Last week I explained the rationale behind a progressive tax model, and outlined how it can be determined in a reasonably fair fashion. But determination and application are two different things.
For roughly a century, since the passage of the Sixteenth Amendment, the United States has been applying a progressive tax via income taxes. Income taxes are far better in theory than in practice, though. In theory, you apply a progressive tax, and link the tax rate to the amount of income one collects over the course of a year. In practice, accounting for all of that income is horrifically complex, and results in several burdens on all of us, beyond the dollars charged in taxes.
The first burden is damage to the Bill of Rights. Despite having a protection against self-incrimination (the Fifth Amendment), in an income tax world one is obligated to report all income, regardless of source…even if the source is illegal activity. So we are legally required to self-incriminate. This has made it possible for people to be convicted of tax evasion when the Bill of Rights would otherwise have protected them from conviction. This clearly violates the intent of the Bill of Rights.
Furthermore, unlike in criminal law, with income tax law, taxpayers are guilty until proven innocent. That is, if the IRS says you owe money, you have to prove that you don’t in order to avoid payment. This violates the principles of the Fourth Amendment, and possibly the Sixth Amendment.
Given how important those Amendments are to the personal security of Americans, carving out exceptions should occur only when the value of what is achieved is substantial to the broder society, and when there is no reasonable alternative. This is how limits to the First Amendment have been decided through the 20th century; the limit needs to be the minimum necessary to achieve the broad social benefit.
The second burden is the cost to taxpayers of calculating the appropriate amount of tax. We are all required to keep records, and follow a very complex set of rules in determining one’s taxes. Every taxpayer must pay in time and/or money, simply to pay money to the government. The burden is sufficiently great to maintain an entire tax preparation industry. While employment is a good thing for the economy, employment put to use in something that benefits society as a whole is far better.
The third burden is the relative ease of tax evasion. When taxes are self-reported, and when the effective tax rate is in excess of 10% (this rate is based on historical research), there is a significant incentive for tax evasion. This is certainly the case with federal income taxes. The underground economy is estimated in the annual $1-3T range, and its size is influenced by both the tax rate and the amount of otherwise illegal activity present in the economy. The people earning money through the underground economy do not pay income taxes, which shifts the burden of paying for federal government services to those who do.
I’m in favor of progressive taxes for a couple of related reasons. First, it is an effective means of minimizing money eddies, places where money sits without directly adding economic activity. Second, it delivers the highest ratio of tax revenues to economic drag. That is, collecting an additional dollar of tax in a progressive tax model has less of a deleterious effect on the economy than collecting that same dollar in a flat tax model. The effects show up in the regression analysis I did for Take 2: Could Employing Tax Cuts Tax Employment.
If income taxes were the only means of achieving a progressive tax model, I might grudgingly accept an income tax. Maybe. But there are other options. In future posts, I’ll discuss them in turn.
Related Articles
- Fair and Balanced (538refugees.wordpress.com)
538 Refugees 
Personally, I still favor a consumption tax (value-added tax) with exemptions for food, shelter, and medical costs.
For roughly a century, since the passage of the Sixteenth Amendment, the United States has been applying a progressive tax via income taxes….
That is, collecting an additional dollar of tax in a progressive tax model has less of a deleterious effect on the economy than collecting that same dollar in a flat tax model. The effects show up in the regression analysis I did for Take 2: Could Employing Tax Cuts Tax Employment.
What flat tax given that we have never enjoyed one?
Moreover, your prior analysis for what it was worth only looked at employment.
Michael:
Your timing was superb. Our Keynesian VP is now predicting that the 2% cut in marginal tax rates enacted during the Lame Duck session will create jobs where $3.4 trillion in borrowing and spending did not.
http://www.usatoday.com/news/opinion/forum/2011-01-12-column12_ST2_N.htm
@Bart:
That’s not what the linked article says.
What flat tax given that we have never enjoyed one?
What do you think we had before we had a progressive income tax?
BD: What flat tax given that we have never enjoyed one?
electrovibe11: What do you think we had before we had a progressive income tax?
No income tax at all.
Monotreme,
I always cringe at VAT or consumption taxes, because they discourage consumption, which I see as the main economic driver. I’d need to see some pretty convincing math before I’d get behind anything that stifled consumption. Not saying it can’t or won’t work! I just don’t think it’d be easy to make it work well.
Mono:
It is true that Biden did not expressly admit that the Porkulus did not create the predicted jobs. That is the backdrop to Obama relenting and adopting a small sliver of the tax holiday the GOP proposed in 2009 as an alternative to the Porkulus.
Mono:
We agree in concept on the idea of a consumption tax, with a couple contentions:
1) I would prefer a standard deduction on spending to keep the tax neutral and minimize calculation rather that running down the rat hole of having Congress favor certain spending.
2) The tax should be collected at the point of sale and be made known to the taxpayer in the bill. VAT taxes are hidden so the government can raise them without as much opposition from voters.
You may want to consider the FAIR tax.
@mclever,
I share your concern, but we need to incentivize (sorry) savings and consumption of necessities, while providing a disincentive (that’s better) for purchase of “luxury” items.
For example, the value-added in a Gucci bag is huge, mainly because of the label. The value-added in a utilitarian bag which does the same job at a much lower cost is correspondingly lower. Which type of consumption should be taxed more?
No income tax at all.
But we did collect taxes, did we not? So what was taxed, especially at the state level? Was it goods and property? Did everyone pay the same rate?
@electrovibe:
It was mostly duties, which was (rightly) seen as a brake on free trade. The Founding Fathers’ system of taxation would most assuredly not fly in today’s world.
I share your concern, but we need to incentivize (sorry) savings and consumption of necessities, while providing a disincentive (that’s better) for purchase of “luxury” items.
For example, the value-added in a Gucci bag is huge, mainly because of the label. The value-added in a utilitarian bag which does the same job at a much lower cost is correspondingly lower. Which type of consumption should be taxed more?
And who would determine which is a ‘luxury’ item? It seems arbitrary to say one bag is a ‘luxury’ item, but another bag is not simply based on brand name. I also don’t like fundamental idea of discouraging consumption (demand). Discouraging demand disourages supply which discourages economic growth. Lastly, I haven’t seen any math that shows we can collect 20% of our GDP with a national consumption tax, so until that math shows up it’s just a talking point that derides serious solutions which is the current shortage of federal (and state) income.
@electrovibe:
“Luxury” = That which has a large value-added.
