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Just a small favor
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Nik wrote: "The reality of modern politics is such that both for individual elections and party ones you need funds to set up a campaign that would be heard and felt. In some countries sposnorship is more limi..."Well one politician was sacked from office here in Australia for taking donation.
Nik wrote: "The reality of modern politics is such that both for individual elections and party ones you need funds to set up a campaign that would be heard and felt. In some countries sposnorship is more limi..."I think that goes on all the time, Nik. Totally corrupt, and probably always has been.
I think it happens in the UK a lot. They're just great at shifting the focus onto someone else
I'm with Jen,We essentially live in a plutocracy where the wealthy have co-opted the political process to benefit themselves and their own agendas -- while the poor pound sand or scream delusionally at their preferred candidates who will never deliver actual change to the status quo.
Segilola wrote: "I think it happens in the UK a lot. They're just great at shifting the focus onto someone else"I'm sure it does, though we like to think that it's squeaky clean in Britain but I'm sure that there is a lot of subtle, hidden corruption. Contrast the Italians, who are under no illusions that their system of governance is anything but thoroughly corrupt. That's why tax avoidance/evasion is a national pastime amongst the masses in Italy - if you can't beat 'em, join 'em.
Jen wrote: "Segilola wrote: "I think it happens in the UK a lot. They're just great at shifting the focus onto someone else"I'm sure it does, though we like to think that it's squeaky clean in Britain but I'..."
I think the corruption here is slowly catching up with other places in terms of visibility. Read an article yesterday about how child protection has been privatised and the trail of privatisation all led back to a Tory donor
Jen wrote: "Contrast the Italians, who are under no illusions that their system of governance is anything but thoroughly corrupt. That's why tax avoidance/evasion is a national pastime amongst the masses in Italy - if you can't beat 'em, join 'em. ..."Some places manage to keep neat facade with only occasional, almost accidental disclosure of the dimension of corruption, while others don't even conceal it.
Many places in Eastern Europe is way ahead in how you describe Italy..
Driver steals gasoline from his boss and receives unofficial salary, because he knows his boss is heavily underpaying taxes, the boss is underpaying, because he knows government officials put much of the state budget into their private pockets and so on - a vicious cycle, based on a moral dilemma - whether stealing from a thief is fine and where everyone answers 'yes'-:)
That's just it, Nik - everyone does it, so it's normal and a sense of what is morally right goes out the window! The low-paid workers just think that what they're skimming off is nothing compared to the scale of corruption at the top.
This is what the Supreme Court says is legal in the U.S.: Citizens United v. Federal Election Commission - Political spending is a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections.In other words, politicians not only owe small favors; they legally can be bought by corporations and unions. I still can't believe this, as it goes against what our founding fathers intended, but it's true. This is the power of the Supreme Court.
Do you think 'small favors' between the leaders of political and business echelon could occur and cost us billions?
Segilola wrote: "I think the corruption here is slowly catching up with other places in terms of visibility. Read an article yesterday about how child protection has been privatised and the trail of privatisation all led back to a Tory donor .."Private interests co-opt the machinery of the state to lock in private risk-free profits at the expense of the broader community.
It's a system I call neo-fascist corporate statism, where the true power in society resides with the plutocrats who have controlling interests in a number of corporate vehicles that are used to co-opt the state to their own interests. Locking in profits and socializing risk and losses to the broader community.
Primary objective of a CEO of a company is to maximise shareholder value by providing dividends or share value. Therefore a company will operate to achieve that by whatever means they can e.g. spending $100m on lobbying to achieve a $1bn increase in share price is what they are supposed to do. Likewise spending the same to prevent a drop of the same value.If laws allow them to for tax or other reasons then the fault is the legislators and the voters who elect them. If companies use loopholes to avoid paying tax then they are doing their job
Philip wrote: "Primary objective of a CEO of a company is to maximise shareholder value by providing dividends or share value. Therefore a company will operate to achieve that by whatever means they can e.g. spen..."Agree.
Philip wrote: "If laws allow them to for tax or other reasons then the fault is the legislators and the voters who elect them. If companies use loopholes to avoid paying tax then they are doing their job ..."In my opinion, here we let them of the leash, first by excusing them from having any kind of responsibility (environmental, social, patriotic, etc) except for profit making and second - by ignoring their influence on the legislature. If we say, like our American friends, that corporations are just like individuals with rights and liberties, we should similarly expect from them having equal share of obligations and to be caring, patriotic, involved, etc.. It would be naive to think that those loopholes are there - randomly. They aren't and therefore IRS and their colleagues in other countries are extremely effective against everyone, except for the top tier.
