Well... the Jury is back....

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Re: Well... the Jury is back....

Postby Gusto10 » Sun Feb 03, 2019 8:03 pm

Interesting to see those tax rates. In the old world - Europe - a rate of 35% on income is common and only the beginning. It will easily go up to 50+% or even 60 at times, save capital gain taxes. In addition, depending on the country, sales taxes as indicated by OS, on goods and services depending on the goods and country of 6 or 9% on bread and butter, 19, 20 or 21% on other goods like petrol (gas). And like it or not laws which will allow taxes to be taxed with VAT. E.g. petrol 60 eurocents/l excl tax, incl tax but excl VAT 1,33, add the VAT 1,50/l and the sales tax is also calculated over the other taxes.
Some countries have road tax. In France it's in the petrol price (average 1euro44/l), in Belgium 1,33/l, Luxembourgh 1,28/l, Netherlands 1,55/l. In the Netherlands one will pay roadtax on top depending on the car you have. An average car will do an additional 800euro's per annum. The price for e.g. an average BMW 320 is about 45000 euro's...
In France recently new taxes were introduced hence the yellow jackets. Petrol prices increased due to tax. Also, all foodstuff sold in plastic is increased in price with 10%, as per Feb 1, new taxes on foodstuff.
These salestaxes are used to finance Brussels. People working for the EU are exempted from taxes, receive a hardship allowance...
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Re: Well... the Jury is back....

Postby crfriend » Sun Feb 03, 2019 11:38 pm

moonshadow wrote:As for me, I'm a mathematical flunkie who turns wrenches for a living, and survives off of whatever crumbs fall from the table.

We are closer than you know. You turn wrenches for a living, I tweak things with small screwdrivers and know what to replace in response to whatever problem may arise. I can identify faulty computer code and fix it. Like you, I keep the infrastructure running. Precisely the only difference is that what I tend to fix isn't immediately visible to the untrained mind.
The national sales tax is an interesting idea, though I certainly see you all's point. There are also some other issues that would need to be worked out. Some say the national sales tax rate would have to be as high as 30% assuming we did away with the income tax. Couple that with the various state sales taxes and we some people could be paying as high as 40-45% on sales transactions. To combat this, some have suggested giving everyone "a check" each month to offset the tax amount up to the poverty point.

Sadly, the net result of that would be to reduce even more of the population to the "poverty point" than are there now and would speed up the process already in motion.
We're seeing this play out to an extent with Trumps trade standoff with China. I've heard criticism from both sides of the aisle on this one. The more liberal minded look at Trumps tariffs with China as a tax on the poor (as virtually everything the average American consumer buys comes from China), then the Republican minded object as basically for the last thirty years they have built mass fortunes on cheap imports that are now in jeopardy. One of Sam Walton's pitches was to improve the life of the middle class by outsourcing the lowest cost goods. It seemed to work well until the "bill came due", and we had to contend with thousands of shuttered manufacturing facilities across the nation.

The "trade war" with China that's being pursued by Trump is at a stroke insane and unwinnable. Why? For one, the US ceded its manufacturing capability decades ago on its way to achieving the demonstrable farce of becoming a "service economy"; the US does retain an absolutely unique position as a "boutique manufacturer", but as far as being able to meet its own internal (mass market) needs cannot possibly do so, nor can it tool up fast enough to do so if the need arises. The US is now in the position of most third-world nations so-far as it exports raw materials and imports its manufactured goods.
The government simply allowed both sides to do what they wanted and the result is what we have now, a "service economy".

A politician a few years back [0] coined the term "Voodoo Economics" to describe the situation. He also had the power to reset the brakes on the train before the thing completely ran away and couldn't be caught. He didn't. By choice.
That's why I've generally favored Trump's tariff plans. Something had to be done, obviously we're not going to fix this ourselves.

There's no way out. We cannot provide for our own needs in a manufacturing sense.

