Walmart and Hostess inspired economic discussion

[YVK]

I have nothing against them as a group however they need to pay their fair share of taxes.

You really need to learn a little about respective shares of taxes vs income. All of your arguments are emotion based, here is the reality check




So, yeah, all of these whining how capital gains taxes being too low don't change the fact that upper brackets not only pay a lion's share of taxes, they also pay them well above the respective share of their AGI - whatever the actual tax rates are. So, what fair share are you talking about? I am in the upper 5% bracket - I would love your idea of 15% flat tax on everybody, 'cause right now I paying my taxes and somebody's taxes too.

Capital gains taxes are idiocy. For me to get any capital gains, I need to work my ass off, get taxed at the max marginal rate, save some money after the taxes are paid, invest it (with obvious risk of loss), and if I get any gains on my investment - you wanna tax me yet again? How about I consider an alternative - I'll just sit on my savings, take no risks, pay no additional taxes. Then we'll see which way would stimulate economy better.

[BaiHu]

You really need to learn a little about respective shares of taxes vs income. All of your arguments are emotion based, here is the reality check




So, yeah, all of these whining how capital gains taxes being too low don't change the fact that upper brackets not only pay a lion's share of taxes, they also pay them well above the respective share of their AGI - whatever the actual tax rates are. So, what fair share are you talking about? I am in the upper 5% bracket - I would love your idea of 15% flat tax on everybody, 'cause right now I paying my taxes and somebody's taxes too.

Capital gains taxes are idiocy. For me to get any capital gains, I need to work my ass off, get taxed at the max marginal rate, save some money after the taxes are paid, invest it (with obvious risk of loss), and if I get any gains on my investment - you wanna tax me yet again? How about I consider an alternative - I'll just sit on my savings, take no risks, pay no additional taxes. Then we'll see which way would stimulate economy better.

Love it! Nice graph.

[Shellback]

Come January 1st, 2013 your taxes, including capital gains, will be adjusted upwards by a consideral margin. Please don't forget to add in your 3.8% Obama Care tax as well. Have a great new year.

[BaiHu]

Come January 1st, 2013 your taxes, including capital gains, will be adjusted upwards by a consideral margin. Please don't forget to add in your 3.8% Obama Care tax as well. Have a great new year.

Some people just don't know how to keep a conversation civil

[Kyle Reese]

Come January 1st, 2013 your taxes, including capital gains, will be adjusted upwards by a consideral margin. Please don't forget to add in your 3.8% Obama Care tax as well. Have a great new year.

Elections have consequences.

[JAD]

Elections have consequences.

So does excessive taxation:

[BaiHu]

Where along the line do you think the middle and lower class are happy about this??

Emphasis mine.

http://online.wsj.com/article/SB1000...211825394.html

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms' expansion plans.

Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.

Companies fear that failure to resolve the fiscal cliff will tip the economy back into recession by sapping consumer spending, damaging investor confidence and eating into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.President Barack Obama called a number of business executives over the weekend, including Warren Buffett, Apple Inc. AAPL +4.52% Chief Executive Tim Cook and J.P. Morgan Chase's JPM +2.25% James Dimon, to promote his solution to the looming budget crisis. All sides in Washington, in a departure from a year of deep divisions, have pledged to work together and compromise to avoid going over the cliff.

"The whole world is looking for stability and clarity from the United States," said David Seaton, chief executive of Fluor Corp., FLR +0.73% a large engineering and construction firm. If uncertainty isn't removed, he said, "people will sit on their war chests of cash and return it to shareholders. You'll have a retarded growth trajectory."

Should the White House and Congress strike a deal to avoid the fiscal cliff, the economy could get a boost. "You might very well get a burst of pent-up demand coming at the start of next year," said Paul Ashworth, chief U.S. economist at Capital Economics, a consultancy.

"Given the timing of the drop-off in business investment," he said, "you have to think it's not just a coincidence with the timing of the fiscal cliff."

Unless the business investment slowdown reverses quickly, it could weigh further on growth prospects and the stock market.