The VAT, called GST in Canada, has been a lifesaver to the Canadian economy. It brought the country out of deficit, allowed surpluses to be established, stabilized health care and the Canada Pension Plan (similar to Social Security), allowed the country to weather the recession much more safely (partly by reducing business taxes significantly). Canada now has healthy growth and 7.6% unemployment. The TSX has recovered to pre-recession levels.
“Luxury” = That which has a large value-added.
Who determines how much value-added a product has, or what consitutes a ‘large’ one?
Who determines how much value-added a product has, or what consitutes a ‘large’ one?
This is where someone who actually understands economics needs to step in. I’m a neuroscientist, Jim, not an economist!
However, to the best of my understanding and belief, you take the difference between the value of the goods coming in (e.g. the raw materials to make a Gucci bag) and the value going out the door (what you charge wholesale for the finished bag).
The GST in Canada began as an across-the-board 7% tax on everything. (GST means “Goods and Services Tax.”) So you paid a 7% surcharge on everything from haircuts to housepainting to hardware, and the proprietor or vendor kept records and submitted the collected revenues to the government. (Food was always exempt, except in restaurants.)
Protections for the low-income were built in via rebates paid quarterly. Business owners filed for refunds on taxes paid to run their business. People buying new homes and paying GST on the purchase price were reimbursed for double taxation on items for which the building contractor had already paid GST, etc etc. It took a few years to iron out all the wrinkles and make the tax as fair as possible.
The GST was reduced to 5% a few years ago and is scheduled to vanish by increments over the next decade.
It was, of course, deeply unpopular at inception but nobody even notices it anymore… and Canadians are happy with their economic recovery and employment situation. (When something works well, it tends to get more popular.. ;-))
This should be the starting point of an overhaul of our draconian tax code.
http://fairsharetaxes.org/default.aspx
filistro,
Correct me if I’m wrong, but the Canadian GST is basically a national sales tax, right? It doesn’t replace your usual income tax, but supplements it, right?
@Mule Rider:
I’m not opposed to changing the tax code, but to call the current one “Draconian” does violence to the English language.
From Wikipedia:
The laws, however, were particularly harsh. For example, any debtor whose status was lower than that of his creditor was forced into slavery. The punishment was more lenient for those owing debt to a member of a lower class. The death penalty was the punishment for even minor offenses. Concerning the liberal use of the death penalty in the Draconic code, Plutarch states:
It is said that Drakon himself, when asked why he had fixed the punishment of death for most offences, answered that he considered these lesser crimes to deserve it, and he had no greater punishment for more important ones.
You can hate on the IRS all you want, but no one has been forced into slavery or killed as a result of not paying taxes.
@mclever.. It doesn’t replace your usual income tax, but supplements it, right?
That’s right. It was an “emergency measure” designed after the 80’s recession to help balance the books and get the country back in a sound fiscal position. However it has had the added effect of lowering income taxes for most people, since the govt is getting an enormous amount of revenue from the GST and has been able to cut back on income tax rates.
@filistro
Thanks, that’s what I thought… A small sales tax (in the 5% to 10% range) usually doesn’t kill consumption. But, if one were to try to replace the income tax revenue stream via a consumption tax, I think the required rate would be so high as to be prohibitive. Less would be consumed, thus necessitating a raise in the consumption rate, causing less to be consumed… You get the idea.
For most of US history, we got by on little or no income tax. As Monotreme noted, the Federal Government was funded mostly by import duties. These accomplished two things:
1) They furnished revenues to run the government.
2) They increased the cost of imported goods. This allowed American companies to pay their workers more, and still be able to compete on prices.
Of course, for most of American history, the US had very little in the way of a standing army, which is (and always has been , when there is one) the largest single Federal expenditure.
If I recall correctly (someone correct me if I’m wrong), the Income Tax was instituted originally as a way to pay of the Federal debt incurred from the Civil War. At that time, the share of Federal revenues supplied by import duties fell from almost 100% to about 66%. The Income Tax was increased again after WW I, again, to pay off the costs of that war. The share of Federal revenue from import duties fell to about 30%. The Income Tax was raised again after WW II. The share of Federal revenues from import duties has now become pretty insignificant in comparison to Income and Payroll taxes.
On a federal level, consumption is not generally taxed. The idea here is to encourage demand, and thus to encourage business growth.
As import duties have been decreased, particularly through the last 50 years, this has encouraged American businesses to move their operations overseas, and has encouraged consumers to buy foreign-made goods. This is a big reason why America has such a problem with unemployment and under-employment, and why conservatives now complain that American workers are “overpaid” and have “too many” benefits. American corporations want to turn the American workforce into what they see overseas — low-paid wage slaves with no benefits.
Replacing all or part of the income tax with new import duties would be an unpopular geopolitical move right now, and would be fought tooth and nail by American businesses (you’d think they’d like it — but no, since they have moved their operations to take advantage of dirt-cheap foreign labor, they’d be in trouble if we did that).
Vastly cutting the size of America’s bloated military budget (it’s already much larger than that of the rest of the world combined) would help a lot as well, since this is the single largest beneficiary (by far) of income tax revenues.
DC:
The government prior to the advent of the income tax not only could not finance a large standing army, it could not pay for the bureaucracy and welfare state desired by socialists and progressives of the day. Financing the latter (as well as redistributing wealth) was why socialists and progressives pushed for the income tax.
We are not going back to the 19th Century by eliminating the bureaucracy, welfare state or standing army.
Moreover, so long as there are no constitutional limits on borrowing, starving the beast by limiting taxes does not work.
We need to consider tax reform on its own merit of reducing taxation’s destructive effect on the economy to the absolute minimum rather than as a means to address our overspending problem.
No income tax at all.
That is a flat tax.
“I’m not opposed to changing the tax code, but to call the current one “Draconian” does violence to the English language.”
As is often the case here, I get called out for incorrect grammar, when the dictionary indicates otherwise.
My statement:
“This should be the starting point of an overhaul of our draconian tax code.”
http://dictionary.reference.com/browse/Draconian
–adjective
1. of, pertaining to, or characteristic of Draco or his code of laws.
2. ( often lowercase ) rigorous; unusually severe or cruel:
Granted, saying it’s unusually “severe” or “cruel” might be loading up the language a bit, but I’ve heard a fair number of left-wingers describe it that way for our lower and working class individuals. So really I’m just repeating (and agreeing) with what they say.
