6 ms·

Stop taxing away so much income. Resolve the entitlements cliff that makes earning more than $12/hr untenable until breaking even at $38/hr. Back off the regula

Stop taxing away so much income. Resolve the entitlements cliff that makes earning more than $12/hr untenable until breaking even at $38/hr. Back off the regulations that make inexpensive living practically illegal. Help people relocate out of high cost of living areas (NY Times location take note). Slash the red tape making business startups near impossible. Squelch the tort, liability, insurance and other laws making risk costs overwhelming. You can't fix social problems by demanding capitalism be socialism.

maak 11y ago
Scandinavia says, yes you can.
- lfjmfkekdk5 11y ago
  Scandinavia is not socialist. When will this ignorant myth end?
  - MrTonyD 11y ago
    Democratic Socialist parties have been in power in many Scandinavian countries for decades. The current systems evolved from Socialism - and Democratic Socialism really defines the modern, functioning form of Socialism -- a type of Socialism that provides a positive alternative to the unfettered Capitalism suggested by the original poster.
    - xname 11y ago
      What you called Socialism is just capitalism+welfare. It has nothing to do with Socialism.
    - eli_gottlieb 11y ago
      No, that's social democracy you're thinking of.
    - lfjmfkekdk5 11y ago
      The ignorance of economic systems here on HN is just unbelievable. Scandinavian countries are very pro free trade and capitalist. They have that alongside a relatively large welfare system. That is not socialism. They are capitalist with few regulations and few state owned enterprises. It's shocking how the myth continues to persist among the economically uninformed.
    - ende 11y ago
      Democratic Socialism? You have no idea what you are talking about and have clearly received this misinformation from a Bernie Sanders talking point (bless the man, but he is has done nothing to help rectify the broken American political lexicon.). The ideology that has pervaded Nordic politics for the past decades is Social Democracy, not Democratic Socialism. There is a very significant difference.
- adventured 11y ago
  I disagree. Scandinavia is in deep trouble financially. Denmark basically has the most indebted households on earth. Their economy hasn't expanded since 2007. Finland has been in an eight year recession / stagnation. Their household debt to income ratio doubled from 2002-2012 or so. They've got a near 10% unemployment rate, which has been getting worse. Their economy hasn't expanded since 2007. Sweden has done slightly better than those two, courtesy of market friendly reforms they performed a few decades ago. Prior to that reform, Sweden had several decades of terrible economic performance. Their household debt to income levels are also vastly inflated and unsustainable, nearly at 200%. Norway is falling into a recession, taking the same commodity hit Canada and Australia are. Their economic success and much celebrated welfare state is almost solely dependent on the price of oil remaining high. There is now talk of having to cut into the sovereign fund to pay for deficits and spending demands. They have no other major exports to pick up the slack. Their GDP lifting off occurred directly in line with the price of oil soaring after 2001. They got rich on the back of irrational US policies around the dollar and the Iraq war. Prior to that, their GDP per capita was no better than the US or similar nations. Their household debt to income ratio is also dramatic, around 220%. That won't go well with a ten year slump in oil prices. If oil hangs around $40-$60 for ten years, Norway will look very different than it does today. The picture is obvious: to maintain their standard of living, Scandinavia has been living far beyond its means to fake a better reality than the one they would otherwise have.
  - vilmosi 11y ago
    Almost everyone got into trouble after the recession, including the US. It's not specific to Scandinavia. They're doing fine.
guelo 11y ago
How does your anti-regulation theory explain that until the 70s wages and productive increased together, afterwards wages have stayed flat with all gains going to shareholders. Is the idea that after the Reagan revolution regulation has increased significantly?
- yummyfajitas 11y ago
  In terms of page count, a quick google search suggests federal regulations dropped under Reagan, then rose ever since then. https://1.bp.blogspot.com/-0MCZ3FJXJJs/UA7zeOEIanI/AAAAAAAAFl8/N6z1g6k5XS0/s1600/number-pages-regulations-added-to-federal-register-each-year-1936-2012-projected.png https://1.bp.blogspot.com/-0MCZ3FJXJJs/UA7zeOEIanI/AAAAAAAAF...
- ctdonath 11y ago
  Gold standard ended in 70's. Government could just declare money into existence, which was distributed into banking and drifted into the "easy money" of stocks.
mc32 11y ago
One of the things he suggests --raising minimum wages and medium wages as well, I think would go a great way to curb the disparity... (the extreme example is the Seattle company having a $70k/yr minimum salary... but I'm also afraid this would make quite a few low-skilled people permanently unemployable as it becomes cheaper to invest in automation. Young adults can be retrained, but there are lots of people in their 30s 40s etc. who don't have a secondary education some of which never finished elementary school in their native languages (thus illiterate). What happens to them? Do we let them find themselves back as they can't find a job and contribute to a high-skills economy?
