number of people at this forum, I suspect, actively engaging in this. Unless you're willing to create a complete authoritarian state (which, ironically, would lead to massive wealth disparity), the horse has already bolted. Some of us do indeed realise what a sucker's game being in the middle class is, but our response is a big dose of unintended consequences. What's 50%, 60%, 70% (take your pick, hell, make it 100% tax) of 0? Just like with fat, obnoxious chicks, we're looking around and saying, "Nah, screw this for a game, I'm outta here". That is the destruction of the middle class because the incentives on being a productive, successful member of society (particularly male) just aren't there in many Western nations anymore. There are greener pastures and we're heading for them. I swear that every time someone mentions these (quasi-)socialistic ideas Singapore and others get 100 new applicants for opening bank accounts or getting a passport.

Some americans are willing and able to live mobily, but others are NOT going to be willing, ready and able to do it. We will see how this ability of americans to be mobile plays out over the years. I doubt that it is as big of a factor as you are making it out to be - though I do know that a lot of guys in RVF, including myself, are considering ways to live mobily outside of the USA.

Healthcare should be interesting to watch after Obamacare takes hold.

Yeah, I believe that obamacare is NOT all that negative as people are making it out to be. There are going to be a lot of investment and money making opportunities with this. How long it will last, and how it will play out is another story.

Personally, I think that manufacturing etc is better than medical b/c it is NOT so easy to export and import medical.. but it is NOT impossible for the US to remain competitive in that medical sector.

 

[jimukr104]

Firstly, anyone who truly thinks increasing taxes would solve any problem needs to look at this.

This isn't even an ideological issue. It's a practical issue, a matter of incentives. When approximately 50% of the population of the U.S. is grabbing all that they can with both hands at the bottom end, when those at the top are "too big to fail", those in the middle will react too, but not how people might expect.

There is a whole movement of people, including a fair number of people at this forum, I suspect, actively engaging in this. Unless you're willing to create a complete authoritarian state (which, ironically, would lead to massive wealth disparity), the horse has already bolted. Some of us do indeed realise what a sucker's game being in the middle class is, but our response is a big dose of unintended consequences. What's 50%, 60%, 70% (take your pick, hell, make it 100% tax) of 0? Just like with fat, obnoxious chicks, we're looking around and saying, "Nah, screw this for a game, I'm outta here". That is the destruction of the middle class because the incentives on being a productive, successful member of society (particularly male) just aren't there in many Western nations anymore. There are greener pastures and we're heading for them. I swear that every time someone mentions these (quasi-)socialistic ideas Singapore and others get 100 new applicants for opening bank accounts or getting a passport.

Agreed....most tax increases will screw the middle-class in the end. Even Obama hurt the middle class mostly. Its the largest group.. certainly larger than the rich so as a group will pay more.
Interestingly the unions must regret they voted for him.. he has weakened them more than any group. Eventually the poor will have more than the middle class.

 

[Feisbook Control]

Some americans are willing and able to live mobily, but others are NOT going to be willing, ready and able to do it. We will see how this ability of americans to be mobile plays out over the years. I doubt that it is as big of a factor as you are making it out to be - though I do know that a lot of guys in RVF, including myself, are considering ways to live mobily outside of the USA.

I disagree entirely. Firstly, expatriation is a booming business as are related things such as medical tourism, foreign brides, etc. There are lots of countries around the world, particularly in SEA and Latin America, that are actively courting Western retirees. People may be stupid, but they're not that stupid and they can sniff out a good deal. Much of the West simply isn't a good deal anymore. There are huge communities of Western retirees in many such countries now, and these countries run the gamut from being highly developed (e.g. Singapore) downwards. Take your pick; there is a niche for anyone depending upon their lifestyle desires and their wealth levels. I know people here in Taiwan whom I suspect would be Democrat voters back in the U.S. who live in Taiwan because of tax, cost of living and medical issues. Their money goes much farther here. These people are very middle class (the wife is/was a teacher). It's not that they're unpatriotic or any of that. They love America (they have a flag hanging outside their house here), they just don't like what it's become or what it wants to do to them. That people expatriating are at least as often these kinds of people as guys who take their yachts to the French Riviera has been a major own goal on the part of the U.S. and other developed nations.

The other thing is if you look at the last line of the chart on that Wikipedia article on the extent of money in tax havens you will see something pretty alarming that confirms the above.

Worldwide, people with under $1 million (USD) have about $10.3 trillion in liquid net worth. $1 trillion of that is offshore. That's almost ten percent! For even wealthier people, it is an even higher percentage. Regardless though, having $1 million is not even a lot of money these days. That's ~$40,000/year to live off at safe withdrawal rates. An income of ~$40,000/year lands you pretty squarely in the middle class (maybe even lower middle class) in retirement in many developed nations now. You don't think it's a really bad sign that about 10% of middle class wealth has done a runner now?

 

[JayJuanGee]

Some americans are willing and able to live mobily, but others are NOT going to be willing, ready and able to do it. We will see how this ability of americans to be mobile plays out over the years. I doubt that it is as big of a factor as you are making it out to be - though I do know that a lot of guys in RVF, including myself, are considering ways to live mobily outside of the USA.

I disagree entirely. Firstly, expatriation is a booming business as are related things such as medical tourism, foreign brides, etc. There are lots of countries around the world, particularly in SEA and Latin America, that are actively courting Western retirees. People may be stupid, but they're not that stupid and they can sniff out a good deal. Much of the West simply isn't a good deal anymore. There are huge communities of Western retirees in many such countries now, and these countries run the gamut from being highly developed (e.g. Singapore) downwards. Take your pick; there is a niche for anyone depending upon their lifestyle desires and their wealth levels. I know people here in Taiwan whom I suspect would be Democrat voters back in the U.S. who live in Taiwan because of tax, cost of living and medical issues. Their money goes much farther here. These people are very middle class (the wife is/was a teacher). It's not that they're unpatriotic or any of that. They love America (they have a flag hanging outside their house here), they just don't like what it's become or what it wants to do to them. That people expatriating are at least as often these kinds of people as guys who take their yachts to the French Riviera has been a major own goal on the part of the U.S. and other developed nations.