But if you stand by your critique of my usage of draconian in that instance, I’ll be sure to remind the next lefty I see who indicates Republicans want to bring back a draconian form of governance about what they’re really saying.
As a dedicated wordsmith, I’m on Muley’s side in this one. Like so many words in our language, “draconian” has evolved over time, and now is commonly and acceptably used to mean “tough, harsh or unfair.”
Last week I heard a teacher at my grandkid’s school refer to the lunchroom regulations as “draconian.”
I’ll second what filistro said. 🙂
And, I think Mule Rider’s suggestion of a small wealth tax to supplement the income tax rather than a consumption tax has a lot of merit.
Bart:
The only recommendation I made in my comment was to shrink the bloated military budget. The rest was informational, not prescriptive.
MR, just wanted to thank you for posting the link to FairShareTaxes.org. Having had some time now to look at the site, I have to admit liking much of it.
Bart, this is the site mentioned at the end of the last tax debate thread. Now that it is on this thread, stop playing games, have a look at it, and please comment on it.
Is that asking nice enough?
“…the lunchroom regulations as “draconian.”
What? No pb&j?! 🙂
“MR, just wanted to thank you for posting the link to FairShareTaxes.org. Having had some time now to look at the site, I have to admit liking much of it.”
You’re welcome.
As an aside, while I think there are other issues I can find common ground with progressives on, I believe the tax issue is the one I can find the most common ground on….
…did Bart’s head just explode?
I’ll be discussing these tax proposals in upcoming articles.
The income tax imposed during the Civil War was declared unconstitutional by the SCOTUS, based on Article 1, Section 9.4. prohibition of direct taxes. It was not raised during WWI.
It took the passage of the XVIth Amendment to bypass that Constitutional ban.
Maybe I missed it, but I haven’t seen anyone bring up automated payment transaction tax [to replace all tax or at least income tax]. Seems progressive, fair, easy, and difficult to exploit. What’s the argument against it?
Max, thanks for the corrections. Better data is always good.
Mule Rider: Thanks for another plug for my website and tax proposal,(http://fairsharetaxes.org) I got alot of hits from here, and 538 members have inquisitive minds: they look though more pages on the site than any other referring site.
I think a good word to describe our tax code is: byzantine = highly complicated; intricate and involved
Some comments are talking up a consumption tax and I think even Michael may be leading up to this. The problem with a consumption tax is that even a tax that is progressive on consumption is regressive in term of the two true measures of 1) ability to pay and 2) extent to which a households has profited from government programs (e.g. where would corporate tycoons be without a publically educated workforce?). Those two measures are income and wealth (net worth).
The reason is that the very wealthy can’t hope to buy anything near their income or net worth. For example I doubt Warren Buffett spends more than $1million dollars a year. Even if it was all luxury item taxed at 100% it would represent 0.01% of his 2006 $8 billion investment gain and 0.005% of his $50 billion net worth. Meanwhile a 30% tax on consumption (which would be needed to supplant current federal taxes (see the so-called “fair tax”) would represent a 30% tax on wages and perhaps 300% of net worth of a minimum-wage worker who has to spend every dollar she makes. See more on this at: http://fairsharetaxes.org/VATvsWealthTax.aspx
Regarding Michael’s objections to the burdens of figuring the tax and evasion, my proposal simplifies our tax code about 10,000-fold (http://fairsharetaxes.org/ProposedReform.aspx) and deals to a great extent with evasion (http://fairsharetaxes.org/TaxForm.aspx)
-Pete
I said (wrongly as it turns out):
“I’m not opposed to changing the tax code, but to call the current one “Draconian” does violence to the English language.”
Mule Rider said:
As is often the case here, I get called out for incorrect grammar, when the dictionary indicates otherwise.
Mule is right; I’m wrong. I apologize. I want to insert a joke here, like “I thought you meant Draco Malfoy,” but it would just fall flat so I’ll leave it at:
I was wrong.
Monotreme ~ I was wrong.
Kumbaya! 😀
Treme, you’re just such a cool, classy guy… 😎
On teh bright side, your post caused me to look up Drakon and learn a bunch of stuff I didn’t know before (or had forgotten) and that always makes my day.
So thanks, eh? 😉
Thanks, ‘Treme. You’re a cool dude.
And did we just get visited by the mastermind behind fairsharetaxes.org? Awesome!
First, another story in the continuing adventures of the Lame Duck Dems…
Before the more GOP legislature elected by the voters comes to town to screw up the Chicago Way, Democrat lame ducks in Illinois just roughly doubled the corporate income tax and raised personal income tax rates by two-thirds. Dems attempted to comfort their mugged constituents with a pledge not to increase the already insane state spending levels by more than 2% per year. Meanwhile, neighboring states which turned various shades of red in November are already lobbying businesses in the Land of Lincoln to move across the border where the cost of business is not so dear.
And now for something completely different…
Sec Treasury Timmy Geithner channelled Jack Kemp’s supply side economics and assured an audience today that the Obama/GOP deal to reduce marginal income tax rates would pay for themselves and be revenue neutral.
Same party, different galaxies. Weird.
Bartles the Clown said
Dems attempted to comfort their mugged constituents with a pledge not to increase the already insane state spending levels by more than 2% per year.
Have you considered living in America? Taxes are the way we pay for the government we want over here in the sane world.
Oh, except for Republicans. They borrow money from China.
Hey Bart, I asked you nicely to look at the tax link posted by Mule Rider and PeteG2. Will you please look at it, pretty please with sugar on top? And then comment on it, oh please??? It is just a few comments (13:58) prior to your latest wonderous posting.
Mule, Pete interesting material. Certainly material worthy of more thought and discussion. I wish I knew more about some of this stuff. What I do know is that our present system isn’t working except for those that have gamed the system. I fear our present system is going to lead to our demise or at the very least the complete demise of the American middle/working class. I am willing to look at any system that would prevent that.
Number Seven says: Hey Bart, I asked you nicely to look at the tax link posted by Mule Rider and PeteG2. Will you please look at it, pretty please with sugar on top? And then comment on it, oh please??? It is just a few comments (13:58) prior to your latest wonderous posting.
Since you asked so nicely, I will give you my first reaction when I read the Fair Share link: Are you shitting me?
Imagine if your earnings (not those of Warren Buffett) were not only taxed once, twice or maybe three times as under the current punitive tax code, but instead retaxed and reduced every single year of your life. You would justifiably hide your money to escape the revenuers.
