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The complete failure to imagine an alternative to property/sales taxes and development fees during this crisis has been one of the most disappointing failures o

by noad 6y ago

The complete failure to imagine an alternative to property/sales taxes and development fees during this crisis has been one of the most disappointing failures of politicians everywhere. We keep being told we need to suffer more and more with deeper cuts while living in the wealthiest country that ever existed by a wide margin. This is absurd. There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. Instead our leaders just keep telling us to toughen up and get stronger while flying jets overhead in meaningless salutes. They seem to be very bad at their jobs.

ErikVandeWater 6y ago
> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. Let's see a source or even back-of-the napkin calculation on this
- Game_Ender 6y ago
  Planet money podcast said we did about $7 trillion in stock buy backs over the last 10 years [0]. That is $700 billion a year, so a 5% tax is $35 billion a year. It’s a lot of money, but not enough for fundamental change. It would of been enough collectively to pay for the stimulus we are doing now though. 0 - https://www.marketwatch.com/story/sp-500-companies-spent-7-trillion-on-buybacks-and-dividends-and-been-rewarded-by-coronavirus-bailouts-says-social-capital-ceo-2020-04-22 https://www.marketwatch.com/story/sp-500-companies-spent-7-t...
  - JamesBarney 6y ago
    My understanding is that we are spending over 2 trillion in stimulus, it doesn't seem like 35 billion or even 700 billion will come close to paying for that.
  - nugget 6y ago
    Didn't the Fed recently create a couple trillion dollars to inject into the economy? I'm not sure why you'd need additional taxes at all, when it seems that deflationary pressure is so great that you can summon up trillions with little inflationary consequence. $35 billion/year seems like nothing compared to this.
    - sixo 6y ago
      Those were loans, paid back almost immediately.
    - chumali 6y ago
      If you are referring to the Fed repo market operations, then these are short-term collateralised loans, so not really the same thing as pumping trillions in to the real economy. A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
      - nugget 6y ago
        At a minimum doesn't the CARES act transfer at least $500 billion to SMBs and unemployed people, via PPP and Federal supplemental UI? And since this is all deficit spending, it's implicitly backed up by the Fed being willing to purchase Treasury issuances? My point being that if you buy into MMT and you don't think what has happened in the last couple months has created any inflationary pressure then you probably believe you can spend another trillion with little risk.
  - andrewljohnson 6y ago
    Does not compute. If congress passed a stock buyback tax 10 years ago, there would have been less buybacks over the 10 years.
    - mrep 6y ago
      Not just less, there would be none and it would have all been given out as dividends. Stock buybacks are just dividends reinvested in the company for you.
      - eli_gottlieb 6y ago
        Then how about the company doesn't make that investment decision for me?
        deleted 6y ago
        [deleted]
        mrep 6y ago
        You can sell a proportion of you holdings to maintain the same ownership percentage thus acting like a dividend if you want. With fractional shares, you should be able to even do it with a small amount of shares. Albeit, I don't know of any brokerage that automates it for you. You can also just buy ETFs as they will sell stocks themselves in order to maintain proper weightings.
        frockington1 6y ago
        Then sell proportionately to the buyback, you'll probably even make some money to get taxed on
      - mikestew 6y ago
        Dividends would have been taxed. “Stock buy-backs are just...” leaves a lot out, enough that one might wonder if it were intentional.
        mrep 6y ago
  - cdash 6y ago
    Really? You think it will pay for the 2+ trillion existing stimulus? That is not to mention the stimulus that just got passed in the house, another 3 trillion. It probably wont actually be enacted to law but 35 billion is peanuts when you are talking about these numbers.
  - this_user 6y ago
    Except if you taxed those buybacks, they wouldn't be happening, or would only be happening at a much smaller volume. BBs are a way for companies to return money to investors when they don't know what else to do with their cash. This is how capitalism is supposed to work by optimising the allocation of capital. What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. Companies will either sit on their cash, or they will be putting it into projects they would otherwise not be doing.
    - mikestew 6y ago
      BBs are a way for companies to return money to investors when they don't know what else to do with their cash. That’s called a “dividend”. A dividend is taxed, however. I’ll leave the rest as an exercise for the reader. What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. I truly don’t know what to make of this comment. On the one hand, we are all being mansplained on how stock buy-backs works, yet not one mention of the word “dividend”.
      - fennecfoxen 6y ago
