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Paul Krugman's two top areas where he would raise revenue as part of long-term deficit...

Paul Krugman's two top areas where he would raise revenue as part of long-term deficit reduction: taxes on very high incomes and financial transactions. The combined income of the top 0.1% of taxpayers totals more than $1T, he says; and contrary to harming economic growth, taxing financial transactions would benefit to the extent that it "reduces the volume of wheeling and dealing."
Comments (30)
  • User 487974
    , contributor
    Comments (1105) | Send Message
    Hey man!
    Enough with the death by a thousand cuts already!
    Just take it all!
    Start with Oprah Winfrey
    Warren Buffet
    Michael Moore
    Jeff Imelt
    every bullsh** liberal Hollywood talking head!


    You are racing towards an European endgame here Paul!
    You, Obama and all the other progressive / communist scuzballs want it, just go take it, isn't that O.W.S. 's motto?
    28 Nov 2011, 05:56 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Jerry: I'm guessing you make an enormous amount of money, or are you just whining on behalf of those that rip you off?


    If someone decides to say tax short term capital gains as income, would that cripple you personally financially, or just HFT firms?


    You OK with hedge fund managers counting management income as capital gains?
    29 Nov 2011, 12:37 PM Reply Like
  • grinninbrit71
    , contributor
    Comments (167) | Send Message
    Backing his call to tax transactions he says "The economic value of all this trading is dubious at best. In fact, there’s considerable evidence suggesting that too much trading is going on."


    Logic totally falls apart.


    If Worker-A make $10,000 per year working 40 hours per week we should tax him X. But for Worker-B who stays at the office longer to make his $10,000, we want to tax him more. There is considerable evidence his extra time at the office is providing no additional economic value. So we need to tax him for it! What ?????


    If someone makes 1 trade to generate 1,000.00. and someone else by making 10 trades can only generate 900.00... we need to tax him extra because he 'wheeling and dealing' isn't doing any good?


    What is the problem with taxing someone for income at the appropriate levels and rates, whatever those may be? Somone makes 20k, they pay more tax than someone making 10k... twice as much or graduated, open for discussion... but why say we need to take more money from one of them because they perhaps aren't as efficient with their trading as the other? Just because the country needs the money? Again if there is a need for revenue, tax income or wealth. Don't tax trades. Don't tax how many hours they spend at the office. Don't tax how many bananas a day they eat...... LORD LORD LORD Paul Krugman!
    28 Nov 2011, 05:58 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Grinnibrit: We're talking about extremely low tax per transaction, like .001%. The person making 10 trades would pay 1 cent more. Now the HFT supercomputing arms of banks that now make 70% of all trades might notice...
    29 Nov 2011, 12:36 PM Reply Like
  • HiSpeed
    , contributor
    Comments (1063) | Send Message
    Why should the middle class be taxed even MORE when they conduct financial transactions?


    MORE bad ideas from Krugman. Weak.
    28 Nov 2011, 05:59 PM Reply Like
  • Old Rick
    , contributor
    Comments (462) | Send Message
    All we ever hear from St. Paul is how he would increase revenues. The issue is that we have an overspending issue not a revenue issue. Where would the Laureate of Nobel cut spending? That would be a refreshing discussion.
    28 Nov 2011, 06:02 PM Reply Like
  • alexbrooklyn
    , contributor
    Comments (93) | Send Message
    Excellent suggestion by Krugman! I fully endorse the idea!
    28 Nov 2011, 06:05 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    If you read the article you'll see the real "utopia" - tax rates like those that used to exist...... those 70 and 80% taxes.


    Raise revenue? Government already accounts for 40% of GDP!


    Big Brother already exists!!


    Yes, we need to reform the tax code and those at the top should pay 30 or 33 or 35 or 38%.... whatever the number. And they should pay it. And those in the upper middle class should pay 20 or 25 or 28 or whatever.... and those below should pay 15 or 18 or 20.... and those below should pay 10 or 12 or 15 and those at the very bottom should pay 3 or 5 or whatever.


    But thats it!!! Cut the damn government. Reduce bureaucrats and drastically reduce their pay. Close military bases overseas and reduce the number of commands. Buy fewer weapons. Close the Departments of Energy, Education, Commerce. Reduce Department of Homeland Security and Transportation by 50%. Raise the retirement age to 70 tomorrow!


    Then we can do the tough work of fixing the health care system.


