different point of view

I'm not even sure what to write here in response because this letter conveys exactly what my sentiments are. I'm not sure what I can add to this, because it seems everything I could have said has been already done so far more eloquently and convincingly than I could have.

In fact when I heard that the capital gains tax was going to be hiked up, I was pretty demoralized about what kind of impact it would have on investment into businesses (particularly start ups) and the decrease in capital flow.

Thanks for pasting this letter, didn't know it existed, and I wish more people could see this message.

The guy is right. It's a shame that instead of turning to people like him to help turn around the economy the U.S. government is doing the opposite - increasing taxes and relying on government spending to stimulate the economy.

this is retarded, first of all he sends a fucking letter persuading his workers to vote for McCain? holy shit.

Also what % of CEOs sacrificed their youths and built their companies from scratch? not many my friend, many if not most CEOs are sons or grandsons of the ones who built it, or they are harvard leeches that simply get in the spot because of connections.

He bitches about taxes? does that douchebag realizes USA is one of the lightest if not the lightest taxed 1st world country in the world? yeah.. he should move his factory to Denmark, lest see how he likes his taxes and how his employees checks sudenly are tripled up.

Also tax-cut on industry =/= tax cut in high income, you can stimulate industry by making tax cuts in it, not by income, fuck their income.


If his letter were any true all european nordic countries were in the shit hole, when you "stimulate" as he wants to all you do is get the rich richer and the poor poorer, exactly the case of mexico, Carlos Slim Helu had all the cuts (avoided taxes, corrupt mother fucker) and yeah he made a shit load of bussiness and jobs etc, yet Mexico is as poor as ever and he is the richiest person in the world.

On January 23 2009 21:06 Baal wrote: this is retarded, first of all he sends a fucking letter persuading his workers to vote for McCain? holy shit. Also what % of CEOs sacrificed their youths and built their companies from scratch? not many my friend, many if not most CEOs are sons or grandsons of the ones who built it, or they are harvard leeches that simply get in the spot because of connections. He bitches about taxes? does that douchebag realizes USA is one of the lightest if not the lightest taxed 1st world country in the world? yeah.. he should move his factory to Denmark, lest see how he likes his taxes and how his employees checks sudenly are tripled up. Also tax-cut on industry =/= tax cut in high income, you can stimulate industry by making tax cuts in it, not by income, fuck their income. If his letter were any true all european nordic countries were in the shit hole, when you "stimulate" as he wants to all you do is get the rich richer and the poor poorer, exactly the case of mexico, Carlos Slim Helu had all the cuts (avoided taxes, corrupt mother fucker) and yeah he made a shit load of bussiness and jobs etc, yet Mexico is as poor as ever and he is the richiest person in the world.

baal, you should be banned from jyang's blogs. You're truly retarded.

the best part about your post is when you totally discredit any opinion with this gem... "Carlos Slim Helu had all the cuts (avoided taxes, corrupt mother fucker) and yeah he made a shit load of bussiness and jobs etc"

aka

Ya fuck him for trying and fuck all those people he gave jobs to! MEXICANS ARE STILL POOR!'

Afaik every single publicly traded corporation cannot give executive positions by bloodline. The private firms perhaps, but those firms are literally built from the group up by the founders and their family.

Ball, I can't believe you actually think that "Harvard Leeches" didn't work their butts off during the 10 years prior in order to get into the most prestigious university in the United States, and maybe even the world? Are you fucking kidding me? Not even the strongest of legacy families aren't a shoo in at these places. I knew someone whose sister got rejected by Princeton even though their family was a legacy family of the university starting from AARON BURR (the guy who shot Alexander Hamilton in a duel). A 200 year legacy family member getting rejected.

By the way under the Obama administration, Corporate Taxes, Capitcal gains Taxes, and personal income taxes are all going up. So yes, the industry IS being taxed more in the coming years. Higher capital gains taxes means that VC activity and general investment toward high risk start ups exemplified by the High tech startups ranging from the Silicon Valley in California to the Research Triangle in South Carolina will be deeply affected.

Financial firms and Oil companies are definitely looking at going offshore, Exxon was already thinking of going overseas during the 90's, and this may push things over the top.

lol coming from sweden this sounds really weird, since USA pretty much is a tax paradise for comapanies compared to here.

agree pretty much what baal said even tough i think it's a bit harshly calling the guy a retard. it's pretty obvious he is dissapointed because of what has happened with the financial crisis and all, and now he needs a scapegoat.