Philip wrote: "Primary objective of a CEO of a company is to maximise shareholder value by providing dividends or share value. Therefore a company will operate to achieve that by whatever means they can e.g. spen..."That may be the nominal primary purpose, but in many cases the actual one is to preserve their own positions, to protect their bonuses and benefits, and in general look after themselves, so yes they will do all sorts of underhand deals.
Explain to me again why a flat tax of, say, 10% with no loopholes is a bad idea. I know it would eliminate a lot of tax-related jobs, but otherwise, what's the down side?
The calculations done here is that it doesn't raise enough - but the US may be different. Here a party proposed 20% flat, and there was a debate as to whether that was enough.The problem is it is regressive. There are some costs that are roughly equal for everyone, such as food, power, education of children and clothing, while housing is a necessity. These take up a far greater proportion of a person's income, and to make these people pay the same tax rates as Bezos seems unfair to some, always assuming Bezos is actually paying what he should and isn't paying next to nothing. It depends on you view of the social role of governments.
I'm paying now about 30% of my income in taxes, so even a 20% tax would be a break for me. And making Bezos or Zuckerberg pay the same with no loopholes seems like a win to me.
Agree with you that if loopholes effectively neutralize the higher taxation, then nothing is achieved. From a personal perspective, I guess you paying 0 tax while Bez and Zuck paying even 60% would even be better, wouldn't it? -:)
The idea behind a rising taxation along with a rising income is based on the belief in the redistribution function of the state, so that less achieving will be helped through lower taxation, while excellent achievers share their success with others and it's aimed at alleviating economic inequality. Not something ideal and it has its drawbacks.
A progressive tax watered down by loopholes is probably the worst as it creates just a hollow facade and pretense..
Some reality on the tax discussion...https://www.cbo.gov/publication/51361
The top 20 percent of households were responsible for 69% of the taxes the US collected in 2013, while the bottom 20% accounted for just 1%. When you hear politicians complain the rich aren't paying their fair share or they're not paying anything at all, it's simply not true.
J.J. wrote: "When you hear politicians complain the rich aren't paying their fair share or they're not paying anything at all, it's simply not true...."They do pay something, of course, and sometimes - a lot, but whether it's a 'fair share' is another question (assuming that 'fair' will always be subjective anyway). That single graph is not very telling in my opinion. Yes, it shows that middle quintile pays a little less from their share of income, fourth quintile almost the same and top quintile - a little bit more (45 vs about 38, except for top 1%?).
According to what I read - an annual salary of over 100K puts you into the top 20%. A big portion of these guys receive salaries and bonuses, which give very little opportunity to avoid income taxation. The ability to 'optimize taxation' starts much higher and for this purpose it's more interesting to look into 0.1% for example. There is plenty of data like this:
https://www.washingtonpost.com/news/w... Don't know how correct this is.
I believe Warren here though (if he's quoted correctly): https://www.politifact.com/truth-o-me...
Now, what if trillions of dollars being 'undistributed', but effectively under individual or corporate control never become an "income" or corporate "profit" and thus don't get taxed?
Having said that, 'tax the hell out of them' approach would probably be silly, as they would shrug and move to somewhere nearby with a better taxation regime (as many do anyway), but to worry about them? These guys know how to take care of themselves much better than most others, so I don't think they need our compassion as much as low achievers -:) And I certainly see no need to applaud them for moving manufacturing facilities out of the country, getting bailouts, laying off or blackmailing with laying off workers or doing other wonderful things...
I don't know, then, what would be best. JJ says, "The top 20 percent of households were responsible for 69% of the taxes the US collected in 2013, while the bottom 20% accounted for just 1%." But wouldn't that be true if a flat tax were applied? More income equals more tax. So if you taxed everyone at 20%, wouldn't the top 20 percent pay 69% or more in overall taxes collected, or maybe even more? I don't know how to figure this. Some of you guys know how to do it, though. Are millionaires/billionaires paying 20% or more in taxes currently?
Do you think "small favors" might be often in money-politics clique?
