Taxation And Political Innovation To Less Inequality

If there is much inequality, and that is undesirable, what's the out? Should we tax more?

Seven ways Americans pay taxes

"Generally, three types of taxes will show up on a worker's pay stub: federal income taxes, payroll taxes (Social Security and Medicare), and state income taxes" ....... State and local governments collect sales taxes on individual goods and services. Similarly, governments charge excise taxes on specific items, including gasoline and cigarettes. ..... Income taxes serve as the largest source of revenue for the federal government, accounting for over 40% of yearly tax revenue. ..... Counties, cities, and other local areas often levy taxes to raise money as well. Property taxes, Lundeen noted, "are generally charged at the local level in order to pay for services such as schools, police and fire departments, and parks." Similarly, localities often charge an additional sales tax. ...... The federal estate tax, often the subject of controversy, applies only after death and only if the estate is worth $5.34 million or more. Also, you may be able to avoid paying a number of excise taxes if you do not smoke, drink, or gamble. However, some excise taxes may be harder to avoid, including those levied on cell phone services, hotel stays, and gasoline purchases ...... the Earned Income Tax Credit (EITC) gives a tax credit to low and moderate earners. ..... Sales taxes are often considered to be regressive, meaning lower-income individuals and households spend a greater proportion of their earnings to pay the tax, compared to higher income residents. ...... Excise taxes are similar to broad sales taxes, except they are charged on specific goods. States typically tax certain purchases, including gas, cigarettes, beer and liquor. Excise taxes are frequently levied on so-called "sin products," and often are intended not only to help raise money, but also to deter unhealthy behaviors. ...... the Social Security tax, employees pay 6.2% of their wages, and employers match that for a total contribution of 12.4%. ..... Property taxes .... In many instances, these taxes are deductible. ..... Many homeowners also qualify for a mortgage interest deduction. ..... The highest estate tax rate charged at the federal level is 40%. ....... Some states have an inheritance tax, where the rate you pay depends on your relation to the deceased. ...... All gifts over $14,000 are taxable, with the tax to be paid by the recipient. The highest gift tax rate is 40% of the taxable gift amount. This tax applies not only to cash, but also to gifts like company shares or cars.

Taxation in the United States

taxes on income, payroll, property, sales, capital gains, dividends, imports, estates and gifts, as well as various fees. In 2010 taxes collected by federal, state and municipal governments amounted to 24.8% of GDP. In the OECD, only Chile and Mexico taxed less as a share of GDP. The United States also has one of the most progressive tax systems in the industrialized world. ......... Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes. Income subject to tax is determined under tax accounting rules, not financial accounting principles, and includes almost all income from whatever source. Most business expenses reduce taxable income ..... certain nonbusiness expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income ..... Federal tax rates vary from 10% to 39.6% of taxable income.

47 Different Taxes We Pay: Can You Think of More?
A List Of 97 Taxes Americans Pay Every Year

The tax structure seems to be A-Okay to me, for the most part. There will be the usual pendulum swings. They will go up a little, or down a little, so politicians stay employed. So how do we tackle inequality?

How the taxed money gets used is a big one. The country spends too much on defense, and too little on education. But those who might vote for larger expenditures on education are too carried away by the hot social issues. Hot to them. Taking money out of politics, a work in progress, sometimes reverse progress, would help.

Financial sector reform. Or where big money goes to die.

Tax havens. Where money gets parked. This is money that could be making serious differences in building infrastructure in the Global South to bring it on par with the rest of the world, so there are more people to buy the goods and services. Instead trillions are put aside. They just sit there. How would you feel if the ocean currents stopped? You would get very cold very fast. Trillions sitting in tax havens are like stopped ocean currents. Money needs to move. Money needs to be put to use. America built infrastructure in Europe, and then it stopped. That was racism.

The biggest one though is massive rises in productivity and political innovation that will spread the goods. If 100 times more food is grown, does that mean food is 100 times as cheap? Should be. Right? At what point does it not make sense to ask people to buy food? There has got to be a price point. Internet access already qualifies. NYC stands to make 500 million bucks a year because it is going to offer free gigabit WiFi from its unused phone booths. Private companies are doing all the work. Why could that not go national? There is zero cost to the taxpayers. Better than zero. Negative cost.

Food and internet access are just two obvious examples. We are at the cusp of massive rises in productivity on many fronts. Food, shelter and internet access are top basics. Nanotech advances in material design should allow us to buy houses like we buy computers today. It is one simple business transaction, not a 30 year plan.