- spronkey 11y ago
  It's only cheaper to invest in automation right now because those individuals who are paid to create said automation are paid well under what they should be. What if software engineering, hardware design, and all the other positions required to create autonomous things were paid 3-4x what they are now? Sure that wouldn't necessarily be the case in the future, but certainly right now it is. We should stop looking at the bottom and look at the top. CEO take-home has increased by orders of magnitude, making the bottom completely untenable.
- ctdonath 11y ago
  That company with the $70k min salary is hurling toward bankruptcy. Top performing employees quit because they got nothing while low performers got fat raises. More than quit had to be hired to replace them. Customers left anticipating increased prices. Stockholders sued CEO for incompetence. Look up "Gravity Investments" in recent news.
  - jonknee 11y ago
    > Stockholders sued CEO for incompetence To be fair it was the CEOs brother who sued and was part of a long time feud and not about the new minimum wage.
- norea-armozel 11y ago
  I think part of the problem is that our welfare system is also very flaky. Take for example a single mother who isn't working currently which takes in some amount of money from SNAP and TANF. If she takes a job immediately of any wage her SNAP benefits go down by some percentage (sometimes it's small but sometimes it's very large as much as 80% as it was for my sister) and her TANF benefits go away immediately. There's no gradient or curve for the sun-setting of the benefits as her income increases. Even the 'workfare' program is a joke because it doesn't pay enough to make sure hypothetical single mother has enough to pay rent, groceries, and other necessities. And I'm not going to talk about daycare but it's clear that's FUBAR by default (it doesn't exist in the US at least as I know of as a benefit). So, if the US were to fix bottom end of poverty it would have to be in restructuring and probably centralizing the dispensation of welfare. I think no state or local government should be involved in the administration of said benefits since the lion's share of the funds come from the US government itself (not from the budgets of the state or local governments). But the chances of that happening is about as good as my chances of winning the Power Ball.
rtpg 11y ago
I've always heard about things like "entitlements cliff", but what specific things work like that? Most things I've seen work on a sliding scale.
- ctdonath 11y ago
  Read this: http://www.zerohedge.com/news/2015-08-07/when-work-punished-ongoing-tragedy-americas-welfare-state http://www.zerohedge.com/news/2015-08-07/when-work-punished-... Short version: USA welfare benefits are very generous until you earn about $12/hr, peaking at a total income approaching $80k/yr. Above that point of earned income, welfare is rapidly cut off, plunging total income until earned reaches $38/hr. It's stupid and few realize how broken the very generous system is.
  - rtpg 11y ago
    Technically, that's how it works in Cook County. I imagine the situation is different places It's so annoying that the system works like this. It takes all of 5 minutes to realize that these should be sliding scales. I bet making these sliding in a revenue neutral way would make a great talking point for the upcoming presidential elections
cpursley 11y ago
I agree. Penalizing people for working and getting a paycheck makes little sense. Wealthy people pay a much smaller tax rate than middle income earners due to low capital gains, which just adds to the wealth gap. I'd like to see a move away from income tax to a more equitable progressive consumption tax (necessities < consumer items < luxury items), increasing short-term capital gains (active traders, etc) and eliminating long-term capital gains (retirement, etc). And bravo on your inexpensive living comment. I believe there's a huge need for reasonably priced housing, but zoning does not allow for it. I read somewhere about how mobile home parks are not getting built any more because middle class and up don't want to see them. It's a similar situation with nimbyism in places like San Francisco. This results in lower income folks spending the majority of their income on housing, widening the wealth gap. What's interesting is it's the middle income and up who are screwing themselves in the long term by marginalizing the very people they depend on. What's even more interesting is that this situation is not the result of free market capitalism, but crony capitalism (aka. cronyism). The market is being manipulated by the wealthy who intentionally restrict choice of those who don't have a voice via the police power of the state (lobbying, etc).
norea-armozel 11y ago
I think something akin to a Land Value Tax is a better option since I believe both income and capital improvements should not be taxed be it a factory owner adding capacity to said factory or your grandma adding solar panels to the roof of her house. Property and income taxes are probably the worse offenders in terms of punishing people who improve their standing in life. But I doubt state and local governments will ever support LVT or anything close to it.