        > A dividend is taxed, however. You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share represents more of the ongoing business, thus sending its stock price higher. The tax on this is called a "capital gains tax," perhaps you've heard of it?
- deleted 6y ago
  [deleted]
- downrightmike 6y ago
  Stock buy backs are the largest point of growth for company spending since 2010. American companies spend more on that than R&D. Since it is the only growth they want to do, and can't weather a couple weeks of downturn because they spent all their money on stock buy backs, it needs a mechanism to curb that bad behavior and make them able to survive without the government printing trillions to bail them out.
  - Pungsnigel 6y ago
    Keeping interest rates artificially low is a good way of making sure no one - companies included - keeps any cash at hand.
derg 6y ago
>They seem to be very bad at their jobs. I'll submit the opposite: they are very good at their jobs, it's just you just aren't who they work for. Lots of wealthy people are doing juuuussst fine.
Grimm1 6y ago
There is a concerted effort at the top of our government to subvert the republic and turn it into a new oligarchy, why we haven't openly branded certain members of congress and the current administration traitors and dealt with them appropriately is beyond me. We're passed the point where cleaning house would be seen as weakness or instability on the world stage, because the current admin is weak and unstable. Cleaning house now would reassure our allies and restore some legitimacy to our government. I'm not suggesting violence, but that our forces responsible from protecting us against domestic threats do their job here, I think the idea that the optics of arresting a sitting president and members of congress is less worse than restoring a functioning legislative and executive branches.
- TheAdamAndChe 6y ago
  In ancient Rome, the senators thought that it was in the good of the republic to disband Julius Caesar. A group of them banded together and killed him. What they failed to realize was how popular he was with the lower and middle classes. His reign had drastically improved their quality of life. His murder led to a string of civil wars and instability. Think hard before disbanding populist figures.
  - Grimm1 6y ago
    Your point is noted, but Trump is popular with less than 44% [0] of people currently and has done nothing to improve their lives. Comparing the current admin with Caesar is giving a huge compliment to them, that they do not deserve. [0] https://projects.fivethirtyeight.com/trump-approval-ratings/ https://projects.fivethirtyeight.com/trump-approval-ratings/
    - kingkawn 6y ago
      Trump is a symptom of a deeper cultural problem for which we are all participants. Take him out too viciously and the entire country would implode forever. Our chance is to address the problem directly by economic relief for rural poor (among others) so that the symptom resolves.
Miner49er 6y ago
> They seem to be very bad at their jobs. On the contrary, I'd argue they are mostly good at their jobs. Their job isn't to help the average American. Their job is to serve Capital. They get paid by the rich, not by average Americans. They are doing a good job at that. Look at the stock market, it goes up while Main Street is in turmoil.
- derg 6y ago
  This screencap just about sums it up: https://pbs.twimg.com/media/EVMnSzMUYAMW4n8?format=jpg https://pbs.twimg.com/media/EVMnSzMUYAMW4n8?format=jpg It's not often you see an image and immediately think "yep, that'll be in some history book in short order". Just utterly divorced and a sign of a _very_ healthy society... If you can't see it: An image with "Dow's Best Week Since 1938" on a graphic while breaking news declares "More than 16 M Americans have lost jobs in 3 weeks"
  - owenversteeg 6y ago
    Yeah, that'll definitely end up as an iconic image. For those that want a higher quality screenshot, I just took one: https://i.imgur.com/FzkO6W5.png https://i.imgur.com/FzkO6W5.png It's Jim Cramer's Mad Money on April 9th 2:00 in. (I do not recommend watching Cramer.)
    - derg 6y ago
      Oh nice thanks! this one is much better.
  - PeterStuer 6y ago
    Te irony is that in a better world this would be great news. 1'Due to great technical innovations, we were able to free up 16M FTE previously required to maintain our economy. We are continuing to redistribute what still needs to be done and expect starting next quarter the average required workweek can be shortened to 24 hours per person, leaving all much more time to leasure and pursue personal interests. The outlook for hitting the 20 hours/week milestone has been udated and is now expected to be reach in 14 months from now'. Instead neo-liberalism serves us this distopian neo-feudal regime that requires all to 'work more/work longer' just to slow our decline into near poverty while a select few 'rulers' horde all the fruits of progress.
deleted 6y ago
[deleted]
adventured 6y ago
