Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Your real tax rate: 40%

articles.moneycentral.msn.com

Post reply on HN
Print view View original

151–160 of 170 posts

Re: Your real tax rate: 40%

#151

Post by Confusion »

rada wrote: post #65

The actual paper is here: http://www.kotlikoff.net/sites/default/files/Does%20It%20Pay... and perhaps the most practical bit is here: The paper provides four main takeaways. First, thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work, save, or contribute to retirement acounts absent highly advanced computer technology and software. S…

  thanks to the incredible complexity of the U.S. fiscal system, 
  it's essentially impossible for anyone to understand her incentive to work
The second line is true regardless if the first. Under what circumstances is $0.3, $0.6 or $.09 worth performing an extra $1 of labor? It depends on how you value your leisure time, whether you have a specific goal for the money in mind, whether your math skills are sufficient to even understand how much extra the $1 will net you, etc. That's not a reason for not simplifying the system, but it is a reason for the first and second argument to be plainly false: households do not, and are often incapable of, reason(ing) based on the fiscal system.

Re: Your real tax rate: 40%

#152

Post by citrik »

mixmax wrote: post #144
jsankey wrote: post #126

Earlier quoted context omitted.

To be honest your point seems completely vacuous (far more ridiculous than the point you are responding to). It appears to reduce to "Danes are magical - I think". What makes Danes special? Is this not related to the sort of government they would create and support?

"Danes are magical" I can assure you we are not.

Some of them are ;)

Re: Your real tax rate: 40%

#153

Post by lutorm »

yummyfajitas wrote: post #116
VBprogrammer wrote: post #88

Earlier quoted context omitted.

Because America is the greatest country in the world people outside America couldn't possibly be happy with the way they do things?

To be fair, in the few cases where I've seen good data, most groups do better in the US than in their native countries. For instance, Asian Americans have average income of $65,000. Japan, the richest country in Asia, has average income of about $40,000. Japanese Americans also live 2 years longer than Japanese. Swedish Americans are also considerably richer than Swedes, as I discovered today: http://super-economy.bl…

Given the obvious bias displayed in the sweeping conclusions drawn in that post, I'm not inclined to put a lot of faith in the author. There are so many possible biases in that comparison.

For example, it's pretty well accepted that it's better to be high-income in the US than in Sweden, so if you for some reason have a population that is in the upper income levels in the US (due to being white and long-resident, for example) it's not surprising that they would have higher income than in Sweden. As Sweden is a much more redistributive society than the US, the upper income levels in the US are, as a matter of speaking, subsidized by the lower-income levels. And there are a lot more lower income levels in the US than in Sweden.

The conclusion that "The U.S would be even richer and have much less poverty if it was made up entirely of Swedes" is ridiculous. It's equivalent to saying "the US would be even richer if it was made up entirely of the people that make a lot of money", which completely ignores the fact that the US economy depends on low-wage earners to a completely different degree than Sweden does.

Re: Your real tax rate: 40%

#154

Post by Calamitous »

erikpukinskis wrote: post #70
_delirium wrote: post #50

Earlier quoted context omitted.

The people who do live in Denmark seem pretty happy about doing so, though ( http://www.sciencedaily.com/releases/2006/11/061113093726.ht... ). One reason might be that they're fairly wealthy to begin with, so it's taking a large percentage out of a large pie (Denmark's per-capita GDP is ~DKK 375,000 = ~$62,000). The social safety net is also rather strong as a result of the government's large amount of income, and i…

And interestingly their unemployment rate is lower than ours* (at least since 2004). Evidence that providing more government services doesn't lead to people just sitting on their asses and cashing their welfare checks. * http://globaleconstats.com/wp/2009/08/25/the-unemployment-ra...

I don't think anybody's seriously arguing that a majority of people would just sit around, but more government funding or regulation services would throw incentives out of whack.