I think we all get small favors from friends and family. I guess that happens on the corporate and political level among those who have relationships. Quid pro quo.
Scout wrote: "I don't know, then, what would be best. JJ says, "The top 20 percent of households were responsible for 69% of the taxes the US collected in 2013, while the bottom 20% accounted for just 1%." But w..."The richer groups are paying more in taxes e..g a person earning £100k in UK will pay approx 40% in tax £40,000 whereas a person earning £20k will pay approx 20% on £9,000 approx £1,800
That is income tax. The problem is that the person with income of £10m is probably paying the same as the £100k as the rest disappears in various companies offshore. e.g. UK company is charged £9.9m for services by offshore company which pays no tax, anywhere (Apple, Google, Amazon, every other big company)
The question is what is fair - the old anecdote to follow
Ten men go out for beer. 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 one day, the owner threw them a curve. He said, "Since you are all such good customers, 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 $2 ? 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 any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D. Professor of Economics, University of Georgia
Philip wrote: "Ten men go out for beer. 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. ..."
Thank you for sharing that. It's a great example in layman's terms without the need of a CPA to explain it.
Way back to Nik's original post several years ago -Quid pro quo is part of American politics. i don't think any of us believe that those lobbying groups and other organiations behind which are major companies all donating to polictical campaigns are not receiving beneficial results in many forms. There has long been a correlation between the amount of money donated by private prison companies to the expanded use of private prisons and legislation that allowed them to profit. Arizona has been very guilty of this.
Philip wrote: "....the old anecdote to follow..."An excellent example. As of what's fair, the answer will differ, inter alia, depending on society's cohesion and mutual trust. Some Scandinavians are apparently content with very high taxation in some brackets, while in some places I know - people would pay the least possible, assuming that their taxes will be mostly stolen by government officials for their private needs.
The system per se that exempts those with low incomes and taxes more those with extra high, looks Ok to me. It's just the loopholes often hollow out the initial intent, allowing to withdraw from taxation considerable amounts. As the result - often the middle bears most of the brunt. I don't suggest to vilify mega rich and if anything their success deserves every applaud, but not to allow them a free pass either. Offshore untaxed profits, residence "shopping" for the lowest taxation, etc need to be dealt with.
Lizzie wrote: ".... Quid pro quo is part of American politics. i don't think any of us believe that those lobbying groups and other organiations behind which are major companies all donating to polictical campaigns are not receiving beneficial results in many forms...."Wonder whether the biggest sponsors get to "interview" the prospective candidates for the highest political/executive positions? It's long know that election promises are enforceable. And whether those given to sponsors, if any, are a bit more binding?
Nik wrote: "Lizzie wrote: ".... Quid pro quo is part of American politics. i don't think any of us believe that those lobbying groups and other organiations behind which are major companies all donating to pol..."Don't know about binding promises. But, private prison companies use their donations and clout to promulgate more business for themselves, which includes blocking change to criminal law procedures as they want bodies in their beds. The amount that CEOs and others make in bonuses based on the contracts and profits is outrageous. They don't want things like marijuana decriminalized because that means less felons which means less prison beds needed.
Big pharm used their political power to limit the discounts on medications for medicare patients. That has been in place for decades and continues. Because of that, I still itemize my medical on my tax return because of how many of my meds are not covered and having to buy them myself despite multiple appeals about meds I have been taking for 30 plus years.
Surprised to read that British politicians enjoy those small favors too:https://www.theguardian.com/politics/...
One of the indictments against Bibi is about billionaires pouring expensive cigars and champagne on his family.
Maybe we should leave alone this petty envy and the let the dudes enjoy perks of being prominent politicians with powerful and generous friends?
See some tax returns got leaked which casts a different view of the anecdotal story in Post 28 i.e. they are paying less than others but we knew that already.
It's common knowledge that politicians accrue wealth while in office, not commensurate with their salaries as public servants. I'm waiting for the day when they're finally investigated for how they become rich while "serving the public."
They define themselves as part of the public, therefore they serve themselves :-)
Many politicians have staff and involve personally in fundraising.. It's an important issue on par with procuring votes... Money and votes.
Of course, it's all voluntary, non-reciprocal, clean, beautiful...
Let's say all is good and a politician conquers the office! If afterwards one of the biggest donors asks for a 'small favor' from a victorious politician, would the latter try to accomodate the request? What do you think?