> There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up There isn't plenty of money in fact. Your 5% tax would get you $30 to $50 billion depending on the year. You're not rebuilding much with that. You can build a few miles of NYC subway with that, and maybe a quarter of a high-speed rail line in part of California. You need to fill in the trillion dollar budget deficit first of all, which overwhelmingly consists of rapidly expanding entitlement spending deficits where we're not bringing in enough tax revenue. There is only one way to mathematically accomplish that in reality: raise income taxes dramatically on the top 1/3. That only gets you back to break-even. It doesn't pay down the federal debt ($600b per year in interest) and it doesn't provide any expansion for spending programs new or old. The US is already spending as much on its total government system (Federal + State + Local) as what advanced welfare states in Western Europe spend in total on their government systems. And we're getting a horrible return on that money almost across the board. The first thing we should do is improve the effectiveness of the money we're already spending while we attempt to bring down the deficits. For what we're already spending, the whole of the US should look like Denmark or Sweden. Why doesn't it? Everyone likes to say one thing first in response: military spending. Ok, slash $150 billion off of that to bring it down to 2.5-3% of GDP type levels (and freeze it for a decade). Next you need another $850b to $1.2t minimum each year in new tax revenue just to balance the budget this decade. It will require immense income taxation increases. There are no other sources that can come close to filling that epic hole.
- jahaja 6y ago
  I don't really understand why higher income taxes is such a big deal in the US. Instead of income taxes you seem to be fine with inflated rents to landlords, massive mortgages, unaffordable child care and education and so on. So regular payments are fine as long as it's not to the government?
  - JumpCrisscross 6y ago
    > regular payments are fine as long as it's not to the government? I live in a high-tax city in a high-tax state and don't do anything aggressive to reduce my tax burden. But if my landlord screws me, I can move. Universities charge an arm and a leg, but there are alternatives, from community colleges to state and foreign schools. Taxes are unavoidable.
brenden2 6y ago
There's this strange belief a lot of people have that leaders care about regular folks. They don't, they only care about themselves, and the system as it is is what got them where they are. Thus, they are incentivized to keep things the way they are. Not just that, but in a plutocracy like the US, leaders want to make sure that poors stay poor. The worst possible outcome for the rich and powerful is that it becomes easier for other people to climb the ladder, and harder for them to increase the size of the gap.
gok 6y ago
> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. In 2018, there were a total of $800 billion of stock buybacks, and this was an utterly exceptional moment when corporations were essentially forced to make them due to tax advantage. So even if your theoretical tax didn't impact buyback behavior at all (it would) and buyback rates returned to 2018 levels (they won't), you would raise $40 billion per year. It would raise federal tax revenue around 1%. How do you envision spending that to completely rebuild society?
- mrscottson 6y ago
  If buybacks were banned, would companies be so fragile that they require massive bailouts? If these buyback didn't create extremely overvalued/frothy markets, would the bailouts need to be as big? I think over leveraging is as toxic for markets as many intuitively expect.
simonsarris 6y ago
> This is absurd. There is plenty of money, we could tax something like... We could spend less money. In Education we spend far more than the 80's and have less to show for it. In healthcare we have astronomical costs that have not bought us more vitality, but an extended morbidity. Gone are the days of grandmothers with sinewy arms maintaining huge gardens. Obesity in the early 2000's was at "crisis" levels and it's gotten so much worse that we just stopped talking about it. But we can keep the numbers up a bit here and there. In infrastructure we let car-first build-out destroy everything Jane Jacobs said we were going to lose. Valuable things that cost no money at all, but are too intangible for top-down planning to notice. The failure of imagination isn't finding new people to juice. It's finding ways to be effective. I agree they are very bad at their jobs, but I don't think finding a new way to tax the rich is any more creative or sustainable. I think it's the same failure of imagination that you fear.
- pwinnski 6y ago
  You are right. We could spend less money on healthcare by adopting Medicare4All or similar. We could cut the military budget _dramatically_ without impacting our national security. And yet both parties have done little but increase the extent to which our countries is beholden to banks.
  - dantheman 6y ago
    Or we could fix medicare and medicaid and make them actually efficient. No need for medicare for all. We just need to fix billing, end price fixing, and massively deregulate - certificates of need, bans on telemedicine, pay for procedure etc. This will actually fix it. Medicare and Medicaid are incredibly expensive and inefficient.
    - ceejayoz 6y ago
      > Medicare and Medicaid are incredibly expensive and inefficient. This appears to be, at the very least, debatable: https://www.healthaffairs.org/do/10.1377/hblog20110920.013390/full/ https://www.healthaffairs.org/do/10.1377/hblog20110920.01339...
creddit 6y ago
Isn’t this already taxed since it’s income? Can someone explain to me the obsession with buybacks and not dividends?
