Comments on: Are We Better off Now? A Look at How Tax Cut Made Rich Richer and Poor Poorer http://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/ Fri, 03 Feb 2012 17:42:24 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: The Sunhttp://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-474 The Sun Tue, 05 Dec 2006 05:05:39 +0000 http://www.thesunsfinancialdiary.com/2006/11/29/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-474 John: The numbers were indeed from IRS data according to NYT. It's true that any survey like this will have errors, but the general trend won't be affected too much by the marginal errors. If people cheat on their taxes, then the real gap could be larger. Anyway, I believe the trend is a good indicator. John: The numbers were indeed from IRS data according to NYT. It’s true that any survey like this will have errors, but the general trend won’t be affected too much by the marginal errors. If people cheat on their taxes, then the real gap could be larger. Anyway, I believe the trend is a good indicator.

]]> By: Dus10http://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-466 Dus10 Mon, 04 Dec 2006 14:21:57 +0000 http://www.thesunsfinancialdiary.com/2006/11/29/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-466 The first thing to learn about statistical analysis and data capturing is that there is very little to trust unless you performed it all yourself (and then you know the truth, whether you manipulate it to fool others, or not).That being said, I am not really surprised by what is being proposed. Given inflation, the poor will always stay near zero, but the nominal values held by those who have a positive savings rate will sky rocket. That does not necessarily mean that the disparity between the rich and poor is increasing the same, however, because these are nominal values and not real values (adjusted for inflation).So, if the idea is to suggest that something should be done, what is it that should be done? Increasing the tax rates of the rich will not work; it is taken as a personal attack, and rightly so. That will lead to fiscal retaliation... off-shoring jobs, vacationing in cheaper countries instead of the nice places in our own nation, etc. Giving more tax credits to the poor will not work either; if it worked, we wouldn't have a poor population any longer because there are plenty of tax credits already available. The key is education, and that is not to say that education is too expensive; anyone in the US has the financial means to get an education, these days. People need to have a personal motivation to get to where they want to be.You can lead a horse to water, but you can't make it drink. The first thing to learn about statistical analysis and data capturing is that there is very little to trust unless you performed it all yourself (and then you know the truth, whether you manipulate it to fool others, or not).

That being said, I am not really surprised by what is being proposed. Given inflation, the poor will always stay near zero, but the nominal values held by those who have a positive savings rate will sky rocket. That does not necessarily mean that the disparity between the rich and poor is increasing the same, however, because these are nominal values and not real values (adjusted for inflation).

So, if the idea is to suggest that something should be done, what is it that should be done? Increasing the tax rates of the rich will not work; it is taken as a personal attack, and rightly so. That will lead to fiscal retaliation… off-shoring jobs, vacationing in cheaper countries instead of the nice places in our own nation, etc. Giving more tax credits to the poor will not work either; if it worked, we wouldn’t have a poor population any longer because there are plenty of tax credits already available. The key is education, and that is not to say that education is too expensive; anyone in the US has the financial means to get an education, these days. People need to have a personal motivation to get to where they want to be.

You can lead a horse to water, but you can’t make it drink.

]]> By: Johnhttp://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-434 John Thu, 30 Nov 2006 18:31:07 +0000 http://www.thesunsfinancialdiary.com/2006/11/29/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-434 If the data is from the IRS, then its quite questionable considering how many people cheat on their taxes, especially the rich and upper middle class. So probably the top 30% or so are probably making more that what the data says. If the data is from the IRS, then its quite questionable considering how many people cheat on their taxes, especially the rich and upper middle class. So probably the top 30% or so are probably making more that what the data says.

]]> By: The Sunhttp://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-422 The Sun Thu, 30 Nov 2006 02:49:15 +0000 http://www.thesunsfinancialdiary.com/2006/11/29/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-422 The number is based on reported income from IRS data, therefore, I assume that's what they earned, whether they were working full time or not is not clear. My guess is that many of the 60 million probably don't work at all and live on welfare instead. Or only one person in a family works on minimum wage while others don't work. The number is based on reported income from IRS data, therefore, I assume that’s what they earned, whether they were working full time or not is not clear. My guess is that many of the 60 million probably don’t work at all and live on welfare instead. Or only one person in a family works on minimum wage while others don’t work.

]]> By: Lazy Man and Moneyhttp://www.thesunsfinancialdiary.com/random-thoughts/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-417 Lazy Man and Money Wed, 29 Nov 2006 20:33:07 +0000 http://www.thesunsfinancialdiary.com/2006/11/29/are-we-better-off-now-a-look-at-how-tax-cut-made-rich-richer-and-poor-poorer/#comment-417 I'm curious how many of the "poor 60M" are full time workers. I'm guessing it's not much as minimum wage is more than $7 a day. We are probably talking about paper boys and college students working one or two days a week or for very limited times.If earning money isn't their main focus, I'm guessing education is, then I wouldn't expect them to bring much of an income. I’m curious how many of the “poor 60M” are full time workers. I’m guessing it’s not much as minimum wage is more than $7 a day. We are probably talking about paper boys and college students working one or two days a week or for very limited times.

If earning money isn’t their main focus, I’m guessing education is, then I wouldn’t expect them to bring much of an income.

]]>