Rich People Don't Create Jobs...

You mean the programs which did not evolve with the market? BTW was a big Qauttro Pro user until it became obsolete.

 

Yes you should do so.

So what?

It is a reimbursement

"The Earned Income Tax Credit (EITC) is a special Federal
income tax credit for low-income workers.The credit reduces the
amount of tax they owe (if any) and is intended to offset some of
the increases in living expenses and Social Security taxes. ........

.The 1975 Act emphasized two longterm
objectives: (1) to offset the impact of payroll taxes on lowincome
workers;
http://www.ssa.gov/policy/docs/progdesc/sspus/ernintax.pdf

It has taken in surpluses and needs to now and invest those surpluses from which to help pay benefits.. It is one of the desperately needed reforms. And some of those funds need to be in individual investment accounts that belong to the person making the contributions.

It has been a key to everyone of them.

If you want to turn it into a welfare system then junk the whole program get rid of the SS Administration and just pay them welfare out of general revenues. The fact is according to the Constitution we should all receive equal treatment so if you pay in you get out and being a retirement system the more you pay in the more you get out. GEE what a wonderful incentive to work hard and increase your lot in life so you have a better retirement.

If that is what you want see above.

It needs to be kept at the bare minimum and let's build some government run poor houses for those who failed in life.

You keep saying it is just a safety net, yet you want those who did not save for their own retirement to live the same retirement as those who did.

 

It was at one just that a "safety net" just enough to get by on like take the trolly to work. Not LIVE off of in a comfortable retirement. That has been it's downfall, more and more and increasing benefits in order for the left to get more votes.

And I love it when letist are so benevolent with other peoples money.

Even had one guy tell me that if I have saved enough to get $24,000 out of my retirement funds, after I have scrimped and saved and done without, I should not get any SS while my neighbor who made the same as me but splurged all his money and never saved buying expensive cars and taking lavish vacations, well he gets to collect.

 

I think there shoudl be a cap on payouts, maybe cap it at 10x min wage

 

You continue to ignore the difference between spending (purchase of goods and services) and investing (purchasing finanicial instruments where no goods or services are involved). "Goods and Services" require people to provide the goods and services creating jobs but purchasing of financial instruments requires no people to provide goods or services and therefore creates no jobs. As I noted previously after a review of SEC transactions for a month less than 0.00005% resulted in actual investments in corporations that used that funding to purchase goods and services and effectively we can state that the 99.99995% that didn't go to corporations created no jobs.

The money that Bill and Melinda Gates gave away does result in spending on goods and services (just like government welfare assistance) but the $77 billion that they have in investments is fundamentally money stuffed in a mattress. Yes, it increases in "wealth" over time but it doesn't create any jobs because it's an investment and not spending.

According the the IRS in 2009 (based upon joint filing status) households with a net earned income between $16,700 and $67,900 paid more in personal income tax dollars than all households with a net income of $209,000 or more and all capital gains taxes combined.

In 2009 the income tax revenues from the Capital Gains tax only represented about 3% of all federal income tax revenues while it was based upon almost 20% of all income in the United States. If it's 20% of all income then logic would dictate that it should also general 20% of all tax revenues for the federal government and that's almost seven-times more than what actually happened in 2009.

I don't have any clue where some believe the wealthy are paying the bulk of the income taxes because it's just not supported by the information from the IRS.

Taxation should only be imposed on "profit" and not "costs" for the household. We know, based upon IRS tax information, that at least 47% of all households are not "operating at a profit" and most are literally "operating at a loss" because they don't have enough income to purchase food, pay the rent, or pay their utilities bills. These households shouldn't be taxed at all. In my proposal I've bumped that up to 50% of all households, established by median household income, because I believe Congress under-estimates the "costs" and I wanted to ensure that only "profit" was being taxed.

Taxation funds the authorized expenditures of Congress regardless of what Congress chooses to spend the money on. It is not the "redistribution of wealth" but instead it's "funding government" and those on the "right" seem to ignore.

Those on the "right" want to reduce government welfare assistance that mitigates the effects of poverty while ignoring the fact that the only way to accomplish this is by reducing poverty. You can't fix a problem by ignoring the cause of the problem and "government welfare spending" is merely a symptom of the problem of poverty. Reduce poverty and it reduces the necessity for the spending. The "right" offers no solutions that would reduce poverty and instead advocate policies that increase poverty effectively increasing the necessity for government welfare assistance.

By not taxing "costs" my income tax proposal actually reduces poverty and government welfare assistance. It makes absolutely no sense to me to first tax a person and then have to provide welfare assistance so that they can afford to buy food. What kind of stupid is that? Far better to not tax them to begin with so that they can afford to buy food without government welfare assistance.