- gruez 6y ago
  >Isn’t this already taxed since it’s income? Buybacks confer additional advantages as well. The gains can be deferred, which can be advantageous when saving for retirement because your marginal tax rate when retired will likely be lower (because less income). For foreign investors, buybacks aren't subject to withholding tax. For the executives, buybacks also benefit them because their compensation tend to be tied to shared price.
VikingCoder 6y ago
The one I've been daydreaming about is to force publicly-traded companies that operate in the United States, whenever they issue stock, they have to issue 20% of it to the US Government. They don't pay taxes. So, fine, issue stock to the government. The government can hold or sell the stock when it makes sense.
JumpCrisscross 6y ago
> an alternative to property/sales taxes and development fees Development fees are a one-off revenue stream, and could fit the Ponzi scheme assertion. But property taxes? These are recurring, and could be turned to sustainably fund a community's costs. > we could tax something like 5% of stock buybacks Within the scope of the author's argument, this would be worse than property taxes. It's an unpredictable revenue stream. And it's unrelated to the liability side of the equation.
mikekchar 6y ago
I never really understood universal basic income until this crisis. Many people really need this basic income now. So you could print money and give it to them, but ideally I guess you need to replace that money from the tax base. But it would be kind of silly (and inefficient) to give out a basic income to everybody and then ask for it back from the poor people who need it. So the only way it works is if you tax the rich people and then give everyone a basic income -- however the basic income that rich people get would necessarily have to be less than the money they paid in taxes to pay for it. So... essentially you are taking money from rich people and handing it to poor people. I mean, I can understand why rich people would be against this idea. The whole thing about being rich is that you can take a few dollars from everybody and get rich. But the reverse could be quite painful. Take a whole whack of dollars and give a few dollars to everybody. It appears to break the "get rich" thing... Until you realise that poor people will spend that money (i.e. give it back to the rich people). Ford hired private investigators to make sure the people he was paying minimum wage to were going to spend it. Ford was a smart guy (Nice guy?? No idea, but definitely smart). I really think that if you want fly the idea of rich people funding the improvement of society, you need to link it back to them getting richer. Otherwise, without a revolution, I don't think you're going to get anywhere. They can spend quite a few dollars lobbying government before they get anywhere close to spending what they would need to spend to improve society.
- spyckie2 6y ago
  There's an interesting article (i forget the title, would love if someone could link it) where the author makes the claim that the true modern wealth gap is between the super rich and the upper middle class. What the article says is that upper middle class feel that their potential income earned is stagnating RELATIVE to the super rich whose income is still increasing. The middle and poor classes are already beaten into a silence that their standard of living will always remain stagnant and they will not enjoy the advances in the economy (since around 40 years ago). It corroborates your point about why rich (in my definition, upper middle class) people would be against the idea of UBI. A lawyer making around 200-300k/yr has had his wages increasing around 5 times slower than a CEO / ibanker making around $2m a year. Instead of thinking, "hey I have a ton of money that poorer people could really use right now", they are instead thinking, "hey, how come THOSE rich people are growing their money soo much faster and I still have to slave away for 20 years before I can pay off my house?" The term "rich" isn't good enough as a classification nowadays because there's a huge difference between the top 400 individuals in the US, the top 1%, and the top 25%, and they're all considered rich by the old definition.
refurb 6y ago
If you taxed 5% of stock buy backs, you’d probably collect $0 as that money is shifted elsewhere.
coronadisaster 6y ago
The company my wife works at are trying to take away benefits while receiving tons of money from the government (almost 1 billion)... Ie: no more 401k matching, no more pay differencial for night employees, etc...
gruez 6y ago
>This is absurd. There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. Even with a 5% tax, buybacks would still be better than dividends. The bigger problem is that dividends and buybacks are functionally the same (return money to shareholders), but they receive different tax treatments. Instead of trying to patch the differences with more taxes, we should make both have the same treatment when it comes to taxes.
- elindbe2 6y ago
  How would you do that in practice? Tax capital gains annually?
apta 6y ago
Islam has instituted a 2.5% "charity tax" (Zakah) for over 1400 years now. It's not that those politicians are unimaginative, it's that they're either willfully neglectful or ignorant. Great political qualities to have /s
deleted 6y ago
[deleted]