Remember Michael’s warning that folks start to evade normal income tax rates above 10% which are levied only once. Under the Fair Share wealth confiscation regime, America would look like Cuba or Venezuela with its wealthy leaving for less predatory climes – no longer producing wealth in the United States and no longer paying any taxes on that wealth. Given that the top 12% of earners targeted by the Fair Share wealth confiscation regime already pay almost half of the tax burden, their departure would leave the government looking toward a now impoverished and heavily unemployed citizenry to make up the difference.
This plan reminds me of the ignorantly nutty counter culture song “I’d Love to Change the World:”
Everywhere is freaks and hairies
Dykes and fairies, tell me where is sanity
Tax the rich, feed the poor
Till there are no rich no more
I’d love to change the world
But I don’t know what to do
So I’ll leave it up to you
Population keeps on breeding
Nation bleeding, still more feeding economy
Life is funny, skies are sunny
Bees make honey, who needs money, Monopoly
I’d love to change the world
But I don’t know what to do
So I’ll leave it up to you
World pollution, there’s no solution
Institution, electrocution
Just black and white, rich or poor
Them and us, stop the war
I’d love to change the world
But I don’t know what to do
So I’ll leave it up to you
Bart, you are so predictable. Again with this shit about punishing the wealthy and double, tripple, quadrupple taxation and the wealthy fleeing high taxes.
See this link for a response as it says it far better and with more patience than I have.
After all, we know the US was depopulated during the decades when we had a >70% tax rate on the upper bracket of income 😉
The “double tax” meme is such obvious bunk. It’s been pointed out several times. Our tax structure tends to exact taxes whenever money changes hands. You get paid, and pay income tax. You give those same dollars to a car salesman, and the auto company pays income taxes (you probably also pay sales taxes). The car company gives those same dollars to an employee, who pays income taxes. The employee gives those same dollars to a McDonald’s for lunch …. etc.
Bart the Clown can always be counted on to mindlessly recite the current right wing talking points on any subject. He’s like a tape recorder on endless loop, always repeating the same tired nonsense. When something changes in the environment, he adds a new loop with the next mindless pieces of inflammatory rhetoric.
Bart, you give conservatives a bad name. People like you are the reason that so many good people don’t like conservatives. It is time to put an end to the politics of anger and paranoia and unthinking hyperbole.
Bart makes the criticisms that many make of any tax reform proposal to have the wealthy investing class pay their fair share is put forward. As DC points out, they are all anticipated and answered at http://fairsharetaxes.org/Talkingpoints.aspx – particularly the first 4 paragraphs.
I add the following: The Wall Street Journal reports that the Fed reports that the top 400 income-“earners” (top 0.0004% – who, by the way, hold more wealth than bottom 50% in the US) paid an average federal income tax rate of 16.6% http://blogs.wsj.com/economics/2010/02/17/a-look-at-the-tax-returns-of-the-top-400-taxpayers/ I read elsewhere that one-quarter of them (can’t find the ref this a.m. paid NO federal income tax.
Finally, regarding Bart’s point about tax evasion. Do you really think anyone is greedy enough to avoid a less than 0.1-2.8% total tax on net-worth exceeding $1 million? Yes, you are right, they are. They would also be committing fraud and robbing their fellow tax-payers. Third party reporting and stiff penalties would put an end to that. (perhaps we need to resurrect Draco … just kidding massive financial penalties would be sufficient)
-Pete
My apologies – Typos fixed:
Bart makes the criticisms that many make when any tax reform proposal to have the wealthy investing class pay their fair share is put forward. As DC points out, they are all anticipated and answered at http://fairsharetaxes.org/Talkingpoints.aspx – particularly the first 4 paragraphs.
I add the following: The Wall Street Journal reports that the Fed reports that the top 400 income-”earners” (top 0.0004% – who, by the way, hold more wealth than bottom 50% in the US) paid an average federal income tax rate of 16.6% http://blogs.wsj.com/economics/2010/02/17/a-look-at-the-tax-returns-of-the-top-400-taxpayers/ I read elsewhere that one-quarter of them (can’t find the ref this a.m.) paid NO federal income tax.
Finally, regarding Bart’s point about tax evasion. Do you really think anyone is greedy enough to avoid a less than 0.1-2.8% total tax on net-worth exceeding $1 million? Yes, you are right, they are. They would also be committing fraud and robbing their fellow tax-payers. Third-party reporting and stiff penalties would put an end to that. (perhaps we need to resurrect Draco … just kidding massive financial penalties would be sufficient)
-Pete
PeteG/#7:
Have you read and actually applied these proposed Fair Share Tax Rates? Let’s go through the exercise with a hypothetical single stream of income of $10 million.
Reform the Federal Income Tax, eliminating nearly all adjustments and deductions, with reduced progressive tax rates (12% to 24%) on all income and other compensation beyond a realistic poverty line (about $25,000 for a household of three).
$2.4 million in taxes – $7.6 million remaining.
You also realize that you have spiked the middle class tax load here by eliminating the home mortgage deduction and dependent deductions while keeping the tax rates largely the same.
EITC has been eliminated, so the poor are paying more taxes as well.
Fund all state and municipal governments through a surcharge on each household’s combined Federal Income and Wealth Tax, with the surcharge rate set by each state and municipality.
Let’s apply Illinois new 5% income tax.
$2.9 million in taxes – $7.1 million remaining.
No more state tax deductions.
Employer-paid payroll taxes are reformed to a federal 7-12% progressive tax on the entire compensation package earned by each employee.
$4.1 million in taxes – $5.9 million remaining.
Did you catch the changes here? The entire compensation package is now subject to tax – health insurance, etc, etc. BTW, “employer paid” still comes out of your compensation.
The government imposed cost of labor just went up again and more are unemployed. Now that taxes have been piled onto Obamacare mandates, employee health insurance is now unaffordable for most businesses. Your tax rates will have to go up again to cover all the new people on Medicaid or going without.
Institute a new annual Federal Wealth Tax on household net-worths over about $800,000 (for a typical family), ranging from 0.2% of net-worths of about $1 million up to 1.4% of net-worths over about $20 million.
For simplicity’s sake, lets say this is 1.0% and let’s apply this over 20 years.
5.8 million in taxes – $4.2 million remaining for an effective 58% tax rate.