 

False. This is a common misconception from those who talk about putting money "into" stocks.

You decide to sell a share of Apple. Bill Gates decides to buy your share of Apple. Upon settlement, Bill Gates now owns the share and own the money. There is no mattress involved. He hasn't put the money "into" the stock market. The money simply moves from Bill to you. You may now spend that money to buy goods and services.

 

The ETIC is a welfare program that provides money from the general fund to provide income to families that shouldn't have been taxed in the first place. It's welfare pure and simple and it doesn't refund any of the taxes they paid into Social Security.

If we look at the Bush privatization proposal it started for those at age 55 and a minimum wage household, even with two income earners, cannot accumulate enough income from investments in 10-15 years (age 65-70) from their 7.65% contribution in FICA taxes. Only those with earned income above the median household income could have benefited from that proposal. Privatization has to be based upon the entire of 45-50 year working career of the minimum wage income earner (which is what my proposal does) because it take a lifetime of investing for a minimum wage worker to benefit from privatization and it has to income both the FICA and Payroll tax money to adequately fund retirement. There also has to be an offset of lost tax revenues to continue funding the program for the 45-50 year transitional period and, once again, my proposal provided that while the Bush proposal did not.

We can also note that Congress has been consistantly reducing Social Security benefits first by increasing full retirement age (I personally lost about $30,000 from the increase in my full retirement age) and by changing the COLA formula from what seniors spend money on to what workers, including 20 year old workers, spend money on and the express goal of changing the COLA formula was to reduce benefits for retirees.

Welfare assistance is not an investment program and Social Security/Medicare are government social welfare programs. Both were designed to provide for about 1/2 of the population that failed to accumulate enough personal assets during their working career to provide enough income for the retiree's financial needs when they became too old to work. My privatization proposal is based upon building personal assets so that the welfare assistance is fundamentally unnecessay.
If that is what you want see above.

Yes, some have proposed funding Social Security and Medicare from general tax revenues but that merely allows for them to be funded with deficit spending like our other general expenditures. From a tax standpoint Social Security and Medicare have been the only successful tax/spend government program there is because it's never generated a dime of deficit spending. If we want to keep it as a successful tax/spend government (welfare) program then I have a suggestion.

Remove the caps and impose the 15.3% Social Security tax across the board.
Have the employers pay the entire 15.3% tax on gross compensation for the worker which includes not just income but also benefits. Effectively they already pay the entire tax because they provide income to the worker on paper and then that money is withheld and sent directly to the federal government. Let's eliminate the "middleman" that's the worker.
Impose the 15.3% Self-Employment tax on all net income that is not based upon wages and compensation including capital gains income.
Provide a "flat" guarenteed income of $30,000/yr (adjusted for inflation specific to those 65 or older) in combined personal and Social Security income for all retirees and disabled people. This is effectively the "means testing" that many refer to.
Eliminate the EITC because employees would no longer be taxed by Social Security.

That's not what I advocate but if we want to keep the only successful tax/spend federal program that's how it can be accomplished and it would also improve the program because we wouldn't have millions of Social Security retirees and those with permanent disabilities relying on other government welfare programs just to survive in poverty.

That is not the case. Roughly 47% of all households don't even have enough income to live on from day to day based upon IRS statistics and they don't have additional income to invest because it's going to the federal government in FICA/Payroll/Self-employment taxes of 15.3%. My privatization proposal doesn't result in those that, for whatever reason, don't have enough personal assets having the same income as those that do have enough personal assets. My proposal, in today's dollars, results in a minimum wage lifetime earner expecting a $55,000/yr income while the safety net is set at $30,000/yr in combined personal income plus government subsidies. My proposal also has "vesting" so that the roughly 40% of people that don't live to retirement age leave their personal wealth accumulation to their heirs dramatically reducing generational poverty in America and increasing the "retirement" income for all subsequent generations.

So yes. I increase the safety net four-fold related to minimum Social Security benefits today but that's based upon both government subsidies and personal income at retirement but the real benefit is for the lifetime minimum wage earner that will see their retirement income increase to about $55,000/yr, none of which is provided for by the government, and that's five times better than the average Social Security benefit today.

 

If the money is not circulated in the ecomony by purchasing goods and services then it's effectively stuffed in a mattress because it's not creating any jobs all of which are dependent upon providing goods and services.

The Tax Foundation is notorious for "cooking the books" in it's advocacy for lower taxes. Let me provide some examples.

Of the top 10% almost 99% are working Americans that pay the "earned" income tax rates of up to 39.6% while the top 1/10th of 1% are all investors that pay the much lower Capital Gains tax on "unearned" income. The Top 1/10th of 1% have 20% of all income in the United States but only pay about 3% of all personal income taxes because they effectively pay a maximum of 17% on net income .

