OT: Then and now

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Douglas Johnson wrote:

Here's another trick. In places where judges are elected, get the local bar association's rating sheet of candidates and vote them in reverse order. For example, a judge that all the lawyers like is probably a bad hat.
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Thank God we don't get all the government we pay for. -- Doug
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"dadiOH" wrote:

Where does the cost of gov't services for the more than 50 million population increase from 1950 to today factor into the above?
BTW, there was a budget surplus when Bush came into office.
Lew
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Lew Hodgett wrote:

Good point. I meant to factor it in and forgot to do so. Actually, it is about 150 million increase...about double. Which means the feds are doing *much* better than I originally stated...they are only spending 5 times as much, not 10.
Add in local and state increases and I bet it is back up to 10X overall. Probably more.
--

dadiOH
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"dadiOH" wrote:

I still remember standing in my hobby shop and listening to the owner bitch about taxes and how federal, state, and local consumed 35%-37% of GDP.
Particular emphasis was placed on the amount of hidden taxes placed on a loaf of bread.
The year was 1947-48 time frame and HST was president..
More than 60 years later, federal, state, and local taxes still consume 35%-37% of GDP.
11 presidents later, nothing much has changed.
Government is how we choose to regulate our society.
It has a cost which is less than the cost of anarchy.
Lew
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This reminds me of the old parable that bears repeating (maybe sending it to Washington??)
Your Taxes Explained!
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
- The first four men (the poorest) would pay nothing.
- The fifth would pay $1.
- The sixth would pay $3.
- The seventh would pay $7.
- The eighth would pay $12.
- The ninth would pay $18.
- The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men --- the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
- The fifth man, like the first four, now paid nothing (100% savings).
- The sixth now paid $2 instead of $3 (33%savings).
- The seventh now pay $5 instead of $7 (28%savings).
- The eighth now paid $9 instead of $12 (25% savings).
- The ninth now paid $14 instead of $18 (22% savings).
- The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
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On 2/2/2010 11:36 AM, Lew Hodgett wrote:

You mean like the 50+% of the Federal budget spent on:
- People refusing to take responsibility to save for their retirement, medical care, and wellbeing in old age?
- People repeatedly making bad personal choices and then demanding the everyone else pay to remediate the consequences?
- People having far more children than they can afford and expecting us all to pay for their cost of care?
The government consumes what it does because FDR and his minions have repeatedly, aggressively, and blatantly ignored the doctrine of enumerated powers and arrogated power to the Federal government it does not have. They do this to support the culture of mooching that elects them.
--
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Tim Daneliuk snipped-for-privacy@tundraware.com
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dadiOH wrote:

But the administration is TRYING to reduce the deficit. On Jan 1st, 2011 the following tax increases will take place:
* Top bracket goes from 35% to 39.6% * The 25 percent tax bracket will revert to 28 percent; * The 28 percent bracket will increase to 31 percent * The 33 percent bracket will increase to 36 percent. (If you have $50,000 of adjusted gross income, your tax goes up by $1,500 (3%). It's for the children.) * The special 10 percent bracket is eliminated * The tax on dividends will rise from 15% to 39.6% * Capital gains from 15% to 20% * The estate tax will rise from 0% to (as much as) 45%, perhaps retroactively for 2010 * The Alternative Minimum Tax will latch in at $45,000 (joint return) * The state sales tax exemption will no longer be available * $250 tax credit for teachers expires * College tuition deduction of $4,000 disappears * The first $2,400 of unemployment compensation will be taxed (it's not now) * Standard deduction for property taxes vanishes.
All of the above will take place unless the Democrats in control of the government vote to reduce taxes or the sun suddenly expires.
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On Tue, 02 Feb 2010 09:56:13 -0600, HeyBub wrote:

Back in those '50s, the top tax bracket was 90% or so and corporate taxes made up more of the governments income than personal income taxes. In spite of those tax rates, the economy flourished. Go figure :-).
--
Intelligence is an experiment that failed - G. B. Shaw

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wrote:

So when do you get to the list of spending cuts?
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And what they don't say is the incremental tax - the tax between one Adjusted gross income to anther can be nearly 50%. That 20k bonus you got is down to 11k .
Martin
HeyBub wrote:

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HeyBub wrote:

The above list was taken from a Reuters news report. Reuters has, at the request of the White House, taken down the report.
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wrote:

The White House pointed out to Reuters that the article was based on a "cough, cough" inaccuracy.
Reuters made the decision to pull the article completely because it could not be corrected.
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we should restore the tax brackets from the 50's - 70's until we're no longer at war.
scott
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Scott Lurndal wrote:

You do realize that very few people paid at that 90% rate don't you? Only those who happened to suddenly come into wealth without a good tax lawyer paid that rate. During those years, the rich had numerous loopholes and tax shelters. Taxing at 90% sounds like a great idea to someone who goes for the class-envy card, but the reality is that no one with a lick of sense is going to expend the time and effort required to make that kind of money only to get 10% of the fruits of their labor.
What the Kennedy tax cuts and later Reagan tax cuts did was make it worthwhile again for people to succeed and not have to hide their money in tax shelters that did little for growing the economy.

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There is never a situation where having more rounds is a disadvantage

Rob Leatham
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On 2/3/2010 11:41 PM, Mark & Juanita wrote:

There is another side to this issue that I experienced personally.
During the late 70's, and until Reagan came into office in the early 80's, the amount of money available for investing in entrepreneurial enterprises - money looking for investments in businesses to take advantage of tax deductions for things like IDC's (intangible drilling costs), depletion allowances, and other business ventures - was amazing plentiful.
Folks in those higher tax brackets would had much rather legitimately invested in an enterprise, that money which would have otherwise gone to taxes if they did not.
The net result of that period of high tax rates, coupled with tax code incentives, was a plentiful supply of money for the entrepreneur and new businesses, some otherwise too risky (like drilling for oil/gas) without the choice of being used to pay taxes, or of investing.
Immediately upon Reagan taking office, that money literally vanished from the table ... I remember around '82, that it was like someone turning off a faucet.
Like I say, I lived this, intimately and to my detriment as a businessman ... AAMOF, were it not for that money drying up, my dreamed of 30 well drilling program in SE Colorado (of which only three "geologic successes, but hydrocarbon failures" were drilled before this money dried up) may well have succeeded in finding another Sorrento Field, making us that much less dependent upon foreign oil, and I would be typing this from the French Riviera instead of waiting for the rain to stop so I can go to the shop to finish a chicken coop (of all things), or not. :)
IOW, it was, prior to Reagan, the HIGHER individual tax rate, and the tax code, not lower taxes, that indeed drove investment in small business.
Just something for the proponents of Reaganomics to consider ... there is ALWAYS unintended consequence to the best of intentions.
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True, but that money only went to the VERY few small business ventures that could take advantage of tax deductions that exceeded cash invested (like oil drilling with depletion allowances that could exceed costs incurred). They were buying losses to take tax deductions that exceeded the losses. A rational approach is to encourage investment in businesses designed to actually make money, not designed to make tax deductions.
A rational taxing system is one where all decisions are made for business purposes, not tax purposes - I do not know of any country with such a rational system, though :-(
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On 2/4/2010 5:29 PM, dhall987 wrote:

Your words, not mine ...
Depletion allowances allow either a statutory or cost method of sheltering only some of the income from producing wells from _gross_ income derived from the sale of product.
IDC's are those expenses deductible up front from drilling expenses, whether the drilling was sucessful or not, and not designed as "tax deductions that exceeded cash invested", but used instead to subsidize the "risk" involved. Not all ventures carry the same risk ... however, it is generally accepted that the greater the risk, the greater the reward.
Nonetheless, that was not my point ... the point was a reduction in the availability of investment funds brought about by a reduction in selected tax rates, irrespective of the type of venture. The O&G business was not the only sector to suffer this phenomenon.
However, and sadly, the state of affairs mentioned in the original post was one of the biggest factors in killing domestic exploration in this country, to the detriment of our energy policies, and to all to this day.
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Swingman wrote:

Yeah, I remember those provisions of the tax code.
I was invited to buy into a sand pit. The money worked as follows:
* As the sand was sold, you took a depletion allowance on the diminishing resource (the sand). * Ultimately, you had one big honkin' hole in the ground. You then charged people to dump stuff in the hole (trees, concrete, etc.). As the hole filled, you got another depletion allowance as the resource diminished (the hole). * When the hole filled up, you covered the site with top soil and sold the ten acres for low-cost housing.
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On Wed, 03 Feb 2010 22:41:48 -0700, Mark & Juanita wrote:

True. But as I said in an earlier post, corporations still wound up paying more taxes than individuals. And it was mostly the rich who were investors in the stock market back then.
--
Intelligence is an experiment that failed - G. B. Shaw

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