The really pernicious side effect of this wealth tax is that capital gains taxes upon sale of an investment have been eliminated and you instead are taxed every year you hold an investment.
This punishes the creation and holding of privately held companies with large capital requirements and limited initial or even ongoing earnings capabilities. Ex. If you have a large farm which is running at a loss, you not only have to borrow or sell off your land to cover your income loss, you now have to pay the government’s wealth tax.
This also punishes American business’ ability to raise foreign equity. Why is a foreign investor going to take a 1% (give or take) annual hit followed by a 24% income tax hit on profits for investing in an American company, even if the company is losing money, when it can invest in Germany or China with a far lower single capital gains tax. Hell, why would a successful American investor stay here?
Think through the consequences of any wealth confiscation regime.
I can’t quite put my finger on how he did it, but I’m pretty sure Bart just misrepresented the entire fairsharetax idea to spin it so it sounds like a diabolical “wealth confiscation” plan.
You make me ashamed to call you a fellow conservative sometimes.
Bart, your last objection has also been anticipated and answered at http://fairsharetaxes.org/Talkingpoints.aspx Here’s part of it:
“Some may initially think, if my wealth is taxed at 2% (because I have a $3 million fortune), in 50 years all of my wealth will be gone. Of course, anyone with that sort of wealth generally earns an average 8-10% rate of return on it annually. Assuming a 9% annual investment return and the proposed wealth tax indexed for inflation: after only 10 years (without working to add a single penny), the $3 million would have grown to nearly $5.8 million ($4.5 million adjusted for inflation). After 50 years, the 3 million family fortune would have grown to over $50 million despite the proposed wealth tax. Remember under the proposal, capital gains taxes, corporate taxes and estate taxes are eliminated. One way to view the wealth tax is that it amounts to a roughly 15-25% tax on the typical investment gains of millionaires, perhaps up to 30% on the investment gains of billionaires. This seems more than fair since middle class workers have for years paid 25-40% of their wages from work in total taxes.”
Further, you did not catch quite a few details of the proposal. Please read the proposal carefully as I believe you are creating quite a bit of confusion here. To name a few things you did not get right on the proposal:
Employer-paid payroll tax is not included as “compensation” for figuring the worker’s taxes.
Foreign citizens investors are only taxed on dividends to the the extent the corporation earned their profit in the US (US taxpayer-funded economic intrastructure). They are not taxed on wealth. US corporate income taxes are eliminated under the proposal, so this is largely a wash for the foreign investor.
On the other hand without corporate taxes, corporations flock to the US – seems good for our economy.
You wrongly apply employer-paid payroll tax to your individual tax-payer (who earned 10 million.)
You have someone earning 10 million a year and then you subtract 20 years worth of my wealth tax from it? That is simply not logical.
EITC and home mortgage deduction are gone but so are sales, property, social security taxes. Each middle class family would pay thousands less. Yes, wealthy investors would pay more on their investments. (This would end the market distortion that now taxes investment gains much less than wages and leads to investment bubbles and the inevitable recessions they lead to.) Warren Buffet’s TOTAL taxes for 2006 (last year I have good numbers for) would have increased from the 11% he actually paid (including the corporate taxes he paid indirectly) to (under my proposal) 29% of his investment income and gains.
I end with the last paragraph from the essay: “Under the income-and-wealth-based tax system and rates described above, in 2007 the hypothetical working, middle-class Smiths would have had a total federal, state, and municipal tax bill of about $13,500 (rather than $20,760), and the millionaire Richs would have paid about $19,300 (rather than $4990). Both would have had total taxes that amounted to 15% of their combined income, other compensation, and investment gain. The Smiths’ total tax bill is reduced from 36% to 23% of their net worth. The millionaire Richs’ total tax bill is increased from 0.4% to 1.5% of their net worth. Seems only fair, or at least somewhat fairer.”
When I run for and am elected President in 2020 – and become the youngest ever to take office at age 41, this Pete guy is going to be at the top of my list for Treasury Secretary.
Pete G, please don’t expect logic from Bart. It does occur, but ONLY when it benefits HIS arguments.
Otherwise, expect fallacious arguments, deliberate misinterpretations, misstatements of fact and ad hominem attacks.
That way, you won’t be disappointed.
Pete G, please don’t expect logic from Bart. It does occur, but ONLY when it benefits HIS arguments.
In other words, don’t EVER expect logic from Baghdad Bart. Baghdad Bart’s world is where logic goes to die.
Again Bart, I’m feeling a lot of love for you in this thread as you are obviously here for the empathetic outpouring of liberal emotion you receive daily and it goes w/out sayin’ ~ you’re welcome …
MR: I’d accept that position. What’s the salary?
Max, BB: Thanks for the info. I really need to stop posting here and instead spruce up my website (content and presentation), stacking logical arguments and data higher and higher until John Boehner, Mitch McConnell, and even Bart collapse under the weight of it all. The quixotic hope is to grow it into a self-sustaining movement. It’s a work in progress. I’ve incorporated suggestions from folks writing in, including economists. Any further suggestions would be welcome at the “contact me” page on the site: http://fairsharetaxes.org
Pete:
Thank you for your thoughtful response. Based upon your quote, I suspect that the author of this tax policy does not understand its implications and perhaps basic math:
Some may initially think, if my wealth is taxed at 2% (because I have a $3 million fortune), in 50 years all of my wealth will be gone.
This is mathematically impossible since the 2% tax will be imposed anew each year on a previously taxed and reduced amount of wealth. You can never reach zero.
Of course, anyone with that sort of wealth generally earns an average 8-10% rate of return on it annually.
Of course? Based on what?
More importantly, these hypothetical earnings on the remaining wealth are their own new earnings streams and are themselves subject to the gauntlet of taxes I applied above. Which put the lie to this nonsense:
One way to view the wealth tax is that it amounts to a roughly 15-25% tax on the typical investment gains of millionaires, perhaps up to 30% on the investment gains of billionaires.
My hypothetical millionaire CEO earning a $10 million annual compensation package is looking at an effective 58% marginal tax rate after 20 years in each stream of annual pay. If this were an investor who does not pay payroll taxes on the capital gains, the effective rate would be 46%.
I used the 20 year figure because the CEO is probably in her 50s and 60s to be earning that kind of money. If you are young wunderkind like Gates, you will pay a substantially higher marginal rate over 40 or so years.
Employer-paid payroll tax is not included as “compensation” for figuring the worker’s taxes.