My big hope for Trump was that he'd abolish the H1-B visa program, as that was pretty much the death-knell for my profession. He hasn't. There's too much money involved.
There is something out of control with states like the one you live in Carl. I can't put my finger on it because I don't live there and "breathe the air" you breathe, but there is no logical reason why any government that taxes to the amount yours and others like yours do should have a crumbling infrastructure. The streets outta be paved in gold for that price! Where is the money going? (I'm eager to hear your thoughts on this)

One Hell of a lot of it is going to debt-service where we're paying off obscenely-expensive loans for projects that should have been done (1) much earlier than they were and (2) from current tax receipts instead of mindless borrowing. Governments get addicted to credit-cards, too, and this is especially pernicious when much capital is unavailable because it's tied up in gambling.
Something is fishy there, and it's not the ocean.... I figure I know about what a "seasoned professional" would bring up there, and I can say that with that kind of money, in a more fiscally conservative state, you'd not be living in an apartment. No sir! (unless you just wanted to). You'd likely have a nice house somewhere near one of the lakes, or within close proximity to one, a nice daily driver car (under a few years old), and a few "toys" in YOUR (not the landlords) garage(s) to tinker with. Granted you'd be at your liberty to live as frugally as you want, but you'd literally be making more money than you'd know what to do with...

You're forgetting that the amount someone in my position would be making a small fraction "there" compared to what I'm making "here". I've done the analysis, and whilst I could use my savings from "here" to get a running start "there" it'd be a one-way move and if things got worse "there" I'd not be able to escape, save to even further "down".

All in all, I lead a very fiscally-conservative life. About the only "impulse buys" I make concern clothing; virtually everything else is out of various sorts of need. My "burn rate" is higher than absolutely required for survival, but that's because I prop up other things that are important to me. Without my current level of income, those things would be impossible, and that could have knock-on effects in coming decades (and, yes, I think in decadal terms even though I likely have less than a decade left on the clock).

It's a complex mess, and things do not look good for the common citizen in the USA.



[0] George H. W. Bush. 1988.
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Re: Well... the Jury is back....

Postby moonshadow » Mon Feb 04, 2019 1:23 am

crfriend wrote:The "trade war" with China that's being pursued by Trump is at a stroke insane and unwinnable. Why? For one, the US ceded its manufacturing capability decades ago on its way to achieving the demonstrable farce of becoming a "service economy"; the US does retain an absolutely unique position as a "boutique manufacturer", but as far as being able to meet its own internal (mass market) needs cannot possibly do so, nor can it tool up fast enough to do so if the need arises. The US is now in the position of most third-world nations so-far as it exports raw materials and imports its manufactured goods.


I've also considered that, it takes time to set up manufacturing facilities. It's not impossible, but it would take at least a few decades to get back to where we left off. The problem is, administrations change hands every four to eight years (and in Trumps case, I'd say he'll be a one-termer), thus there just isn't enough time to get everything done.

It is rather puzzling why we aren't rolling in industry again, with a corporate tax structure that is highly favortable towards big business, and God knows every small town and county across the U.S. is clamoring for whatever industry they can get to let them set up. I know most new industries that set up around here do so basically tax free, with all types of incentives to sweeten the deal.

The news of a possible armed conflict with China is very concerning. I'm more afraid of that than one with Russia. As pretty much everything we have comes from China, or Chinese components, if China cuts us off, we'd essentially be in the dark ages over here... literally (we don't even make light bulbs anymore) An alliance between China and Russia would be one hell of a global shift in power, and they'd pretty much have us, and the rest of the western world by the balls. We. Simply. Don't. Make. Things... Such a conflict will not result in a rehashing of WWII memories of American industry pumping out tanks and bombs for the war effort. We'll have a populous that doesn't know how to do anything but bake cakes, tailor dresses, flip burgers, stock shelves, and clean toilets. Even if we did have a capable workforce, it would take years to set the industry up, it only takes a few hours for either Russia or China to deliver a warhead... by then, it's too late. America has all her eggs in one basket (China)... we f__ked up, plain and simple, and it was done so, in the name of greed and turning a tidy profit.

It's a complex mess, and things do not look good for the common citizen in the USA.


I hear ya. I think about this a lot. There is a lot of change and strange things afoot in the nation right now, and I don't understand any of it. Jenn and I speak of places we'd like to explore (move to) in the future, but I myself am running out of time, having only 20-30 workable years of life left in me. On the one hand, I want to pay off this place and hunker down, settle in, and watch the world go by. On the other hand, Lebanon Virginia is an economically scary place to live. There are ZERO employment opportunities here, and things are not much better within a 30 minute commute. There are places to work in Johnson City TN, Bristol, Kingsport, etc, but that's quite a drive. Additionally I don't expect those jobs to pay what I'm making now, couple that in with a two hour daily commute to put wear on your car... it's scary indeed.