by noad 6y ago

ErikVandeWater 6y ago

> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. Let's see a source or even back-of-the napkin calculation on this

Game_Ender 6y ago
Planet money podcast said we did about $7 trillion in stock buy backs over the last 10 years [0]. That is $700 billion a year, so a 5% tax is $35 billion a year. It’s a lot of money, but not enough for fundamental change. It would of been enough collectively to pay for the stimulus we are doing now though. 0 - https://www.marketwatch.com/story/sp-500-companies-spent-7-trillion-on-buybacks-and-dividends-and-been-rewarded-by-coronavirus-bailouts-says-social-capital-ceo-2020-04-22 https://www.marketwatch.com/story/sp-500-companies-spent-7-t...
- JamesBarney 6y ago
  My understanding is that we are spending over 2 trillion in stimulus, it doesn't seem like 35 billion or even 700 billion will come close to paying for that.
- nugget 6y ago
  Didn't the Fed recently create a couple trillion dollars to inject into the economy? I'm not sure why you'd need additional taxes at all, when it seems that deflationary pressure is so great that you can summon up trillions with little inflationary consequence. $35 billion/year seems like nothing compared to this.
  - sixo 6y ago
    Those were loans, paid back almost immediately.
  - chumali 6y ago
    If you are referring to the Fed repo market operations, then these are short-term collateralised loans, so not really the same thing as pumping trillions in to the real economy. A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
    - nugget 6y ago
      At a minimum doesn't the CARES act transfer at least $500 billion to SMBs and unemployed people, via PPP and Federal supplemental UI? And since this is all deficit spending, it's implicitly backed up by the Fed being willing to purchase Treasury issuances? My point being that if you buy into MMT and you don't think what has happened in the last couple months has created any inflationary pressure then you probably believe you can spend another trillion with little risk.
- andrewljohnson 6y ago
  Does not compute. If congress passed a stock buyback tax 10 years ago, there would have been less buybacks over the 10 years.
  - mrep 6y ago
    Not just less, there would be none and it would have all been given out as dividends. Stock buybacks are just dividends reinvested in the company for you.
    - eli_gottlieb 6y ago
      Then how about the company doesn't make that investment decision for me?
      - deleted 6y ago
        [deleted]
      - mrep 6y ago
        You can sell a proportion of you holdings to maintain the same ownership percentage thus acting like a dividend if you want. With fractional shares, you should be able to even do it with a small amount of shares. Albeit, I don't know of any brokerage that automates it for you. You can also just buy ETFs as they will sell stocks themselves in order to maintain proper weightings.
      - frockington1 6y ago
        Then sell proportionately to the buyback, you'll probably even make some money to get taxed on
    - mikestew 6y ago
      Dividends would have been taxed. “Stock buy-backs are just...” leaves a lot out, enough that one might wonder if it were intentional.
      - mrep 6y ago
- cdash 6y ago
  Really? You think it will pay for the 2+ trillion existing stimulus? That is not to mention the stimulus that just got passed in the house, another 3 trillion. It probably wont actually be enacted to law but 35 billion is peanuts when you are talking about these numbers.
- this_user 6y ago
  Except if you taxed those buybacks, they wouldn't be happening, or would only be happening at a much smaller volume. BBs are a way for companies to return money to investors when they don't know what else to do with their cash. This is how capitalism is supposed to work by optimising the allocation of capital. What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. Companies will either sit on their cash, or they will be putting it into projects they would otherwise not be doing.
  - mikestew 6y ago
    BBs are a way for companies to return money to investors when they don't know what else to do with their cash. That’s called a “dividend”. A dividend is taxed, however. I’ll leave the rest as an exercise for the reader. What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. I truly don’t know what to make of this comment. On the one hand, we are all being mansplained on how stock buy-backs works, yet not one mention of the word “dividend”.
    - fennecfoxen 6y ago
      > A dividend is taxed, however. You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share represents more of the ongoing business, thus sending its stock price higher. The tax on this is called a "capital gains tax," perhaps you've heard of it?
deleted 6y ago
[deleted]
downrightmike 6y ago
Stock buy backs are the largest point of growth for company spending since 2010. American companies spend more on that than R&D. Since it is the only growth they want to do, and can't weather a couple weeks of downturn because they spent all their money on stock buy backs, it needs a mechanism to curb that bad behavior and make them able to survive without the government printing trillions to bail them out.
- Pungsnigel 6y ago
  Keeping interest rates artificially low is a good way of making sure no one - companies included - keeps any cash at hand.