maak 11y ago

Scandinavia says, yes you can.

lfjmfkekdk5 11y ago
Scandinavia is not socialist. When will this ignorant myth end?
- MrTonyD 11y ago
  Democratic Socialist parties have been in power in many Scandinavian countries for decades. The current systems evolved from Socialism - and Democratic Socialism really defines the modern, functioning form of Socialism -- a type of Socialism that provides a positive alternative to the unfettered Capitalism suggested by the original poster.
  - xname 11y ago
    What you called Socialism is just capitalism+welfare. It has nothing to do with Socialism.
  - eli_gottlieb 11y ago
    No, that's social democracy you're thinking of.
  - lfjmfkekdk5 11y ago
    The ignorance of economic systems here on HN is just unbelievable. Scandinavian countries are very pro free trade and capitalist. They have that alongside a relatively large welfare system. That is not socialism. They are capitalist with few regulations and few state owned enterprises. It's shocking how the myth continues to persist among the economically uninformed.
  - ende 11y ago
    Democratic Socialism? You have no idea what you are talking about and have clearly received this misinformation from a Bernie Sanders talking point (bless the man, but he is has done nothing to help rectify the broken American political lexicon.). The ideology that has pervaded Nordic politics for the past decades is Social Democracy, not Democratic Socialism. There is a very significant difference.
adventured 11y ago
I disagree. Scandinavia is in deep trouble financially. Denmark basically has the most indebted households on earth. Their economy hasn't expanded since 2007. Finland has been in an eight year recession / stagnation. Their household debt to income ratio doubled from 2002-2012 or so. They've got a near 10% unemployment rate, which has been getting worse. Their economy hasn't expanded since 2007. Sweden has done slightly better than those two, courtesy of market friendly reforms they performed a few decades ago. Prior to that reform, Sweden had several decades of terrible economic performance. Their household debt to income levels are also vastly inflated and unsustainable, nearly at 200%. Norway is falling into a recession, taking the same commodity hit Canada and Australia are. Their economic success and much celebrated welfare state is almost solely dependent on the price of oil remaining high. There is now talk of having to cut into the sovereign fund to pay for deficits and spending demands. They have no other major exports to pick up the slack. Their GDP lifting off occurred directly in line with the price of oil soaring after 2001. They got rich on the back of irrational US policies around the dollar and the Iraq war. Prior to that, their GDP per capita was no better than the US or similar nations. Their household debt to income ratio is also dramatic, around 220%. That won't go well with a ten year slump in oil prices. If oil hangs around $40-$60 for ten years, Norway will look very different than it does today. The picture is obvious: to maintain their standard of living, Scandinavia has been living far beyond its means to fake a better reality than the one they would otherwise have.
- vilmosi 11y ago
  Almost everyone got into trouble after the recession, including the US. It's not specific to Scandinavia. They're doing fine.

guelo 11y ago

How does your anti-regulation theory explain that until the 70s wages and productive increased together, afterwards wages have stayed flat with all gains going to shareholders. Is the idea that after the Reagan revolution regulation has increased significantly?

yummyfajitas 11y ago
In terms of page count, a quick google search suggests federal regulations dropped under Reagan, then rose ever since then. https://1.bp.blogspot.com/-0MCZ3FJXJJs/UA7zeOEIanI/AAAAAAAAFl8/N6z1g6k5XS0/s1600/number-pages-regulations-added-to-federal-register-each-year-1936-2012-projected.png https://1.bp.blogspot.com/-0MCZ3FJXJJs/UA7zeOEIanI/AAAAAAAAF...
ctdonath 11y ago
Gold standard ended in 70's. Government could just declare money into existence, which was distributed into banking and drifted into the "easy money" of stocks.

mc32 11y ago

One of the things he suggests --raising minimum wages and medium wages as well, I think would go a great way to curb the disparity... (the extreme example is the Seattle company having a $70k/yr minimum salary... but I'm also afraid this would make quite a few low-skilled people permanently unemployable as it becomes cheaper to invest in automation. Young adults can be retrained, but there are lots of people in their 30s 40s etc. who don't have a secondary education some of which never finished elementary school in their native languages (thus illiterate). What happens to them? Do we let them find themselves back as they can't find a job and contribute to a high-skills economy?