We've even thought about going back "home"... my real home (towards Roanoke Virginia) in the next few years as things have just been one struggle after another after another since we moved into the coalfields. I guess I had it coming... I mean what else would you expect in Appalachia after all...? I likely won't consider it until after Dad dies, as that's getting pretty close to my birth town, and I don't feel like dealing with yet even more skirt drama (I'm SO over that nonsense...)

For now all we can do is wait and see.
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Re: Well... the Jury is back....

Postby PatJ » Thu Feb 07, 2019 5:25 pm

If you look at price increases in products because of Trump's tariffs, I doubt that any of us had any tax savings at all. Unfortunately, the tariffs are especially hurtful to lower income people. But as it has been said so many times, the rich get richer, and the poor get poorer.
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Re: Well... the Jury is back....

Postby oldsalt1 » Thu Feb 07, 2019 8:53 pm

[...]industry pumping out tanks and bombs for the war effort. We'll have a populous that doesn't know how to do anything but bake cakes, tailor dresses, flip burgers, stock shelves, and clean toilets. Even if we did have a capable workforce, it would take years to set the industry up, it only takes a few hours for either Russia or China to deliver a warhead... by then, it's too late. America has all her eggs in one basket (China)... we f__ked up, plain and simple, and it was done so, in the name of greed and turning a tidy profit.

There is a lot here I just want to stick in a few points First the Us is just about China's biggest customer. If they destroy us who is going to buy their products.

second delivering a warhead would precipitate retaliation which would escalate to mutual total destruction . That's not to say that some radical crackpot may get his hands on a nuke . but there is no chance that an established major player is going to start something because there is no way that anyone would win.
Last edited by crfriend on Thu Feb 07, 2019 11:28 pm, edited 1 time in total.
Reason: tried to fix quoting [CRF]
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Re: Well... the Jury is back....

Postby crfriend » Thu Feb 07, 2019 11:37 pm

oldsalt1 wrote:[... D]elivering a warhead would precipitate retaliation which would escalate to mutual total destruction . That's not to say that some radical crackpot may get his hands on a nuke . but there is no chance that an established major player is going to start something because there is no way that anyone would win.

First and foremost we need to recall precisely how much comms-gear that make the USA tick today was sourced from China -- and I can just about guarantee that nobody here has done a top-to bottom analysis of all the silicon and code running in that silicon to find the back-doors. I suspect that if China wanted to -- or needed to -- they could simply make a few keyboard-strokes and the USA would go cold and dark from a total electrical-grid "failure". There's no need for nukes at this point in time.

If somebody insane launched on China, I could see a retaliatory strike as an option -- just to make a point -- but it'd be a gesture; the real damage will be done by the cold and the dark without the US's modern technology. Contemplate a world where refrigeration is impossible, movement is impossible, and communication is effectively impossible over any distance. No drugs, no clean water, no fuel, no food. It'll be over within weeks. We forget how dependent we have become on our technology. And it's astonishingly fragile.
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Re: Well... the Jury is back....

Postby dillon » Fri Feb 08, 2019 1:57 am

Gusto10 wrote:Interesting to see those tax rates. In the old world - Europe - a rate of 35% on income is common and only the beginning. It will easily go up to 50+% or even 60 at times, save capital gain taxes. In addition, depending on the country, sales taxes as indicated by OS, on goods and services depending on the goods and country of 6 or 9% on bread and butter, 19, 20 or 21% on other goods like petrol (gas). And like it or not laws which will allow taxes to be taxed with VAT. E.g. petrol 60 eurocents/l excl tax, incl tax but excl VAT 1,33, add the VAT 1,50/l and the sales tax is also calculated over the other taxes.
Some countries have road tax. In France it's in the petrol price (average 1euro44/l), in Belgium 1,33/l, Luxembourgh 1,28/l, Netherlands 1,55/l. In the Netherlands one will pay roadtax on top depending on the car you have. An average car will do an additional 800euro's per annum. The price for e.g. an average BMW 320 is about 45000 euro's...
In France recently new taxes were introduced hence the yellow jackets. Petrol prices increased due to tax. Also, all foodstuff sold in plastic is increased in price with 10%, as per Feb 1, new taxes on foodstuff.
These salestaxes are used to finance Brussels. People working for the EU are exempted from taxes, receive a hardship allowance...


