Are the rich paying their 'fair' share?

[Dauphin]

If you did a permanent tax on this company alone, it's simple. The share value would go down to $80 to reflect the fact that five shares under the new system are an identical financial instrument to four shares under the old system. Both give you payments of $20 and cost $400.

So, assume I am a prospective investor with $400. In scenario 1, I would get an $80 dividend. In scenario 2, I would look to get a $100 dividend and pay $20 tax, and end up with $80. If my income was only/mostly from dividends, it'd look like I am contributing more in taxes in scenario 2 (20% burden vs 0% burden) when in fact the tax burden is not really falling on me as I am getting the same return on investment.

This is simplistic, but the point I was getting at....

Moreover, there are other issues to consider.

[MrFun]

That's horse****. 10% of the population is not starving to death, Jon. The poor are facing an obesity epidemic, not starvation. Think about those numbers for a minute. Do they make any sense at all?

You can go to mcdonald's and get enough calories for a day for like ten dollars. Or less. There's no ****ing way that 30 million people (or 17 million households) live on less than say 30 dollars a day. Plus food stamps. Plus welfare.

My job is considered "full time" even though the company only gives me about 32 hours a week. At $8.50 an hour, I earn just about $13,000 a year. This is before taxes, Social Security, and so on. I have no health benefits through my employer - they do not offer any such plans.

[Al B. Sure!]

No you idiot, you've shown that firefighters aren't worth much in places where people will happily do it for free. Just like air isn't worth anything, but without it you would die.

But people don't do it for free. They volunteer at significant cost to themselves in time, effort, and risk exposure. Why is this?

Why don't the major cities have volunteer departments? Why are there so many people in certain communities willing to do the job for nothing yet the Philly FD pays an average firefighter a salary of $48,000 plus a pension? Are there not ~2000 people willing to do it free in a city of 1.5 million? Per capita, there are more volunteer fire fighters in other communities.

[Al B. Sure!]

So, assume I am a prospective investor with $400. In scenario 1, I would get an $80 dividend. In scenario 2, I would look to get a $100 dividend and pay $20 tax, and end up with $80. If my income was only/mostly from dividends, it'd look like I am contributing more in taxes in scenario 2 (20% burden vs 0% burden) when in fact the tax burden is not really falling on me as I am getting the same return on investment.

This is simplistic, but the point I was getting at....

Moreover, there are other issues to consider.

The tax burden falls on you in either case. The corporate tax came off of corporate income before it was paid as your dividend.

I missed your exact scenario but I'm assuming you're talking about if there's a difference between a corporate tax of 20% with no tax on ordinary income and no corporate tax with a tax on ordinary income.

[Al B. Sure!]

My job is considered "full time" even though the company only gives me about 32 hours a week. At $8.50 an hour, I earn just about $13,000 a year. This is before taxes, Social Security, and so on. I have no health benefits through my employer - they do not offer any such plans.

Do you have crazy debt? Is housing expensive? Medical costs?

Not seeing how you're 'struggling' on $13K/year with no dependents.

[Dauphin]

The tax burden falls on you in either case. The corporate tax came off of corporate income before it was paid as your dividend.

I missed your exact scenario but I'm assuming you're talking about if there's a difference between a corporate tax of 20% with no tax on ordinary income and no corporate tax with a tax on ordinary income.

Nope, I'm talking about dividend tax vs no dividend tax.

[Jon Miller]

My job is considered "full time" even though the company only gives me about 32 hours a week. At $8.50 an hour, I earn just about $13,000 a year. This is before taxes, Social Security, and so on. I have no health benefits through my employer - they do not offer any such plans.

You are under employed like Alby...

JM

[regexcellent]

There are plenty of americans who are starving or facing malnutrition.

17.2 million households (so probably 2-3x as many people)

http://thinkprogress.org/economy/2011/11/24/375776/food-insecurity-by-the-numbers/?mobile=nc

JM

Okay I know this has been covered but it deserves special mention: Have you ever been to Denny's?. Huge plate of pancakes for like, a quarter or something. And it's open 24/7 so if you're blacked out all day from the liquor and smack you can still grab a bite at like, 3:00 AM.