My tax proposal would have reduced the tax rate for 99% those in the top 10% income earning category, excluding just the top 1/10th of 1% that are super-wealthy investors, from the top 39.6% to 29% (a 25% tax rate cut) for 2013 and would have fully funded a balanced budget.

Income taxes are only imposed on "net income" (i.e. profit) while the bottom 47% of income households don't have a net income. It is dishonest to include those without a net income in personal income tax revenue statistics that are exclusively based upon positive net income.

The Tax Foundation ignores the fact that those in the bottom 90% provide roughly 40% of all federal revenue that comes from the FICA/Payroll/Self-Employment tax. This includes those that are in the bottom 50% that have these taxes imposed on their gross, not net, income. Even though they don't have a "net income" they're still being taxed and that taxation accounts for 40% of all federal tax revenues. If we use "gross federal revenues" then those in the Top 10% with roughly 45% of all personal income in the United States only provide about 40% of all federal tax revenues.

 

It is circulating in the economy. It is not "stuffed in a mattress".

Again: You have a share of Apple stock that you want to sell. You execute a sell order. Bill Gates buys your share of stock. He gets your share of stock, and you receive the money. His money has now circulated back into the economy. You now own it and may spend it on goods and services to create jobs.

 

If the money is spent on goods and services, provided for by labor, then the money re-enters the market creating jobs but if it's re-invested then it creates no jobs. Jobs provide goods and services and without the purchase of goods and services no jobs are created.

Re-investment where the "mattress" merely changes hands does nothing for the economy.

 

As I would have hoped you'd have grasped by now, ultimately, it can't not be spent on goods and services. All you have to do is ask, "And what does he then do with the money?" as the money changes hands. It will always end with the purchase of some good or service.

 

Not necessarily true. A person that already has enough income to fund all of their expenditures will spend no more based upon additional income. They merely re-invest it and the "mattress" simply changes hands once again. Even those earning more than they require in goods and services remove money from the economy by investing it as opposed to spending it. So long as it's locked up in "investments" it doesn't purchase any goods or services and is effectively "money in a mattress" because it doesn't create any jobs. The only money that benefits the economy is money that's spent on goods and services because that spending creates jobs. Investments alone don't create any jobs (except for the small fees related to services necessary for the investments) and do not benefit the economy.

As was previously noted in this thread Bill Gates has $77 billion that he's not going to spend to purchase anything. There's no way Bill Gates could spend $77 billion on goods and/or services. That's way beyond the ability of any person to spend. In point of fact it's virtually impossible to consistantly spend $10 million per year on goods and services. A person simply doesn't need that much to live on.

 

Okay, so because they have nothing they wish to buy (unlikely, assuming unlimited wants) they invest it. Let's say they buy stocks with it, thus handing that money to someone else. What does the new owner of the money then do with it?

 

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There is no money hidden in mattresses!!! All of the money you allude to is in full circulation in the economy. Maybe all of it is not spent precisely how you wish but no matter ALL of it is energizing the economy. People don't invest to earn gains solely to stick those gains in a mattress.

Shooting the messenger does not work;

Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent...pay negative 9 percent.
You read that right. One group is paying more than 100 percent of individual income taxes, the other is paying less than zero.
It's right there in Table 3 on page 13 of the report. The numbers are based on 2010 IRS and Census Bureau figures....CNBC

In 2013, according to our analysis of preliminary IRS data, people with adjusted gross incomes above $250,000 paid nearly half (48.9%) of all individual income taxes, though they accounted for only 2.4% of all returns filed. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.6%. By contrast, people whose incomes were less than $50,000 accounted for 63.4% of all individual income tax returns filed in 2013, but they paid just 6.2% of total taxes; their average tax rate was 4.2%....Pew Research

IRS data for 2009 (most recent year available) are displayed above and show that the top 1% of US taxpayers (about 819,000 filers) paid 37% of all federal income taxes collected, the top 50% paid almost all taxes collected (98%) and the bottom half (about 41 million filers) paid only 2%....AEI

The 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70% of federal income taxes, according to the Congressional Budget Office....USA Today

 

Now you are saying investments are a sin? The equity markets might be the single most important aspect of the US economy. It's no one's business if someone is investing $1000 or $50 billion. I've never known a wealthy person who does not spend like they are on steroids relative to mere mortals! ALL of this spending energizes the economy...

 

The problem with your assertion is that it founds on the notion that money is wealth. If I were to ask you "if more money circulating equates to more production and therefore more economic growth, why not simply print money and cut huge checks to every American?" You would reply, rightly, that would create inflation and the purchasing power of that money would go down. Now, trapped by your own logic, I would point out that money not in circulation increases the purchasing power of money that is in circulation. And, it would also become obvious that it doesn't matter how much money there is in an economy. Consumption is a result of production, not the other way around. The law of supply and demand applies to all commodities, including money.

