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On September 11 2012 13:00 ziggurat wrote:Show nested quote +On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive.
You think normal people don't invest everything into their business and takes a giant bank loan with it? Only those with very privileged background can say that.
There is no doubt that social safety helps social mobility regardless of the tax rates. Of course there are people who continue to invest, but it's much easier for them if they have more than 1 shot. Plenty of millionaires don't hit it on the first try, they fall down and try again and again until they get it.
Do people forget that the greatest economic boom of the 50s-60s were done under 70-90% tax rates for the rich?
Even if the government take half of what you make, you would still make 10x more than the other average guy instead of 20x more if you succeed, why should that stop the highly motivated people?
Why people still believe in the myth of trickle down when it has been proven flawed time and time again is beyond me.
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On September 11 2012 13:00 ziggurat wrote:Show nested quote +On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive.
Have you ever started your own business (and no, being self-employed doesn't count).
I think there are a lot of people that do invest every last cent into their business. Hell, the average 'successful' small business that employs 50 to 60 people typically need massive bank loans in order to insure they make pay roll.
For many undereducated or under-skilled people, entrepreneurship is the only way to ascend from the lower-middle class to upper middle class, unless you want to be a wage slave forever. Do you think your local bakery owner would give up his business so he can work for a bakery? You'll always make more money as an owner, and there is value in simply being your own boss.
I think there is truth in what you're saying -- that only highly motivated people can start and maintain a successful business. But even if they were successful enough to be taxed at 50%, that wouldn't be enough of a disincentive to stop being an entrepreneur or not start a business to begin with.
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On September 11 2012 14:00 RavenLoud wrote:Show nested quote +On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Do people forget that the greatest economic boom of the 50s-60s were done under 70-90% tax rates for the rich?
This isn't what you think it is. Define, "the rich".
Inflation means that the number of people in the top bracket has multiplied many times since the first income tax. One of the first "highest brackets" was in 1939, which was a 75% tax above $5,000,000, which is what, $80-90 million today?
A 75% tax on income above $80 million and calling that bracket "the rich" is a lot different than a tax on income above $388,000 and calling that "the rich".
tl;dr "the rich" is meaningless and comparing tax brackets is not exactly enlightening unless you include things like inflation, the % of the population affected by the tax, etc. The top bracket in the 30s-60s included many fewer people than it does today. The threshold for being in the upper bracket was much higher.
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If anyone is in the mood to read something extremely depressing ...
The Deafness Before the Storm: Bush White House ignored adamant warnings from CIA of imminent Al-Qaeda attack
On April 10, 2004, the Bush White House declassified that daily brief — and only that daily brief — in response to pressure from the 9/11 Commission, which was investigating the events leading to the attack. Administration officials dismissed the document’s significance, saying that, despite the jaw-dropping headline, it was only an assessment of Al Qaeda’s history, not a warning of the impending attack. While some critics considered that claim absurd, a close reading of the brief showed that the argument had some validity.
That is, unless it was read in conjunction with the daily briefs preceding Aug. 6, the ones the Bush administration would not release. While those documents are still not public, I have read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration’s reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed. In other words, the Aug. 6 document, for all of the controversy it provoked, is not nearly as shocking as the briefs that came before it.
The direct warnings to Mr. Bush about the possibility of a Qaeda attack began in the spring of 2001. By May 1, the Central Intelligence Agency told the White House of a report that “a group presently in the United States” was planning a terrorist operation. Weeks later, on June 22, the daily brief reported that Qaeda strikes could be “imminent,” although intelligence suggested the time frame was flexible.
But some in the administration considered the warning to be just bluster. An intelligence official and a member of the Bush administration both told me in interviews that the neoconservative leaders who had recently assumed power at the Pentagon were warning the White House that the C.I.A. had been fooled; according to this theory, Bin Laden was merely pretending to be planning an attack to distract the administration from Saddam Hussein, whom the neoconservatives saw as a greater threat. Intelligence officials, these sources said, protested that the idea of Bin Laden, an Islamic fundamentalist, conspiring with Mr. Hussein, an Iraqi secularist, was ridiculous, but the neoconservatives’ suspicions were nevertheless carrying the day.
In response, the C.I.A. prepared an analysis that all but pleaded with the White House to accept that the danger from Bin Laden was real.