[MrFun]

I'd be in a lot worse situation on that income, if I was renting an apartment. I have student loan debts, but ever since graduating with my Masters in 2006, I have been keeping them on forbearance based on economic hardship. Thankfully, before I even finished school, I had them all consolidated and they are locked at an incredibly low interest rate. Nevertheless, my student loans will continue to accrue interest while I'm on forbearance.

But other than that, no, I have no crushing debt - no credit card debt, no car payments (car I own, I paid in full).

And for my depression treatment, I go to a Catholic institution where I pay two dollars per appointment with my counselor, and I pay just twenty-six dollars for each refill for both of my prescriptions. So in regard to medical expenses, I am fortunate to have found out and gain access to these resources.

EDIT: This is a x-post in response to Alby

[giblets]

But people don't do it for free. They volunteer at significant cost to themselves in time, effort, and risk exposure. Why is this?

Why don't the major cities have volunteer departments? Why are there so many people in certain communities willing to do the job for nothing yet the Philly FD pays an average firefighter a salary of $48,000 plus a pension? Are there not ~2000 people willing to do it free in a city of 1.5 million? Per capita, there are more volunteer fire fighters in other communities.

I have no idea. Maybe Philadelphia is run by Democrats who are beholden to public sector unions. Maybe cities require a more professional fire department than the more rural areas. However, one thing is clear: the existence of charity doesn't prove people are "irrational".

And if you don't request payment for something, you are in fact offering to do it for free. That's what the word means.

[Al B. Sure!]

I have no idea. Maybe Philadelphia is run by Democrats who are beholden to public sector unions. Maybe cities require a more professional fire department than the more rural areas. However, one thing is clear: the existence of charity doesn't prove people are "irrational".

And if you don't request payment for something, you are in fact offering to do it for free. That's what the word means.

I had said EITHER people are irrational OR there's non-monetary compensation that people are receiving from volunteering.

One of those seems like a more likely explanation than your 'I have no idea'.

[Al B. Sure!]

nm

[giblets]

I had said EITHER people are irrational OR there's non-monetary compensation that people are receiving from volunteering.

One of those seems like a likely explanation than your 'I have no idea'.

You either made a false dichotomy or asserted that helping someone else for no personal gain is irrational . Of course, it's possible that some people just like being a fireman. It could be one of those stupid things like wanting to join the military.

[Jaguar]

If you want to complicate things further, you can rename things. There is no muddled confusion which I am demonstrating, my model is clear and gives a pretty clear conclusion.

Those like yourself to defend the current unfairness and wish to make things even more unfair are the ones who muddle the issue, by either taking a too simple argument (see earlier), or complicating things to such an extant that relevant relationships are unclear.

Still doesn't change the fact that the wealthy have consumption and investments which are available to them and not to that working class/poor which are incredibly advantageous. And that only they can take advantage of.

To not tax the wealthy correspondingly higher for 'extra' that they get (which is most often realized as capital gains) is unfair.

JM
(Once more, I am not saying that taxing capital gains highly makes the best sense, based on arguments from KH (mostly), it is very likely the case that taxing consumption+wealth transfers to the poor/working class makes the best economic sense. I am just pointing out that when you consider what is going on, taxing capital gains is what is fair.)

Your model is absolutely confused. You have people making money off of consumption. Just because you think you're "fairer" than I am does not entitle you to use words incorrectly.

I don't object to your arguments because they are normatively redistributionist - because they come to the conclusion that wealth should be redistributed; I am a redistributionist as well. I object to them because they are wrong. Krazyhorse's model, which you describe as making the best economic sense, is also the most fair, in that it doesn't "take sides" between two people of equivalent levels of lifetime purchasing power who happen to have different time preferences on their consumption.

[Al B. Sure!]

Of course, it's possible that some people just like being a fireman. It could be one of those stupid things like wanting to join the military.

And that would be... NON-MONETARY COMPENSATION!

So the DOLLAR value a job pays does not SOLELY determine the value of the job!

Now why is it that the city of Philadelphia can't get 2000 people out of a city of 1.5 million to volunteer while much smaller communities can get more volunteers per capita?