- - - Updated - - -

Spending does not create wealth. You are putting the cart before the horse. People buy goods and services with goods and services. Money is just a means to facilitate that activity.

 

I cited directly from the SS administration and the history, and you have offered nothing to refute the facts. That is SPECIFICALLY why it was created and what it continues to do to this day and just because it is a welfare program does not change that fact of that the funds come from general revenues.

Again

""The Earned Income Tax Credit (EITC) is a special Federal
income tax credit for low-income workers.The credit reduces the
amount of tax they owe (if any) and is intended to offset some of
the increases in living expenses and Social Security taxes. ........

.The 1975 Act emphasized two longterm
objectives: (1) to offset the impact of payroll taxes on low income
workers;
http://www.ssa.gov/policy/docs/progd...s/ernintax.pdf"

Why are you being obstinate about it?

No his plan would not have affected those over 55, SS would have remained the same for them.

"Would reform affect everyone? The president has said all along that any reform would not affect the benefits of current and near retirees. On Wednesday, he specified that benefits of anyone age 55 and older will not be changed."
http://money.cnn.com/2005/02/02/retirement/stofunion_socsec/index.htm

Well we live longer don't we and not the benefit has been cut, future INCREASES in benefits are affected and I don't believe the COLA adjustment was passed but stand to be corrected although it needs to be indexed to actual inflation and not the Consumer Price Index for Urban Wage Earners and Clerical Workers to which it is tied now.

No they aren't, they are insurance systems although SS more than Medicare. If SS was welfare there would be no qualifications ie, you have to work and have paid into the system to collect.

YOU seem to want to turn it INTO a welfare system.

SS neither were designed for just 1/2 the population.

But both are headed there as was predicted long ago. And of course a 15% tax to fund SS was NEVER envisioned at the start the only reason it is still afloat.

Then remove the caps on benefits across the board.

And there goes a pot load of spendable income for the middle class.

And then get rid of the cap on benefits.

So then why should I save for my retirement if it is going to lower the SS benefit?

You just did.

If SS was successful we wouldn't be having this discussion of junking it and coming up with something new.

It's what you are proposing.

 

Sorry to say it, but both of your analyses are simplistic. Yes, it is true that additional income results in additional consumption, but in economics it is known that this relationship is not linear. It is also called the "propensity to consume", either average or marginal:



It is clear that the consumption vs. income relationship levels off at high incomes. This indicates that a person's propensity to consume is, in fact, not unlimited, neither are wants. I think this effect is pretty self-explanatory, because the day has only 24 hours, and eventually, spending cannot increase even if one "works" and spending the whole day. Like someone else said before, there is no way how Bill Gates can spend as quickly as his fortune would allow, even if he would buy 1 jet per month (he needs only 1 or 2, though).

This issue manifests itself currently as low money velocity. Because the ones that don't need to spend it have most of the money, velocity is low, holding our economy back.

 

Ahhhh let's see your link on that one.

Making it above and below 75,000 looks like the bottom paid $171B versus $876B the top paid.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=563

 

They don't have most of the money. In fact they have very little money relative to their net worth. They buy other assets with that money (stocks, bonds, real estate, etc), handing that money over to someone else. The next question is then, "What does that next person do with the money?"

You need to learn to think beyond stage one.

 

The title of this thread is Rich People Don't Create Jobs...and this is absurd! ALL people who spend create jobs. Some spend more than others and in different ways but all of it is SPENDING. ALL spending energizes the economy.

The person who has $50 billion does not effect the next person wanting to achieve more wealth.

Lastly, the entire concept of forcing more spending in order to grow the economy is misguided! We should be spending based on what we need in life relative to how much we have available to spend...period. What others spend has nothing at all to do with how much I spend. How others spend has nothing to do with how I spend. If I desire more to spend then it is solely my responsibility to create more money with whatever potential I have. Whether I succeed or fail in reaching my potential is not effected or determined at all by others.

How petty it is to whine about others wealth...

 

Well then, if every investment directly stimulates the economy again (and some of it does, I already conceded above), why is money velocity at all time lows?

Very simple, because the person hoarding $50 billion DOES affect everyone else. In fact, they reduce the money supply for everyone else, making money more expensive for them (that's your supply and demand right there).

P.S.: I don't whine about other people's wealth, in fact, I am probably in the top 10% wealth wise. Why does everyone assume that when one points out that income/wealth inequality is a problem that one is envious/poor/lazy/a moocher whatever you want to pick from that list?