Huh? The employer provides the employee a compensation package and then pays between 7-12% of that to the government, giving the employee the remainder.
Foreign citizens investors are only taxed on dividends to the the extent the corporation earned their profit in the US (US taxpayer-funded economic intrastructure).
There is nothing in the author’s bullet points which states that foreigners escape US income and wealth taxes on their earnings in the US. If the author intends to relieve foreigners of all taxes on earnings in the US except dividends, the proposed tax code punishes American citizens in favor of foreigners and gives American investors a tremendous incentive to emigrate to another country and change their citizenship.
On the other hand without corporate taxes, corporations flock to the US – seems good for our economy.
The plan eliminates double taxation through corporate and then capital gains taxes, but also taxes the investment principle every year and then makes capital gains income taxable at far higher individual rates. This is at best a wash for short term investments and punishes long term investments.
You wrongly apply employer-paid payroll tax to your individual tax-payer (who earned 10 million.)
How do you figure? Here is the bullet point rule: “Employer-paid payroll taxes are reformed to a federal 7-12% progressive tax on the entire compensation package earned by each employee.”
EITC and home mortgage deduction are gone but so are sales, property, social security taxes. Each middle class family would pay thousands less.
Only if they do not itemize.
Pete: EITC and home mortgage deduction are gone but so are sales, property, social security taxes. Each middle class family would pay thousands less.
Also…
SS and Medicare taxes are paid as payroll taxes, albeit as a slightly smaller rate.
If states are forbidden from collecting sales and property taxes, their income tax surcharge goes up to make up the difference.
Pete, note the subtle <ad hominem “the author of this tax policy does not understand its implications and perhaps basic math.
As I cautioned you.
Bart, as you can see, has difficulties thinking outside his (very small) box.
Bart would also COMPLAIN about the scratching and chafing of his neck if we to his left were to hang him with a BRAND, SPANKING, NEW rope!
Bart: Perhaps you missed it. I am the author of the proposal and website.
MR: Thanks. I’d take that job. What’s the starting salary.
Max and BB: Thanks for the info. I really need to stop posting here and spruce up the content and presentation of the website. I’d like to stack the data and logical arguments higher and higher, so John Boehner, Mitch McConnell and even Bart collapse under the weight of it all. My quixotic goal is to advance a self-sustaining movement for fair, economy-fixing, country-saving tax code. It’s a work in progress. Suggestions welcome on the site’s “Contact me” page. I’ve already incorporated suggestions from economists and just plain folks.
-Pete
http://fairsharetaxes.org
Barted ~ Thank you for your thoughtful response.
Yes it’s true, as even Bartles panders and then of course the rest of his post he lowers his daily disingenuous/misinformation winger boom.
OK, at least he’s polite before he spouts his daily erroneous talkin’ pts. unlike some folk yesterday who called Bart despicable!
I’ll have to wait till after work to try to work Barts numbers through the proposed FairShare tax code. Hopefully, Pete is working on this already. Take care folks, see you in about 6 hours. Don’t feed any energy drinks to Bart.
Bart: Perhaps you missed it. I am the author of the proposal and website.
MR: Thanks. I’d take that job. What’s the starting salary.
Max and BB: Thanks for the info. I really need to stop posting here and spruce up the content and presentation of the website. I’d like to stack the data and logical arguments higher and higher, so John Boehner, Mitch McConnell and even Bart collapse under the weight of it all. My quixotic goal is to advance a self-sustaining movement for fair, economy-fixing, country-saving tax code. It’s a work in progress. Suggestions welcome on the site’s “Contact me” page. I’ve already incorporated suggestions from economists and just plain folks.
-Pete
“What’s the starting salary.”
Probably not enough to compensate for a brilliant enough tax idea/plan that might actually prevent this country from enduring another economic collapse and descent into chaos and ruin.
Pete:
I did not know you were the author. I went straight to the proposals in between court hearings this morning.
As some one who has drafted contracts and homeowner’s association declarations, may I suggest that you be very careful about how you write up your proposals to make them as clear as possible and then continue as you are having others critique them. It is easy to get lost in the minutia and miss some major items.
Also, have you consulted with tax professionals on how taxes are usually applied? You appear to have assumptions on how your system would work which are contrary to current practice. If you are proposing changes, then you have to spell them out in your proposals so folks like myself do not jump to the wrong conclusions from cursory bullet points.
Finally, if you want to sell this proposal to progressives, foreigners better bear the same tax burden as Americans. Even progressives are likely to protest that gross inequity because it gores them.
We obviously disagree, but good luck on your project. You have put in some good work so far.
PeteG2,
I very much like the idea of a wealth tax and for many of the reasons that you propose on your site, but I do think you overestimate the annual returns that most wealthy get. Assuming 8-10% every year is a stretch. Perhaps during their “growth” years when they’re trying to accumulate and are choosing a more aggressive portfolio, but probably more like 6-7% as they move some of their investments to things with a more stable rate of return to preserve their gains. That, and I’d like to see it kick in at around $2 million rather than $1 million, because when home equity is included, I expect that a lot of middle-class near-retirees will cross that $1M threshold, but won’t be what anyone could call “rich.” Thirty years ago, $100,000 was enough to retire comfortably, but each generation learns they need about 10X what their parents needed, thanks to inflation…
Otherwise, good site.
Barted ~ We obviously disagree, but good luck on your project. You have put in some good work so far.
Damned by faint praise lol
mclever says: I’d like to see it kick in at around $2 million rather than $1 million, because when home equity is included, I expect that a lot of middle-class near-retirees will cross that $1M threshold, but won’t be what anyone could call “rich.”
Top 12% is not rich? Progressives almost without fail will do their utmost to avoid their own progressively punitive tax codes.
Bart,
No, a million dollar net worth doesn’t automatically make one “rich.” Usually “rich” is reserved for the top 5% or top 1% unless it’s being used in a relative context.
I was (empathetically, yes shiloh) putting myself in the hypothetical shoes of a couple in their mid-to-late 50’s who’d bought a house now worth ~$400K-$500K (not unlikely if they live in a major city and bought it 30 years ago) and had responsibly saved 10% a year over the thirty-plus years they’ve both been working. Assuming they they both started out making about $15K each in 1980 and maintained consistent earnings at a little over double the minimum wage, then they’d be making about $35K each today. If they saved that 10% in the Vanguard S&P index fund, with reinvested dividends and compounded interest, they’d have over $600K in savings now. (You can do the math on that yourself, if you’d like.) And no, I wouldn’t consider a middle-aged couple making $70K in combined salary rich.