I think even Americans could deal with those rates IF we felt like we were getting something for our money. The trouble is that we don’t really know or understand where our tax dollars go, and we just see national debt accruing while people like our illustrious President apparently pay nothing. This suggests that we either willingly elect thieves and cheats, or are so easily duped that we willingly believe whatever a candidate says without checking the facts. Trump portrayed himself as a self-made billionaire, only for us to learn that not only is he no billionaire, but that he inherited perhaps $400,000,000 and skillfully parlayed that sum into multiple bankruptcies.
As a matter of fact, the sun DOES shine out of my ...
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Re: Well... the Jury is back....

Postby Sinned » Fri Feb 08, 2019 1:53 pm

Fortunately in the Uk we have PAYE [0] which is the opposite of SAYE [1] which is virtually redundant now that savings interest rates are less than a politician's IQ [2]. Only the self-employed or those with investments fill in a self-assessment form [3]. We are given a tax code [4] and pay tax on income over and above that. We are also charged NI which is supposed to pay for state benefits such as maternity allowance and state pension [5]. Needless it's now just an extra tax. It all goes into a pot to pay out the benefits and in theory the pot could become less than the amounts paid out. :!:

[0] Pay As You Earn - tax money taken from your wages( gross ) by the wages department before you see any money ( nett ).
[1] Save As You Earn - not worth it with rates < 2%. The base rate is currently 0.75% which makes loans cheap but spare cash can earn more elsewhere.
[2] Well our politicians are at best fodder for comedians ( bring back Spitting Image, all is forgiven ) and best the swine around the pearls.
[3] A 40 page form delving deeply into every aspect of your life to the detriment of your self-respect and privacy. I know, I've had to fill some ine. Similar to the claim form for Unemployment Benefit and as thorough.
[4] The tax code gives your tax free income. Currently 118 which means you pay tax only on income above £11850. Then there are tax bands - basic ( 20% ) £11851 - £46350, higher ( 40% ) £46351 - £150000 and additional > £150000 ( 45% ).
[5] National Insurance. This is a tax on earnings paid in two parts - one by the employer and one by the employee. It is applied every pay period and is payable on all earnings over £162 a week in any period. If your are interested in this goggle it.
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Re: Well... the Jury is back....

Postby Pdxfashionpioneer » Sat Feb 09, 2019 11:07 am

Much of this has probably been said before, but as an accountant and a public policy buff I can't resist.

As Carl said, sales taxes are regressive because the poor spend a larger percentage of their income than the rich.

Some people argue that the rich pay more than their fair share of the taxes because that 1% pays such a large percentage of the total INCOME tax. While it's a true statement, it's misleading, the wage income upon which Social Security is taxed is capped. So the poor and middle class pay a bigger percentage of their WAGES for Social Security and Medicare. In addition, as has been noted a number of times in this forum, the wealthy make a lot, often more off of their investments than wages.

So, if we increased the marginal tax rates along the lines of what AOC is calling for, what would happen? We would probably see more reinvestment in the businesses in the US, higher wages for the workers and middle class and trickle-up economics as we had from the 1930's until 1980 when Ronnie and his 'Reckin' Crew took over Washington, DC. Why? Well, when the top marginal income tax rate was 90%, few executives made more than $1,000,000 per year. What would be the point? If a $1,000,000 salary was raised to $2,000,000, $900,000 of that raise would be paid as income taxes (assuming that exec didn't have a very clever accountant). Most of those fat cats realized they were better off reinvesting the money in the company they were running and owned a piece of than to take the money as wages. The reinvestment went toward more efficient equipment making the workers more productive so, they were worth higher wages, with higher wages, they bought more stuff and the wheels of the economy went round and round. And how do you like that, even the rich got richer under Democratic administrations than under Republican, because the rising tide of the rising economy did lift all of the boats.

