When one specific party comes out and says "We want to cut taxes" it NEVER fails that the other trots out their spokesmen/women to say "They are giving a tax break to the RICH!"
Notice which party won control of government. As I said, it's not a compelling argument.
Although I suppose I am more logical than most. FUD seems to persuade a lot of people...
By the way, this has been a great discussion. Unfortunately, there have been too many threads on Slashdot lately that descend into name calling with no attempts to form a rational argument.
If I was going to go the flat tax route, I would include universal basic income. Pay everyone $10k, and then take 25% of all other income. I'm open to higher combinations too. $20k and 50%? Things might get dicey after a 50% tax rate, but I'd be open to going slightly above it to see what happens. Figure out a combination that can would eliminate social welfare programs while balancing the budget.
As noted by another commenter, inflation adjustments would be necessary. I think it would really reduce a lot of government bureaucracy.
I see your point on wealth creation. However, you use Bill Gates as your example. Bill made this new wealth through his company, Microsoft. Although Bill was instrumental, Microsoft created the new industry and the jobs that go with it. The same goes for most wealthy people. Eliminating the corporate tax would make it easier for them to do so.
A strongly progressive personal income tax structure would not harm Bill's ability to grow Microsoft. It would make it harder for him to extract the wealth he created, encouraging him to keep it invested and grow the company. Modest withdrawals from his portfolio would yield modest taxes. It's only when Bill tries to live extravagantly when he would have to pay a high tax rate. Effectively, a $500k Lamborghini becomes a $1M Lamborghini. It's up to him if it's worth it when he decides to sell is stock.
For luxury items, the high price is part of its allure. Bentleys are nice, but they aren't nice enough to justify the price tag. People buy them to show off their money. People with the means, and want to buy those items would still do so.
The poor create no jobs.. Everybody else is probably at least indirectly responsible for some jobs. Even a lot of middle class folks I know (myself included) have a person who cleans house for them. It's not a company, it's a just a person. But she has a full time self-created job.
If the poor created no jobs, they would be dead. There is basic economic activity that must be done to survive. That creates jobs. Larry Ellison likely spends only a small percentage of his income maintaining his personal staff, where a poor person would spend everything.
Yea, let's "soak the rich" they don't deserve to be that wealthy!
I suppose there are some people that make that argument, however that is not a compelling one. The purpose of a progressive tax structure is to compensate for the fixed costs associated with basic human existence. Individuals that have substantially more than those basic needs aren't as affected by taxation.
Rather than thinking tax the wealthy, we should probably think of it as don't tax the poor.
Wealth is not fixed because you aren't including labor or natural processess. Yes there is certain amount of gold in the ground. No, there really aren't a certain number of deer or beef on earth. Yes we can count them. We can also make more. There are rates of resource exchange, production, and consumption and none of it is fixed.
Please see another comment on this thread where we discuss time versus individuals as inputs to wealth. At a fixed point in time, overall wealth is fixed, but varies from individual to individual. The total wealth of course varies with time.
The amount you receive does not decrease just because Bill Gates's share is increasing. That is what it would mean for wealth to be fixed—more pie for anyone else means less for you, not merely relative to them but relative to what you had before. Perhaps you're getting a smaller percentage, but it's still at least as large in absolute terms.
Thought experiment time!
Bob and Jim both have 50% of a pie with a mass of 500g. Bob has 250g and Jim has 250g. Agree?
Now the pie doubles to 1000g, but Bob has 70% of the pie and Jim has 30%. Bob now has 700g of pie, and Jim has 300g of pie. Did I do my math right?
Both Bob and Jim have more pie than before, but Bob received a disproportionately larger increase in pie than Jim, almost a whole pie! This is what I'm talking about. Everyone can become wealthier, while a few can become disproportionately so.
Wealth is not a fixed sized pie over time. It changes size.
That's where we have a disconnect. I am not talking about wealth over time, I'm talking about wealth right now. Wealth right now is fixed. Over time it changes, that's why we have inflation.
So yes, you have less because Bill Gates has more. When the economy grows, everyone benefits. The problem is the wealthy benefit disproportionally more than everyone else. Their portion of tomorrow's pie is bigger.
When people talk about taxing the wealthy, the goal is to make that growth closer to proportional on average. Otherwise we risk having a few individuals controlling the entire pie someday.