Furthermore, your pejorative accusation that I’m avoiding anything is baseless and unsubstantiated. You have no idea how much money I have, nor how much I pay in taxes, nor how much I’m willing to pay. (Yeah, I know, poor sentence structure. So sue me!) Your arguments might carry more weight if you left off the snide asides intended merely to provoke.
🙂
Top 12% is not rich? Progressives almost without fail will do their utmost to avoid their own progressively punitive tax codes.
As opposed to wingnuts like you who don’t want to pay for the pointless wars they shamelessly shill for?
mclever says: No, a million dollar net worth doesn’t automatically make one “rich.”
The average net worth of an American household is a bit over $50,000. A million dollar net worth is twenty times the average. How is that not “rich?”
Pay your “fair share” of taxes.
Progressives tend to be comparatively wealthy upper middle class urban dwellers. The discussions here about excusing folks from the highest tax rates in our progressive tax code or to limit tax increases to the top 2% are expressly meant to help progressives avoid being gored by their own tax code.
I suggest instead that the highest income tax rate be inflicted upon the top half of earners. I assure you progressives would be the first ones to squeal like little piglets.
Bart,
Did you even read my example?
Or are you more interested in making generalized attacks?
mclever,
You’ve been around here long enough to know the answer.
I was (empathetically, yes shiloh)
Indeed as even Bart would agree 😉 empathy is a good thing … and I believe mentioning my name at 538 will also give you demerit points ~ hmm, have I beaten this dead horse sufficiently ?!? Oh I’m sorry as no one is allowed to acknowledge my existence …
Which begs the age old question ~ If Bart continues to bart, but there is no one here to acknowledge his barting, has he actually barted? 😛
BTW, shiloh, I think that dead horse has started to decay already…
😉
mclever, you are now on double secret probation lol ~ dead horse notwithstanding … Am I having too much fun ?!? Rhetorical question.
I suggest that the median is more worthwhile in a random variable with such disparity.
A net worth 2 million would be needed to be 20 times the median.
I also would point out that someone with a net worth of 1 million is not in a position to stop working unless they are old enough not to have to worry about depleting their assets. With 2 million invested wisely, and a very low expenditure rate, maybe.
I’d say “rich” is somewhere in the 5 million range, as far as net worth is concerned.
I agree, shortchain.
mclever:
I read your argument that a family with a million dollar net worth is not really rich and posted the reason why that dog will not hunt. “Rich” is your wealth relative to your fellow citizens and 20x the average net worth is “rich” if that word has any meaning.
If anyone with a net worth of a million dollars thinks it is equivalent of the median of $50,000, then exchange the expensive house on the Hamptons and the several hundred thousand in investments with the average Joe and Jill living in a 3/2 ranch house in Chattanooga, TN with a small IRA worried about how they will work their way through retirement, not how they will retire “comfortably” in the rich manner to which they are accustomed.
Pay your “fair share” of taxes or repudiate the entire wealth confiscation scheme.
Is there a middle ground?
A middle between median and rich? Say, well-to-do but not necessarily rich?
We recently had a discussion if INCOME greater that $250k/yr made one rich. And laughed when someone said “No you gotta be making $5M to be rich”. Funny the coincidence in the $5M number here.
If I’m 50 and I’ve got $10,000 in the bank, a house that’s $50,000 underwater that I’ve owned for ten years and a 401k that’s lost half it’s value down to $75,000, $1M is net assets looks pretty damned rich to ME!!! Hell, $500k is looking pretty damn good because I’m MOST PROBABLY NOT going to reach even the $500k number in the next 12 years! I’ll be lucky if the house even gets back to equity by that time.
That is the reality for MILLIONS of people out there today.
sc and mclever, quite honestly, it looks pretty damn bad to be arguing the relative merits of $1M vs $5M as to one being “rich” and one not.
“Rich” is the guy whose net worth is twice mine. But HE might not think so.
Bart,
Fixating on a magical number, like “20 times average net worth” as the threshold for being “rich” is about a puerile and foolish as is possible.
According to the online “alphadictionary”,
Sumptuous, luxurious, exhibiting great wealth and richness, having plush, luxurious appointments. 2. Great in size or numbers, thick or dense with.
A net worth of 1 million isn’t even in the ballpark.
However, “thick or dense” does a fair job of describing you, so — congrats! You’re “rich”.
However, “thick or dense” does a fair job of describing you, so — congrats! You’re “rich”.
thick synonyms: creamy, clogged, jellylike …
dense synonyms: slow, stupid, blockheaded, boorish, doltish, dull, dumb, fatheaded, ignorant, imbecilic, impassive, lethargic, numskulled, oafish, obtuse, phlegmatic, simple, slow-witted, sluggish, stolid, thick, torpid, backward, moronic, underdeveloped, confused
shortchain, Bartles is indeed rich! Thumbs up!
apologies to phlegmatic, slow-wtted, moronic dolts
Max,
If you read my comment above you will notice that I was pointing out that 1M net worth is not “rich”. Of course the term is relative. To a guy living under a bridge, the threshold for “rich” would probably be living in a car, but one that he owns outright.
I’ve tried to sign off, but the current debate I think is missing the point and so is pulling me back in.
There’s been alot of back and forth about who is wealthy and so should be subject to the the wealth tax. It’s a “wealth tax”, not a “tax on the wealthy.” Maybe it would be clearer if I called it a net worth tax. It’s just as second way, in addition to the income tax of capturing 1) ability to pay and 2) the extent to which a household has profited from economic infrastructure provided by gov’t (all taxpayers).
To get into the details, I chose the amount not subject to the net worth tax to be 150% of the median price of a home ($270K, even for those who choose not own a home) plus $50k per household member plus amount in a tax-free account (cap dependent on age, $672 for a 60 year old couple). The exempt total is 1.04 million in this case. So to use a something like the situation someone suggested, $600K equity in a home paid off + $600K in a retirement account = 1.2 million net worth. Subtract exempt 1.04K million =$196 K subject to the net worth tax. The total net worth rate at this level in 1.67% for combined federal-state-and-local or all of $3270. This is added to their (likely reduced under my proposal) income tax and remember no property (real estate) tax (12K a year?), sales tax (4K a year?), or social security tax (5-10 K per year).