When you let the rich keep more of their income, they do have more to invest. But investing in additional homes in foreign lands, yachts and outrageously expensive cars built overseas, museum quality art, etc. does do much, if anything, for American workers. What it has done TO American workers is lower the relative productivity of their workplaces (certainly lower than it would have been if more had been reinvested in the production facilities) and increase the income and wealth inequality that funds the vicious cycle that Carl talks about so frequently.

The reality is that like Moon most lower and middle class Americans will pay about as much in taxes as they have and the rich and major corporations, of which there are very few, will get 2/3 of the tax reduction.

So what have the corporations done with their tax savings? Reinvested them? Sort of, mostly they've bought their shares back so the per-share price of their stocks would go up and the C-suite execs would get bigger bonuses because, look at this, they got the share prices to go up! Which is what a lot their bonuses are based on.

Carl's also right that most European countries have both income and Value Added Taxes (those built-in sales taxes) and while a number of European countries are having to reduce some of the benefits to their citizens, those benefits are still so much more than what we Americans get, there's no comparison! Beginning with the lack of personal bankruptcies caused by medical expenses and the lack of mass shootings and a runaway gun death rate.

And they're about as free as us Americans!
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Re: Well... the Jury is back....

Postby crfriend » Sat Feb 09, 2019 1:36 pm

Pdxfashionpioneer wrote:When you let the rich keep more of their income, they do have more to invest. But investing in additional homes in foreign lands, yachts and outrageously expensive cars built overseas, museum quality art, etc. does [not] do much, if anything, for American workers.

You forgot one other "investment property": politicians and the system they operate in. And politicians can come surprisingly cheaply. (Recall Ronald Reagan's Attorney General who, if memory serves, got convicted of taking a $5,000 bribe. It's an impressive revelation when it turns out that the Attorney General of the United States is "in range" for folks of quite modest means. Now I know those are in 1980's dollars, but at the time I could have scraped that much together if I tried hard.)

I don't call the place an oligarchy lightly, and neither does ex-president Carter, nor numerous scholars. (I still love the stink-eye that Carter gave Trump at Bush the First's funeral; to attract the stink-eye from Carter means you've done something really offensive.)
So what have the corporations done with their tax savings? Reinvested them? Sort of, mostly they've bought their shares back so the per-share price of their stocks would go up and the C-suite execs would get bigger bonuses because, look at this, they got the share prices to go up! Which is what a lot their bonuses are based on.

I suspect a lot of the buybacks are happening specifically to boost the [already obscenely inflated] share price ever higher. We're in a dangerous bubble here, and when it lets go it's "Game Over" -- certainly for the US, and likely for a lot of other economies because the tie-in is so great. The USA did one Hell of a lot of damage with the 2008 "mortgage security" scam, and has learnt precisely nothing from it; we're back in the sort of regulation regime we had in 1929 -- and this time the stakes are vastly higher.
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Re: Well... the Jury is back....

Postby moonshadow » Sat Feb 09, 2019 2:57 pm

Dave, thanks for weighing in, I was hoping you would.

I'm going to do something that I've never seen before, especially on an internet political discussion.... stand back and prepare to be amazed!......

You all have made some compelling points. I have learned quite a lot of thoughtful, opposing viewpoints on my thoughts regarding the notion of a flat federal sales tax (value added or otherwise). As such, I concede my side. Minor advantages aside, it is clear in the grand scheme of things, the hypothetical evidence would seem to indicate that such a plan would create more problems than it solves.

I won't hang my head in shame though, for I learned a lot I didn't know before, and that's nothing to be ashamed of....

Perhaps I should stick with philosophy and leave the bean counting to the pros! :lol:
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Re: Well... the Jury is back....

Postby beachlion » Sat Feb 09, 2019 3:55 pm

Never hold back when you feel you have to tell the world about your ideas. If you step in unfamiliar surroundings, the experts will help you to get a better understanding.

For me, explaining to somebody something in my field of experience is a learning moment for me too. You have to go through your knowledge and translate it in such a way that your audience will understand it. It is often very refreshing.
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Re: Well... the Jury is back....

