American Budget Cuts

Here's a graph of the top marginal tax rate for the past century. Note that during the only period since WWII when the rate was lower than it is today, so was the threshold --- down to ~$50,000 in today's money. Today the threshold is seven times higher in real terms. No, do tell. Will it involve goosestepping and tiny mustaches? Yes, he's a fictional character. Back in real life any rich man who decides that he'd rather be poor so long as he can also be useless could (in my opinion, to considerable advantage) be easily replaced by someone who's less of a bloody fool.Edited by Dr Adequate, : No reason given.Edited by Dr Adequate, : No reason given.Edited by Dr Adequate, : No reason given.

I'm sorry, am I communicating with a 5 year old? 'Cos I thought you were a fucking scientist, and I usually expect a little more intelligence in the replies I receive from scientists.What is this "money he made at Microsoft"? Are we talking about the wage he was paid? Are we talking about bonuses he received? Are we talking about the wealth created by selling shares in what was originally his own company?And what has any of this to do with the general concept of profit vs efficiency?Any chance you could get back to me on my three points?

Why even bother responding to a Randroid? Anyone who thinks that Atlas Shrugged is in any way relevant to reality is delusional, not to mention utterly lacking in ethics.

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If a free society cannot help the many who are poor, it cannot save the few who are rich. John F. Kennedy - Amherst College, Oct 26, 1963

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I am for one enjoying the banter this thread has stirred.
My comments are that I have to agree the US spends to much money on the military. For better or worse it is the ebb and flow of the US form of government and 2 party system that has sustained our dynamic country all this time.It does seem however the middle of the politcal bell curve is shifting futher and further to the right and so what was once considered right wing conservative is unable to pass a Republican purity test. Hence more moderate politicians being squeezed to the right.Nuclear power plants I feel is a bad idea. From what I know about them, they are expensive poisonous hot water heaters that will add to our problems in the form of keeping up the maintainance and doing away with the waste.
Electric cars are a good idea, except the power that churns them is from most likely fossil fuels.
I think solar and wind and wave technology makes good sense if the infrastructure and investment in this technolgy can ever become profitable. Once something is profitable it will be embraced. Which is why corporations embrace war and why such a large slice of pie goes to this end. Who is paying for the American wars and who is profiting? Must there always be a perpetual war between Oceania, Eurasia and Eastasia? What this world is witnessing is a tremedous change. Look at the middle east. Wow! But in the face of change is the old guard and fundalmentalist clinging ever harder to the old ways. Why change it if is is not broke? Because it is broke, and we are broke . Americans are willing to pay a athlete tens of millions to play a sport.
But will balk at paying his taxes.

Of course selling of stocks is not included, but I do include salary, bonuses and dividends. With money going out for things that do not increase effeciency I thought the link would be obvious.

You know wrong.Nuclear power is by far the cheapest method of power generation, and modern reactors are extremely safe.Quite literally, more radiation is released by a coal burning power plant than a nuclear reactor.France produces something like 80% of their power with nuclear plants, and has for decades, without incident.Nuclear power is also just about the only way to move forward - with fossil fuel drying up and polluting so badly, with power requirements only ever rising particularly in the developing world, and with thoughts of electric cars, only nuclear power plants have an easily available, plentiful, reliable fuel source capable of keeping up with demand.Solar/wind/geothermal/wave power just don't cut it, and coal/oil/gas won't be around forever.

No, it reduces the incentive to pay employees and investors, since those are inefficiencies. Obviously - that's why laying off workers is considered "more efficient." I'm simply using it as it applies to economics:

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An economic system is said to be more efficient than another (in relative terms) if it can provide more goods and services for society without using more resources.

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http://en.wikipedia.org/wiki/Economic_efficiencyWhen the CEO is paid 10 million a year instead of 5, that's 5 million dollars being lost to the company instead of being used for production of the goods and services the company provides. They wouldn't have to make any more money (resources) to pay the CEO 5 million instead of 10 and recoup that extra 5 mil, so it's clearly an inefficiency.Profits are always inefficient, which is why competition drives them down. But the profit motive drives profits up - because the profit motive is defined as people wanting more profits - which means its driving a specific inefficiency up.Profits are inefficient. ...No, it's not. That's not what "aggregate" means.What you've said makes no sense at all because you don't know what I meant by "aggregate spending" and "aggregate income." Your spending is my income, it's not your income. You can't spend and make the same dollar at the same time! Sure they are, they're for sure going to waste some of it. The human profit motive all but ensures it. That's where overinflated CEO salaries come from - it's waste created by the human profit motive. It's a direct refutation of your position that the market will bear the price of health insurance for high-risk pools. It won't, which is why no one is in that business.People who need health care can hardly be blamed for lacking what no business is prepared to sell them. But they do need it. The failure of the market to sell it necessitates government intervention, since the role of government is to intervene where the free market fails. I was talking about doctors, actually, since that's what we're talking about - paying doctors for providing health care. Again - doctors deserve to be paid when they provide life-saving services. You appear to believe that doctors don't deserve to be paid unless they've saved the life of someone affluent.I don't believe that the life of an affluent person is somehow more worthy of medical care than the life of someone not. Can you elaborate on your view that it is? Don't be absurd. Certainly you can! Sustainability is not a condition of employment; how else would miners be able to earn a wage? Since miners get paid, we know that people who perform unsustainable actions - there won't be ore to mine forever - can and do expect to get paid for it.Edited by crashfrog, : No reason given.

Do you understand how a progressive income tax system works?
You might want to explore the concepts of marginal and effective tax rates.