All CEOs are not created equal. He makes the case quite well (and I agree with him) that what we need is a system that encourages entrepreneurship and startup businesses. If we kill that then we really do have no mechanism for the kind of economic growth that made the US into the world power it is today. But just because the founder of a startup who sacrifices as much as this guy did has the same job title as the guys in charge of some of the megacorps around doesn't mean they share anything more than the name. "Business" is not a monolithic entity and in fact represents a large number of different interests with very divergent goals. Sloppiness of thought is encouraged by the broad use of such poorly-defined terms, and the continual use of such rhetoric is a black mark on both major parties as far as I'm concerned.

On January 23 2009 21:07 Svenman87 wrote: Show nested quote + On January 23 2009 21:06 Baal wrote: this is retarded, first of all he sends a fucking letter persuading his workers to vote for McCain? holy shit. Also what % of CEOs sacrificed their youths and built their companies from scratch? not many my friend, many if not most CEOs are sons or grandsons of the ones who built it, or they are harvard leeches that simply get in the spot because of connections. He bitches about taxes? does that douchebag realizes USA is one of the lightest if not the lightest taxed 1st world country in the world? yeah.. he should move his factory to Denmark, lest see how he likes his taxes and how his employees checks sudenly are tripled up. Also tax-cut on industry =/= tax cut in high income, you can stimulate industry by making tax cuts in it, not by income, fuck their income. If his letter were any true all european nordic countries were in the shit hole, when you "stimulate" as he wants to all you do is get the rich richer and the poor poorer, exactly the case of mexico, Carlos Slim Helu had all the cuts (avoided taxes, corrupt mother fucker) and yeah he made a shit load of bussiness and jobs etc, yet Mexico is as poor as ever and he is the richiest person in the world. baal, you should be banned from jyang's blogs. You're truly retarded. the best part about your post is when you totally discredit any opinion with this gem... "Carlos Slim Helu had all the cuts (avoided taxes, corrupt mother fucker) and yeah he made a shit load of bussiness and jobs etc" aka Ya fuck him for trying and fuck all those people he gave jobs to! MEXICANS ARE STILL POOR!'

i didnt say Mexicans are still poor, i said mexicans are even more poor and Carlos Slim is a BIG reason why you idiot.

Carlos Slim didnt "try" you idiot, he heritaged the biggest monopoly in the country and with dirty tatics, deals with corrupt politicians and raping the whole industry in the country he now is owner of the entire country, you oversimplify this to a childish level, shut the fuck up when u have no clue what you are talking about.

On January 23 2009 21:15 Uptown wrote: Afaik every single publicly traded corporation cannot give executive positions by bloodline. The private firms perhaps, but those firms are literally built from the group up by the founders and their family. Ball, I can't believe you actually think that "Harvard Leeches" didn't work their butts off during the 10 years prior in order to get into the most prestigious university in the United States, and maybe even the world? Are you fucking kidding me? Not even the strongest of legacy families aren't a shoo in at these places. I knew someone whose sister got rejected by Princeton even though their family was a legacy family of the university starting from AARON BURR (the guy who shot Alexander Hamilton in a duel). A 200 year legacy family member getting rejected. By the way under the Obama administration, Corporate Taxes, Capitcal gains Taxes, and personal income taxes are all going up. So yes, the industry IS being taxed more in the coming years. Higher capital gains taxes means that VC activity and general investment toward high risk start ups exemplified by the High tech startups ranging from the Silicon Valley in California to the Research Triangle in South Carolina will be deeply affected. Financial firms and Oil companies are definitely looking at going offshore, Exxon was already thinking of going overseas during the 90's, and this may push things over the top.

oh really?



This guy graduated from Yail... he doesnt seem to bright to me.

Anybody with a properly functioning brain can easily cruise through Hardvard, they dont have the money to do so tho, and even if you do, you are not friends with the families that matter.

On January 23 2009 21:19 SpasticInk wrote: lol coming from sweden this sounds really weird, since USA pretty much is a tax paradise for comapanies compared to here. agree pretty much what baal said even tough i think it's a bit harshly calling the guy a retard. it's pretty obvious he is dissapointed because of what has happened with the financial crisis and all, and now he needs a scapegoat.

I call him a retard because this idiot complains about a non-existant socialism, he is living in a fiscal paradise and still complains and he does it because he wants to persuade his workers to vote for McCain, another piece of shit who is going to give him hug tax cuts.

ok i gotta say it.

tl;dr

but gl thought

While I cant argue with your example of bringing up that clown monkey formerly known as the commander and chief, to say that it is a cakewalk to get in and cruise through these highly prestigious universities is an insult to the thousands of kids who legitimately grinded their tails off to attain success.

