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ABC: Lies, Myths and Downright Stupidity
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Posted by: daperlman

As as huge Stossel fan, I am very much looking forward to this Stossel Special "Lies, Myths and Downright Stupidity". Here is an excerpt from my Stossel email-newsletter...

quote:
My book, Give Me a Break: How I Exposed Hucksters, Cheats and Scam Artists ? and Then Became the Scourge of the Liberal Media, is now in stores! You can read an excerpt on my Web page. I'm getting wonderful compliments, and some nasty complaints about it. I love that. On Friday, I have a special hour devoted to some of the myths in my book. We call it Lies, Myths and Downright Stupidity.

I believe it is being shown in the Friday 10pm 20/20 time slot.

Posted by: philw1776

I have Stossel as a keyword but never get any hits. Guess he doesn't make the program guide. He is one small voice of thoughtful rationality on network 'news' TV.

Posted by: daperlman

quote:
Originally posted by philw1776
I have Stossel as a keyword but never get any hits. Guess he doesn't make the program guide. He is one small voice of thoughtful rationality on network 'news' TV.

Me too... I have a Stossel ARWL. 3 years not 1 hit

Posted by: Todd

Cool. Stossel is awesome!

Posted by: daperlman

I think it is listed as 20/20 still

Posted by: trainman

quote:
Originally posted by daperlman
Me too... I have a Stossel ARWL. 3 years not 1 hit

I've got a wish list for him, too, and he's in the guest lists for episodes of "Good Morning America" and "Jimmy Kimmel Live" next week.

Posted by: daperlman

quote:
Originally posted by trainman
I've got a wish list for him, too, and he's in the guest lists for episodes of "Good Morning America" and "Jimmy Kimmel Live" next week.

Did you use actor 'Stossel' or keyword 'Stossel' or... "John Stossel'?

Posted by: Todd

quote:
Originally posted by daperlman
Did you use actor 'Stossel' or keyword 'Stossel' or... "John Stossel'?

He's not an actor though. I would just use the keyword.

Posted by: Rob Helmerichs

So, Todd--do you really think the Skins will be divided by Gibbs? And that this will make you happy?!? :D

Posted by: MacThor

Rob, you beat me to it. Should read "Skins + Gibbs = 8" (wins) :D

Posted by: trainman

quote:
Originally posted by Todd
He's not an actor though. I would just use the keyword.

That's exactly right...I picked the appearances up with the keyword "JOHN STOSSEL" (with the quotes).

Interestingly, 12 or 13 days ago when the data first appeared for tonight's "20/20," his name was in the description, but it had disappeared within the next day or two. A liberal media conspiracy, perhaps? :D

Posted by: Todd

quote:
Originally posted by MacThor
Rob, you beat me to it. Should read "Skins + Gibbs = 8" (wins) :D

It's really a secret new formula I have come up with for them....

:D

Posted by: Todd

So what did yous guys think of the show? I thought it was pretty good. It would sure help if the facts would sometimes get in the way of politically correct or long-held views. While I had heard a little bit about this in the past, I was amazed at how the ban on DDT has caused the death of over 50 million people in the past 30 years, particularly in Africa. But I'm sure the misinformed environmentalists won't take any responsibility for this as usual...

Posted by: MacThor

We enjoyed it, but it seemed to me that most of the myths were just common sense. Did that many people really think a cold was caused by temperature and not a virus? The DDT thing was the most surprising.

Posted by: vman41

quote:
Originally posted by MacThor
Did that many people really think a cold was caused by temperature and not a virus?

I was in the camp that think cold temperature increases your susceptibilty to the virus, which is different than saying colds are caused by the temperature.

I've seen the tax thing before, though I'd wish they'd run the numbers boths ways with and without including the Soc. Sec. 'payroll' taxes. I'm confident that including payroll taxes would still show the burden skewed towards the rich, but it is a more honest way of viewing it.

Posted by: wedgecon

The IRS numbers show correctly that the rich do pay most of the taxes. But that is not the same thing as saying they pay their fair share. The rich use all kinds of legal and illegal tax dodges to hide their real income from the government so the amounts reported to the IRS and SS are really bogus.

Posted by: daperlman

quote:
Originally posted by wedgecon
The IRS numbers show correctly that the rich do pay most of the taxes. But that is not the same thing as saying they pay their fair share. The rich use all kinds of legal and illegal tax dodges to hide their real income from the government so the amounts reported to the IRS and SS are really bogus.

so what is your point? That what the IRS gets isn't their 'fair share?' The top 5% paying 70% (I think it was something like that) isn't enough?