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Facts don't lie or have an agenda. Facts are just facts

Hmmm, so... When the CEO is paid $10,000 a year instead of $5,000 that's $5,000 dollars being lost to the company instead of being used for production of the goods and services the company provides. They wouldn't have to make any more money (resources) to pay the CEO $5,000 instead of $10,000 and recoup that extra 5 thou, so it's clearly an inefficiency.Is this your argument? If not, can you explain your reasoning behind the figures you have chosen? Ah, so I can increase the profitability of my own company by simply being more "profit motivated"? Please explain how I can gain this motivation, and how this will in turn improve the profitability. Which inefficiency would it be in my own company? I run a small IT supplies and services company, with a turnover of around $5m. I'm confused. Surely the larger the salary (a cost) obviously the smaller the profit. Please explain.

Sure. Any time you pay more for something than you have to, that's inefficiency from your perspective.Clearly the profit motive is an inefficiency, because it's more expensive to employ someone earning a wage than an unpaid volunteer. Inefficiencies can't always be eliminated, of course, but many can. Well, if you prioritize profits over other things, there are certainly things you can do to increase profits. You could steal labor instead of purchasing it. You could steal resources instead of purchasing them. You could influence politicians to grant you a regulatory monopoly. You could sell things that cost less to produce - like "nothing" - to people who think they're buying something expensive.For instance, you could charge them for the Brooklyn Bridge but sell them nothing. Your salary and your portion of the profits. Employing you instead of employing someone just like you who works for less is an inefficiency, and the only reason you don't rectify that inefficiency is your own profit motive - you want to keep getting paid. I'm sure you have some self-serving story about how you're the best person for the job, but the UK has plenty of IT service/supply companies that make just as much money as yours but their CEO's (or whatever you are there) make less money than you. No, the larger the profit. The more you get paid, the more you profit, obviously. Businesses don't have profit motive because businesses don't have any motives. They're organizations, not organisms! Profit motive is experienced by humans, not by businesses, and the result is to reduce business profits to increase personal profits. Most businesses employ someone who's job is to prevent all but a very small number of people at the top from being able to do this, however; they're usually called the "CFO" or some such.

So you exclude the one element related to profit and we're back to salaries again, which have nothing to do with the company profit... Is profit something that "goes out"? I asked about this before but you ignored me then. I guess I'll expect the same again.

ok, before I get into this, just want to confirm the following: Ah, so all along you have not been talking about corporate profits but instead personal profits of individuals. So you are not complaining about corporate profits. You are not claiming that corporate profits are a sign of inefficiency within the company. And in fact, you are saying that personal profits (in the sense of CEO salaries) are a bad thing in that they are a drain on the company profits (which they are) and I assume then that you are regarding company profits as a good thing?Do I have this straight?

Trading shares does not take capital away. It just trades hands.You may disagree with my view, but I really don't see the difference between skimming off the top and the extraordinary salaries that CEO's make nowadays. For all intents and purposes, it is a drain on capital. The portion of the profit taken out of the company for personal use? Yes. Isn't that the whole point, to make the owners of the company rich?Edited by Taq, : No reason given.

Why would anyone buy those shares if those shares do not receive a dividend? What do you think drives the capital appreciation of those shares? Why would anyone ever buy a share that does not compensate for the risk inherent in that share? I know you don't see the difference, and that is what I'm complaining about. You and Crash and Rrhain the other week have very little clue about all of this and yet let rip with emotional and hyperbolic rhetoric. It's no wonder the right find such behaviour hilarious.And in fact, I totally agree with you regarding the stupid levels of board level compensation. Actually, it's not the level that I disagree with the most but the no-downside reward structure that is in place. Same with trading remuneration in the banks. I was writing and advising on this very issue 11 years ago on the back of the emerging market crisis... and nothing has changed. By personal use, do you mean the use made of it by the pension funds? They form one of the largest groups of owners of share capital. Is that who you are complaining about?And back to my first point. Should shares not pay dividends? Who in their right mind would exchange an essentially risk-free dollar for a dollar share of some company, with no compensation for the risk?

To be fair, all along I've been talking about profit motive - you can go back and confirm this - and clearly, profit motive is something that only people can experience; businesses are organizations not organisms and therefore can have no motives of their own.It would make no more sense to suggest that businesses were motivated to make profits than to say that letters were motivated to be in alphabetical order. No, corporate profits would be an inefficiency of my interactions (buying, selling) with the company. When I buy a widget from WidgetCo, the profit WidgetCo makes on the widget is an inefficiency in the transaction of buying a widget. I want that transaction to be as efficient as possible, which means I'd like WidgetCo's profits to be as low as possible, because WidgetCo's profits are an inefficiency in this transaction. If they took lower profits I could buy more widgets (production) for the same amount of money (resources), by definition more efficient. I don't recall saying that they were a "bad thing"; I'm simply saying they're an inefficiency, which they are, and that therefore it's inaccurate to say that the profit motive causes reductions in inefficiency. That's not the case because the profit motive is the desire to have larger profits, which are inefficiencies. To the extent that there's a profit motive to reduce any inefficiency it's only a function of the profit motive creating a desire to exchange one kind of inefficiency - say, underproductive labor - for another, specifically profits.If someone at your business figures out a way to reduce an inefficiency in your business, he's going to want to be rewarded for it. Specifically he wants the inefficiency he's discovered and corrected to be replaced by as large a personal profit for himself as possible, and the limit of that is obviously the entire value of the reduced inefficiency (since you would not reward someone 100 dollars for saving you 99), which means his personal profit motive has led him to do nothing at all but exchange one inefficiency for another: increased profits for himself.