The other thing is if you look at the last line of the chart on that Wikipedia article on the extent of money in tax havens you will see something pretty alarming that confirms the above.

Worldwide, people with under $1 million (USD) have about $10.3 trillion in liquid net worth. $1 trillion of that is offshore. That's almost ten percent! For even wealthier people, it is an even higher percentage. Regardless though, having $1 million is not even a lot of money these days. That's ~$40,000/year to live off at safe withdrawal rates. An income of ~$40,000/year lands you pretty squarely in the middle class (maybe even lower middle class) in retirement in many developed nations now. You don't think it's a really bad sign that about 10% of middle class wealth has done a runner now?

I concede that you make a fair argument that the amount of money offshore is substantial; however, I doubt that there is any major exidus from america.... even though 1/10 dollars is off shore, there appear to be fewer than 1 or 2 /100 americans who are off shore. Probably the number could be going up; however, the question is whether the number is going to become a significant factor in the future? and, if so, what kinds of controls are going to be attempted for such? I have NO idea, but probably, you are correct that modern technology makes this off shore living easier to accomplish.

Since you like to cite wikipedea. Here's one in your direction: http://en.wikipedia.org/wiki/American_diaspora

 

[worldwidetraveler]

I concede that you make a fair argument that the amount of money offshore is substantial; however, I doubt that there is any major exidus from america.... even though 1/10 dollars is off shore, there appear to be fewer than 1 or 2 /100 americans who are off shore. Probably the number could be going up; however, the question is whether the number is going to become a significant factor in the future? and, if so, what kinds of controls are going to be attempted for such? I have NO idea, but probably, you are correct that modern technology makes this off shore living easier to accomplish.

Since you like to cite wikipedea. Here's one in your direction: http://en.wikipedia.org/wiki/American_diaspora

"It's estimated that U.S. corporations have more than $2 trillion in offshore earnings that are not being taxed by the U.S."

http://www.bloomberg.com/news/2013-...firms-with-biggest-overseas-profit-hauls.html

Now 2 trillion is some major cheddar.

 

[Feisbook Control]

JJG: Of course, that's a good link you provided. Honestly, I really could be completely wrong in my pessimism here and anything I say is all speculation, but it's still worrying, I think. I am still trying to hedge my bets. The world is a very, very different place to how it was even a couple of decades ago. In fact, the comfortable, middle class lifestyles of many in the developed West may be the historical aberration and we may be seeing some sort of regression to the historical mean. I just don't want to be on the wrong side of history by hitching a ride on a sinking ship. Nothing lasts forever. It would pain me deeply if the West (including America) were to decline, both in a broader philosophical sense, but also because I know people who would be affected. Yet I am not optimistic and I don't want to be taken for a sucker all the same.

I suspect that the number of Americans abroad will increase due to one reason alone: most Americans simply don't have enough money to retire on. They are going to find themselves in a real squeeze financially, particularly if their money is not liquid (e.g. tied up in real estate, particularly real estate that they might not be able to sell easily). Other places are going to look more attractive. Of course, another response might be to enact more socialism, but that's probably only going to accelerate the death spiral because it will disproportionately affect the very people it would supposedly be meant to help. Any legislation to stop capital flight will be completely ineffective as the people with the real money will know it's coming months before it ever gets to the House floor and they will have ample time to get out or, a la Cyprus, exceptions will be made whilst everyone else's money is frozen. The worse things become for the middle class, the more edgy the middle class will become until at some point there might very well be a bolt for the exits. Or it might not even be as dramatic as that. Middle class people might stop doing the things that historically used to work for them, e.g. starting a business or going to college.

The other thing we need to consider is the relative composition of society. Let's say the number of people abroad stays the same in absolute terms, say at 3-6 million people. It's one thing if the middle class is, for example, 150 million people, so such people represent 2-4% of the population. Now imagine the middle class shrinks to 100 million people (even ignoring the growth of the absolute population of the nation). Now those 3-6 million people are, in some sense, 1.5 times as important. Again, you could get a death spiral where the middle class don't exist in large enough numbers to actually hold society together functionally.

A society functions because everyone believes they have a stake in society. In the short term, they sacrifice their selfish needs, delay gratification, etc., but in the long term, society as a whole improves and those individual actors also benefit from that. Once people, particularly the middle class, lose that feeling, then all bets are off and you descend rapidly into a "me and mine" dysfunctional society with a lot of cases of the tragedy of the commons because it actually becomes irrational/detrimental to not be entirely self-serving in the short term. Of course, in the long term, that's utterly disastrous.

There is clearly a crisis at the heart of society in many Western nations, I think we're both in agreement on that. I don't know how these crises will get solved (and they may not get solved in all cases, or the cure may be worse than the disease), but I think that we honestly can't begin looking at the 1% without simultaneously really addressing the 47% (or whatever it is) and everything that surrounds them. I believe it's not just financial, that the broader culture is corrupted. I am being somewhat prescriptive, but I'm mostly just trying to be descriptive. Saying "tax rich people" is kind of non-sensical if for individuals with more than $30 million, more than half their wealth has already fled and so on down that chart.

 

[Jaydublin]

And you are suggesting that the creation of jobs is NOT a goal of companies, and probably, we differ in that regard. I understand that companies can do whatever they want for the benefit of their shareholders; however, in my current thinking, if companies are NOT providing social good, such as jobs, then we as a society may consider that their licenses (charters) should be taken away. Devils in the details, here.

