Author Topic: Re: Klarman worried about political divide  (Read 14544 times)

Cardboard

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Re: Klarman worried about political divide
« Reply #110 on: January 24, 2019, 10:59:33 AM »
"There is an alternative possibility of sustainable growth, where the needs of the many do not depend on the whimsical generosity of the few."

I am still waiting for your proposal on this "alternative possibility" with the case of billionaires such as Buffett, Gates, Bezos and many others who can basically let their capital compound free of taxes for decades.


Cardboard

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Re: Klarman worried about political divide
« Reply #111 on: January 24, 2019, 11:02:57 AM »
Breaking news!

An economic advisor or expert advising Warren is now defining the solution:

https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html

Stay tuned for more...

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Gregmal

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Re: Klarman worried about political divide
« Reply #112 on: January 24, 2019, 11:06:43 AM »
Breaking news!

An economic advisor or expert advising Warren is now defining the solution:

https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html

Stay tuned for more...

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Warren is only qualified to talk about Native American history....

MarkS

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Re: Klarman worried about political divide
« Reply #113 on: January 24, 2019, 11:14:29 AM »
Tim, Mark,

I would refer you to the following paper on the Income Distribution between National Accounts
https://www.nber.org/papers/w22945.pdf

Specifically the discussion on taxes and transfers (p28-29).

On the top of page 28 the authors clearly state that they use all types of taxes from all sources, federal, state and local.  The chart you cite shows they are using a combined rate of about 24%. Since the Federal payroll tax is about 7.5% this means that approximately two thirds of the combined rate is state and local. So I stand by my comment.

LC

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Re: Klarman worried about political divide
« Reply #114 on: January 24, 2019, 11:18:58 AM »
I'm not saying you were wrong. The authors acknowledge the makeup of taxes. There is a figure in the appendix I believe which does so. I simply think payroll tax it is a valid addition to determine one's overall tax contribution.

I also thought you may have found the topic of transfers and income growth of the middle classes to be insightful. Perhaps not?

Tim, Mark,

I would refer you to the following paper on the Income Distribution between National Accounts
https://www.nber.org/papers/w22945.pdf

Specifically the discussion on taxes and transfers (p28-29).

On the top of page 28 the authors clearly state that they use all types of taxes from all sources, federal, state and local.  The chart you cite shows they are using a combined rate of about 24%. Since the Federal payroll tax is about 7.5% this means that approximately two thirds of the combined rate is state and local. So I stand by my comment.
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LC

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Re: Klarman worried about political divide
« Reply #115 on: January 24, 2019, 11:28:25 AM »
"There is an alternative possibility of sustainable growth, where the needs of the many do not depend on the whimsical generosity of the few."

I am still waiting for your proposal on this "alternative possibility" with the case of billionaires such as Buffett, Gates, Bezos and many others who can basically let their capital compound free of taxes for decades.

You're still waiting because you seem to be forgetting. Many proposals have been suggested over time, right here in the politics forum or on this website in general.

Capping senior management pay would be one, or in general, incentive realignment. Much stronger punishments for environmental destruction, employee hiring collusion, market manipulation and fraud, etc. would other. There are many aspects of tax reform, legal reform, healthcare reform, I don't even know where to start. In other words, change the structure to limit the abuse of externalities, severely punish those who do as an actual deterrent, and fairly tax the ones you cannot limit.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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Gregmal

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Re: Klarman worried about political divide
« Reply #116 on: January 24, 2019, 11:35:33 AM »
"There is an alternative possibility of sustainable growth, where the needs of the many do not depend on the whimsical generosity of the few."

I am still waiting for your proposal on this "alternative possibility" with the case of billionaires such as Buffett, Gates, Bezos and many others who can basically let their capital compound free of taxes for decades.

You're still waiting because you seem to be forgetting. Many proposals have been suggested over time, right here in the politics forum or on this website in general.

Capping senior management pay would be one, or in general, incentive realignment. Much stronger punishments for environmental destruction, employee hiring collusion, market manipulation and fraud, etc. would other. There are many aspects of tax reform, legal reform, healthcare reform, I don't even know where to start. In other words, change the structure to limit the abuse of externalities, severely punish those who do as an actual deterrent, and fairly tax the ones you cannot limit.

Capping pay will just favor a specific few in terms of attracting talent. This is seen first hand in NBA and NHL where they have salary caps. Players who can get max contracts or field multiple offers in the same range pretty much always end up going to the most desirable places. Look at Labron. South Beach, back to his hometown, and LA. If you are a CEO and you have identical offers from similar companies but one is in South Florida, whereas the other is in Oklahoma, who is at a disadvantage? Not fair to shareholders either. If executive pay is capped, that excess money should go back to the owners of the company. Not wasted on low end talent.

Tim Eriksen

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Re: Klarman worried about political divide
« Reply #117 on: January 24, 2019, 11:40:11 AM »
Tim, Mark,

I would refer you to the following paper on the Income Distribution between National Accounts
https://www.nber.org/papers/w22945.pdf

Specifically the discussion on taxes and transfers (p28-29).

Yeah I had already read that.  That is what I was interacting with and noting the flaws (payroll tax inclusion, sales tax % is too high) which so far you have not responded to.

Please explain how the tax burden has shifted from the rich to the bottom 50% when the bottom 50% pays no income tax.

I understand the bottom 50% pay payroll tax although as I point out 1) some of it is refunded as credits which the paper incorrectly treats as income so as to avoid negative tax rates.  2) the bottom 50% get a much higher return than the middle class or the rich due to decreasing credit for higher incomes (roughly 90% credit for the first $1,000 of monthly average income, 32% for the next $4,000 and only 15% for the final $5,000) and 3) it is basically a retirement plan technically termed a tax and should be excluded from tax burden calculation. 4) Social Security is technically off-budget nothing paid in is used for anything else. 
« Last Edit: January 24, 2019, 11:50:52 AM by Tim Eriksen »

JSArbitrage

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Re: Klarman worried about political divide
« Reply #118 on: January 24, 2019, 11:51:56 AM »
BTW - Larry Kudlow is an economist.

No, he isn't.  He got a degree in history and joined an iBank as an analyst.  He then quickly became TV host (which is what he has been doing for the last 40 years.)  I have both (a) more education in economics and (b) more experience in the fields of economics than Kudlow AND I don't think I should be even close to considered an economist.  Has Kudlow published a single thing in economics?  I am not aware of anything (but I am no Kudlow expert.)

I don't know how you define economist.  From where I sit these jobs qualify Kudlow as an economist:

Staff economist for the Federal reserve
Chief economist for Bear Stearns
Office of management and budget as associate director of economics and planning
Economist for National Review

I actually didn't know that Kudlow was chief economist of Bear Stearns.  I am wrong.  He is an economist.

LC

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Re: Klarman worried about political divide
« Reply #119 on: January 24, 2019, 12:29:27 PM »
Capping pay will just favor a specific few in terms of attracting talent. This is seen first hand in NBA and NHL where they have salary caps. Players who can get max contracts or field multiple offers in the same range pretty much always end up going to the most desirable places. Look at Labron. South Beach, back to his hometown, and LA. If you are a CEO and you have identical offers from similar companies but one is in South Florida, whereas the other is in Oklahoma, who is at a disadvantage? Not fair to shareholders either. If executive pay is capped, that excess money should go back to the owners of the company. Not wasted on low end talent.

Is this how the NY Knicks, one of the most valuable and desirable franchises in the NBA, has consistently underperformed the San Antonio Spurs, who rarely makes max offers and is in an entirely undesirable location?

"Lethargy bordering on sloth remains the cornerstone of our investment style."
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