None of them rely on coal or iron ore. They rely on human ingenuity and intellectual property, neither of which is inherently limited.
Fundamentally, human labor is the only resource that costs money. You can't put money in the ground and extract coal, oil, or iron ore. You pay people to find it and get it out of the ground. That's why those resources cost money.
Nothing has fundamentally changed to economics. The old laws still apply.
Personally, I believe that the issue is the USA's tax rates are too high on these companies so they are being encouraged to do business overseas instead of in their home country to shelter themselves from the tax rates in the USA.
I entirely agree. More specifically, I would like to see a tax swap between corporations and individuals. It would work like this:
Reduce or eliminate corporate tax
Dramatically increase the tax rates on the upper most individual income tax brackets
Tax dividends and capital gains at the same rate as regular income
Despite what some people want you to think, wealthy individuals are not "job creators". Corporations are! Think about it. That's why my plan would stimulate the economy and still balance the budget.
Executives fund things that have the right buzzwords. Right now it's AI. Before that, IoT. I remember engines getting funded because they were called "Fuel Cells". It's been going on forever.
In May, Cantrell and Gerona published a study that examined 40 EpiPens and EpiPen Jrs., a smaller version, that had been expired for between one and 50 months. The devices had been donated by consumers, which meant they could have been stored in conditions that would cause them to break down, like a car’s glove box or a steamy bathroom. The EpiPens also contain liquid medicine, which tends to be less stable than solid medications.
Testing showed 24 of the 40 expired devices contained at least 90 percent of their stated amount of epinephrine, enough to be considered as potent as when they were made. All of them contained at least 80 percent of their labeled concentration of medication. The takeaway? Even EpiPens stored in less than ideal conditions may last longer than their labels say they do, and if there’s no other option, an expired EpiPen may be better than nothing, Cantrell says.
What part of "Look, when we produce an amazing show like Stranger Things, that's a lot of capital up front, and then you get a payout over many years. " doesn't sound like just that?
"... negative free cash flow will be an indicator of enormous success."
Netflix has a pretty good track record, so unless the CEO is spouting some off-the-rails crap, I'll assume that they have a good plan in place.
In terms of off the rail crap, this statement qualifies in my opinion:
So in some senses, negative free cash flow will be an indicator of enormous success.
Negative cash flow is an indicator of huge expenses. They can either be out of control operating expenses (very bad), capital expenses (investment), or payments on debt. In none of these cases are they an indication of success.
In this case, negative cashflow is an indicator of a huge investment in content creation, which may or may not pan out. The CEO seems to think it's a sure thing, and investing vast sums of cash as a result.
On the other hand, this statement makes perfect sense:
Look, when we produce an amazing show like Stranger Things, that's a lot of capital up front, and then you get a payout over many years. And seeing the positive returns on that for the business as a whole is what makes us comfortable that we should continue to invest and integrate to basically self-develop many more properties as Ted (the content head) can find the appropriate ones.
He's saying the negative cash flow is due to capital expenses, and he expects to have a good return on that investment.
Some of y'all are WAY too hung up on the language, rather than on the message conveyed. Just sayin'
Yes, but if it wasn't for the screwed up wording, this wouldn't be news. The headline would read, "Netflix investing heavily in original content," and no one would care. They've been doing that for some time now.
It's nicer than saying, "We're reinvesting our earnings into the long term growth of netflix rather than pushing net cashflow that can be paid out as investor dividends because I care more about the longevity of Netflix more than your capital gains" to your shareholders.
Most investors will accept that statement eagerly. If investors only cared about dividends, the startups in Silicon Valley would have no funding.
A company flush with cash has two options to make investors happy:
1. Invest the cash into a new area that promises to have a large return on investment (this case).
2. Pay a dividend, or buy back stock.
The worst thing a company can do is sit on loads of cash, like Apple.
I think he's saying that spending money developing new shows is better than resting on their laurels and collecting cash.
That might be what he meant to say, but that's not what he said. He should have said, "we anticipate a reduction in cash as we make substantial investment in our in house programming. We expect a substantial return on this investment in the future."
Instead, he basically said, "High cost structure is an indicator of a successful business." Which is the opposite of true.