Maybe I am misunderstanding this but it sounds like you think one of the goals people have when they take on huge personal risk to start a business should be to provide jobs for other people. Am I reading this right?

And as I have told you before. The private sector WILL provide capital and jobs but ONLY when the price is right. You confuse the private sector refusing to invest with them not wanting to make terrible investments. When the price is right, they will buy.

 

[Bushido]

And you are suggesting that the creation of jobs is NOT a goal of companies, and probably, we differ in that regard. I understand that companies can do whatever they want for the benefit of their shareholders; however, in my current thinking, if companies are NOT providing social good, such as jobs, then we as a society may consider that their licenses (charters) should be taken away. Devils in the details, here.

I see where you are coming from but your good intentions are mistaken in my opinion.

Profit DOES provide a social good. A profitable company will create jobs either directly or indirectly. I'm not going to explain the economics to you because I think you already know how it works. If you don't then a quick read of the following might help:

http://mises.org/books/economics_in_one_lesson_hazlitt.pdf

The aim here is to build prosperity, not create jobs for the sake of creating jobs. That gets you nowhere in the long run and forcing companies to do it is antidemocratic in itself.

As this thread illustrates, our tax systems are a fucking joke. They are so complex that entire industries are based on exploiting their loopholes. It's ridiculous. This is an example of how a HUGE amount capital is allocated to activities that offer no value whatsoever to the real economy. Even banking has a better claim to value addition than "tax consultants" and their ilk (no offence to anyone who works in that industry). Western governments should throw out the tax book and start over with something based on consumption such as the Fair Tax.

http://en.wikipedia.org/wiki/FairTax

Of course, this will never happen in the US/UK because of all the vested interests involved but it would be interesting if a major economy adopted it. I can only dream.

While we debate about increasing taxation and government schemes to create jobs, Asia is slowly but surely liberalizing and following the Singapore model. It doesn't take a genius to see why massive amounts of capital are flowing there. Taxing the rich will only increase this effect.

 

[JayJuanGee]

JJG: Of course, that's a good link you provided. Honestly, I really could be completely wrong in my pessimism here and anything I say is all speculation, but it's still worrying, I think. I am still trying to hedge my bets. The world is a very, very different place to how it was even a couple of decades ago.

FeisbookC:

I am a little bit confused about your perspective in that your profile says you are from australia living in the Taiwan, but you are speaking as if from the American perspective.

It seems that you and I are NOT really thinking that differently about the potential problem more and more Americans living abroad and even potentially how we may respond on an individual level b/c there is only so much that we cannot control regarding the system, but we can control our own response to it. Like you said, we can hedge our bets, so to speak by having our fingers in several pots, and maybe we are young enough, mobile enough and NOT tied down enough to accomplish sufficient mobility to be hedged. Part of my original point was that many times, people get really attached geographically in a lot of different ways career, family, property and are NOT going to be able to be geographically mobile… NOT without a lot of inconvenience.

The solution to the various problems in America and the upcoming downfall and all that is a whole other story, and really, I do NOT claim to be any expert or to have any answers. I do predict, however, that the downfall is NOT going to be in the next 10 to 15 years… maybe 30 years, but who knows with these goofball politicians and crazy unpredictable things involving many actors (who are sometimes unpredictable).

You may be correct that the horse has left the stall regarding the outsourcing of America and its wealth and we may NOT be able to recuperate in such a way to bring us back to the taxes of the 50s or the 60s b/c we live in a much different world, especially with various technologies and global mobility. In the end, though, the wealthy and those from wealthy countries, are much more mobile than the poor and those from poorer countries.. so there is quite a bit of value in holding an american passport... for the time being.

And you are suggesting that the creation of jobs is NOT a goal of companies, and probably, we differ in that regard. I understand that companies can do whatever they want for the benefit of their shareholders; however, in my current thinking, if companies are NOT providing social good, such as jobs, then we as a society may consider that their licenses (charters) should be taken away. Devils in the details, here.

Maybe I am misunderstanding this but it sounds like you think one of the goals people have when they take on huge personal risk to start a business should be to provide jobs for other people. Am I reading this right?

I think that you are reading my statement too simply.

I am speaking quite broadly in the above quote in characterizing that sometimes large corporations are NOT socially responsible, and when that happens, there are public recourse, such as taking away their charters.

Generally speaking, I believe that small businesses frequently get screwed and over regulated and need a lot more freedom from governmental oversight. Generally, smaller businesses are NOT the ones that are exploiting and/or bullying communities with the various tactics that some large corporations pull from time to time. Also, I am NOT painting all large corporations as being bad b/c they are operating within the regulatory scheme that they are in... so that regulatory scheme can be modified when it is NOT accomplishing social goods.

Certainly NOT all companies have goals to create jobs, and that might be how the business of those companies are structured, but companies do get licenses (charters) to operate. In sum, I am NOT anti-company, just asserting the need for companies to be accountable to the community in which they operate. And, I agree that some companies may NOT have to create jobs because it may NOT be part of their business objective.

And as I have told you before. The private sector WILL provide capital and jobs but ONLY when the price is right. You confuse the private sector refusing to invest with them not wanting to make terrible investments. When the price is right, they will buy.

Jay Dub:

If you are referring to some place that you have taught me about something then maybe you should link to that b/c that informational piece is NOT a part of this thread.

I doubt that we are talking about some kind of world that is a one size fits all, and companies act in different kinds of ways depending on their size and their goals and the regulatory environment and sometimes even politics, believe it or NOT.