spronkey 11y ago
It's only cheaper to invest in automation right now because those individuals who are paid to create said automation are paid well under what they should be. What if software engineering, hardware design, and all the other positions required to create autonomous things were paid 3-4x what they are now? Sure that wouldn't necessarily be the case in the future, but certainly right now it is. We should stop looking at the bottom and look at the top. CEO take-home has increased by orders of magnitude, making the bottom completely untenable.
ctdonath 11y ago
That company with the $70k min salary is hurling toward bankruptcy. Top performing employees quit because they got nothing while low performers got fat raises. More than quit had to be hired to replace them. Customers left anticipating increased prices. Stockholders sued CEO for incompetence. Look up "Gravity Investments" in recent news.
- jonknee 11y ago
  > Stockholders sued CEO for incompetence To be fair it was the CEOs brother who sued and was part of a long time feud and not about the new minimum wage.
norea-armozel 11y ago
I think part of the problem is that our welfare system is also very flaky. Take for example a single mother who isn't working currently which takes in some amount of money from SNAP and TANF. If she takes a job immediately of any wage her SNAP benefits go down by some percentage (sometimes it's small but sometimes it's very large as much as 80% as it was for my sister) and her TANF benefits go away immediately. There's no gradient or curve for the sun-setting of the benefits as her income increases. Even the 'workfare' program is a joke because it doesn't pay enough to make sure hypothetical single mother has enough to pay rent, groceries, and other necessities. And I'm not going to talk about daycare but it's clear that's FUBAR by default (it doesn't exist in the US at least as I know of as a benefit). So, if the US were to fix bottom end of poverty it would have to be in restructuring and probably centralizing the dispensation of welfare. I think no state or local government should be involved in the administration of said benefits since the lion's share of the funds come from the US government itself (not from the budgets of the state or local governments). But the chances of that happening is about as good as my chances of winning the Power Ball.

rtpg 11y ago

I've always heard about things like "entitlements cliff", but what specific things work like that? Most things I've seen work on a sliding scale.

ctdonath 11y ago
Read this: http://www.zerohedge.com/news/2015-08-07/when-work-punished-ongoing-tragedy-americas-welfare-state http://www.zerohedge.com/news/2015-08-07/when-work-punished-... Short version: USA welfare benefits are very generous until you earn about $12/hr, peaking at a total income approaching $80k/yr. Above that point of earned income, welfare is rapidly cut off, plunging total income until earned reaches $38/hr. It's stupid and few realize how broken the very generous system is.
- rtpg 11y ago
  Technically, that's how it works in Cook County. I imagine the situation is different places It's so annoying that the system works like this. It takes all of 5 minutes to realize that these should be sliding scales. I bet making these sliding in a revenue neutral way would make a great talking point for the upcoming presidential elections

cpursley 11y ago

I agree. Penalizing people for working and getting a paycheck makes little sense. Wealthy people pay a much smaller tax rate than middle income earners due to low capital gains, which just adds to the wealth gap. I'd like to see a move away from income tax to a more equitable progressive consumption tax (necessities < consumer items < luxury items), increasing short-term capital gains (active traders, etc) and eliminating long-term capital gains (retirement, etc). And bravo on your inexpensive living comment. I believe there's a huge need for reasonably priced housing, but zoning does not allow for it. I read somewhere about how mobile home parks are not getting built any more because middle class and up don't want to see them. It's a similar situation with nimbyism in places like San Francisco. This results in lower income folks spending the majority of their income on housing, widening the wealth gap. What's interesting is it's the middle income and up who are screwing themselves in the long term by marginalizing the very people they depend on. What's even more interesting is that this situation is not the result of free market capitalism, but crony capitalism (aka. cronyism). The market is being manipulated by the wealthy who intentionally restrict choice of those who don't have a voice via the police power of the state (lobbying, etc).

norea-armozel 11y ago

I think something akin to a Land Value Tax is a better option since I believe both income and capital improvements should not be taxed be it a factory owner adding capacity to said factory or your grandma adding solar panels to the roof of her house. Property and income taxes are probably the worse offenders in terms of punishing people who improve their standing in life. But I doubt state and local governments will ever support LVT or anything close to it.