Posted by: Rob Helmerichs

quote:
Originally posted by daperlman
so what is your point? That what the IRS gets isn't their 'fair share?' The top 5% paying 70% (I think it was something like that) isn't enough?

Not if they make 75%.

(I'm not saying they do, just that your question is meaningless in the absence of more information.)

Posted by: daperlman

quote:
Originally posted by Medieval Guy
Not if they make 75%.

(I'm not saying they do, just that your question is meaningless in the absence of more information.)

let us assume that the top 5% of income earners DO hold a majority of the wealth in the country. What do you think they do with it? They spend it. Would you rather have the rich spending the money or have the Gov't waste a large portion of it and then redistribute the remainder?

Our economic system was meant to reward those with wealth as an inscentive to accumulate wealth.

Posted by: wedgecon

The problem is they do not spend that much of the money. The whole concept of trickle down is a myth.

Another myth I think John should write about is the myth of government waste. Governments are not any more wasteful than any other large organization (Large Corporation, Church, whatever). All are just as wasteful.

I am tired of Republicans chanting about wasteful government and not doing a thing about it except to make it bigger and more wasteful. Anybody who thinks any large corporation is more efficient than the government is smoking crack.

An on to the biggest waste of government money: Large corporations feeding at the government trough.

Posted by: daperlman

quote:
Originally posted by wedgecon
The problem is they do not spend that much of the money. The whole concept of trickle down is a myth.

Savings are invested in corporations by institutional investment houses. People work for and buy from corporations.

quote:

Another myth I think John should write about is the myth of government waste. Governments are not any more wasteful than any other large organization (Large Corporation, Church, whatever). All are just as wasteful.
Gov't agencies often do not compete. Corporations face consequences for not meeting fiduciary expectations, Gov't doesn't.

quote:

I am tired of Republicans chanting about wasteful government and not doing a thing about it except to make it bigger and more wasteful. Anybody who thinks any large corporation is more efficient than the government is smoking crack.

He DID discuss this. Especially this congress and president.

quote:

An on to the biggest waste of government money: Large corporations feeding at the government trough.

corporations do not hold wealth, individuals do.

Posted by: steuert

I was interested in a couple of figures that Stossel presented: That the top 1% pay 34% of the total of income taxes, while Rabble-rouser and Super-Idiot Sharpton kept mumbling that "they don't even pay 5%," and, secondly, Stossel's report that gov't spending increased at least as much under GOP presidents as it did under Domocratic administrations.

BTW, I noticed that Babwa Wawa has asked to be released from her 20/20 contract early so she will be free to do "other things" at ABC. I can't help but wonder if she hasn't worked herself into a snit over the increased attention and air time Stossel has been getting lately. In any event I will be happy to see more of him and less of her.

Posted by: BrettStah

quote:
Originally posted by wedgecon
The problem is they do not spend that much of the money. The whole concept of trickle down is a myth.

So what do they do with their money? Pile it up under their mattress? I'm not sure what the cut-off is to be in the top 1%, but I know a few families that are really, really, well-off. They have numerous vehicles, own more than one house and often have other property they own, lots of clothes, jewelry, take multiple vacations, etc. Most have part-time or full-time help for household and lawn work. They also tend to host big and expensive "events"... huge weddings, anniversary parties, holiday parties, etc. I'm sure there are some really rich people who live in one bedroom apartments, never spending much money, but I'll wager they are very few in number.

Posted by: MacThor

quote:
Originally posted by BrettStah
So what do they do with their money? Pile it up under their mattress? I'm not sure what the cut-off is to be in the top 1%, but I know a few families that are really, really, well-off. They have numerous vehicles, own more than one house and often have other property they own, lots of clothes, jewelry, take multiple vacations, etc. Most have part-time or full-time help for household and lawn work. They also tend to host big and expensive "events"... huge weddings, anniversary parties, holiday parties, etc. I'm sure there are some really rich people who live in one bedroom apartments, never spending much money, but I'll wager they are very few in number.

You should read "The Millionaire Next Door" - there are actually many fewer millionaires like you describe than the kind that live modestly.