Earlier in this thread, I had made statements about capital strike going on since 2007 2008-ish, and likely that capital strike is mostly with the banks getting cheap money and failing/refusing to lend that cheap money to small businesses, home owners etc etc. NOT all sectors of business are engaged in this capital strike that seems to be taking place. For example, in health industry there seems to be money to make, and various kinds of investments going on in the health industry, but also some weird political conduct as well is going on in the health industry based on various hostility towards obamacare... anyhow, my point is that there is NO one size fits all.

The aim here is to build prosperity, not create jobs for the sake of creating jobs. That gets you nowhere in the long run and forcing companies to do it is antidemocratic in itself.

Actually at this moment in history, and for about the past 5 years, America has been going through an economic crisis, and that crisis has NOT really affected the vary well to do companies because they have been streamlining jobs by the millions. That is that these large companies have been able to screw millions of Americans for the sake of profits, and they were NOT able to do the same in Germany because the Unions were too strong. Here, Americans got screwed because Unions and politicians were too weak to stop them from engaging in that economy wrecking conduct.

In essence there has been a jobs crisis since about 2007 or 2008, and accordingly the solution to a jobs crisis is the creation of jobs. If the private sector will NOT create those jobs, then the govt must step in to do such. Now, maybe everyone does NOT agree that there really is a job crisis, then if that is the case, then jobs do NOT need to be created.
I am NOT saying to create jobs merely for the sake of creating jobs. I was saying that jobs must be created because there seems to have been a job crisis in America since about 2007 or 2008-ish – too many unemployed and NOT enough positions for them to fill and accordingly a large number of the positions that have been filled are at ½ the payrate that these americans were previously receiving…. That is called redistribution of wealth from the middle to the top of what used to be wages.

Actually, I am NOT very strict in my thinking about how to accomplish the objective of the creation of more jobs and better wages in America, but another way to increase wages is to make it easier for employees to unionize, which would help to cause increases in wages and benefits rather than the government forcing such job creation to give power to the people to pester the creation. Another possibility, if companies want to withhold their capital to create incentives for the creation of worker run cooperatives, in which company abandoned faciltities can be used for manufacturing and production that is NOT being accomplished by these companies that are withholding their capital. There has been too much idle equipment and facilities in the last 5 years or so because companies have been withholding production… and probably sending some of their free capital to China and other overseas location, such as your Singapore suggestion.

As this thread illustrates, our tax systems are a fucking joke. They are so complex that entire industries are based on exploiting their loopholes. It's ridiculous. This is an example of how a HUGE amount capital is allocated to activities that offer no value whatsoever to the real economy. Even banking has a better claim to value addition than "tax consultants" and their ilk (no offence to anyone who works in that industry). Western governments should throw out the tax book and start over with something based on consumption such as the Fair Tax.

http://en.wikipedia.org/wiki/FairTax

I am NOT opposed to proposals to simplify the US tax code system and to remove loopholes and complications in the various US taxes, yet I am skeptical of any “tax reduction” system that lumps social security into that simplification and suggests that social security is part of the problem, when in fact social security is one of the best tax / govt programs ever established, world-wide. Social Security is very efficient and over the years has run at a surplus and has developed a current surplus of trillions of dollars (at least on paper). There seems to be a major problem in suggesting to just throw all that efficiency and good out the door and to start over without one of the best govt programs ever developed… so I have a problem with a framework that discounts the value of the US Social Security system. Otherwise, I am NOT opposed to simplification and removal of tax loopholes. Nonetheless, I remain skeptical of various proposals to tax on a flat tax basis – for reasons that I have already discussed in my previous posts (which in essence the rich need to pay more, and that is what is fair).

Of course, this will never happen in the US/UK because of all the vested interests involved but it would be interesting if a major economy adopted it. I can only dream.

Well, I suppose that your NAME is DREAM BIG for a reason, no? A guy cannot fault someone for having BIG aspirations, especially if those BIG aspirations are well intended.

While we debate about increasing taxation and government schemes to create jobs, Asia is slowly but surely liberalizing and following the Singapore model. It doesn't take a genius to see why massive amounts of capital are flowing there. Taxing the rich will only increase this effect.

You are suggesting that race to the bottom is the solution, which in my thinking a race to the bottom is NOT the solution. America has a lot to offer, and actually a lot of American money is also going to China because China has been making a lot of investments into their future, such as speed trains and other infrastructure investments. The US could also attract investors with a little creativity, and in my humble opinion, that attraction of investors does NOT automatically mean that there is a need to get rid of all or most taxes in order to sell ourselves down the river.

 

[Feisbook Control]

JJG: I am Australian, living in Taiwan. There are multiple reasons I have mostly written about the U.S. in this thread. Firstly, more people are American here. Secondly, I believe the U.S. is further down the rabbit hole than Australia (more below), but it's where we're all headed eventually unless we course correct.

From all that I have read, I think that of all of the Anglophone countries, the U.S. and U.K. seem to be in the worst shape long term. I think they're in real trouble, actually. There seems to be a very marked distinction between socio-economic classes in those two countries that doesn't seem to be anywhere near as bad in Australia or Canada, and the middle class in the U.S. and U.K. seem to be under real pressure. There's a lot of debt in those countries. Their education systems are bad compared to Canada or Australia, and they seem to be doing immigration in all the wrong ways. Basically, the U.S. and the U.K. seem to have either actively opened the floodgates, or turned a blind eye, to the dregs of the third world. They are being swamped by people who will be/are a massive drain on social services and thus, (more) productive members of their societies. On the other hand, Canada and Australia have much more sensible immigration policies, probably to the point that the average immigrant who now gets let in is actually smarter and harder working than the average local. That's a net gain, and those countries should remain competitive and prosperous going forwards. Feminism and general cultural Marxism seem to be at their cutting edge in the U.S. in particular too. It just seems to me that in virtually every way, from economics to culture, the U.S. and U.K. are trying to hit the self-destruct button. It's bizarre to me and it's hard to see how the U.S. and U.K. will turn around from the self-destructive policies and institutions they now have. Sure, there will always be some really smart people there, but lots of places have some really smart people and the rest of the population are pretty much useless. That doesn't make for great countries to live in unless you're super loaded.