That statement makes no sense. He's saying his cash flow will be negative because they will be investing in new products. However, new products are not an indicator for success. Sales is!
Slashdot Mirror
When one specific party comes out and says "We want to cut taxes" it NEVER fails that the other trots out their spokesmen/women to say "They are giving a tax break to the RICH!"
Notice which party won control of government. As I said, it's not a compelling argument.
Although I suppose I am more logical than most. FUD seems to persuade a lot of people...
By the way, this has been a great discussion. Unfortunately, there have been too many threads on Slashdot lately that descend into name calling with no attempts to form a rational argument.
Thank you.
If I was going to go the flat tax route, I would include universal basic income. Pay everyone $10k, and then take 25% of all other income. I'm open to higher combinations too. $20k and 50%? Things might get dicey after a 50% tax rate, but I'd be open to going slightly above it to see what happens. Figure out a combination that can would eliminate social welfare programs while balancing the budget.
As noted by another commenter, inflation adjustments would be necessary. I think it would really reduce a lot of government bureaucracy.
I see your point on wealth creation. However, you use Bill Gates as your example. Bill made this new wealth through his company, Microsoft. Although Bill was instrumental, Microsoft created the new industry and the jobs that go with it. The same goes for most wealthy people. Eliminating the corporate tax would make it easier for them to do so.
A strongly progressive personal income tax structure would not harm Bill's ability to grow Microsoft. It would make it harder for him to extract the wealth he created, encouraging him to keep it invested and grow the company. Modest withdrawals from his portfolio would yield modest taxes. It's only when Bill tries to live extravagantly when he would have to pay a high tax rate. Effectively, a $500k Lamborghini becomes a $1M Lamborghini. It's up to him if it's worth it when he decides to sell is stock.
For luxury items, the high price is part of its allure. Bentleys are nice, but they aren't nice enough to justify the price tag. People buy them to show off their money. People with the means, and want to buy those items would still do so.
The poor create no jobs.. Everybody else is probably at least indirectly responsible for some jobs. Even a lot of middle class folks I know (myself included) have a person who cleans house for them. It's not a company, it's a just a person. But she has a full time self-created job.
If the poor created no jobs, they would be dead. There is basic economic activity that must be done to survive. That creates jobs. Larry Ellison likely spends only a small percentage of his income maintaining his personal staff, where a poor person would spend everything.
Yea, let's "soak the rich" they don't deserve to be that wealthy!
I suppose there are some people that make that argument, however that is not a compelling one. The purpose of a progressive tax structure is to compensate for the fixed costs associated with basic human existence. Individuals that have substantially more than those basic needs aren't as affected by taxation.
Rather than thinking tax the wealthy, we should probably think of it as don't tax the poor.
Wealth is not fixed because you aren't including labor or natural processess. Yes there is certain amount of gold in the ground. No, there really aren't a certain number of deer or beef on earth. Yes we can count them. We can also make more. There are rates of resource exchange, production, and consumption and none of it is fixed.
Please see another comment on this thread where we discuss time versus individuals as inputs to wealth. At a fixed point in time, overall wealth is fixed, but varies from individual to individual. The total wealth of course varies with time.
The amount you receive does not decrease just because Bill Gates's share is increasing. That is what it would mean for wealth to be fixed—more pie for anyone else means less for you, not merely relative to them but relative to what you had before. Perhaps you're getting a smaller percentage, but it's still at least as large in absolute terms.
Thought experiment time!
Bob and Jim both have 50% of a pie with a mass of 500g. Bob has 250g and Jim has 250g. Agree?
Now the pie doubles to 1000g, but Bob has 70% of the pie and Jim has 30%. Bob now has 700g of pie, and Jim has 300g of pie. Did I do my math right?
Both Bob and Jim have more pie than before, but Bob received a disproportionately larger increase in pie than Jim, almost a whole pie! This is what I'm talking about. Everyone can become wealthier, while a few can become disproportionately so.
Yes, it's very important to have inflation compensation that is reliable, accurate and not politically influenced!
Wealth is not a fixed sized pie over time. It changes size.
That's where we have a disconnect. I am not talking about wealth over time, I'm talking about wealth right now. Wealth right now is fixed. Over time it changes, that's why we have inflation.