Collectively, the members of the Standard & Poor's 500-stock index spent $580 billion on plants and equipment in 2011, according to calculations by the Journal from data supplied by S&P Capital IQ. Spending has run ahead of that pace throughout the year but has slowed in recent months. The latest retrenchment includes such household names as Wal-Mart Stores Inc., WMT +0.28% Ford Motor Co., F +3.05% Boeing Co., BA +1.69% Intel Corp. INTC +0.15% and Walt Disney Co. DIS +1.10%

During the 2007-09 recession, businesses cut back sharply on all kinds of spending. But investment helped propel the recovery, growing faster than the rest of the economy from the second half of 2009, once the recession ended, through the first half of this year. That helped many companies boost productivity and profits without adding new workers.

The pattern changed in the third quarter, when business investment fell at a seasonally adjusted annual rate of 1.3%, according to a preliminary estimate from the Commerce Department. The latest drop included a decline in investment in structures, such as buildings, at a 4.4% annual rate. Investment in equipment and software stalled after growing at a roughly 5% annual pace in the first six months of the year.

"We have really not seen tailwinds to the economy," said OfficeMax Inc. OMX +0.20% chief executive Ravi Saligram. "When that happens, American businesses focus on productivity. You always prepare for the worst and if things get better, that's great."

The slowdown in capital spending contrasts with a rebound in U.S. consumer spending and confidence, which has returned to a five-year high. Meanwhile, the latest survey by the Business Roundtable, which tracks expectations for sales and investment among its big-company CEOs, found the worst sentiment about the economic outlook in three years.

Consumers may be taking their cues from signs of stronger job growth, lower fuel prices [BTW, WTF does anyone see that] and an improving housing market. Businesses, on the other hand, appear more worried about the future, as profit growth and the global economy slow and the outlook for U.S. government policies remains murky.

The mood appears better among small businesses than large corporations. A survey by the National Federation of Independent Business in October found an uptick in capital spending among small businesses. While overall sentiment among small businesses remains below its prerecession average, it has been resilient in recent months.

Snap-on Inc., SNA +2.17% which makes equipment for auto technicians, reports healthy investment among the 800,000 small businesses it serves across the U.S. "Their confidence is fair and reasonable," said Snap-on CEO Nicholas Pinchuk. "As you move up to bigger companies, their foresight becomes broader and their confidence starts to erode."

Slower global economic growth also is contributing to the investment slowdown. China for example, has reduced demand for coal and other minerals, slowing orders for earth-moving and other equipment from Caterpillar Inc. CAT +1.95%

At the start of the year, Caterpillar expected to spend $4 billion building and expanding factories in Illinois, North Carolina, Texas, China and Thailand, among others. Last month, Caterpillar said it wouldn't reach that target, and expects capital spending to fall next year.

In technology, Intel is facing lower demand for its semiconductors. Intel last month said it would shift idle factory space and equipment into producing its newest chips, reducing its capital spending this year to roughly $11.3 billion, from an earlier projection of $12.5 billion. Chief Financial Officer Stacy Smith told investors last month that spending could fall again next year.

Other semiconductor companies buying less new equipment include Texas Instruments Inc. TXN +1.73% and Harris Corp., HRS +0.39% which has cut capital spending by 46% so far this year, to $44 million from $82 million. Apple said it planned to spend $10 billion on new stores and equipment in the current fiscal year ending Sept. 30, 2013, down from $10.3 billion in the 2011-2012 fiscal year.

Among the companies cutting capital-spending targets, the biggest concentration is in the energy industry, where natural-gas prices are near record lows.

Devon Energy Corp. DVN +1.56% spent $6.2 billion in the first nine months of this year, up 13% from the same period last year, with boosted spending on oil projects.

But capital spending next year will be "significantly less than 2012," particularly in acquiring new leases, Devon chief executive John Richels told analysts.

Write to Sudeep Reddy at sudeep.reddy@wsj.com and Scott Thurm at scott.thurm@wsj.com


As you could see, I could highlight this whole article. Each and every point in that article was about survival; so when you think that the top 1% of CEOs, FOs and OOs need to be taxed more, just look at what they're doing with their money and investments now in their very own companies. They are turtling!

So, go ahead, take a populist shot. I know what you're thinking. "Did those rich guys ship all their money off shore, most of it or put it all in blind trusts?" Well, to tell you the truth, in all of the excitement of this election, they kind of lost track themselves But being as these one percenters are the most powerful people in the world, and would blow off to an island far away from any OWS punk, you've gotta ask yourself one question: Do you feel lucky? Well, do ya, punk?