The quality of the education systems and immigration policies in Australia and Canada probably act as a mitigating force against the general decline in the U.S. and U.K., but make no mistake that Australia (and Canada from what I can tell) has somewhat of a love affair with mad economic and cultural practices. I am pessimistic for the U.S. and U.K., and think they will cease to exist in their current forms within a couple of generations at most. Australia and Canada (don't really know much about New Zealand) should have time to course correct when they see the others self-destruct.

Anyway, that's just my take on a kind of bigger picture.

You are right that people become tied down geographically. It's probably not that easy for most people to just get a second passport, but it is pretty easy to set up a number of flags with assets. My father is quite wealthy (but not anywhere near the level of being a kingmaker). He is always complaining about the Australian government changing this law or that law, or trying to take a bite out of him. I've asked him why he doesn't put at least part of his money offshore. Then he just makes excuses. He knows that he is a target. Frankly, anyone with more than their own home is a target. In the land of the blind, the one eyed man is king. In the land of the financially irresponsible, the man with no debt and some savings is a rich man. In this day and age, it is pretty easy to set up accounts and brokerages overseas. People would be a fool not to do so and really can only blame themselves for being fleeced by the government (and thus those in the 1% and the 47%).

People will talk about diversification with their assets in order to mitigate risk from any one particular asset class. Yet they don't take the next logical step and diversify their assets to mitigate legislative risk from having everything in one country or currency. The super rich have always known this, as have people in countries that have experienced bouts of hyper inflation and so on. Smart middle class people in the Anglosphere need to figure this out because the new world order is that their nations are going to increasingly resemble the second/third world and, as in those places, their citizens and governments are going to increasingly see them as targets.

Americans are doubly fucked because the government taxes them on income and assets abroad, if I understand this correctly (though I know there's some kind of threshold -- $90,000? -- below which they don't need to pay tax). A second passport might not be so important for people from other countries, but if I were American, I'd be thinking pretty carefully about just how valuable that American passport was and just how much of an albatross was around my neck. There are lots of other passports that are equally as easy to travel on, and some are even better (e.g. E.U. passports).

 

[JayJuanGee]

JJG: I am Australian, living in Taiwan. There are multiple reasons I have mostly written about the U.S. in this thread. Firstly, more people are American here. Secondly, I believe the U.S. is further down the rabbit hole than Australia (more below), but it's where we're all headed eventually unless we course correct.

Feisbook_C:

Now I understand your country perspective, and generally speaking, I agree that a guy can be from any of the anglosphere countries that you described, and understand his/her place in the world from a priviledged perspective – with some of the variance to which you refer.

From all that I have read, I think that of all of the Anglophone countries, the U.S. and U.K. seem to be in the worst shape long term. I think they're in real trouble, actually. There seems to be a very marked distinction between socio-economic classes in those two countries that doesn't seem to be anywhere near as bad in Australia or Canada, and the middle class in the U.S. and U.K. seem to be under real pressure. There's a lot of debt in those countries. Their education systems are bad compared to Canada or Australia, and they seem to be doing immigration in all the wrong ways. Basically, the U.S. and the U.K. seem to have either actively opened the floodgates, or turned a blind eye, to the dregs of the third world. They are being swamped by people who will be/are a massive drain on social services and thus, (more) productive members of their societies. On the other hand, Canada and Australia have much more sensible immigration policies, probably to the point that the average immigrant who now gets let in is actually smarter and harder working than the average local. That's a net gain, and those countries should remain competitive and prosperous going forwards.

These points seem valid to me.

Feminism and general cultural Marxism seem to be at their cutting edge in the U.S. in particular too.

To the extent possible, I attempt to remain open to various perspectives; however, when guys attempt to suggest that feminism in America is contributing to america’s downfall or that Marxism is contributing to such, these seem to be misreadings of both where America is at and which forces are controlling its direction forward.
Surely, both feminism and Marxism are present in the public discourse, but these forces have little influence on America’s direction… at least little influence in terms of what is really going on behind the scenes.
What has been going on is that when right wing forces get into govt – at least dating back to Reagan, there has been irresponsible spending of enormous proportions and then by the time a democrat gets into office, such as Clinton, there is little to no money left to spend on social programs. And, a similar cycle occurred under Bush to run the govt treasuries into the ground, and by the time Obama gets into power, he is somewhat bootstrapped into concepts of cuts being the supposed solution. These are NOT feminist and/or Marxist forces that are screwing and robbing the US treasury… and some of the continued bleeding that takes place under democratic administration is NOT to benefit socialistic forces, but to appease banking and finance interests because we had been pushed into some kind of impending doom… which then they attempt to justify that cuts to social security is “needed,” which much of the crises has been created by narrowed and wealthy interests (NOT created by populist forces that are fighting for crumbs).

It just seems to me that in virtually every way, from economics to culture, the U.S. and U.K. are trying to hit the self-destruct button. It's bizarre to me and it's hard to see how the U.S. and U.K. will turn around from the self-destructive policies and institutions they now have. Sure, there will always be some really smart people there, but lots of places have some really smart people and the rest of the population are pretty much useless. That doesn't make for great countries to live in unless you're super loaded.

The quality of the education systems and immigration policies in Australia and Canada probably act as a mitigating force against the general decline in the U.S. and U.K., but make no mistake that Australia (and Canada from what I can tell) has somewhat of a love affair with mad economic and cultural practices. I am pessimistic for the U.S. and U.K., and think they will cease to exist in their current forms within a couple of generations at most. Australia and Canada (don't really know much about New Zealand) should have time to course correct when they see the others self-destruct.

