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Date:         Mon, 9 Nov 1992 16:07:24 -0500
From:         Andrew Allen <E7L8ALL@TOWSONVX.BITNET>
Subject:      More paint remover for Brett's primer
Comments: To: politics@ohstvma.bitnet

Warning : very long post, sorry!

>>What Brett' appears to be advocating is that what we need is *more* tax
>>cuts for the wealthy, as opposed to demanding that they pay their fair
>>share and cutting off the loopholes and dodges that they currently
>>utilize to avoid paying.

>       A nice bit of misrepresentation.  I see you followed Clinton closely.
>Nowhere are "tax cuts for the rich" advocated or even mentioned.  Tax cuts
>should be across the board.  (Nor are loopholes advocated.)

OK how would you like it worded? How many folks who flip burgers or sell
shoes for a living are going to directly profit from a capital gains tax
reduction ?


>       I wouldn't place any regulations on corporations.  Let them live/die by
>the market.

These {suggestions that I posted previously and deleted to save space}
are not "regulations" on corporations, merely an alteration of what
is considered deductible from income. I don't feel that it is a "regulation"
(in the sense that regulation is usually taken) to say that Chrysler can't
write off of income a chateau in the Alps for use by their executives.

This doesn't mean that they can't have a chateau anywhere they want (I might
even have some suggestions B)) or pay their CEO a salary that is computed
by a million astrophysicists with typewriters; it just means that they can't
write it off as an expense.

As far as living/dying by the market; there are some businesses that
are just a bit more equal than others... (does the name Chrysler ring
a bell?) that are so large that they are protected from such an end.

Hell, when these big companies are hurting they send their official
lap dog, the President to..er, deliver their message to their competitors. B)


>       Capital gains are actually a second tax.  You are first taxed on the
>income that you use to invest, then again when you reap any gains.  At the very
>least, they need indexing for inflation.  At best, no tax at all.

Boy, nobody whines as well (or as effectively) as the wealthy! When
Average Working Joe and Josephine don't get a salary increase for
a few years running and inflation eats at their incomes (buying power)
nobody starts talking about indexing their incomes to inflation for
tax purposes... or for that matter when J&J obtain some piddling
interest income on their bank accounts that doesn't get indexed
either, does it?

>>In order to encourage long-term investment, I think the best thing
>>that we can do is to discourage short-term speculative investments
>>(not to mention junk bond trading schemes, etc.). What I would
>>propose is a transaction tax on the sale of stocks, bonds and
>>other securities. The tax would not apply to first issues or stocks/
>>bonds/securities that have been held in excess of 10 years.

>       We already have those.  (Commissions :).  I think the federal
>government should stay away from any kind of transaction fee.  They would be
>meddling in a market to no apparent gain.  (They would take in revenue, but
>there would be no benefit to the market.)

The gain would be in encouraging long term investment, much like the way
that common folks pay a "substantial penalty for early withdrawl" on their
higher yield bank accounts, cds, etc.


>       I'm at the top income bracket.  (Hello down there :).  If the top
>bracket is returned to past levels (50%, 97%, etc.) I will not take future
>raises as salary, but instead as stock options, pre-tax benefits, etc.  I will
>not lose 1/2 to 9/10 of my money by taking the raise as ordinary income.

Well, I have tilted my keyboard further upwards so that you can "hear" me
better! B)

I am certainly happy for you that you have these options that most people
do not. What you neglect to mention is that while tax rates may have been
50 or 70%, no wealthy person or corporation ever really paid that much.

(OK more accurately, they may have paid that percentage on some tiny
portion of their income that they couldn't squirrel away or find some
loophole for)

What it is more reasonable to look at is the real portion of income that
is paid in taxes, not just income taxes but also sales taxes, property
taxes, etc. The vast majority of workers spend virtually all of their
incomes and hence pay more taxes as a percentage of income than those
who make enough to "recycle" their money in profit making ventures.

> [stuff deleted] This is not a rich vs.
>poor argument.  The poor are not that way becuase others are rich.

'Scuse me but I just have to indulge here... Why are the poor, poor if
it is not due to a system of distribution that reinforces the fact that
some must be poor in order that others may have far more than they need?

How could excess exist as a concept without its opposite?


>>Government may not be perceived by many as a good
>>or efficient provider of such, but it is more trusted than the private
>>sector.

>       Again I have to disagree.  The private sector is not some evil entity.
>There are good companies and bad, and it is up to the consumer to make an
>informed choice.

The private sector may not be "evil" but it has only one concern, profit.
In most cases short term profit.

While (trust me on this one) I have no love of big government (or most
little ones for that matter) It does have a charter to look out for the
interests of people moreso than big business. I can vote to replace my
congressman, I can't vote to replace the CEO and board of some megalithic
corporation.


>       Reagan created the largest peacetime expansion ever.

Not to mention the largest peacetime debt too.

As one pundit put it; "I could make it look like prosperity was occurring
if I had a few hundred billion dollars for walking around money, too."

>18 million new jobs,

Steadily declining real wages, caused by a loss of high wage jobs in the
industrial sector...

>falling unemployment,

As I recall one of the main reasons that unemployment "fell" was that
Reagan redesigned the criteria by which a worker was considered
unemployed. (I could be wrong on this one but as I remember it, if
a worker has passed his benefit period then he is no longer considered
unemployed. Considering this and that a significant number of the
unemployed do not receive benefits this would result in a large
underreporting in unemployment figures.)


>  When did "rolling recessions" occur

This is a term that I first heard on a Frontline program to describe the
effects of Reagan era recessions that targetted certain industries.

>       The middle class gained the most during the 1980s (35% or there abouts,
>compared to 26% for upper and 29% for lower, numbers are from memory via
>Forbes, but I will post the actuals this weekend).

Well, geez, did somebody hold up the stagecoach that was delivering the
prosperity checks to my town?


>       The rich, in quantity, gained more.  But like Ross said, doubling a
>penny isn't that much.  Doubling a million looks like a lot more when you say
>"gained a million".  Both are still 100% improvements.

Well I guess so, but doubling a penny doesn't do much good if it takes
fifty cents to buy a cup of coffee...

In a society where everybody is at a decent level already then making
adjustments that affect everyone equally makes sense, but when this is
clearly not the case the logic of your argument fails because it is
contradicted by reality.

Before Reagan, my neighborhood was a safer place. Before Reagan when I
went downtown I would see a few (very few and infrequently) homeless
individuals, now there are homeless people in abundance downtown and
in my neighborhood as well. There is just no denying that under
Reagan (and his supply-side philosophy) poverty increased and became
more profound and unemployment increased significantly, not just
among factory workers either, I know engineers and scientists, highly
skilled people who are either unemployed or underemployed.


>       I'd be more than glad to give up the extra cars and TVs if it means
>Mexican workers are earning enough to buy GM cars and Zenith TVs.

Being in the upper tax bracket you would likely not be called upon to make
that sacrifice, at least not until hundreds of thousands of other people
were asked to give up little comforts like food, clothing and shelter.


>       Supply side did not bring us those things.  It brought jobs, decreasing
>deficits (as a % of GNP), etc.  The only social stratification I have seen is
>by those promoting class warfare (ie, progressive income taxes).

Well feel free to pop by sometime, I can arrange a tour for you...B)

About this "warfare" thing, I am not interested in penalizing the wealthy,
only in having them carry their fair share of the load.

Brett'

-other Andy