    Oh, and perhaps a new tax on idiot Nobel winners that can't stand the idea of individual success.
    28 Nov 2011, 06:10 PM Reply Like
  • Native Texan
    , contributor
    Comments (-724) | Send Message
    Here's a crazy idea, it comes from the Conservatives, "Reduce Spending".
    28 Nov 2011, 06:10 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    And how will reducing spending stop the 70% of all transactions that high frequency trading now makes up?


    It's individual investors like you and I who are being ripped off by HFT.


    I guess you could regulate it, but wouldn't it make sense to have a .01% per transaction tax?


    Income growth is an exponential, not linear progression in our system, due to the corruption and influence that money brings with it. You've got a feedback loop where the very rich can rig politics and therefore economics to make themselves richer.


    That's not the sort of "pull yourself up by the bootstraps" type system you might be imaging. That sort of political influence to make yourself richer is out of the reach of almost all.
    28 Nov 2011, 06:20 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    Just out of curiousity... How am I being ripped off by HFT?


    I am a small investor - I buy stocks a few times a year at the most. I'm a classic buy and hold investor - it takes a lot for me to throw in the towel and look for the next investment. Why do I care if a bunch of supposedly smart guys write programs or sit in front of computer screens and make trades all day?


    I just keep collecting my dividends. How am I hurt?
    28 Nov 2011, 06:25 PM Reply Like
  • DianeLee
    , contributor
    Comments (346) | Send Message
    HFT devalue the actual holdings themselves as the stock is trimmed penny by penny, dollar by dollar, even tho we still collect the dividends. HFTs are not in business to invest, but to scrape profits. I seriously question whether they add liquidity, as they claim, when the value of the stock is consistently lowered by HFT.
    29 Nov 2011, 09:20 AM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    You're being hurt to a very small degree, but multiply that by everyone they do it to.


    It's a similar model to google. Low revenue per person, but hit everyone.


    I guess I'm confused, government taxing people to build roads = bad.


    High frequency trading skimming money off every stock transaction you do to make more money for someone who already makes 10 million a year and pays the same tax rate you do = good.


    People are literally running around and screaming that they'd rather have nothing than roads for their money.
    29 Nov 2011, 12:30 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    I don't quite follow how you think people don't want their tax money spent on roads? I do, thats actually one of the few things our government actually should be doing. What I want to see stopped is the simple transfer of wealth to favored political groups - whether its the overpaid bureaucrats, the financial elite, or the lobbyists.


    How is HTC skimming money? I put in an order for 1000 shares of stock XYZ for $10. They either are willing to sell me the shares or not - same if I were selling at $10. Why is it skimming if they are trying to buy at $10 and then trying to sell at $10.01? Personally I think its a great waste of time but, hey its a free country so be my guest.


    As to the comment that they drive down the price of stock XYZ. Well I'm ok with that frankly - let them drive it down to $1.00. If the firm is well run people are going to step in and buy at good valuations. Their loss and my gain IMO.


    I think HFT is a sideshow. Yes, regulate it so that it doesn't lead to market crashes that are a result of computers acting strange - but even there just make sure that when the computer tries to sell to me a .01 that you don't wipe out the transaction when the HFT's come crying that they weren't as smart as they thought!!!


    If you want to tax the transactions go ahead I say - and tax the 1% more - just make sure that your cutting more than a Trillion dollars in spending NEXT YEAR - thats the real problem in this country!
    29 Nov 2011, 01:47 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    You think it's a waste of time? It's 70% of all transaction. I'm guessing they do it because it makes them a lot of money, not because they think it's a great way to waste their time.


    Spending is certainly an issue but cutting it definitely won't create jobs, and you'll just end up paying unemployment for all these people anyway.


    It makes sense to do both now, but weighted more towards taxes, then continually decrease spending.
    29 Nov 2011, 07:07 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    Yes I think its a waste of time - but its their right to do what they choose.


    Spending is 98% of the issue. And cutting it is the only way to create long term growth - which is how we will get our jobs back. As long as we continue to borrow to pay for totally irrelevent bureaucrats we won't have growth. Deeply cut the government, cut social spending, and that money will instead be spent on investment, infrastructure, and real jobs.