[Alaskapopo]

You really need to learn a little about respective shares of taxes vs income. All of your arguments are emotion based, here is the reality check




So, yeah, all of these whining how capital gains taxes being too low don't change the fact that upper brackets not only pay a lion's share of taxes, they also pay them well above the respective share of their AGI - whatever the actual tax rates are. So, what fair share are you talking about? I am in the upper 5% bracket - I would love your idea of 15% flat tax on everybody, 'cause right now I paying my taxes and somebody's taxes too.

Capital gains taxes are idiocy. For me to get any capital gains, I need to work my ass off, get taxed at the max marginal rate, save some money after the taxes are paid, invest it (with obvious risk of loss), and if I get any gains on my investment - you wanna tax me yet again? How about I consider an alternative - I'll just sit on my savings, take no risks, pay no additional taxes. Then we'll see which way would stimulate economy better.

Like I said I could give a shit about the total dollar amount of taxes paid. What matters is how much of their total in percentage form did they pay. You get rewarded for taking financial risks with profit you should not get a lower tax rate. I refuse to cry for those in the 1% when those in the middle class have lost their jobs, homes and standard of living.
Pat

[BaiHu]

Like I said I could give a shit about the total dollar amount of taxes paid. What matters is how much of their total in percentage form did they pay. You get rewarded for taking financial risks with profit you should not get a lower tax rate.
Pat

You really have to get the difference b/w percentages and dollar value.

Let's say we do a 20% flat tax, which is a least higher for you, so we nail the ultra rich an add'l 5% on their capital gains, not their income. Then we'll move the above average top rate (1 million in salary) from 35% to 40% and leave bonuses at 50%.

We'll take the one percenter, who makes $1 million a year in salary, $1 million in bonus and $1 million in investments. He'd be taxed at 40%, 50% and 20%.
This isn't exactly how it's done, but I'm making it really simple and really brutal. He gets no deductions of any kind.

The current way, he pays the following taxes:
140k on salary
500k on bonus
150k on investments
That's $800k in taxes on a $3 million income.

If I use the abusive tax system I created above that will hopefully be amenable to you:
He pays 400k on his salary
He pays 500k on his bonus
He pays 200k on his investments

That's $1.1 million dollars in taxes on a $3 million income. Now, you might say that it's not enough, that's only 300k difference, but the percentage is ENORMOUS, it's about 27% higher than the current tax rate!!

Now, let's just use your 20% flat tax on the poor. This guy usually pays just under 4% and now he's gonna pay your 20% flat tax. He makes 30k.

He used to pay $1200 a year in income taxes. He doesn't have any investments.
He now pays $6000 a year in income taxes that is FIVE TIMES HIS PREVIOUS TAX BURDEN!!!

Percentages sound scary, but if you don't know what dollar value they represent, it's pointless. It's the ol' penny wise, pound foolish. The guy who will take 100% of nothing vs 50% of something. People make this mistake all. the. time. in business. Well they only make a 5 cents on every widget. Yes, but they make 100 million widgets a year! That's 5 million bucks! Nice work

[Nate]

Two things, first:

Like I said I could give a shit about the total dollar amount of taxes paid. What matters is how much of their total in percentage form did they pay. You get rewarded for taking financial risks with profit you should not get a lower tax rate. I refuse to cry for those in the 1% when those in the middle class have lost their jobs, homes and standard of living.
Pat

You notice that the top 1% earns 17% of income, but pays 37% of taxes (I'm assuming this Federal income taxes), whereas the bottom 50% ears 13%, but pays 2% of taxes. That means that, as a percentage of income, the top 1% pays 14.5 times more than the bottom 50%. They already are paying a much, much greater percentage of their incomes in taxes. (Much higher absolute number, too)

Next, the major reason why capital gains/dividends are taxes less than regular income is that corporate profits are already taxed. (At one of the highest corporate tax rates in the world) Taxing them again with a 35%+ rate would really wallop the incentive to invest. (Not eliminate, of course, but it would do a number on the after tax return on investments) Since it's not very politically likely to eliminate the corporate income tax (you want to give a free ride to greedy corporations!?!?!), the tax on investment profits is lowered. I'd much prefer a situation where there is no corporate tax (and that means no incentive to game the corporate tax system/get corporate welfare through it), and investment profits (cap gains and dividends) are treated as ordinary income. Plus, you wouldn't have people screaming about how so-and-so pays a lower total tax rate than more-worthy-so-and-so and how unfair that is.