The authors divide the pop into four quadrants, lifestyle and income being the axes. People in "high income high lifestyle" -- the ones you describe -- are labeled "celebrities - uberwealthy." They are by far the smallest percentage of the population. There are many more in the "high income modest lifestyle" category. No surprise the biggest category by far is "modest income high lifestyle" -- appropriately labelled "Debtors"

Getting back to taxes, given the graduated tax system, I'd be surprised if (assuming top 5% pay 70% of tax is true) that 5% made less than 70% of the income, not more. They are paying at a much higher rate, regardless of deductions.

Posted by: gtrogue

I believe that the top 5%, $125k and up, of wage earners pay 54% of the taxes.

People making $75k a year and up pay 75% of the taxes. Considering that that only about 15%-20% of taxpayers fall into this category I think it's more than their fair share.

The middle income, average Americans politicians love to talk about fall into the $40k-$75K range and pay only about 15% of the taxes.

The 70% or so that earn less than $40k pay the remaining 10%-15% of the taxes.

Posted by: Rob Helmerichs

But the only way for a fair comparison is to know the ratio between the percentage of taxes they pay and the percentage of income they make...

Posted by: BrettStah

Of course, the most logical system would eliminate the vast majority of the complexity that is part of our current tax system, and replace with a simple-to-understand flat income tax or national sales tax, with only some sort of threshold/rebate to offset "essentials" such as food, medicine, etc. In other words, let people who earn (or spend, in the case of the sales tax) at or below the poverty level get off with no federal tax liability, and everyone else pays the same percentage on everything else.

Posted by: davidmin

Why is it logical that everyone pay the same percentage?

David

Posted by: SnakeEyes

Why should one person be taxed more than another? That's not fair. Everyone should be treated equally. Something like 96% of rich wage earners are first generation rich. These people earned their way to the top. When you tax these people more you are essentially punishing them for greater achievement.

Posted by: SnakeEyes

quote:
Originally posted by BrettStah
Of course, the most logical system would eliminate the vast majority of the complexity that is part of our current tax system, and replace with a simple-to-understand flat income tax or national sales tax, with only some sort of threshold/rebate to offset "essentials" such as food, medicine, etc. In other words, let people who earn (or spend, in the case of the sales tax) at or below the poverty level get off with no federal tax liability, and everyone else pays the same percentage on everything else.

Agreed with few other points. The best and most fair system is the lowest, flatest tax possible to raise the revenues the government thinks it needs. A couple deductions will have to remain. For example there is no way you will be able to get people to give up their mortgage interest deduction. I also believe you have a negative income tax below the poverty level that will bring people up closer to at least poverty level and working criteria that would allow them to receive enough to be above poverty level. That way it isnt just a handout.

Posted by: davidmin

Fair isn't the same as logical. Anyway, why is it fair to tax everyone the same percentage? Does everyone receive the same benefit from government?

Any tax system is arbitrary.

David

Posted by: BrettStah

Logical in the sense that we would eliminate the thousands upon thousands of pages of tax code, and the thousands upon thousands of pages of tax regulations that interpret the tax code, and the thousands of tax court rulings that interpret both the tax regulations and the tax code. Also, it would greatly reduce the hundreds of millions that are spent each year on tax compliance, due to the tax code and regulations.

And yes, tax systems can usually be seen as arbitrary. But why not make it simple, fair (in the sense that the more you make, the more you pay, but the percentage is the same, so there is no penalty to make more money), and easy for people to comply with?

How about a tax form like this?

code:
1. How much did you earn? _____

2. Subtract $20,000 from line 1: _____

3. Multiply the amount in line 2 by 20%. This is your tax liability: _____

4. How much have you already paid in taxes (withholding taxes)? _____

5. Subtract the amount from line 4 from line 3: _____

6. If line 5 is a negative number, that is the amount of your refund.
If line 5 is zero you have already paid your taxes this year.
If line 5 is greater than zero, that is the amount due.

There'd be some extra stuff needed, most likely to modify the amount of the tax rebate to take into account the number of people in your household. So it may range from $15,000 to $30,000 potentially (just guessing).

My favorite would be to eliminate the income tax completely, though, since if we leave it in place it's so easy and tempting for Congress to "tweak" it to give a special break for various interest groups, which is how we got into the current maze our current tax system is. I'd prefer a national sales tax, with a monthly rebate per household that would offset expenditures for "essentials". No need to define what is essential and non-essential, like some states do... just assume each household of a given size will need to spend X amount of money each month, send them the rebate, and let them spend the money on the taxes on whatever they deem "essential".