derg 6y ago

>They seem to be very bad at their jobs. I'll submit the opposite: they are very good at their jobs, it's just you just aren't who they work for. Lots of wealthy people are doing juuuussst fine.

Grimm1 6y ago

There is a concerted effort at the top of our government to subvert the republic and turn it into a new oligarchy, why we haven't openly branded certain members of congress and the current administration traitors and dealt with them appropriately is beyond me. We're passed the point where cleaning house would be seen as weakness or instability on the world stage, because the current admin is weak and unstable. Cleaning house now would reassure our allies and restore some legitimacy to our government. I'm not suggesting violence, but that our forces responsible from protecting us against domestic threats do their job here, I think the idea that the optics of arresting a sitting president and members of congress is less worse than restoring a functioning legislative and executive branches.

TheAdamAndChe 6y ago
In ancient Rome, the senators thought that it was in the good of the republic to disband Julius Caesar. A group of them banded together and killed him. What they failed to realize was how popular he was with the lower and middle classes. His reign had drastically improved their quality of life. His murder led to a string of civil wars and instability. Think hard before disbanding populist figures.
- Grimm1 6y ago
  Your point is noted, but Trump is popular with less than 44% [0] of people currently and has done nothing to improve their lives. Comparing the current admin with Caesar is giving a huge compliment to them, that they do not deserve. [0] https://projects.fivethirtyeight.com/trump-approval-ratings/ https://projects.fivethirtyeight.com/trump-approval-ratings/
  - kingkawn 6y ago
    Trump is a symptom of a deeper cultural problem for which we are all participants. Take him out too viciously and the entire country would implode forever. Our chance is to address the problem directly by economic relief for rural poor (among others) so that the symptom resolves.

Miner49er 6y ago

> They seem to be very bad at their jobs. On the contrary, I'd argue they are mostly good at their jobs. Their job isn't to help the average American. Their job is to serve Capital. They get paid by the rich, not by average Americans. They are doing a good job at that. Look at the stock market, it goes up while Main Street is in turmoil.

derg 6y ago
This screencap just about sums it up: https://pbs.twimg.com/media/EVMnSzMUYAMW4n8?format=jpg https://pbs.twimg.com/media/EVMnSzMUYAMW4n8?format=jpg It's not often you see an image and immediately think "yep, that'll be in some history book in short order". Just utterly divorced and a sign of a _very_ healthy society... If you can't see it: An image with "Dow's Best Week Since 1938" on a graphic while breaking news declares "More than 16 M Americans have lost jobs in 3 weeks"
- owenversteeg 6y ago
  Yeah, that'll definitely end up as an iconic image. For those that want a higher quality screenshot, I just took one: https://i.imgur.com/FzkO6W5.png https://i.imgur.com/FzkO6W5.png It's Jim Cramer's Mad Money on April 9th 2:00 in. (I do not recommend watching Cramer.)
  - derg 6y ago
    Oh nice thanks! this one is much better.
- PeterStuer 6y ago
  Te irony is that in a better world this would be great news. 1'Due to great technical innovations, we were able to free up 16M FTE previously required to maintain our economy. We are continuing to redistribute what still needs to be done and expect starting next quarter the average required workweek can be shortened to 24 hours per person, leaving all much more time to leasure and pursue personal interests. The outlook for hitting the 20 hours/week milestone has been udated and is now expected to be reach in 14 months from now'. Instead neo-liberalism serves us this distopian neo-feudal regime that requires all to 'work more/work longer' just to slow our decline into near poverty while a select few 'rulers' horde all the fruits of progress.