For every empty skull that exits the doors of Harvard/Yale/etc, there are several hundred hardworking and capable individuals that come out with them. Baal I would be foolish to deny that there is plenty of legacy entrants and semi-"bribe" acceptants to these schools in the form of endowments (Whitman and Bloomberg giving 30Million+ comes to mind), to generalize the entire group of students at these institutions is simply going too far.

As a successful poker player you obviously had to put in countless hours of work to get to the point you are, and no one should be able to take these accomplishments away from you, or diminish your abilites. However, to degrade the legitimate students at these places due to the select few who come into the spotlight for their idiocy and "cheating" ways is analogous to the lay man illegitimizing your accomplishments and hard work as a poker player because of the select few "SuperUsers" that exist.

Blame the 'system' or the heirarchy within the academic institutions themselves who have decided that accepting these underqualified individuals would benefit the overall student body as a whole for one reason or another, but please reconsider your overarching judgement on the overwhelming majority of students who deserve what they have achieved and won through their own perseverance.

Looks so fake, and if it's real what he wrote is just plain retarded. Like someone forced him to build his company and QQing in an open letter to his employee where he basically say he'll go south with the money and let them down sounds like uber douchery to me. He sounds like a gigantic republican doucheface and his letter is not helping his cause, not a bit.

I wanna drop in here to say that i agree with what Uptown said

and that I do not really oppose inheritence, its really the family's hard work and they should be rewarded in seeing that their descendents are running the company.

inheritence isn't that big of an issue as the inheritence tax on the super rich is HUGE and the govt already knows that its there to prevent money from going down for generations, like the rockefellers fortune.

but its fair that families with couple million don't really pay much inheritence tax and they can see their kids enjoy their hard work. which u can call is like happiness to them. a reward for the work they put in.

edited based on the below post... dunno where i came up with that # haha

there hasn't even been 20 generations of rockefellers and their money is a tiny fraction of what it use to be. Family wealth usually disappears after 3 generation because the kids and grand kids squander it. It's a myth that most people are rich only because they come from rich families. Family wealth simply doesn't last, especially now a days when savings and investments are evaporating.

On January 23 2009 22:21 masterfrywad wrote: there hasn't even been 20 generations of rockefellers and their money is a tiny fraction of what it use to be. Family wealth usually disappears after 3 generation because the kids and grand kids squander it. It's a myth that most people are rich only because they come from rich families. Family wealth simply doesn't last, especially now a days when savings and investments are evaporating.

wealth does not last if the next generation is incompetent, but it grows fast if it isnt, since money attracts money and that is an inmutable law of bussiness.

BTW the Rockefeller fortune has never been properly tracked since for obvious reasons do not want this out but actually they are estimated to surpass Carlos Slim by a huge margin.

On January 23 2009 22:04 Uptown wrote: While I cant argue with your example of bringing up that clown monkey formerly known as the commander and chief, to say that it is a cakewalk to get in and cruise through these highly prestigious universities is an insult to the thousands of kids who legitimately grinded their tails off to attain success. For every empty skull that exits the doors of Harvard/Yale/etc, there are several hundred hardworking and capable individuals that come out with them. Baal I would be foolish to deny that there is plenty of legacy entrants and semi-"bribe" acceptants to these schools in the form of endowments (Whitman and Bloomberg giving 30Million+ comes to mind), to generalize the entire group of students at these institutions is simply going too far. As a successful poker player you obviously had to put in countless hours of work to get to the point you are, and no one should be able to take these accomplishments away from you, or diminish your abilites. However, to degrade the legitimate students at these places due to the select few who come into the spotlight for their idiocy and "cheating" ways is analogous to the lay man illegitimizing your accomplishments and hard work as a poker player because of the select few "SuperUsers" that exist. Blame the 'system' or the heirarchy within the academic institutions themselves who have decided that accepting these underqualified individuals would benefit the overall student body as a whole for one reason or another, but please reconsider your overarching judgement on the overwhelming majority of students who deserve what they have achieved and won through their own perseverance.

Its not a walk in the park, but intelligent people will pass it withouth much trouble, like many people int his forums what im saying is that if you are lets say Daut, graduate from Harvard bla bla, u will do good, but you wont be the CEO of Cerberus, because you are not IN the club.