Posted by: daveyg013

Very interesting, Brett. If only we could figure out a way to make things that simple. I do kind of like the sales tax only idea. We currently pay taxes when we make money, pay taxes when we spend money, pay more taxes at year-end, pay taxes when we die, etc. It would be nice to pay all taxes at once. I'd pay flat 30% sales tax (or whatever the average amount of our income that goes to all taxes combined each year is) on everything I buy if that was the only tax I'd ever have to pay. Except that would probably never work as more and more people would be buying and selling under the table to avoid sales tax. I'd buy everything from Europe on the Internet if it meant no taxes.

Posted by: BrettStah

The thing about buying stuff "under the table" is an important one to consider. But remember that the number of taxpayers would drop from the current number (which includes individuals and businesses, totalling hundreds of millions of taxpayers) to only businesses. IIRC it's estimated that the number would be 1/10th of the current taxpayers. So if we just kept the current budget we spend on compliance (auditing, etc.), the risks of being caught would increase greatly on businesses. Plus if most businesses are already collecting sales taxes for the state they're located in, there wouldn't be much extra work needed. In fact, the sales tax proposals I've seen typically give the retailer a kickback for the collection of the taxes, then the retailer sends the taxes to the state, which then gets a kickback and sends the taxes to the federal treasury. So if compliance costs for businesses go down, risk of being caught goes up, and it doesn't add a lot of complexity, I'm willing to bet that overall tax cheating goes down compared to the current system.

Posted by: davidmin

I still don't think that taxing everyone at the same rate is fair. $100 has a much different value to a poor man than to a rich man.

The tax system could be a lot simpler, but there's a whole set of economic incentives and disincentives built into the present system that would be upset by any change. So politically, it's difficult.

David

Posted by: Rob Helmerichs

quote:
Originally posted by davidmin
I still don't think that taxing everyone at the same rate is fair. $100 has a much different value to a poor man than to a rich man.

Well, yeah--which is why with one rate, the rich man would be paying a whole lot more $100s than the poor man!

Posted by: SnakeEyes

quote:
Originally posted by BrettStah

My favorite would be to eliminate the income tax completely, though, since if we leave it in place it's so easy and tempting for Congress to "tweak" it to give a special break for various interest groups, which is how we got into the current maze our current tax system is. I'd prefer a national sales tax, with a monthly rebate per household that would offset expenditures for "essentials".

A national sales tax is even better. However, it's such a huge reform and the current tax system is sucha political tool I don't see it happening.

Posted by: TonyD79

Getting back to what rich people do with their money (the trickle down theory).

What always makes me chuckle is that anyone claiming that money going to the government gets "wasted." What does everyone think the government does with the money? Do they burn it? No. They pay salaries, they buy big things from big companies.

In other words, the money goes right back into the economy.

So, anyone can base their argument on lower taxes by saying "I earned it, it should be mine" and I will understand what they say (and agree to a certain point) but to say that the money is "wasted" is kind of comical.

Posted by: devdogaz

quote:
Originally posted by davidmin
I still don't think that taxing everyone at the same rate is fair. $100 has a much different value to a poor man than to a rich man.

I'll never understand those that think that because one person has more than another, it's OK to take more from that person. Isn't it enough that the person with more will automatically be paying more taxes just because of his income. You socialists think that simply because he can afford it, we should take a higher percentage from him.

quote:
The tax system could be a lot simpler, but there's a whole set of economic incentives and disincentives built into the present system that would be upset by any change. So politically, it's difficult.

The "whole set of economic incentives and disincentives built into the present system" are the reason why people want tax reform. One shouldn't have to do months of research and gather up hundreds of pages of documentation to prepare one's taxes. It should a simple formula that is the same for everyone. Do away with all the tax shelters and loopholes and deductions and strategies. You make x, you pay y. Spend the rest how you want. No one should care how much interest you paid on your mortgage or whether you discussed business over lunch.

David

Posted by: Crrink

One important thing to note:
While the statistics about who pays what percentage in income tax are correct, income taxes make up only about half of the revenue the Federal Government collects.
The rest come from sneakier taxes like special taxes on gasoline that most people don't realize they pay, and even those that do realize it don't realize how much money it adds up to.
We all pay for corporate taxes in one way or another, and those are impossible to tally up per person, per income level.

Naturally, the calculations of how this impacts the rich/poor are wide ranging - typically depending on the political aims of whomever is doing the research.