Answers to inequality: (1) Fourth industrial revolution (2) Political innovation on par with technological innovation -- we can now actually let everyone be heard, quite literally, thank you tech (3) Move the stopped ocean currents of global finance (4) World government and new institutions for the global economy (5) 100 to 200 billion less on defense and 100 billion more on education, pre-K, child care, public transportation.

One idea I have been toying with is this: what if the American people, through their government owned somewhere between 1 to 5% of every company in America? So when you incorporate a company, 1-5% is gone. So when Google hits a market cap of 500 billion, 300 million Americans collectively own 25 billion of it. Would that be a problem to Google? Probably not. Companies pay taxes. What if they also shared some ownership? 300 million Americans make the dollar valuable, for example. If 250 million were to withdraw their trust in the dollar, the dollar would fall. So, what is 1 to 5% for that trust? What do you think, Bernie?

Taxation And Political Innovation To Less Inequality https://t.co/zqPMowsvHq @BernieSanders #2016

— Paramendra Bhagat (@paramendra) January 21, 2016

Greece

A Pain in the Athens
Why Greece Isn't to Blame for the Crisis

despite endless lazy moralizing commentary to the contrary, Greece has very little to do with the crisis that bears its name. To see why, it is best to follow the money—and those who bank it. ....... The roots of the crisis lie far away from Greece; they lie in the architecture of European banking. When the euro came into existence in 1999, not only did the Greeks get to borrow like the Germans, everyone’s banks got to borrow and lend in what was effectively a cheap foreign currency. And with super-low rates, countries clamoring to get into the euro, and a continent-wide credit boom underway, it made sense for national banks to expand private lending as far as the euro could reach. ....... So European banks’ asset footprints (loans and other assets) expanded massively throughout the first decade of the euro, especially into the European periphery. Indeed, according the Bank of International Settlements, by 2010 when the crisis hit, French banks held the equivalent of nearly 465 billion euros in so-called impaired periphery assets, while German banks had 493 billion on their books. Only a small part of those impaired assets were Greek, and here’s the rub: Greece made up two percent of the eurozone in 2010, and Greece’s revised budget deficit that year was 15 percent of the country’s GDP—that’s 0.3 percent of the eurozone’s economy. In other words,

the Greek deficit was a rounding error, not a reason to panic

. ........ In such an over-levered world, if Greece defaulted, those banks would need to sell other similar sovereign assets to cover the losses. But all those sell contracts hitting the market at once would trigger a bank run throughout the bond markets of the eurozone that could wipe out core European banks. .....

something had to be done to stop the rot, and that something was the troika program for Greece, which succeeded in stopping the bond market bank run—keeping the Greeks in and the yields down—at the cost of making a quarter of Greeks unemployed and destroying nearly a third of the country’s GDP

. ...... how has such a small economy managed to generate such a mortal threat to the euro? ...... what the European elites buried deep within their supposed bailouts for Greece. Namely, the bailouts weren’t for Greece at all. They were bailouts-on-the-quiet for Europe’s big banks, and taxpayers in core countries are now being stuck with the bill since the Greeks have refused to pay. .......... The final figure “loaned” to Greece was around 230 billion euro. ...... They raised bonds to bail Greece’s creditors—the banks of France and Germany mainly—via loans to Greece. ..... Of the roughly 230 billion euro disbursed to Greece, it is estimated that only 27 billion went toward keeping the Greek state running. Indeed, by 2013 Greece was running a surplus and did not need such financing. Accordingly, 65 percent of the loans to Greece went straight through Greece to core banks for interest payments, maturing debt, and for domestic bank recapitalization demanded by the lenders. By another accounting, 90 percent of the “loans to Greece” bypassed Greece entirely. ...... bondholders, who got to sell their now LTRO-boosted bonds back to the governments that had just bailed them out .........

the whole shebang “was about protecting German banks, but especially the French banks, from debt write-offs.”

....... If 230 billion euro had been given to Greece, it would have amounted to just under 21,000 euros per person. Given such largess, it would have been impossible to generate a 25 percent unemployment rate among adults, over 50 percent unemployment among youth, a sharp increase in elderly poverty, and a near collapse of the banking system—even with the troika’s austerity package in place. ....... someone in core Europe is going to have to own up to all of the above and admit that their money wasn’t given to lazy Greeks but to already-bailed bankers who, despite a face-value haircut, ended up making a profit on the deal. ....... Germany being a serial defaulter that received debt relief four times in the twentieth century ....... We’ve never understood Greece because we have refused to see the crisis for what it was—a continuation of a series of bailouts for the financial sector that started in 2008 and that rumbles on today.

It’s so much easier to blame the Greeks and then be surprised when they refuse to play along with the script.