On January 23 2009 22:14 JYang wrote: I wanna drop in here to say that i agree with what Uptown said and that I do not really oppose inheritence, its really the family's hard work and they should be rewarded in seeing that their descendents are running the company. inheritence isn't that big of an issue as the inheritence tax on the super rich is HUGE and the govt already knows that its there to prevent money from going down for generations, like the rockefellers fortune. but its fair that families with couple million don't really pay much inheritence tax and they can see their kids enjoy their hard work. which u can call is like happiness to them. a reward for the work they put in. edited based on the below post... dunno where i came up with that # haha

i dont oppose inheritance either, it is natural for a father to try to do it however thats not whats giong on, this is not the father leaving the business he built to his son, this is more like the wealthy familie exchanging seats in the positions of powers constantly, kind of the way the jews handle themselves.

On January 23 2009 22:38 Baal wrote: Show nested quote + On January 23 2009 22:04 Uptown wrote: While I cant argue with your example of bringing up that clown monkey formerly known as the commander and chief, to say that it is a cakewalk to get in and cruise through these highly prestigious universities is an insult to the thousands of kids who legitimately grinded their tails off to attain success. For every empty skull that exits the doors of Harvard/Yale/etc, there are several hundred hardworking and capable individuals that come out with them. Baal I would be foolish to deny that there is plenty of legacy entrants and semi-"bribe" acceptants to these schools in the form of endowments (Whitman and Bloomberg giving 30Million+ comes to mind), to generalize the entire group of students at these institutions is simply going too far. As a successful poker player you obviously had to put in countless hours of work to get to the point you are, and no one should be able to take these accomplishments away from you, or diminish your abilites. However, to degrade the legitimate students at these places due to the select few who come into the spotlight for their idiocy and "cheating" ways is analogous to the lay man illegitimizing your accomplishments and hard work as a poker player because of the select few "SuperUsers" that exist. Blame the 'system' or the heirarchy within the academic institutions themselves who have decided that accepting these underqualified individuals would benefit the overall student body as a whole for one reason or another, but please reconsider your overarching judgement on the overwhelming majority of students who deserve what they have achieved and won through their own perseverance. Its not a walk in the park, but intelligent people will pass it withouth much trouble, like many people int his forums what im saying is that if you are lets say Daut, graduate from Harvard bla bla, u will do good, but you wont be the CEO of Cerberus, because you are not IN the club.

Ah. If taht's what you're saying, yeaaaaaaaaaaaaaaa I think I have to agree with you(or at the last, you'd have to defy huge odds against you). Add to this the issue of race and you'll have an even more retarded situation

While I don't know for a 'fact' whether such 'old boys clubs' exist (they probably do exist on the East Coast, but I'm so used to the West Coast mentality), I certainly can't deny their existence.

I guess the question then is, "how do you try to rectify this entrenchment of power" situation that you describe and detest, while fostering the creative power and entrepreneurship of the legitimate folks?

I own my own business and I paid over 30K in quarterly sales tax last month. I also pay a shitload in payroll tax, income tax, disability insurance, workers compensation insurance and a bunch of other things mandated by our government. Do I like paying taxes? Of course not. In fact, I pretty much take every measure to pay as little in taxes as possible. But I feel that CEO's letter is pure bullshit and I'm speaking from the same perspective here. In fact, I feel his whole argument is pretty much the rich man's excuse. If they reduce my taxes, I'm not gonna give my employees a raise or hire more people, I may use that money to start another business which would expand the economy, but it's just as likely that I'll move into a nicer apartment when my lease is up, or take a nicer vacation or take a trip down to AC, get a suite/8-ball/hookers and enjoy carnal pleasures.

I am in favor of an improved tax code that is highly targeted to encourage economic growth but much of what is proposed is really a tax cut for the rich disguised as a greater good. IMO, what this country needs is a more progressive tax code and and a sound fiscal policy based on a balanced budget. Let's be realistic here, government is gonna have waste and while I hope that they improve upon that, there is no way we will have a balanced budget if we start cutting taxes on the upper class. And I believe a balanced budget will do way more to spur economic growth than keeping capital gains taxes at 15%.

x a fucking 1000 on the OP.

I guess this guy is in the south caribbean now!

The crux of the issue is if you believe that productive people deserve to be more wealthy or not. If you believe this, then you should feel sympathy for the rich guy. He has been infinitely more productive in his life, as in net benefit produced to real people, than any of his employees.

On a side note, the vast majority of millionares are self-made. They become millionares through hard work for decades and being EXTREMELY frugal during the entirety of their life. The millionare is very rare that you'll see driving a foreign luxury car.

Anyway the guy is right at least that if you reward productivity, you get more, which makes everybody better off, and if you punish it, you get less, which makes everybody worse off. Regardless of what kind of distribution of wealth is fair, if both the rich and the poor lose it's a bad system. Even if the distribution is more fair then. I think excessive taxing does hurt everybody.