Re: Your real tax rate: 40%

#155

Post by lsc »

chime wrote: post #4

I've used 50% as a conservative estimate for all my back-of-the-napkin calculations for years and it has served me well, especially in consulting projects. Sure I can lower that by showing expenses etc. but in the general sense, if I charge $100/hour, what I'm really doing is enabling myself to spend $50/hour in the future. The true benefit of this is that I don't have to feel worried about over/under charging my cli…

eh, it always seemed to me that consulting was really only a win if you were consulting to support another business... e.g. if I can earn $100/hr and turn around and plow that money into my hosting business the same year, that seems huge in terms of net-worth growth. Yeah, I still gotta pay the piper when the money comes out, but meanwhile I can use it to grow more money. (and really, once I'm rich, I like to think that losing a bunch to the tax man will hurt less.)

The problem with this approach is, of course, that if you screw up your accounting and get audited, you can come away with some silly high tax bills that can't be discharged by bankruptcy.

Re: Your real tax rate: 40%

#156

Post by ArturSoler »

rubashov wrote: post #147
jsankey wrote: post #126

Earlier quoted context omitted.

To be honest your point seems completely vacuous (far more ridiculous than the point you are responding to). It appears to reduce to "Danes are magical - I think". What makes Danes special? Is this not related to the sort of government they would create and support?

They are high time preference and relatively high IQ. These are the features that distinguish the various ethnicities that build pleasant societies.

I guess you meant to say that they have low time preference.

Re: Your real tax rate: 40%

#157

Post by ArturSoler »

mcknz wrote: post #29

It's not like the entire tax goes into a black hole -- it would be interesting to see what the return is on the average tax rate: how much benefit is derived from state, federal, and city services (roads, water, security, libraries, parks) and benefits (unemployment, social security, disability).

> it would be interesting to see what the return is on the average tax rate

You won't see it. It's not possible to know how receivers of government action value it without selling them for a price (ie, not being government action).

Re: Your real tax rate: 40%

#158

Post by [deleted] »

byrneseyeview wrote: post #101
JoeAltmaier wrote: post #99

Earlier quoted context omitted.

Really rich people have little or no income. The dodge comes in taking your jet, car, residence, living expenses etc as work expenses. While you OWN billions, your income may be thousands.

If you own "billions," you presumably own equity or debt (maybe some commodities, but it's not likely). If you own debt, you're paying taxes on the interest. If you own equity, the value of that equity is the net present value of future cash flows--meaning it's 'taxed' at the rate at which corporations are taxed. In addition, spending a lot of money and then making it a 'work expense' still requires lots of income. Y…

[deleted]

Re: Your real tax rate: 40%

#159

Post by JoeAltmaier »

stinkytaco wrote: post #143
JoeAltmaier wrote: post #97

Earlier quoted context omitted.

Around tax time, thousands of smart people set up shop to "do your taxes". And all of us waste time and effort. Make it automatic and flat, and we ALL get to go back to work. Much larger savings that the total IRS budget.

Where that sounds like a good idea, I think the reality would be grossly unfair. First of all, what's an income? Is it just money I earn? What about interest (paid and earned), capital gains (money I don't actually have, but earned) or government benefits? You're already making exceptions defining income. Second, there's the practical matter of people/business who operate on extremely thin profit margins and if you c…

And its not grossly unfair now?

A flat tax could be modified by a minimum income, age exception etc. But the trick is to make the calculation dead simple, and unavoidable. So thousands of smart people turn their attention to something else, like creating real value for instance.

Re: Your real tax rate: 40%

#160

Post by nanairo »

Confusion wrote: post #151
rada wrote: post #65

The actual paper is here: http://www.kotlikoff.net/sites/default/files/Does%20It%20Pay... and perhaps the most practical bit is here: The paper provides four main takeaways. First, thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work, save, or contribute to retirement acounts absent highly advanced computer technology and software. S…

thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work The second line is true regardless if the first. Under what circumstances is $0.3, $0.6 or $.09 worth performing an extra $1 of labor? It depends on how you value your leisure time, whether you have a specific goal for the money in mind, whether your math skills are sufficient to e…

I beg to differ. Go to someone in the street and tell them if they'll work an extra shift for X amount of money: most people can answer that question.

So maybe you meant that it's impossible to generalise it to the whole population because everyone has different "goal for the money in mind" and value of "leisure time"?

Post reply on HN