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On September 11 2012 15:08 Defacer wrote:Show nested quote +On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Have you ever started your own business (and no, being self-employed doesn't count). I think there are a lot of people that do invest every last cent into their business. Hell, the average 'successful' small business that employs 50 to 60 people typically need massive bank loans in order to insure they make pay roll. For many undereducated or under-skilled people, entrepreneurship is the only way to ascend from the lower-middle class to upper middle class, unless you want to be a wage slave forever. Do you think your local bakery owner would give up his business so he can work for a bakery? You'll always make more money as an owner, and there is value in simply being your own boss. I think there is truth in what you're saying -- that only highly motivated people can start and maintain a successful business. But even if they were successful enough to be taxed at 50%, that wouldn't be enough of a disincentive to stop being an entrepreneur or not start a business to begin with.
No, you won't always make more money as an owner.
Yes, being taxed at 50% may be enough of a disincentive for the entrepreneur to decide to not start the business. It depends on what specifics we're talking about.
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If that taxing "problem" would keep people from creating their own business we would not see as many corporations (where the owners get double taxed on the companies winnings and their payouts) and similar juristical entities... The tradeoff is that you won't go down with your company if it fails (at least not your savings, just your already invested capital, which you decide how much you want to put in after the min. requirement). + Show Spoiler + this could work a little different in the US, I don't know, I doubt it
Savety is more important than making a few more bucks.
People that are too scared of the high taxes to start their own business are a hilarious myth.
Btw: If your company runs smooth/sustainable you will make at least as much money as an owner compared to being an employee, probably much more... Else you better just shut down your company because it is not sustainable anyway, if it can't actually pay for yourself and just keeps you afloat it will go down sooner or later anyway...
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On September 11 2012 15:42 Velr wrote:If that taxing "problem" would keep people from creating their own business we would not see as many corporations (where the owners get double taxed on the companies winnings and their payouts) and similar juristical entities... The tradeoff is that you won't go down with your company if it fails (at least not your savings, just your already invested capital, which you decide how much you want to put in after the min. requirement). + Show Spoiler + this could work a little different in the US, I don't know, I doubt it Savety is more important than making a few more bucks. People that are too scared of the high taxes to start their own business are a hilarious myth.
It's not fear, it's math...
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Care to answer the points i made not just the last sentence/conclusion?
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On September 11 2012 15:23 JonnyBNoHo wrote:Show nested quote +On September 11 2012 15:08 Defacer wrote:On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Have you ever started your own business (and no, being self-employed doesn't count). I think there are a lot of people that do invest every last cent into their business. Hell, the average 'successful' small business that employs 50 to 60 people typically need massive bank loans in order to insure they make pay roll. For many undereducated or under-skilled people, entrepreneurship is the only way to ascend from the lower-middle class to upper middle class, unless you want to be a wage slave forever. Do you think your local bakery owner would give up his business so he can work for a bakery? You'll always make more money as an owner, and there is value in simply being your own boss. I think there is truth in what you're saying -- that only highly motivated people can start and maintain a successful business. But even if they were successful enough to be taxed at 50%, that wouldn't be enough of a disincentive to stop being an entrepreneur or not start a business to begin with. No, you won't always make more money as an owner. Yes, being taxed at 50% may be enough of a disincentive for the entrepreneur to decide to not start the business. It depends on what specifics we're talking about.
Sorry, your right, let me rephrase that. Some entrepreneurs assume greater risk and responsibility for the opportunity to make significantly more money than they could otherwise, due to their education or skill level.
If you're a designer, for example, there is a ceiling that you'll hit when you work for other people -- despite being the driving creative and productive force for a product. Which is why more and more designer consider starting their business or developing their own products.
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On September 11 2012 15:18 Defacer wrote:If anyone is in the mood to read something extremely depressing ... The Deafness Before the Storm: Bush White House ignored adamant warnings from CIA of imminent Al-Qaeda attackShow nested quote +On April 10, 2004, the Bush White House declassified that daily brief — and only that daily brief — in response to pressure from the 9/11 Commission, which was investigating the events leading to the attack. Administration officials dismissed the document’s significance, saying that, despite the jaw-dropping headline, it was only an assessment of Al Qaeda’s history, not a warning of the impending attack. While some critics considered that claim absurd, a close reading of the brief showed that the argument had some validity.