One thing I do know - I work in a room full of people that are in the top 1% of wage earners - a few of them are probably in the top .05%
These guys spend a LOT of money. You wouldn't believe their Amex bills every month - five figures each and every month for a family of 5, and a lot more in December.
Yes, they do save and invest - but that money helps the economy as well.

I think there are very, very few wealthy people who live as if they earn $50k a year and stuff the rest of the money under a mattress - whatever any book might say.

I mean, think back to how much money you needed to live on in college. It's probably a fraction of what you 'need' today, even if you aren't living very extravagantly.
While it is hard to believe, the same sort of thing happens when you earn $100k, $500k or even more.

Posted by: daperlman

quote:
Originally posted by Crrink
One thing I do know - I work in a room full of people that are in the top 1% of wage earners - a few of them are probably in the top .05%

These guys spend a LOT of money. You wouldn't believe their Amex bills every month - I'm talking about five figures each and every month for a family of 5.

You don't mind cleaning up after them
When did hookers start taking AMEX... and where are they?... kidding

Seriously it should not matter how they spend their money. When the minority of voters people pay the majority of taxes it will inevitably lead to socialism.

Posted by: MacThor

They're not stuffing it in mattresses, they're investing it.

Posted by: davidmin

Huh? Where did I say I am a Socialist?

Is there an income tax system in system in the world that isn't progressive? Did you know that sales taxes are inherently regressive?

David

Posted by: devdogaz

You didn't directly say you were a socialist. However, your comments led me to believe that you support taxing those that make more money at a higher rate than those that make less money. I consider that stance to be socialist and the fact that our government does it doesn't make it any less socialist. If you don't agree with this, then I apologize for calling you that.

And yes, sales taxes are inherently regressive. They tend to tax the poor more than the rich. There are ways to mitigate this, but that's not the ideal tax system that I would advocate. I think a flat tax that is the same percentage for every person, with a few simple deductions for dependents and cost of living, is the best way to go.

Posted by: BrettStah

Here's how a sales tax can have the regressiveness removed:

Take the government poverty level for a given family size. Now, figure out how much the sales tax will be if a family spent that amount in a year. Now, give them a check each month equal to 1/12th of that amount. Voila! No one who spends at or below the poverty level winds up paying any sales tax. (So the government assumes every family of a given size will have to spend the poverty level amount for their family size, so there is no need to exempt certain types of things like food, medicine, etc., or to require receipts of purchases, etc.)

Quick example... let's say the poverty level for a family of four is $20,000, and the sales tax rate is 30%. Each family of four would be assumed to have to spend $20,000 each year on essentials, so the taxes on that ($6,000) would be rebated to them, divided into 12 monthly payments of $500.

If you're a family of four and spend $20,000 or less, you'd pay zero federal taxes. (If you spend less you'd actually wind up with left-over tax rebates for you to keep). If you're a family of four that spends $30,000, you'd pay $3,000 in taxes total (after taking the $6,000 rebate into account), which is a 10% effective tax rate. If your family of four spent $50,000, you'd pay a net amount of $9,000 in taxes, for an effective tax rate of 18%.

So you could, in my opinion, call a sales tax with the rebate that I mentioned a type of progressive tax. But the difference to me is that each person decides how much they pay by deciding what they buy. So they aren't punished with a higher tax rate just because they earn more money.

Also, some reputable economists have done studies and predict prices on most goods will drop (due to the removal of taxes on businesses and the associated compliance costs) anywhere from 20-30%.

Posted by: davidmin

I was just looking at a web page that called for ending business taxes for that reason (a Socialist web site at that!). It seems to make sense as long as the drop in taxes and the drop in prices are linearly related, but....

David

Posted by: davidmin

I also think a sales tax is just a wacky idea, since it doesn't cover services in most cases.

David

Posted by: BrettStah

The sales tax plan I support covers new goods and services... check out the site that pitches the plan: www.fairtax.org

Posted by: ellinj

I missed this. Anyone know if they plan to rerun it soon?

Posted by: Spire

quote:
Originally posted by ellinj
I missed this. Anyone know if they plan to rerun it soon?

I don't know when (or if) it's going to be rerun, but you can read a summary of nine of the ten "myths" here.

Posted by: Ereth

Many, many years ago Mad Magazine ran what THEY figured would be the eventual "simplified tax form". It goes like this:

1. How much did you make last year? $___________

2. How much did you spend? $__________

3. How much did you have left? $___________

4. Send it in.