    Bureaucrats produce nothing and they shouldn't even be counted as jobs. Our government now accounts for 40% of GDP. That is crushing our economy. If you go to the Treasury department and look at government spending as a % of GDP you'll be appalled at what you see. And when looking at the graphs keep in mind that in the 50's and 60's Defense spending accounted for half of the expenditures - then compare that spending to today's and take into account the change in defense spending and it makes it even worse.


    Has our education for our poorest children gotten better now that we have the Department of Education?


    Have Native American's seen their lives improved with the idiot bureaucrats in DC running their lives?


    Is our national energy policy providing better for us since the advent of the Department of Energy?


    I'm not asking those questions as sarcasm? And when considering them ask yourself if we wouldn't have at least the same and probably better outcomes with people taking care of their own communities than the idiot overpaid bureaucrats in DC issuing paper?
    29 Nov 2011, 10:36 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Again, Goldman Sachs does HFT because it makes them an enormous amount of money, not because it's a waste of time.


    The dept. of education is 2% of the federal budget. Not exactly choking the country to death.


    The dept. of energy handles: nuclear weapons, radioactive waste disposal, nuclear reactor production for the navy, sponsoring research. It takes up about .6% of the federal budget.


    Now this stuff has to be assumed by the agencies that handled it before anyway and their budgets have to grow.


    Assuming we just leave nuclear waste in the streets, there's no costs to the states to handle more education costs somehow, etc. you've saved all of 2.6% of the federal budget.


    All the while insisting that people execute 70% of all stock trades for no other reason than to waste their time.


    Maybe there's a problem of scope here?
    1 Dec 2011, 03:51 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    Note that you didn't answer any of the questions asked and that I said go ahead and implement that tax. It doesn't change the real problem.


    But you do point out something valuable - Refusal to hold anyone in government accountable - our kids can't read - well hey thats ok the Department of Education is just 2% of our expenditures.


    And exactly how was it we used to be the best in the world at primary education? Because the bureaucrats weren't involved!!!!!


    2% here, .6% there, 4% over there, 1.5% around the corner, 17% under there, 3.1% next to it..... and pretty soon its just your children and grandchildren's future being spent to enrich the triumvirate of the bureaucrats, politicians and financial elite...... but keep believing the government is looking out for you.
    1 Dec 2011, 05:14 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Our literacy rate is actually pretty high. You're making emotional arguments rather than actually looking at data.


    It does add up. To 2.6%. And that's if you can somehow spend $0 on nuclear reactor development, nuclear waste disposal, education, etc.


    And sure without the DoE giving grants to energy research maybe that money would come from somewhere else, but that's then baked into higher product costs instead of higher taxes.


    I'm not saying there's not problems that need to be fixed, my point is you're hyper focused on the wrong things and no data seems to be able to convince you otherwise.


    Education and research aren't really a huge part of the budget, but they're pretty big GDP drivers.


    We need education and research more than hedge fund managers need to pay capital gains instead of ordinary income tax on their fund management fees.


    And I did answer most of your questions. It's pretty obvious that I think at least some portions of the DoE are useful to me by mentioning say nuclear waste disposal.


    I left off native american affairs since I don't really know anything about the subject.
    1 Dec 2011, 06:23 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    actual data? You mean like OECD rankings?


    Here you go



    Oops those damn facts that show how we've dropped from numero uno all the way down to #20. How were we once the best without the Department of Education and are now thoroughly mediocre with the Department of Education?


    Damn bureaucrats! Thats how.
    1 Dec 2011, 07:14 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    And that shows that it's the fault of the Department of Education directly?


    You're not even showing correlation, never mind causation.


    All you have there is a list of world education rankings, not a graph showing our standing over time compared to Department of Education (per capita) funding levels. Even if you had that, then all you're showing is correlation, not causation.


    There's still the need to normalize for immigrant intake, size of country (higher expenditures on infrastructure for larger ones drain funds), etc.


    The best comparisons I see on there would be Canada and Germany. Neither take in as many immigrants as we do. No idea what their per capita funding levels are.


    Hopefully you have the Department of Education to blame for your complete and total ignorance of statistics, science, etc.
    2 Dec 2011, 12:05 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    I see since you can't even begin to defend the department of education and our sorry ass results lets attack the messenger. Liberal hate it when the light is shined on the results of their beloved bureaucrats.


    We spend the MOST per capita on primary education in the world - only country close to us is Switzerland.


    Department of Education is 4-5 times larger than in 1980.