NO beef with this. Seems to be a pretty accurate assessment to me.

You are right that people become tied down geographically. It's probably not that easy for most people to just get a second passport, but it is pretty easy to set up a number of flags with assets. My father is quite wealthy (but not anywhere near the level of being a kingmaker). He is always complaining about the Australian government changing this law or that law, or trying to take a bite out of him. I've asked him why he doesn't put at least part of his money offshore. Then he just makes excuses. He knows that he is a target. Frankly, anyone with more than their own home is a target. In the land of the blind, the one eyed man is king. In the land of the financially irresponsible, the man with no debt and some savings is a rich man. In this day and age, it is pretty easy to set up accounts and brokerages overseas.

You are pretty much making my point in that your father seems to be a very good example of someone who should have a large number of incentives to offshore a percentage of his assets, but he does NOT take the appropriate measures – probably in some sense, he doesn't really believe that the ship is sinking.

People would be a fool not to do so and really can only blame themselves for being fleeced by the government (and thus those in the 1% and the 47%).

This statement is a bit loaded for a few reasons. 1) you have already described that there are various incentives working against people taking measures to protect themselves and 2) this convolution of the 1% and/or the 47% reaks of some kind of aversion that you seem to bear towards regular people and suggesting that there is a group that is freeloading off the govt… too much baggage for me to attempt to unravel.

People will talk about diversification with their assets in order to mitigate risk from any one particular asset class. Yet they don't take the next logical step and diversify their assets to mitigate legislative risk from having everything in one country or currency. The super rich have always known this, as have people in countries that have experienced bouts of hyper inflation and so on. Smart middle class people in the Anglosphere need to figure this out because the new world order is that their nations are going to increasingly resemble the second/third world and, as in those places, their citizens and governments are going to increasingly see them as targets.

I generally agree with your ideas here, except the concept that the poor are leeching off the rich.. The problem, in my thinking is the other way around. But you certainly explain yourself well, here, and I agree with a lot of what you are saying.

Americans are doubly fucked because the government taxes them on income and assets abroad, if I understand this correctly (though I know there's some kind of threshold -- $90,000? -- below which they don't need to pay tax). A second passport might not be so important for people from other countries, but if I were American, I'd be thinking pretty carefully about just how valuable that American passport was and just how much of an albatross was around my neck. There are lots of other passports that are equally as easy to travel on, and some are even better (e.g. E.U. passports).

Good points, here.

 

[Feisbook Control]

JJG: Thanks for the +1, btw. I did not expect that at all. Right back at you.

Surely, both feminism and Marxism are present in the public discourse, but these forces have little influence on America’s direction… at least little influence in terms of what is really going on behind the scenes.

I can see that a reasonable argument could be made for them not having direct influence on economic issues (though more on that in a second), but on cultural issues, they've absolutely gutted the culture in the Anglosphere, particularly anything to do with the family. The patriarchal, nuclear family (and everything extending from that) has been largely destroyed amongst the lower class (see Charles Murray on this point). It has been replaced by the state.

On economic issues, we have seen a massive expansion of the welfare state and the state in general as consuming a percentage of GDP. This has been quite a bizarre unholy alliance between the 1% on the one hand and the cultural Marxists/feminists on the other hand. Both seem to have thought they could use the other to accomplish their ends. The 1% have used feminism and general cultural Marxism to completely shatter the self-sufficiency and strength of the family unit and replace it with external actors, particularly consumerism. Feminism has been a massive own goal for most families these days. Women are unhappier than they were in the past, they have less financial security, and women entering the workforce has simultaneously massively inflated things such as property prices and masked the decline in real earnings by men over the same period. Meanwhile, the 1% have profited massively from this. Unfettered immigration of the wrong kind has also contributed to this, which is why some of the most pro-immigration advocates are from big business. In the meantime, the cultural Marxists/feminists have gone along with this thinking that they are playing the long game and that eventually, capitalism will eat itself. (I would also say that there are a fair number of chardonnay socialists out there who talk out of both sides of their mouths because they would die rather than live amongst the 47% or have their children educated around them. Just look at their utter contempt for "fly over states", "white trash", etc.) Who will win in the long term, I can't say, but I know who the loser is, and that's the average guy/family.

What has been going on is that when right wing forces get into govt – at least dating back to Reagan, there has been irresponsible spending of enormous proportions and then by the time a democrat gets into office, such as Clinton, there is little to no money left to spend on social programs. And, a similar cycle occurred under Bush to run the govt treasuries into the ground, and by the time Obama gets into power, he is somewhat bootstrapped into concepts of cuts being the supposed solution.

I think you are partly correct, though see my above assessment. As for the Clinton example, people love to bring up Clinton. Six of the eight years of his presidency saw the Republicans control both houses though, so it's more complicated than that, and Clinton's presidency was, in many ways, a continuation of the decline of the middle class that really began in the 70s. As for Bush and Reagan, you won't get an argument out of me there. Reagan, in particular, is always seen as some sort of paragon of small government. Yet the government grew under him, as did the national debt. I am not pro-Republican in the least. I think the average Republican voter has been a huge patsy and instrumental in his own decline. The Tea Party might be the only hope in that respect (but they will never gain any mainstream traction because the average American doesn't really want small government), but the other Republicans seem more interested in their thirty pieces of silver. Frankly, the sooner the Republican Party (and its clones abroad, particularly in the U.K.) dies a horrible death, the sooner we can begin turning Western culture around.

These are NOT feminist and/or Marxist forces that are screwing and robbing the US treasury… and some of the continued bleeding that takes place under democratic administration is NOT to benefit socialistic forces, but to appease banking and finance interests because we had been pushed into some kind of impending doom… which then they attempt to justify that cuts to social security is “needed,” which much of the crises has been created by narrowed and wealthy interests (NOT created by populist forces that are fighting for crumbs).