Postby Sinned » Sat Feb 09, 2019 8:12 pm

Dave, the problem with investment in this day and age is that the equipment brought in isn't designed to make the existing workforce more productive, with computerisation the equipment replaces the workforce segway by segway until there are about half a dozen running the place. And as AI gets more developed even those half dozen get made redundant. Thus the rich ( the owners ) get even richer and the plebs get trodden into the ground, again. Of course there may come a point that because no-one's working there's no-one left to buy anything, but we haven't reached that stage. YET.
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Re: Well... the Jury is back....

Postby Pdxfashionpioneer » Mon Feb 11, 2019 10:41 am

the equipment brought in isn't designed to make the existing workforce more productive, with computerisation the equipment replaces the workforce


That and achieving previously impossible results has always been the motivation for buying the latest equipment. The difference is, in the past, the available markets were so starved for goods, the increase in productivity spurred an even greater growth in demand, so employment kept growing.

there may come a point that because no-one's working there's no-one left to buy anything, but we haven't reached that stage. YET.


That is becoming such a distinct possibility that the idea of universal, guaranteed income is gaining traction. Including among the billionaire class who are asking themselves, what have we done?

Apparently, like all of the rest of us, not even billionaires are solely concerned with money. While I have a great deal of respect for Jimmy Carter, just because he's said we've slipped into an oligarchical form of government, doesn't mean he's right. Btw, where, when and in what context did he say that?

Dave, thanks for weighing in, I was hoping you would.


I'm flattered you have such high regard for my opinion.

opposing viewpoints on my thoughts regarding the notion of a flat federal sales tax (value added or otherwise)


Before anyone totally dismisses a federal level value added tax (VAT), I'd like to pass along a thought or two in support of it playing a role in the total taxation system. First, most other developed nations have made a VAT part of their taxation system. Probably because they found that even though it's regressive, it's also stable. We're finally beginning to realize that here in Oregon. That a major reason we can never seem to find enough money for our public education system is that most of the state's revenues come from its income taxes, which of course drops even faster than the economy when there is a downturn. That in turn is when the state spends the most on additional unemployment benefits and other forms of social welfare. Not to mention when the Legislature is sometimes inclined to stimulate the economy through public works projects, which increases public outlays. In Oregon, sales tax has always been not just a 3rd rail issue (touch it and you die) no, it's a Valdemort issue. Even bringing it up by name and you might die! It's finally getting discussed as a way to stabilize tax revenues, because even during the Great Recession, consumer spending didn't drop all that much.

Generally, during recessions, capital spending by major corporations hasn't dropped all of that much. The rationale is that major capital projects are investments in the future and by the time this new plant or whatever comes on line, we'll be coming out of the recession and it will shortly afterward start paying for itself. Providers of capital goods also pay VAT, so that helps to keep the public coffers at pre-recession levels.

In short, there is no such thing as an all-purpose cure-all. Just as every skilled worker needs a variety of tools and every professional needs a variety of techniques, governments need a variety of taxing mechanisms to obtain sufficient funds to accomplish their public purposes.
Last edited by Pdxfashionpioneer on Wed Feb 13, 2019 10:21 am, edited 1 time in total.
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Re: Well... the Jury is back....

Postby crfriend » Mon Feb 11, 2019 11:14 am

Pdxfashionpioneer wrote:While I have a great deal of respect for Jimmy Carter, just because he's said we've slipped into an oligarchical form of government, doesn't mean he's right. Btw, where, when and in what context did he say that?

2015 in the run-up to the farcical non-election of 2016:

https://www.google.com/search?q=carter+ ... +oligarchy

He's also nowhere near alone in making the assertion.
Before anyone totally dismisses a federal level value added tax (VAT), I'd like to pass along a thought or two in support of it playing a role in the total taxation system.

The problem here is that (what's left of) the working class is already at the breaking-point when it comes to the tax burden and applying another layer will push millions more below the poverty line. With the middle class effectively dead, there's no slack left in the system.

Warren Buffett musing about why his secretary pays higher tax rates than he does in a nice opener, but Warren is just one of a few hundred and likely holds little sway with the others.

What the US needs to do is stop penalizing work. However, with the current system there is precisely zero chance of that happening. There's nowhere else for the money to come from.
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