I've seen some people mention inheritance, seeming to think that if you've inherited your money you've got less right to it. Whenever I bring up the productivity argument, saying that rich people deserve the money in exchange for being productive for society, they say that not all rich people deserve their money, since some inherited it.

This is bollocks. The inherited fortune, after all, has already paid its productivity debt to society when it was first gathered. After that, it's spent by the rich guy, either on himself or on other people as he wishes. By what logic can you tax that fortune if the rich guy decides to give it to charity? By what logic then, if he gives it to his best friend? Or to his daughter? The question is not whether that daughter deserves the money, but whether the rich guy does, and if he does, he ought to be able to spend it however way he likes. If you tax inheritance money, you're not taxing the recipient as much you are taxing the dead guy, and this has all the same implications for productivity as other taxes.

Someone said "money attracts money." I take this to imply that you believe rich people aren't necessarily more productive, since they can just sit on their money lazily and it will attract more money all by itself. If you believe this, I don't think you understand quite how money attracts money. Money attracts money because money itself is productive. Consider the example in the letter.

A guy works hard for a decade to gather capital, depriving himself of any luxury, in order to start a company. Once he is successful, he makes more money than his employees. Imagine if the employees were willing to live like that guy for a decade, depriving themselves of all luxury, in exchange for a big paycheck after that decade. If employees were willing to do that, rich guys in the economy would be completely unnecessary. Everyone would just work for free and wait until they receive their paychecks a decade later. The employees aren't willing to do that, showing that money is productive. In the form of investments, it allows people to get paid now for work that is only useful in the future, enabling productivity in the long term.

The argument is similar for the millionaire, although not as obvious. Instead of spending one of his millions on charity or whatever else he finds important, he invests it into a business. He then waits a decade for that money, until eventually the paychecks come in. Because waiting a decade for your money is not someone ordinary folks are willing to do, the rich guys are crucial to the economy. Their money is productive, and they are compensated for it.

So in the end, you can make two arguments in defense of the rich guy. One is that it's fair for productive people to get paid more, and the other is that, regardless of your opinion about fairness, it's a sensible idea for productive people to get paid more, as you'll naturally get more productivity then (making everyone better off).

a fucking men

On January 23 2009 23:38 Fudyann wrote: The crux of the issue is if you believe that productive people deserve to be more wealthy or not. If you believe this, then you should feel sympathy for the rich guy. He has been infinitely more productive in his life, as in net benefit produced to real people, than any of his employees. On a side note, the vast majority of millionares are self-made. They become millionares through hard work for decades and being EXTREMELY frugal during the entirety of their life. The millionare is very rare that you'll see driving a foreign luxury car. Anyway the guy is right at least that if you reward productivity, you get more, which makes everybody better off, and if you punish it, you get less, which makes everybody worse off. Regardless of what kind of distribution of wealth is fair, if both the rich and the poor lose it's a bad system. Even if the distribution is more fair then. I think excessive taxing does hurt everybody. I've seen some people mention inheritance, seeming to think that if you've inherited your money you've got less right to it. Whenever I bring up the productivity argument, saying that rich people deserve the money in exchange for being productive for society, they say that not all rich people deserve their money, since some inherited it. This is bollocks. The inherited fortune, after all, has already paid its productivity debt to society when it was first gathered. After that, it's spent by the rich guy, either on himself or on other people as he wishes. By what logic can you tax that fortune if the rich guy decides to give it to charity? By what logic then, if he gives it to his best friend? Or to his daughter? The question is not whether that daughter deserves the money, but whether the rich guy does, and if he does, he ought to be able to spend it however way he likes. If you tax inheritance money, you're not taxing the recipient as much you are taxing the dead guy, and this has all the same implications for productivity as other taxes. Someone said "money attracts money." I take this to imply that you believe rich people aren't necessarily more productive, since they can just sit on their money lazily and it will attract more money all by itself. If you believe this, I don't think you understand quite how money attracts money. Money attracts money because money itself is productive. Consider the example in the letter. A guy works hard for a decade to gather capital, depriving himself of any luxury, in order to start a company. Once he is successful, he makes more money than his employees. Imagine if the employees were willing to live like that guy for a decade, depriving themselves of all luxury, in exchange for a big paycheck after that decade. If employees were willing to do that, rich guys in the economy would be completely unnecessary. Everyone would just work for free and wait until they receive their paychecks a decade later. The employees aren't willing to do that, showing that money is productive. In the form of investments, it allows people to get paid now for work that is only useful in the future, enabling productivity in the long term. The argument is similar for the millionaire, although not as obvious. Instead of spending one of his millions on charity or whatever else he finds important, he invests it into a business. He then waits a decade for that money, until eventually the paychecks come in. Because waiting a decade for your money is not someone ordinary folks are willing to do, the rich guys are crucial to the economy. Their money is productive, and they are compensated for it. So in the end, you can make two arguments in defense of the rich guy. One is that it's fair for productive people to get paid more, and the other is that, regardless of your opinion about fairness, it's a sensible idea for productive people to get paid more, as you'll naturally get more productivity then (making everyone better off).

terrible first line, i think everybody (or almost everybody) on the planet think that the productive deserves more.