I think it's both. Clearly, the 1% are a problem, yet it's absurd that the 47% also exist. There has been a massive growth in the welfare state. I do think that at some level, this has not really helped the poor. The War on Poverty, like the War on Drugs, the War on Terror, and so on, is one of those things that can/will never end because there are too many vested interests involved. I think there is now a whole industry of career politicians, lobbyists, etc. (or charities in the private sector) who cream a lot off the top. As to how much goes to the poor, I really don't know, though it's obviously enough to keep them obese and fairly docile. The real losers in all of this, have been the middle class (men/families) who have had to bear the direct costs and also the indirect costs (such as flight to better school districts, thus also driving up housing costs in those areas).

You are pretty much making my point in that your father seems to be a very good example of someone who should have a large number of incentives to offshore a percentage of his assets, but he does NOT take the appropriate measures – probably in some sense, he doesn't really believe that the ship is sinking.

My father is a Baby Boomer. He, probably correctly, sees that he has maybe a decade or two left to live, so I can understand his inertia with regard to trying new things in that respect. He most definitely does believe the ship is sinking though. Out of everyone I know, he has the most reactionary political opinions.

I am right at the end of Gen X. I think my generation is pretty much screwed. We're a bunch of patsies in the main, though I think I will be better off than most. We won't benefit from the old system because we still have too many decades left to go. Our parents' generation have basically trashed the institutions of the West, but we (and younger generations) are going to have to cover the costs of that, without partaking of the same benefits in old age.

I actually see a lot of hope for Gen Y. There are lots of patsies there too, and many willingly so. Yet there are also many more who have completely swallowed the red pill on all sorts of issues from women to economics and things are going to be very interesting by the time Gen Y hits their forties or so (and so starts assuming power).

This statement is a bit loaded for a few reasons. 1) you have already described that there are various incentives working against people taking measures to protect themselves and 2) this convolution of the 1% and/or the 47% reaks of some kind of aversion that you seem to bear towards regular people and suggesting that there is a group that is freeloading off the govt… too much baggage for me to attempt to unravel.

On the first point, I think it's a problem with critically engaging with the world. I'll give you an example. A few years ago, I met a Gen Y Canadian guy. He started telling me that the Conservative Canadian government had dumbed down the education system so badly that he didn't even know what an MP was and it was all part of a conspiracy to keep people ignorant so that the Conservatives could do what they wanted. I made a couple of points to him. Firstly, I pointed out that when he was at that age in school when he should have learnt that, the Conservative government hadn't been elected. Arguably, it's because the education system has become moving away from learning "facts" and into a whole lot of wishy washy territory that he doesn't know that sort of thing. I say this half tongue in cheek, but I suspect that he probably couldn't have told me what 9 x 12 is off the top of his head either. That aside though, I asked him if it might be incumbent upon him to go to a public library or use the internet to discover what an MP is. He told me that it was the responsibility of the government to teach him that in school. I sort of did a double take. He was convinced there was a conspiracy against him, but he also bought into the conspiracy. Then he started going on about corporations, but later told me about how cool it was working for corporations handing out promotional gifts in shopping centres. Again, WTF? We live in an age of unprecedented access to information, yet also arguably an age of unprecedented willing ignorance.

On the second point, my aversion is not against regular people. A large part of what I am getting at is the great tragedy that has befallen the middle 52%, and thus the fabric of society. There has been a tragedy for the 47% too in many respects as they don't realise that they are pawns, tools with which to beat the middle class. Yet my real sympathies are with the 52% and those who were formerly amongst their ranks but have fallen from them and who still feel a real sense of shame about having to use social assistance, rather than that it is their entitlement.

I generally agree with your ideas here, except the concept that the poor are leeching off the rich.. The problem, in my thinking is the other way around. But you certainly explain yourself well, here, and I agree with a lot of what you are saying.

My contention is not that the poor are leeching off the rich. It is that both are leeching off the middle class. There are lots of countries that have a 1% and then a massive poor class representing 90%+ of the population. Those are generally countries that suck to live in without money. Ironically, they are also the most susceptible to extreme politics on both sides of the aisle. My contention is that a healthy society needs a very strong middle class, but that is under attack from both above and below in many countries.

 

[Emancipator]

On the first point, I think it's a problem with critically engaging with the world. I'll give you an example. A few years ago, I met a Gen Y Canadian guy. He started telling me that the Conservative Canadian government had dumbed down the education system so badly that he didn't even know what an MP was and it was all part of a conspiracy to keep people ignorant so that the Conservatives could do what they wanted. I made a couple of points to him. Firstly, I pointed out that when he was at that age in school when he should have learnt that, the Conservative government hadn't been elected. Arguably, it's because the education system has become moving away from learning "facts" and into a whole lot of wishy washy territory that he doesn't know that sort of thing. I say this half tongue in cheek, but I suspect that he probably couldn't have told me what 9 x 12 is off the top of his head either. That aside though, I asked him if it might be incumbent upon him to go to a public library or use the internet to discover what an MP is. He told me that it was the responsibility of the government to teach him that in school. I sort of did a double take. He was convinced there was a conspiracy against him, but he also bought into the conspiracy. Then he started going on about corporations, but later told me about how cool it was working for corporations handing out promotional gifts in shopping centres. Again, WTF? We live in an age of unprecedented access to information, yet also arguably an age of unprecedented willing ignorance.

