G2A DFL and DSA?
G2A Why are poor people poor?
"As I keep saying, I have no problem with being in the middle of the continuum, therefore I would happily raise the taxes on the rich. However I think we had better be able to provide them value for the money we appropriate.So what do you think, how can wealth transfer be beneficial and not destructive? It can not just be a safety net that catches people and turns into a hammock. It must be like a trampoline that catches them, and promotes and enables their returning to or becoming productive self sustaining members of our society.
"Giving" money to "dependent" people is one sure way to keep them "dependent" and create more "dependent" people, which is good for no one.
If you have kids you are already aware of this, they would happily spend everything you give them and then come back asking for more. Training them about work, rewards, self control, budgetting, saving, etc is our job.
Somehow the "poor" people need to learn that lesson and have their hopes rekindled. Sending them checks for no effort just won't cut it. That is just enabling the co-dependency and propogating the problem."
And after a period of time in the hammock or two bounces, how do we make it so painful that they want to get up and sure don't want to fall again? We simply can not afford a large number of freeloaders in this globally competitive world. Thoughts?
17 comments:
So what do you think, how can wealth transfer be beneficial and not destructive?
Wealth transfer is at the heart of any economy. It allows people to buy things, it creates jobs. An economy in which with wealth isn't transferred would very quickly grind to a halt, and the result would be there would be no wealth for anyone.
--Hiram
In America as even Fox News acknowledges,47% of working Americans don't even earn enough to pay federal income taxes. In America, poverty increasingly is not limited to the poor. Why is that? I think it has to do with income allocation. Increasingly, small segments of the population have been successful at developing strategies, particularly tax strategies, which have shifted wealth to themselves, and the burden of paying for government onto others. That's why we have the income disparity we do, and that's why the rest of us are getting poorer.
--Hiram
Here's an example of how some people are getting richer at your expense:
http://online.wsj.com/article/SB10001424052970204062704577223682180407266.html
--Hiram
Warren Buffett has famously said: "“I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain,”
How does this fit with your experience? When the capital gains rate was cut during the Bush administration, did you increase or decrease the amount you invest? Employees often have an array of retirement investments, 401k's provided by their employers, Roth and classic IRa's, being among the most prominent. Each of these investments has different characteristics including different tax treatments. These differences do affect the way we allocate savings between them. But in your experience, do they affect the overall amount you save?
--Hiram
Wealth transfers done by the force of government are destructive, on both ends of the transaction. Among the rich the create resentment of the freeloaders, and among the freeloaders, resentment of the rich. Wealth transfer, to achieve benefits to "society," must be voluntary, either through normal free market exchanges-- you work for what somebody pays you to do, or vice versa, or you sell them something they want more than the dollars they hold in their hand-- or through charity, in which individuals or collections of them (like a charitable organization) give another individual something of value-- food, clothing, healthcare-- in exchange for that person's gratitude AND with the expectation that the person will make a reasonable effort on their own behalf, say by looking for work.
Our government has built a terrible "poverty trap" in this country, and we are finding out how costly it really is, both financially and in human terms. It's time we quit justifying it and start showing a little REAL compassion towards ALL of us-- poor and rich alike.
J. Ewing
I'm back on my same old soapbox. Even if we concede that government needs to act as intermediary and "force" charity upon us, "for the poor," you cannot justify a "tax the rich" approach. We already tax the bejeebers out of the rich-- the top 2% of earners pay 25% of the taxes, or something like that-- but what happens to the money? If we just cut a check to every poor person in America out of what we spend on wealth transfers alone, A poor family of four would be making something like $72,000/year, tax free! Why is anyone poor? Think how much better our country would be if we found jobs for these folks (or LET them find jobs) and PAID them $72,000/year (or less) for their work?
J. Ewing
Wealth transfers done by the force of government are destructive, on both ends of the transaction.