So yes, you have less because Bill Gates has more. When the economy grows, everyone benefits. The problem is the wealthy benefit disproportionally more than everyone else. Their portion of tomorrow's pie is bigger.
When people talk about taxing the wealthy, the goal is to make that growth closer to proportional on average. Otherwise we risk having a few individuals controlling the entire pie someday.
None of them rely on coal or iron ore. They rely on human ingenuity and intellectual property, neither of which is inherently limited.
Fundamentally, human labor is the only resource that costs money. You can't put money in the ground and extract coal, oil, or iron ore. You pay people to find it and get it out of the ground. That's why those resources cost money.
Nothing has fundamentally changed to economics. The old laws still apply.
They rely on human ingenuity and intellectual property, neither of which is inherently limited.
I'm going to go startup a multi-billion dollar company right now. Apparently, the things I need are abundant!
Bullshit, human ingenuity is a finite resource. Companies have entire departments devoted to managing those resources. Human resources.
Talented people are rare and therefore costly. The rules haven't changed.
Wealth is not a fixed sized pie. I don't have less because Bill Gates has so much more. Remember, a rising tide (or ocean) lifts all boats...
Wealth is absolutely a fixed size pie. Scarcity of resources is the fundamental problem that economics tries to solve.
The reason most small business owner's don't typically incorporate are:
Much more small businesses would incorporate if it wasn't for our corporate tax structure penalizing them for doing so.
Personally, I believe that the issue is the USA's tax rates are too high on these companies so they are being encouraged to do business overseas instead of in their home country to shelter themselves from the tax rates in the USA.
I entirely agree. More specifically, I would like to see a tax swap between corporations and individuals. It would work like this:
Despite what some people want you to think, wealthy individuals are not "job creators". Corporations are! Think about it. That's why my plan would stimulate the economy and still balance the budget.
Executives fund things that have the right buzzwords. Right now it's AI. Before that, IoT. I remember engines getting funded because they were called "Fuel Cells". It's been going on forever.
There is a thing called google you can use to learn more
Google says your wrong.
A stockholder isn't the same as an investor. Stop using the terms interchangeably.
Please explain your reasoning.
What part of "Look, when we produce an amazing show like Stranger Things, that's a lot of capital up front, and then you get a payout over many years. " doesn't sound like just that?
"... negative free cash flow will be an indicator of enormous success."
Netflix has a pretty good track record, so unless the CEO is spouting some off-the-rails crap, I'll assume that they have a good plan in place.
In terms of off the rail crap, this statement qualifies in my opinion:
Negative cash flow is an indicator of huge expenses. They can either be out of control operating expenses (very bad), capital expenses (investment), or payments on debt. In none of these cases are they an indication of success.
In this case, negative cashflow is an indicator of a huge investment in content creation, which may or may not pan out. The CEO seems to think it's a sure thing, and investing vast sums of cash as a result.
On the other hand, this statement makes perfect sense:
He's saying the negative cash flow is due to capital expenses, and he expects to have a good return on that investment.
Some of y'all are WAY too hung up on the language, rather than on the message conveyed. Just sayin'
Yes, but if it wasn't for the screwed up wording, this wouldn't be news. The headline would read, "Netflix investing heavily in original content," and no one would care. They've been doing that for some time now.
It's nicer than saying, "We're reinvesting our earnings into the long term growth of netflix rather than pushing net cashflow that can be paid out as investor dividends because I care more about the longevity of Netflix more than your capital gains" to your shareholders.
Most investors will accept that statement eagerly. If investors only cared about dividends, the startups in Silicon Valley would have no funding.
A company flush with cash has two options to make investors happy:
1. Invest the cash into a new area that promises to have a large return on investment (this case).
2. Pay a dividend, or buy back stock.
The worst thing a company can do is sit on loads of cash, like Apple.
Exactly!
I think he's saying that spending money developing new shows is better than resting on their laurels and collecting cash.
That might be what he meant to say, but that's not what he said. He should have said, "we anticipate a reduction in cash as we make substantial investment in our in house programming. We expect a substantial return on this investment in the future."
Instead, he basically said, "High cost structure is an indicator of a successful business." Which is the opposite of true.
That statement makes no sense. He's saying his cash flow will be negative because they will be investing in new products. However, new products are not an indicator for success. Sales is!