deleted 6y ago

[deleted]

adventured 6y ago

> There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up There isn't plenty of money in fact. Your 5% tax would get you $30 to $50 billion depending on the year. You're not rebuilding much with that. You can build a few miles of NYC subway with that, and maybe a quarter of a high-speed rail line in part of California. You need to fill in the trillion dollar budget deficit first of all, which overwhelmingly consists of rapidly expanding entitlement spending deficits where we're not bringing in enough tax revenue. There is only one way to mathematically accomplish that in reality: raise income taxes dramatically on the top 1/3. That only gets you back to break-even. It doesn't pay down the federal debt ($600b per year in interest) and it doesn't provide any expansion for spending programs new or old. The US is already spending as much on its total government system (Federal + State + Local) as what advanced welfare states in Western Europe spend in total on their government systems. And we're getting a horrible return on that money almost across the board. The first thing we should do is improve the effectiveness of the money we're already spending while we attempt to bring down the deficits. For what we're already spending, the whole of the US should look like Denmark or Sweden. Why doesn't it? Everyone likes to say one thing first in response: military spending. Ok, slash $150 billion off of that to bring it down to 2.5-3% of GDP type levels (and freeze it for a decade). Next you need another $850b to $1.2t minimum each year in new tax revenue just to balance the budget this decade. It will require immense income taxation increases. There are no other sources that can come close to filling that epic hole.

jahaja 6y ago
I don't really understand why higher income taxes is such a big deal in the US. Instead of income taxes you seem to be fine with inflated rents to landlords, massive mortgages, unaffordable child care and education and so on. So regular payments are fine as long as it's not to the government?
- JumpCrisscross 6y ago
  > regular payments are fine as long as it's not to the government? I live in a high-tax city in a high-tax state and don't do anything aggressive to reduce my tax burden. But if my landlord screws me, I can move. Universities charge an arm and a leg, but there are alternatives, from community colleges to state and foreign schools. Taxes are unavoidable.

brenden2 6y ago

There's this strange belief a lot of people have that leaders care about regular folks. They don't, they only care about themselves, and the system as it is is what got them where they are. Thus, they are incentivized to keep things the way they are. Not just that, but in a plutocracy like the US, leaders want to make sure that poors stay poor. The worst possible outcome for the rich and powerful is that it becomes easier for other people to climb the ladder, and harder for them to increase the size of the gap.

gok 6y ago

> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. In 2018, there were a total of $800 billion of stock buybacks, and this was an utterly exceptional moment when corporations were essentially forced to make them due to tax advantage. So even if your theoretical tax didn't impact buyback behavior at all (it would) and buyback rates returned to 2018 levels (they won't), you would raise $40 billion per year. It would raise federal tax revenue around 1%. How do you envision spending that to completely rebuild society?

mrscottson 6y ago
If buybacks were banned, would companies be so fragile that they require massive bailouts? If these buyback didn't create extremely overvalued/frothy markets, would the bailouts need to be as big? I think over leveraging is as toxic for markets as many intuitively expect.

simonsarris 6y ago

> This is absurd. There is plenty of money, we could tax something like... We could spend less money. In Education we spend far more than the 80's and have less to show for it. In healthcare we have astronomical costs that have not bought us more vitality, but an extended morbidity. Gone are the days of grandmothers with sinewy arms maintaining huge gardens. Obesity in the early 2000's was at "crisis" levels and it's gotten so much worse that we just stopped talking about it. But we can keep the numbers up a bit here and there. In infrastructure we let car-first build-out destroy everything Jane Jacobs said we were going to lose. Valuable things that cost no money at all, but are too intangible for top-down planning to notice. The failure of imagination isn't finding new people to juice. It's finding ways to be effective. I agree they are very bad at their jobs, but I don't think finding a new way to tax the rich is any more creative or sustainable. I think it's the same failure of imagination that you fear.

pwinnski 6y ago
You are right. We could spend less money on healthcare by adopting Medicare4All or similar. We could cut the military budget _dramatically_ without impacting our national security. And yet both parties have done little but increase the extent to which our countries is beholden to banks.
- dantheman 6y ago
  Or we could fix medicare and medicaid and make them actually efficient. No need for medicare for all. We just need to fix billing, end price fixing, and massively deregulate - certificates of need, bans on telemedicine, pay for procedure etc. This will actually fix it. Medicare and Medicaid are incredibly expensive and inefficient.
  - ceejayoz 6y ago
    > Medicare and Medicaid are incredibly expensive and inefficient. This appears to be, at the very least, debatable: https://www.healthaffairs.org/do/10.1377/hblog20110920.013390/full/ https://www.healthaffairs.org/do/10.1377/hblog20110920.01339...

creddit 6y ago

Isn’t this already taxed since it’s income? Can someone explain to me the obsession with buybacks and not dividends?

gruez 6y ago
>Isn’t this already taxed since it’s income? Buybacks confer additional advantages as well. The gains can be deferred, which can be advantageous when saving for retirement because your marginal tax rate when retired will likely be lower (because less income). For foreign investors, buybacks aren't subject to withholding tax. For the executives, buybacks also benefit them because their compensation tend to be tied to shared price.