In conclusion, under my proposal the hypothetical couple are among the middle class who pay reduced overall total taxes (compared to the current system), eventhough they are subject to a small wealth tax. It’s more fair than the current system in which a single minimum wage worker ($14,500/yr) pays $4400 (30%) in total taxes. Yes? Oh, and the federal budget (and all state local) would have balanced, at least in 2007.
-Pete
http://fairsharetaxes.org
Perhaps the argument should be using the term “wealth” vs “rich”. I know plenty of people who are rich and don’t have a lot of wealth.
And vice-versa.
sc, when you put this argument in a political context, as in determining where the line is drawn for taxing purposes, is where we have the debate and the differences that make Congresspeople earn their money.
Real wealth is when you don’t stop to think about your bank account first when you make that next purchase, whether it’s a suit, a boat, a plane, or house.
And now, see Bart the Chameleon change colors and pretend to be the defender of the middle class working stiff. Get your tickets while they last!!!!!
Max,
Do point out where I was “determining where the line is drawn for taxing purposes,”
— because I’m in complete agreement with PeteG. The debate should be about taxing wealth, not “the wealthy”. Who is “wealthy” is a question that is pointless to decide.
Now, where the line is drawn for a particular percentage, that’s something we could discuss — but frankly, once it got into Congress, it will get twisted out of all recognition, and that’s independent of which party is in power…
I like the new meme that progressives are all high-end yuppies. It sure beats the old meme that we’re all lazy welfare cheats living off the government. Or rather, off of money that the tyrannical gubmint cruelly confiscated from hard-working Republicans.
sc, you misunderstand my point.
It is NOT with PeteG’s proposal, but with the appearance of the comments between mclever and yourself over $1M vs $5M as the definition. From the outside looking in is was a bit unbecoming. Further, y’all opened the door to more of Bart’s irrelevance.
Max, I agree that “rich” is a relative term… I can appreciate your sentiment that “rich” is anyone whose net worth is twice yours. However, when defining “rich” for potential taxation purposes, saying “anyone twice as rich as Max” won’t quite cut it. 😉
From my conversations with others on this topic, I’ve come to expect that most older people see a million dollars as a magical number. Unreachably rich! But, my earlier post showed how a couple making below the median wage could end up with a million in assets just by responsible saving habits. I don’t think people who start out with nothing and make below median wages are rich, no matter how well they scrimp and save.
Furthermore, for people in my generation, those of us who’ve crunched the numbers are coming to grips with the fact that a million dollars won’t be near enough for us to retire when we’re 70, especially if we assume Social Security won’t be there. By that time, someone in my generation will need around $2.5 million to live at the same standard of living as someone who makes $35K now. A married couple will need even more.
From that perspective, I think of shortchain’s definition of “rich” as a good starting point. Anyone below retirement age with enough assets that they could conceivably live off of their investment income for the indefinite future rather than work for a salary is probably”rich” by most people’s consideration. But it’s only a starting point…
dc,
From Bart, you were expecting consistency, already? Oy vey!
Pete G,
Thanks for your input. From the perspective of using 150% of the median home price plus other adjustments, I have more appreciation for that choice than what looked like (from a cursory reading of your site) an attitude that anything over $1M was automatically wealthy. If you’re using something keyed to an economic indicator (like housing prices), then that’ll scale with the economy, which is good, in my opinion.
Furthermore, you’re right that I wasn’t considering your other proposed reductions in taxes. Thank you for clarifying.
🙂
Max,
I’m not responsible for either you or Bart misreading my comment and going off on some irrelevant topic.
shortchain & Max,
You can blame all the confusion on me. Somewhere up thread, I suggested that $1M seemed like an arbitrary line for “wealth”, because I could conceive of middle-class folks whose responsible saving habits had put them above that line. I thought $2M might be more reasonable to avoid “catching” those middle-class, below-median-wage-earning folks. I questioned the $1M number, because $1M today isn’t the same as it was for my grandparents’ generation, and I thought it had been arbitrarily chosen.
However, I apparently hadn’t read Pete G’s proposal carefully enough. He wasn’t just drawing $1M out of a hat because it sounded like a big number, but actually had some justification for the numbers he used.
I still doubt that he’d be able to do away with state sales, income, and property taxes, because states need to raise revenues somehow. But if the federal payroll tax(es) could be absorbed into the regular taxes and replaced by a net worth tax instead, then perhaps that would be a good first step.
Number Seven says: And now, see Bart the Chameleon change colors and pretend to be the defender of the middle class working stiff. Get your tickets while they last!!!!!
I think we should all be treated the same. However, it is fun to use progressive class warfare against progressives to point out their hypocrisy. There is a reason the Obama Administration has both the most progressives and tax cheats in recent memory.
Let the record show Bartles did not disagree he is ~ slow, stupid, blockheaded, boorish, doltish, dull, dumb, fatheaded, ignorant, imbecilic, impassive, lethargic, numskulled, oafish, obtuse, phlegmatic, simple, slow-witted, sluggish, stolid, thick, torpid, backward, moronic, underdeveloped, confused
Indeed, a well-rounded teabagger who is totally obsessed w/Obama …
but, but, but Bartles, we still love ‘ya!
sc,
Your reference conflating Bart and myself was totally uncalled for and beneath you. Not sure why you choose to be so snippy, simply because I disagreed with the tenor of the comments made between you and mclever.
Sorry if I stepped on a nerve.
mclever, thanks for your clarification. I agree that inflation takes it’s toll. I’m old enough to remember when you could get a Coke and a bag of chips for $0.15!!! Hope you saw the point I was trying to make concerning the prior exchange.
I still hold that one is truly wealthy once one does not think of the cost regardless of what they are buying. The degree is based on the person and their desire for consumption.
And now see Bart the Chameleon rage against ‘class warfare’ when just a hair ago he was defending his hero, Reagan the Socialist for starting the war. After all, it is only class warfare when the middle class and working poor mention redistribution, but when the wealthy want the money redistributed their way, it is the market at work.
Bart, since you have had so much fun with songs, let me post this one from one of my faves, Blondie: just go away
Just Go Away.
Seriously, Just Go Away
Just want to say Hi to Electrovibe. Electrovibe was a fellow poster at ThePartisanDiologes, the site I mentioned as having become a flame war site.
Hey 7, yeah, had to move. Didn’t like the new layout at all and it seemed to give a bigger voice to those who screamed the loudest w/ the most rhetoric. This is a good place for a break.
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