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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 1:11 am
I see three problems with a consumption tax. The first has been beaten into the ground in the first few posts and that is that it would be an extremely regressive tax. That could be fixed with an extremely large initial deduction. The second problem is that not all spending uses up resources. Music downloads and other electronic entertainments use essentially no resources. Ditto money spent of physical therapy, and other services. But a consumption tax as proposed in the OP is supposed to preserve environmental resources. As such it a blunt instrument. Targeted sales or use taxes would do a much better job of curbing consumption of resources if the is the goal. Third, taxes on goods and services always has a negative effect on the economy because it slows buying.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 4:12 am
It would be good if we didn't need extreme philanthropists like Buffet and Gates. Stop the greedy scum setting up systems to cream off a disproportionate amount of wealth in the first place. Let the people at the poorer end of the scale earn enough to live on in the first place.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 9:34 am
Right. I get the concern with resource exhaustion. If the whole world consumed at the rate of Bill Gates we'd be screwed. So the tax on consumption would have to be exponentially progressive, not regressive.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 10:06 am
(November 10, 2014 at 10:35 pm)Heywood Wrote: I agree with him. I have often said we should be looking at inequality in standard of living(what he calls consumption inequality) and inequality in income really doesn't tell us anything. It tells us why there's inequality in standard of living.........
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 10:28 am
So what if we did what we're doing now, but increase the tax threshold to be above the so-called "poverty limit line"?
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 10:35 am
If your poorest wage earners earn less than it costs to feed, clothe and house themselves then no tax break is going to help. The Walton family that own Walmart earn too much to spend, whilst their workers are striking for minimum wage. The middle and upper classes are subsidising the Walton family by paying Walmart workers benefits so that they can live.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 4:30 pm
(This post was last modified: November 11, 2014 at 4:57 pm by Heywood.)
(November 11, 2014 at 1:11 am)Jenny A Wrote: I see three problems with a consumption tax. The first has been beaten into the ground in the first few posts and that is that it would be an extremely regressive tax. That could be fixed with an extremely large initial deduction. The second problem is that not all spending uses up resources. Music downloads and other electronic entertainments use essentially no resources. Ditto money spent of physical therapy, and other services. But a consumption tax as proposed in the OP is supposed to preserve environmental resources. As such it a blunt instrument. Targeted sales or use taxes would do a much better job of curbing consumption of resources if the is the goal. Third, taxes on goods and services always has a negative effect on the economy because it slows buying.
1. Income taxes are inherently regressive as well. That is why we grant exemptions and make them progressive. The consumption tax as proposed in the OP would grant exemptions and be progressive. As you point out the regressive nature of consumption tax is as easily corrected as is the regressive nature of income taxes. I don't see concern number one as being a good reason to be opposed to a consumption tax
2. The consumption tax as proposed in the OP is not designed to conserve environmental resources as you suggest. Its purpose is to address the inequality in consumption of the rich versus the poor. It does this by taxing the rich who consume more less than the poor who consume less. I think this is the more meaningful metric. As Gates points out...if rich are to feel guilty, it should be because they have so much more stuff and not because the have more 0s in a book.
3. This is the concern I am worried about the most. Do we want to create a system where the wealthy are less inclined to engage in the trade of goods and services? Clearly when a wealthy family spends 2 million dollars to improve their home they benefit....but so do all the contractors and laborers hired to do the work.
At the end of the day I have to question this. What difference does it really make if the government takes it bite from the income side or consumption side. In the example in the OP the family of 4 making $50,000 a year had a $1500 tax liability. Basically they could buy $1500 less in goods and services because of the consumption tax...but then if an income tax left them with a $1500 tax liability....the results would be exactly the same.....they could buy $1500 less in goods and services than if the tax did not exist in the first place.
(November 11, 2014 at 12:15 am)whateverist Wrote: Oh I can understand why he would say we shouldn't be concerned with it. I'll bet he'd like that. What I don't understand is why so many peons like you support the 1%. Hoping to get a couple of choice morsels from the table?
If we consider the set of the world's population.....I am a 1 percenter. People who have about the same amount of wealth as I do...who rail against the 1 percenters....are cherry picking the set they use in order to bury their head in the sand regarding their true situation.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 4:41 pm
(This post was last modified: November 11, 2014 at 4:43 pm by The Grand Nudger.)
LOL, yeah, you're a 1%er... if we add enough people who make zero dollars a year. Quick, somebody grab the crown for King Nothing.
I am the Infantry. I am my country’s strength in war, her deterrent in peace. I am the heart of the fight… wherever, whenever. I carry America’s faith and honor against her enemies. I am the Queen of Battle. I am what my country expects me to be, the best trained Soldier in the world. In the race for victory, I am swift, determined, and courageous, armed with a fierce will to win. Never will I fail my country’s trust. Always I fight on…through the foe, to the objective, to triumph overall. If necessary, I will fight to my death. By my steadfast courage, I have won more than 200 years of freedom. I yield not to weakness, to hunger, to cowardice, to fatigue, to superior odds, For I am mentally tough, physically strong, and morally straight. I forsake not, my country, my mission, my comrades, my sacred duty. I am relentless. I am always there, now and forever. I AM THE INFANTRY! FOLLOW ME!
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 4:51 pm
(This post was last modified: November 11, 2014 at 4:53 pm by Heywood.)
(November 11, 2014 at 10:35 am)fr0d0 Wrote: If your poorest wage earners earn less than it costs to feed, clothe and house themselves then no tax break is going to help. The Walton family that own Walmart earn too much to spend, whilst their workers are striking for minimum wage. The middle and upper classes are subsidising the Walton family by paying Walmart workers benefits so that they can live.
It is just as valid to say that the Walton's are subsidizing the government.....who then subsidize the poor. The taxes paid by the Walton's go toward the benefit the workers they employ. Some think the Walton's are getting a break at the expense of the tax payer....but they forget that the Walton's are also tax payers.
Its not that I am unsympathetic to the plight of the poor. I have come to the realization that no matter what we do, there will always be people who can't or are simply unwilling to support themselves to a standard we deem reasonable for a human being. We can and should help these people and helping these people requires a transfer of wealth from the richer of society to the poorer of society. The one advantage of doing that transfer via a government programs is that it doesn't monkey with the labor markets like a minimum wage does. In my opinion a rag bag of government programs is better than a minimum wage....but what is even better than a rag bag of government programs....is a universal basic income.
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RE: Bill Gate's Solution to Income Inequality
November 11, 2014 at 4:51 pm
(November 10, 2014 at 10:35 pm)Heywood Wrote: (November 10, 2014 at 10:20 pm)Chad32 Wrote: I caught on to that too. Poor people don't save much, if anything. They can't. So they use almost all, or all, their money to consume.
If the exemption is greater than their income....the poor pay no tax whatsoever. Poor people would be hit disproportionately by say a national sales tax....but this isn't that.
(November 10, 2014 at 10:29 pm)whateverist Wrote: Yeah this wouldn't help with income inequality. It would just further exploit those who have and make less. They can't afford to save. They're living paycheck to paycheck, just barely scraping by. To reward those who can afford to save more just widens the gap, a fact that I can't believe escaped Gates' notice.
Gates takes the position that income inequality isn't what we should be concerning ourselves with.
I agree with him. I have often said we should be looking at inequality in standard of living(what he calls consumption inequality) and inequality in income really doesn't tell us anything.
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