VikingCoder 6y ago

The one I've been daydreaming about is to force publicly-traded companies that operate in the United States, whenever they issue stock, they have to issue 20% of it to the US Government. They don't pay taxes. So, fine, issue stock to the government. The government can hold or sell the stock when it makes sense.

JumpCrisscross 6y ago

> an alternative to property/sales taxes and development fees Development fees are a one-off revenue stream, and could fit the Ponzi scheme assertion. But property taxes? These are recurring, and could be turned to sustainably fund a community's costs. > we could tax something like 5% of stock buybacks Within the scope of the author's argument, this would be worse than property taxes. It's an unpredictable revenue stream. And it's unrelated to the liability side of the equation.

mikekchar 6y ago

I never really understood universal basic income until this crisis. Many people really need this basic income now. So you could print money and give it to them, but ideally I guess you need to replace that money from the tax base. But it would be kind of silly (and inefficient) to give out a basic income to everybody and then ask for it back from the poor people who need it. So the only way it works is if you tax the rich people and then give everyone a basic income -- however the basic income that rich people get would necessarily have to be less than the money they paid in taxes to pay for it. So... essentially you are taking money from rich people and handing it to poor people. I mean, I can understand why rich people would be against this idea. The whole thing about being rich is that you can take a few dollars from everybody and get rich. But the reverse could be quite painful. Take a whole whack of dollars and give a few dollars to everybody. It appears to break the "get rich" thing... Until you realise that poor people will spend that money (i.e. give it back to the rich people). Ford hired private investigators to make sure the people he was paying minimum wage to were going to spend it. Ford was a smart guy (Nice guy?? No idea, but definitely smart). I really think that if you want fly the idea of rich people funding the improvement of society, you need to link it back to them getting richer. Otherwise, without a revolution, I don't think you're going to get anywhere. They can spend quite a few dollars lobbying government before they get anywhere close to spending what they would need to spend to improve society.

spyckie2 6y ago
There's an interesting article (i forget the title, would love if someone could link it) where the author makes the claim that the true modern wealth gap is between the super rich and the upper middle class. What the article says is that upper middle class feel that their potential income earned is stagnating RELATIVE to the super rich whose income is still increasing. The middle and poor classes are already beaten into a silence that their standard of living will always remain stagnant and they will not enjoy the advances in the economy (since around 40 years ago). It corroborates your point about why rich (in my definition, upper middle class) people would be against the idea of UBI. A lawyer making around 200-300k/yr has had his wages increasing around 5 times slower than a CEO / ibanker making around $2m a year. Instead of thinking, "hey I have a ton of money that poorer people could really use right now", they are instead thinking, "hey, how come THOSE rich people are growing their money soo much faster and I still have to slave away for 20 years before I can pay off my house?" The term "rich" isn't good enough as a classification nowadays because there's a huge difference between the top 400 individuals in the US, the top 1%, and the top 25%, and they're all considered rich by the old definition.

refurb 6y ago

If you taxed 5% of stock buy backs, you’d probably collect $0 as that money is shifted elsewhere.

coronadisaster 6y ago

The company my wife works at are trying to take away benefits while receiving tons of money from the government (almost 1 billion)... Ie: no more 401k matching, no more pay differencial for night employees, etc...

gruez 6y ago

>This is absurd. There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up. Even with a 5% tax, buybacks would still be better than dividends. The bigger problem is that dividends and buybacks are functionally the same (return money to shareholders), but they receive different tax treatments. Instead of trying to patch the differences with more taxes, we should make both have the same treatment when it comes to taxes.

elindbe2 6y ago
How would you do that in practice? Tax capital gains annually?

apta 6y ago

Islam has instituted a 2.5% "charity tax" (Zakah) for over 1400 years now. It's not that those politicians are unimaginative, it's that they're either willfully neglectful or ignorant. Great political qualities to have /s

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