That is, unless it was read in conjunction with the daily briefs preceding Aug. 6, the ones the Bush administration would not release. While those documents are still not public, I have read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration’s reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed. In other words, the Aug. 6 document, for all of the controversy it provoked, is not nearly as shocking as the briefs that came before it.
The direct warnings to Mr. Bush about the possibility of a Qaeda attack began in the spring of 2001. By May 1, the Central Intelligence Agency told the White House of a report that “a group presently in the United States” was planning a terrorist operation. Weeks later, on June 22, the daily brief reported that Qaeda strikes could be “imminent,” although intelligence suggested the time frame was flexible.
But some in the administration considered the warning to be just bluster. An intelligence official and a member of the Bush administration both told me in interviews that the neoconservative leaders who had recently assumed power at the Pentagon were warning the White House that the C.I.A. had been fooled; according to this theory, Bin Laden was merely pretending to be planning an attack to distract the administration from Saddam Hussein, whom the neoconservatives saw as a greater threat. Intelligence officials, these sources said, protested that the idea of Bin Laden, an Islamic fundamentalist, conspiring with Mr. Hussein, an Iraqi secularist, was ridiculous, but the neoconservatives’ suspicions were nevertheless carrying the day.
In response, the C.I.A. prepared an analysis that all but pleaded with the White House to accept that the danger from Bin Laden was real.
This isn't really anything new that wasn't already discussed at length by people like Richard Clarke. The real lesson here I think is that partisanship can be deadly--if al Qaeda were considered a threat to America instead of a Clinton boogeyman, there's a chance more would have been done.
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On September 11 2012 15:49 Velr wrote:
Care to answer the points i made not just the last sentence/conclusion?
If an investment doesn't makes sense from a numbers standpoint you don't make it. Taxes play a role in those numbers. You can't ignore it.
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Why people still believe in the myth of trickle down when it has been proven flawed time and time again is beyond me.
As many are in the habit of saying, time and time again.
Somehow, the issues of high tax rates negatively affecting economic growth, capital flight, and others keep cropping up. There is a debate on the validity of highly progressive tax rates being a net help or hurt to the economy. Is this good policy? Straw man all you want, we're coddling the rich, entrepreneurs are superhumans unaffected by any disincentives whatsoever. Heck even claim business owners take milder chances when they started up than is generally perceived. It is a legitimate question of policy to examine what levels of progressive taxation harm growth to an unacceptable level. I see a lotta napkin analysis on these caricatures of people and their motivations thrown against percentage tax rates and the like. There are real tax rates and the real chance of business failure. You can examine just how much was risked for how much return. To give you an idea, '04-'08 saw 647k start up and 574k close. Just saying, 'Nah, these guys are gonna do what they do whether it goes up 0% 1% 5% 10%' doesn't even come close to the rigor required for the conclusions thrown out here.
Already addressed was the trouble with statistics on the rich; using them to say something they're not.
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On September 11 2012 15:56 JonnyBNoHo wrote:Show nested quote +On September 11 2012 15:49 Velr wrote:
Care to answer the points i made not just the last sentence/conclusion? If an investment doesn't makes sense from a numbers standpoint you don't make it. Taxes play a role in those numbers. You can't ignore it.
If an investment does not make a winning (is not worth it) or barely any you won't pay taxes on this.
The thing your talking about is a decision an allready big business might do, but iirc we were arguing if "hgih" taxes on "high" incomes would stop people from forming their own buisnesses. I disagree or would at least call the effect, compared to the added safety from social security thanks to higher taxes, negligible.
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On September 11 2012 15:56 JonnyBNoHo wrote:Show nested quote +On September 11 2012 15:49 Velr wrote:
Care to answer the points i made not just the last sentence/conclusion? If an investment doesn't makes sense from a numbers standpoint you don't make it. Taxes play a role in those numbers. You can't ignore it.
If you reject marginal economics, are you a classical economist? There aren't many classical economist these days who aren't Marxists...