Excesive taxing doesnt hurt everybody, again just look at Denmark. tax wasting is the problem.

in Denmark your taxes go for healthcare, student aids etc, in USA your taxes go to bail out chrysler and bank of america

On January 23 2009 22:49 TenBagger wrote: I own my own business and I paid over 30K in quarterly sales tax last month. I also pay a shitload in payroll tax, income tax, disability insurance, workers compensation insurance and a bunch of other things mandated by our government. Do I like paying taxes? Of course not. In fact, I pretty much take every measure to pay as little in taxes as possible. But I feel that CEO's letter is pure bullshit and I'm speaking from the same perspective here. In fact, I feel his whole argument is pretty much the rich man's excuse. If they reduce my taxes, I'm not gonna give my employees a raise or hire more people, I may use that money to start another business which would expand the economy, but it's just as likely that I'll move into a nicer apartment when my lease is up, or take a nicer vacation or take a trip down to AC, get a suite/8-ball/hookers and enjoy carnal pleasures. I am in favor of an improved tax code that is highly targeted to encourage economic growth but much of what is proposed is really a tax cut for the rich disguised as a greater good. IMO, what this country needs is a more progressive tax code and and a sound fiscal policy based on a balanced budget. Let's be realistic here, government is gonna have waste and while I hope that they improve upon that, there is no way we will have a balanced budget if we start cutting taxes on the upper class. And I believe a balanced budget will do way more to spur economic growth than keeping capital gains taxes at 15%.

This...

Bill O'Reilly said the "tax me less and ill produce more" in almost with the same exact words (and lots of poor ppl believe it ffs!), tax me less and ill give employment!... and we all know that O'Reilly is wrong in 100% of his beliefs, so there is no need to discuss this any further.

i believe in tax me less and i'll produce more but not tax me less and i'll give employment

where's the motivation to work if gov't takes over 50% of ur income

there's a reason why communism failed.

its human nature, face it, its embedded into our brains for hundreds of thousands years and we're not going to change it anytime soon

On January 23 2009 23:53 Baal wrote: terrible first line, i think everybody (or almost everybody) on the planet think that the productive deserves more.

I suppose, but a lot of people also believe that the unproductive deserve the money of the productive, and don't realize that this position is hard to reconcile with the above position. There's plenty of people who believe in egalitarian ideals.

Excesive taxing doesnt hurt everybody, again just look at Denmark. tax wasting is the problem. in Denmark your taxes go for healthcare, student aids etc, in USA your taxes go to bail out chrysler and bank of america

Excessive taxing hurts by definition. A lot of taxing doesn't necessarily hurt more than a little taxing, depending on what is done with the money. I agree that there is plenty of ways for the government to screw over the economy other than taxes. Spending tax money on things that hurt the economy hurt twice. First in the tax, second in the way it's spent. If you spend the tax money on things that are good for the economy, the taxes hurt far less. In this way a government with big taxes and big spending can damage the economy less than a government with small taxes and small spending, depending on how the money is spent.

For a tax to be a net benefit to the economy though, you have a pretty tough standard to meet. Taxes cause so much deadweight loss in the economy that you really need to spend the money well to make up for that. Some tax dollars may be well spent, but even if this is better arranged in Denmark than in the USA, I daresay that many taxes are still a net loss.

I think the "tax me less and I'll produce more" applies strongly to the entrepreneur type who must invest 100% of his energy for his start up to succeed. A higher return stimulates him to go for another start up, while a dramatically higher tax rate on his gains inevitably affects his desire to pull the long hours (for years) again, and will question whether it is truly worth it when 50% of his gains are lost.

However, I'm not sure this is the case for the the executives in established Fortune 500 firms. For this subset of the very wealthy, I somehow feel that the difference between a 30% tax rate and 50% tax rate on their income - at the very least - impacts their drive on a smaller scale than for the enterprising individual. I can't really express myself too eloquently on this suspicion, but I guess I'll leave it at "first impression"

========================
I think these are the issues that have come up in the two threads on LP thus far:

Are CEOs worthless?
- Some are, many aren't.