Should have pointed out to him education falls under provincial gov not federal cons

 

[Feisbook Control]

On the first point, I think it's a problem with critically engaging with the world. I'll give you an example. A few years ago, I met a Gen Y Canadian guy. He started telling me that the Conservative Canadian government had dumbed down the education system so badly that he didn't even know what an MP was and it was all part of a conspiracy to keep people ignorant so that the Conservatives could do what they wanted. I made a couple of points to him. Firstly, I pointed out that when he was at that age in school when he should have learnt that, the Conservative government hadn't been elected. Arguably, it's because the education system has become moving away from learning "facts" and into a whole lot of wishy washy territory that he doesn't know that sort of thing. I say this half tongue in cheek, but I suspect that he probably couldn't have told me what 9 x 12 is off the top of his head either. That aside though, I asked him if it might be incumbent upon him to go to a public library or use the internet to discover what an MP is. He told me that it was the responsibility of the government to teach him that in school. I sort of did a double take. He was convinced there was a conspiracy against him, but he also bought into the conspiracy. Then he started going on about corporations, but later told me about how cool it was working for corporations handing out promotional gifts in shopping centres. Again, WTF? We live in an age of unprecedented access to information, yet also arguably an age of unprecedented willing ignorance.

Should have pointed out to him education falls under provincial gov not federal cons

That too. With him it was a case of "Where to begin?"

Thanks for the +1 also.

 

[JayJuanGee]

My contention is not that the poor are leeching off the rich. It is that both are leeching off the middle class. There are lots of countries that have a 1% and then a massive poor class representing 90%+ of the population. Those are generally countries that suck to live in without money. Ironically, they are also the most susceptible to extreme politics on both sides of the aisle. My contention is that a healthy society needs a very strong middle class, but that is under attack from both above and below in many countries.

Feisbook_C:

After a few times back and forth, I begin to get confused about what I have already written and whether I am becoming too repetitive.

Certainly, both you and I seem to share some interest and/or allurement in getting into politics, and each of us is NOT afraid to delve into the weeds a bit in order to make our point(s).

I’m sure that you and I would get along quite well to have a few drinks and discuss these kinds of "problems of the world," even though we come down differently in various regards.

You bring up a lot of good points, and probably whole new 30 page threads could be dedicated to some of your points.

Your below sentence seems to highlight one of the major framing differences that seems to exist between us.

"My contention is not that the poor are leeching off the rich. It is that both are leeching off the middle class."


I mean, I think that we both see a fairly major problem with the disappearance of the middle class; however, we have different ways in thinking about the cause(s) of the problem and the emphasis to give to such causes to the attack on the middle class, which then affects how we think about the solution.

You also seem to indicate that a solution is to move the republican party more to the right in the direction of the tea party. In my thinking, that would truly be a disaster, because even though there may have been some grass roots initiation of the tea party and some of the tea party ideas are valid, the direction of the tea party has been largely co-opted by a few wealthy interests that merely are pushing towards destructive rather than constructive measures. I cannot see how the way forward in America is to destroy systems (such as govt systems) without any real plan.

I have NO problem with the concept of destroying, in the event that there is a meaningful plan, and I already mention one of the problems with the plan that you pointed out (the fair tax plan) is that it seems to downplay the contributions of the social security system – which as I already mentioned social security has been running surpluses and bringing in much more income than what it pays out, and that is why on paper, social security has more than a trillion dollar surplus. In my view, it would be retarded (or at least ill-informed) to extinguish social security system without some kind of either replacement or transition. It’s benefits and power as a system needs to be recognized and accounted (even if it were disbanded or revised in some way).

I believe that even though some revisions to various “entitlements” may be beneficial, likely those revisions would be drops in the bucket in solving society structure issues. And, frequently discussion of “entitlements” as the problem are distractions from where the real problems lie.

In that sense, social problems and the reconstruction of society into feminism and Marxism is in NO way at the root of the problems of which we suffer. Those issues of feminism and Marxism and moral issues get brought in and cause a lot of fuzzy logic and emoticons.


In essence, the wealthy like to use various kinds of issues like these morality ones, gay marriage and social/moral values issues to distract the public and to frustrate us while the behind the scenes robbing continues.

You and I seem to agree that the existence of the middle class has been severely threatened, and its restoration will likely be a key to better days in America and/or other western countries.

I cannot agree that entitlement or poor people and/or social systems are contributing in any meaningful way to bringing down the middle class. That discussion of poor/entitled people causing the problems of society is a distraction from the real prizes – which I have itemized in several areas in this thread already… but in essence are the banks and wealthy companies and wealthy people manipulating in order to NOT pay their fair share.

Even though earlier in this thread some data was presented that the wealthy pay 70% of all taxes, and even though that may seem like a lot, it is a spin and propaganda number to get people to buy into the idea that the rich pay their fair share and that the poor are part of the problem. Anyhow, 70% is NOT enough, if that is the true number. I do NOT know what the exact correct number is but if 70% is a current accurate number, then maybe it should be 95%. Again, I do NOT really know the exact number that is needed to fix the problem, but I do know that currently, the rich are NOT contributing to the building of necessary infrastructure that will allow for middle class prosperity. And, if the contribution number is considered in a historical context, the tax contributions of the rich have been going down since the 1980s, and that lessening of their contributions has caused the deterioration of the middle class in America.

 

[Bushido]

JJG,

You are correct about the need for a plan. Thatcher's liberalisation of public transport in 80's UK wrought havoc because there was no plan. The system has never recovered and today we have one if the worst train networks in Europe (still better than you guys though heh).

That said, using words like "destruction" is sensationalising the issue. We all know there is huge waste in governments on both sides of the pond. For instance, the current UK government let go of 100,000s (!) of government workers and things continue as usual. The world didn't end. We have a new aristocracy of public workers who continue to enjoy better salaries, job security, better pensions and cush hours. Those in the private sector work harder for longer to create the value that drives our economies. Why should taxpayers have to fund this shit? (I am referring to the civil servants here, not nurses and firefighters).

By the way, is there a reason why you capitalise every negative? NO, I am NOT trolling. Just wondering.