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On September 11 2012 15:50 Defacer wrote:Show nested quote +On September 11 2012 15:23 JonnyBNoHo wrote:On September 11 2012 15:08 Defacer wrote:On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Have you ever started your own business (and no, being self-employed doesn't count). I think there are a lot of people that do invest every last cent into their business. Hell, the average 'successful' small business that employs 50 to 60 people typically need massive bank loans in order to insure they make pay roll. For many undereducated or under-skilled people, entrepreneurship is the only way to ascend from the lower-middle class to upper middle class, unless you want to be a wage slave forever. Do you think your local bakery owner would give up his business so he can work for a bakery? You'll always make more money as an owner, and there is value in simply being your own boss. I think there is truth in what you're saying -- that only highly motivated people can start and maintain a successful business. But even if they were successful enough to be taxed at 50%, that wouldn't be enough of a disincentive to stop being an entrepreneur or not start a business to begin with. No, you won't always make more money as an owner. Yes, being taxed at 50% may be enough of a disincentive for the entrepreneur to decide to not start the business. It depends on what specifics we're talking about. Sorry, your right, let me rephrase that. Some entrepreneurs assume greater risk and responsibility for the opportunity to make significantly more money than they could otherwise, due to their education or skill level. If you're a designer, for example, there is a ceiling that you'll hit when you work for other people -- despite being the driving creative and productive force for a product. Which is why more and more designer consider starting their business or developing their own products.
Sure, I think taxes still play a role there though. When the designer considers starting her own business she'll figure out how much more she'll make and then decide if it is worth the effort or not. The higher the taxes the smaller gain in income. So I'd have to assume that fewer designers would decide to go it alone at a higher tax rate than a lower one.
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2nd Worst City in CA8938 Posts
Thanks for posting this. Gonna check out his book. :D
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On September 11 2012 13:21 xDaunt wrote:Show nested quote +On September 11 2012 13:10 HunterX11 wrote:On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Is there any evidence that this is true? I don't think it's at all self-evident that people wouldn't want to be more successful if it means being not as much more successful than they might be. The more money you make, the more money you make, even with taxes. Taxes are a percentage. Maybe if the top tax bracket were 90% or something this might come into play, but even when the top tax bracket was that high, an entrepreneur was far from certain to reach it anyway. Let's wait and see what happens to France when Hollande enacts his confiscatory 75% tax rate on the rich.
A day or two ago the richest man in France applied for Belgian citizenship. The guy who owns Louis Vuitton, Moet & Hennessy.
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On September 11 2012 15:18 Defacer wrote:If anyone is in the mood to read something extremely depressing ... The Deafness Before the Storm: Bush White House ignored adamant warnings from CIA of imminent Al-Qaeda attackShow nested quote +On April 10, 2004, the Bush White House declassified that daily brief — and only that daily brief — in response to pressure from the 9/11 Commission, which was investigating the events leading to the attack. Administration officials dismissed the document’s significance, saying that, despite the jaw-dropping headline, it was only an assessment of Al Qaeda’s history, not a warning of the impending attack. While some critics considered that claim absurd, a close reading of the brief showed that the argument had some validity.
That is, unless it was read in conjunction with the daily briefs preceding Aug. 6, the ones the Bush administration would not release. While those documents are still not public, I have read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration’s reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed. In other words, the Aug. 6 document, for all of the controversy it provoked, is not nearly as shocking as the briefs that came before it.
The direct warnings to Mr. Bush about the possibility of a Qaeda attack began in the spring of 2001. By May 1, the Central Intelligence Agency told the White House of a report that “a group presently in the United States” was planning a terrorist operation. Weeks later, on June 22, the daily brief reported that Qaeda strikes could be “imminent,” although intelligence suggested the time frame was flexible.
But some in the administration considered the warning to be just bluster. An intelligence official and a member of the Bush administration both told me in interviews that the neoconservative leaders who had recently assumed power at the Pentagon were warning the White House that the C.I.A. had been fooled; according to this theory, Bin Laden was merely pretending to be planning an attack to distract the administration from Saddam Hussein, whom the neoconservatives saw as a greater threat. Intelligence officials, these sources said, protested that the idea of Bin Laden, an Islamic fundamentalist, conspiring with Mr. Hussein, an Iraqi secularist, was ridiculous, but the neoconservatives’ suspicions were nevertheless carrying the day.