Should the CEOs be taxed more?
- If by taxing their personal income more, their drive to produce is diminished, there's an argument for not doing so. But there seems to be two subsets of "execs" who have vastly different "elasticities" (if you can call it that) between tax rate and work drive and it is difficult to come up with a "one size fits all" plan. Tax break for start up pple who create jobs? idk.

Is the 'old boys club' an issue?
Yes, but honestly what can you do about this? I cant dispute being "in the club" (as Baal says) is a huge factor in politics, but I personally do not know about what it is like for the corporate world on this front and cannot voice an opinion on it. I would like to believe that it is not the case, but for firms based in the Northeast, I wouldn't be too terribly surprised if instances of this existed.

Personal income tax brackets, Corporate Tax rates, Capital Gains Tax rates?
I know I'm opposed to a hike on the Capital Gains tax, but I'm not so sure I have a clear opinion for the other two. I know for a fact that the proposed adjustment of persona income tax brackets wont even reach 10% of what the Govt needs for that financial firm rescue budget, even when taxing the rich heavier, b/c there just arent enough of them around.

And I honestly don't know enough about Corporate Tax rate issues to give an informed opinion that actually has any meaning.

I agree with you guys in theory...

But in practical terms you guys really think it goes down like this:

Entrepreneurs see that capital gains tax goes up from 15% to 20% so they decide to work 33% less hard.

CEO sees his marginal income tax rate go from 35% to 39.6% so he decides not to work as hard.

In practical terms, in both scenarios, they are gonna work just as hard. We're not talkin bout the difference from capitalism to communism here, we're talkin bout a couple percent and it really isn't gonna make much of a difference IMO in the motivational factor that drives our ecomony. But it will make a difference in the rich man's wallet and it will make a difference in our national deficit.

let me correct myself,

it wont make much of a difference in the rich man's wallet, but it will make a huge difference in the poor man's wallet since the lost tax revenue will be shifted and the tax burden will fall on the middle and lower class.

correct me if I'm wrong b/c I'm not sure either, but isn't the gains tax scheduled to go far higher than 20%? I think the gains tax affects VC investment and general investment (and hence growth opportunities) rather than personal returns for an entrepreneur starting up a company. But when investors and investment institutions are faced with substantially more unfavorable rates (let's say it's increased to like 40%), I do think that a lot of high risk high tech start ups will have great difficultly finding capital aside from MAYBE angel money.

For income tax, let's say that federal, state, municipal, etc combined now brings the total income tax to say, 55-60%. While the entrepreneur will surely put everything he's got into his first endeavor and he makes $10Mil. But will he go for a 2nd shot in something completely different, given that he already has enough money, but knows that tons of it will be taken away? (even though he's still got the drive to create something enw from scratch again) I think in this situation, (which I believe is not a trivial one) the effect of a higher income tax rate is profound. I know a few people who either did or heavily considered, the option of spending less than half the year in the country so that they would not be taxed, because of reasons of this nature.

But I do concede that these are mostly hypotheses that are scribbled on paper, as you say.


What I do wonder, is whether there is or should be a way to increase the $ the govt has to work with, without having to deal with all these problems? Like, oh, say not make as many bombs?

On January 24 2009 00:07 JYang wrote: i believe in tax me less and i'll produce more but not tax me less and i'll give employment where's the motivation to work if gov't takes over 50% of ur income there's a reason why communism failed. its human nature, face it, its embedded into our brains for hundreds of thousands years and we're not going to change it anytime soon

The main reason why communism didnt work its because the government is too powerful, and corrupt.

But yeah you need incentive to work harder however paying the toilet scrubber less and the CEO more doesnt do the trick, ill put Denmark as an example again, taxing is ridiculous and i dont see people not motivated to work, its all about finding the balance.

The wealth distribution in wrong and im not advocating communism but rich people getting explonentionally richer and richer must be stopped, the Sam Waltons are hurting for the global economy.

Its better to have 560,000 small stores than having a Walmart devouring all competition... capitalism isnt perfect and it needs strict monopoly supervision and it does not.

On January 24 2009 01:46 Baal wrote: Its better to have 560,000 small stores than having a Walmart devouring all competition

why

On January 24 2009 02:04 TedHastings wrote: Show nested quote + On January 24 2009 01:46 Baal wrote: Its better to have 560,000 small stores than having a Walmart devouring all competition why

Obviously so we can all pay three times as much!