    And uh, Germany has about 4 million immigrants from Turkey living in the country. And Canada seems to be very welcoming to immigrants though I don't pay any attention to their numbers.


    And i find it amazing that in all your posts you put forth zero results and then when I provide something from the OECD I'm the one that is ignorant. And I"m also ignorant in science - I guess you just were able to figure that one out all on your own.


    I guess those masters degress from Carnegie Mellon just aren't what they used to be.
    2 Dec 2011, 01:37 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    That's why I said Canada and Germany made good comparisons. Notice we aren't looking terrible by comparison.


    And yes they do take in less than we do. Saying Germany takes in 4 million doesn't disprove that.


    And how much of that spending comes from the Dept. of Education and not from local funds?


    Now normalize that per capita spending to income levels for each country.


    If I provided data that says that people in Nigeria have longer commutes than people in the US, can I then throw up my hands and say that proves that Nigeria should abolish their department of transportation? And that that would solve all their budget problems?


    People ignorant of math and science graduate from all tiers of universities. If you want to be judged by the name of your university and not by your ability to reason then you've barking up the wrong tree with me.


    Here's data normalized to percent of gdp per capita:
    2 Dec 2011, 02:41 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
    From 1992???????????


    What a joke. And its on a RELATIVE basis. I'd expect poorer countries to spend relatively more on education than richer countries. It doesn't change the fact that we spend the most and get terrible results for our money (unless your one of the idiot bureaucrats or public unions that actually gets rich off the money). Sobering article below:



    There are lies, damn lies, and statistics. And your posting just proves that statement correct.


    And you say hey, we don't look bad by comparison - totatally ignoring that we were #1 - now we should be happy with being average!!!


    Yeah, more liberal bullshit - everyone should be average!!!!


    The difference between our education system and say Finland's is pretty straight-forward. Finland sets high standards. They run their schools locally. ALL teachers are from the top 1/3 of their graduating class (and only from accredited universities). All teachers can and are fired if the principle finds their performance lacking (note, that is correct, the principle runs the school not bureaucrats or unions). And finally note that teachers in Finland actually earn less than teachers in the USA - they earn about the average in Finland. Compare that to the USA - where 1/3 of our teachers are from the upper third of their college/university class. Public school teachers can't be fired unless they actually kill someone. And they earn more than the average person in the communities that they supposedly serve.


    And one last statistic for you - in the past 30 years we've doubled the number of people per pupil employed by our education system - Double the number of adults per student - and where are the results?


    Bureaucrats, public unions, and liberal apologist like yourself are the problem.
    2 Dec 2011, 04:04 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Yes because George Bush didn't massively expand the Department of Education. It's a liberal thing!


    Proportionally to the amount of money they make, Finns spend double what we do on education.


    In Finland the teachers union is also heavily involved in policy decisions, and much more involved at the school level than here.


    So if you want to emulate Finland then we need the teachers union more involved in policy decisions, and we need to spend more relative to our income levels on education. Maybe you want to find another country to hold up?
    2 Dec 2011, 05:56 PM Reply Like
  • winnersdon'tquit
    , contributor
    Comments (211) | Send Message
    "reduces the volume of wheeling and dealing."

  mean like deposits, withdrawals, bank checks, check cashing, mortgage payments, car payments, everyday stuff like that???


    I guess middle class Americans are bigger "fish", than we give ourselves credit for.
    28 Nov 2011, 06:18 PM Reply Like
  • Terry330
    , contributor
    Comments (866) | Send Message
    No, only on stocks you hold less than one minute.
    28 Nov 2011, 06:29 PM Reply Like
  • SA reader
    , contributor
    Comments (176) | Send Message
    40% of Americans don't pay taxes. Raise taxes on EVERYONE. Cut unemployment benefits if you want to cut unemployment levels. I know several people that are on unemployment just because it's free money and will go out and get a job when it runs out.
    28 Nov 2011, 08:08 PM Reply Like
  • Native Texan
    , contributor
    Comments (-724) | Send Message
    Couldn't agree more, SA reader.
    28 Nov 2011, 08:22 PM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
    Well unless state taxes, sales taxes, gasoline taxes, property taxes, vice taxes, capital gains taxes, use taxes, etc. don't count as taxes, you're dead wrong.


    What you mean is 40% of Americans don't pay federal income tax, but that's nowhere near the extent of our taxes.
    29 Nov 2011, 12:28 PM Reply Like
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