In response, the C.I.A. prepared an analysis that all but pleaded with the White House to accept that the danger from Bin Laden was real.
Dick Cheny knew that terrorists had taken over planes and did nothing to stop it + Show Spoiler +
Fun fact is that they did not include his testimony in the 9-11 report ^_^
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On September 11 2012 20:19 RCMDVA wrote:Show nested quote +On September 11 2012 13:21 xDaunt wrote:On September 11 2012 13:10 HunterX11 wrote:On September 11 2012 13:00 ziggurat wrote:On September 11 2012 08:58 HellRoxYa wrote:On September 11 2012 08:35 ziggurat wrote:On September 11 2012 07:09 Roe wrote:On September 11 2012 06:41 xDaunt wrote:On September 11 2012 06:02 ImAbstracT wrote:Let's look at the extreme case, where taxes are say, 90%. I'm not recommending that, but just using that as an example. In that case, a business has a huge incentive to continue to invest in the business (which creates deductible expenses) instead of taking money out of the business.
High tax rates favor business investment. Lower tax rates encourage owners to not invest, not hire, and to take money out of the business as fast as they can.
I sure wish just once somebody would explain this basic business principle in the MSM. Whoever wrote this is just dumb. Calling someone dumb is a good argument... What he wrote is factually correct. When taxes are low, business hire less (in fact they lay off more), when taxes are high they invest in their company more and the economy of the country is much healthier because you have people actually spending their money instead of hoarding it off shore. Are you simply aware that businesses aren't competent and won't be able to invest their money appropriately, so you argue for these types of regressive policies? I really do want to know from where you get this distorted view of reality. No. If taxes are high people are incentivized to think "I could work really hard and start a great business ... but I'd lose most of the profits in taxes anyway so why bother?" Or, they think "I'm going to invest my money, should I invest it here where the govt will take a ton of my profits? Or should I invest it offshore where I'll get to keep most of the profits myself?" Starting a business is a big risk. Many businesses fail. So when a smart person is trying to decide if they will start one or not they look at the possible outcomes, and reasistically assess the risk/reward ratio. For example, say I am considering $1,000,000 in a business and I see the following possible outcomes: Scenario 1 - 10% chance that this will happen - Huge success - I make $500,000 a year from this business Scenario 2 - 50% chance that this will happen - moderate success - I make $200,000 a year from this business Scenario 3 - 40% chance - business fails, I lose my investment You can make up whatever numbers you want, but if the tax rate is really high a lot of people will simply look at the numbers and decide its not worth it. If tax rates are low people are encouraged to start businesses because the rewards are that much greater if they are successful. Yet you're forgetting an important part of the equation. Are you fucked if your company does not succeed or not? The higher the taxrate the less likely you are to be fucked if your business fails. I actually find your argument highly lacking due to this. Also, people are, in general, risk averse, which means that a safer society (one where you don't fail at life if your company fails in this scenario) would make people more willing to start a new company, not less. No, I think you have it all wrong. If my business fails I'm not fucked -- unless I invested every last cent I own into it, which few people would do. Even if I did, I can always go out and get a job. I doubt the social safety net is much of a factor. The highly motivated people who are going to start successful businesses are not likely to end up on welfare no matter how bad the economy is. But the fact the govt will take half of any money I make is a huge disincentive. Is there any evidence that this is true? I don't think it's at all self-evident that people wouldn't want to be more successful if it means being not as much more successful than they might be. The more money you make, the more money you make, even with taxes. Taxes are a percentage. Maybe if the top tax bracket were 90% or something this might come into play, but even when the top tax bracket was that high, an entrepreneur was far from certain to reach it anyway. Let's wait and see what happens to France when Hollande enacts his confiscatory 75% tax rate on the rich. A day or two ago the richest man in France applied for Belgian citizenship. The guy who owns Louis Vuitton, Moet & Hennessy.
Let's be careful here, because nobody has the full story. He applied for dual citizenship (he's not simply renouncing his French citizenship), he said he would continue paying his taxes in France, and Le Monde reports an undisclosed source mentioned that he applied for a Belgian citizenship to make it easier to go through with a "delicate" investment. I certainly don't discard the idea that his move may very well be motivated by the tax increase for the highest earners, but we should tread carefully here instead of jumping to conclusions.
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EPT