Edit: I should elaborate. So long as Walmart is devouring all competition, that means it's producing efficiently from the consumer's standpoint. That's a good thing, because it means we pay less.

Once Walmart starts taking advantage of it's monopoly position by raising prices, it won't be producing efficiently from the consumer's viewpoint anymore, and it will then be profitable for small stores to compete. There will be more stores.

On January 24 2009 00:22 Uptown wrote: I think the "tax me less and I'll produce more" applies strongly to the entrepreneur type who must invest 100% of his energy for his start up to succeed. A higher return stimulates him to go for another start up, while a dramatically higher tax rate on his gains inevitably affects his desire to pull the long hours (for years) again, and will question whether it is truly worth it when 50% of his gains are lost. However, I'm not sure this is the case for the the executives in established Fortune 500 firms. For this subset of the very wealthy, I somehow feel that the difference between a 30% tax rate and 50% tax rate on their income - at the very least - impacts their drive on a smaller scale than for the enterprising individual. (...) If by taxing their personal income more, their drive to produce is diminished, there's an argument for not doing so. But there seems to be two subsets of "execs" who have vastly different "elasticities" (if you can call it that) between tax rate and work drive and it is difficult to come up with a "one size fits all" plan.

The deadweight loss caused by a tax is more easily understood if you don't look at a single individual but if you look at the so called marginal producer. Let's take entrepeneurship as an example. The marginal entrepeneur is that person who ran the numbers, and just barely decided to go into entrepeneurship instead of getting a high-paying job or being an artist or a becoming poker player or whatever options are open to her. That person that is exactly on the edge, that's so close to deciding to do something else, even a miniscule change in the tax rate, you're going to lose that person. The less miniscule your change is, the more of these marginal entrepeneurs you're going to lose. They'll all be doing other things. So if the government conjures up a tax that makes it only slightly less attractive to start a business, you're going to lose lots of those marginal people that were close to deciding to do something else. And that's all lost productivity.

You can try to get creative with your tax plan to make sure only the "right" people shoulder the burden, but what usually ends up happening is that everyone pays part of the cost no matter who you're taxing. For example, if you follow politics, you see some people advocating that corporations be taxed more rather than "people." But what's going to happen if you tax a business, then that business is going to raise it's prices and it's going to share its costs with the consumers. It's very hard to work around this and even if you somehow succeeded in making a business not pass the tax on to consumers then quite a few would probably just close down. This is an example of business-consumer but the same principle is at work everywhere, tax burden is either going to be passed on or a lot of marginal agents in the taxed segment are going to decide to switch over to a less heavily taxed role.

On January 24 2009 01:46 Baal wrote: The main reason why communism didnt work its because the government is too powerful, and corrupt. But yeah you need incentive to work harder however paying the toilet scrubber less and the CEO more doesnt do the trick, ill put Denmark as an example again, taxing is ridiculous and i dont see people not motivated to work, its all about finding the balance. The wealth distribution in wrong and im not advocating communism but rich people getting explonentionally richer and richer must be stopped, the Sam Waltons are hurting for the global economy. Its better to have 560,000 small stores than having a Walmart devouring all competition... capitalism isnt perfect and it needs strict monopoly supervision and it does not.

The main reason why communism didn't work is because it does not in any way stimulate entrepreneurs. It could work if there was a way to encourage people to start a succesfull business, in other words switch to capitalism. However capitalism has its flaws aswell, namely the will to control the economy. Some things are just not in your hands. I am reading a very interesting book on this matter, "Econoshock". I must note that the book is in dutch, so it wont be much help to most of the people on this forum.

The thing is we have a huge economic shock which is hitting the world as we speak. We can not escape its effects so we are going to have to learn how to live with it. This economic shock was (according to the writer of the book) perfectly perdictable, so to me if these companys go broke then thats their fault. If they have to size down, well so be it they are succesfull in building up a flexible business. Hell, everybody will have to adapt to be able to prevail, so why shouldnt the corporations.

I do understand why the CEO in this case is writing this letter. He does this pure out of frustration, but he has to face the facts he is going to have to size down if he can no longer bear the costs of his endeavour. Again i say this, he is not alone in this situation. I think that (just as the writer of the book proposes) this i going to get a whole lot worse before it gets better. But when we recover from this crisis we will be stronger than when we went in it. I do see that this suggests that there isn't much of a bright future for curent entrepreneurs, but this is just the way the cooky crumbles.

I am still a student so maybe i got it all wrong, but i beleive in what i wrote down here. And i will do my very best to adapt to the comming situation. I am looking forward to your comments.