Are they? Let's take the most prominent form of wealth transfer, Social Security. Current workers transfer money to retirees. Are workers destroyed? Are retirees? Is there anything particularly unfair about the deal? SS is now the only reliable retirement plan most workers will have. If the wealth transfer were implemented by some private agency, would whatever destructive effects be mitigated? Would it somehow be improved if we gave the Mitt Romney's a world, the huge cut they take in those kinds of wealth transfers, both in terms of income, and in terms of tax benefits which only they receive? Are the workers in Mitt Romney deals more dependent on government provided retirement, not just Social Security but also government guaranteed pension benefits, after the deals are completed? How come the government doesn't get a piece of the profit in exchange for picking up a portion of the retirement obligations Mitt dumps off on the government?
--Hiram
We already tax the bejeebers out of the rich--
Check out that piece that was published not in Pravda, but in the Wall Street Journal. If only the rest of us had access to such bejeebers.
--Hiram
Even if we concede that government needs to act as intermediary and "force" charity upon us, "for the poor," you cannot justify a "tax the rich" approach.
The reason, and perhaps the justification, for taxing the rich and not the poor, is that the rich, not the poor, have the money. If we want things like a military to protect us, schools to educate, medical facilities to care for us, the people with money will have to pay for them. Is the argument here, that since the rich pay for these services, they should be the only ones allowed to benefit from them? That they should be the ones who are cared for in our hospitals, taught in our schools, allowed to serve in our military? Apart, that is, from certain of the deserving poor, who can be designated by some death panel as worthy beneficiaries of their charity?
--Hiram
"...Social Security. Current workers transfer money to retirees. Are workers destroyed? Are retirees? " --hiram
Yes. Perhaps not "destroyed," but the program is destructive in that people are harmed. Current workers get a lower salary, and SS is the most regressive of federal taxes. In return they get a promise (that we know can't be kept) that they will receive an income after retirement. If they die before they collect one penny, their family gets ZERO in return for all those taxes paid. Retirees are also living on promises, and earning less, and working longer, than they would need to if they had made their own investments. 30 million Chileans and 100s of workers in Houston can't be wrong.
J. Ewing
WSJ Bain Investments Seems like Bain had some really good investment options in their 401K portfolio. It also seems they were pretty high risk. (ie possibly lose it all) If the IRS is satisfied, I am satisfied.
Now back to the question, how does robbing from the rich help reduce poverty? In particular, the entitlement dependent generational type.
how does robbing from the rich help reduce poverty?
It pays for Social Security, making it possible for our elderly and our disabled to lead decent lives. I pays for our schools, so that our kids can get jobs serving those very rich people we robbed. It pays for the military, so those rich people can live in security.
I would say America has done awfully well by the Mitt Romney's of the world. It strikes me he has little to complain of.
--Hiram
I agree with education and the military, and I would add reduce the National Debt. I think these would all help the poor without increasing dependency.
I disagree with wealth transfer to social security, I believe those older folks need to live with their life choices and we have enough programs for the elderly poor.
I believe those older folks need to live with their life choices
They didn't have a choice exactly, but they paid into it on the promise of benefits. And for the younger generation Social Security is more not less important because they won't have either the pensions or the savings that the older generation has now.
--Hiram
Whether they have adequate savings mostly will depend on the lifestyle they choose.
If they choose immediate gratification and sloth over hard work, education, saving, investing, etc, you are correct that their savings will be inadequate. They will reap what they have sewn. Which was my point.
A timely article... MSN Millionaire Sounds easy... If you are really dedicated, capable and maybe a bit lucky...
"Whether they have adequate savings mostly will depend on the lifestyle they choose."
Oh sure. Some of them will choose not to marry, not to have kids, to live modestly, to never go on vacation, to max out their 401k's. I am sure those folks will do just fine. But I looking forward, I think we have to make the best guesses we can, and to understand the choices the politics of the future will inevitably force on us.
--Hiram
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