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When famous bank robber Willy Sutton was asked why he robbed banks, he reportedly replied "Because that's where the money is." And when our next President, no matter who it is, and Congress try to unscrew this financial mess, they will quickly realize two things:

- It will require a crapload of money.

- Poor people don't have money

Like a group of Willy Suttons, they will come after the rich because no one else will have any money. The fairness part of the debate will become moot.

The problem is that the rich are the only group powerful enough to stop the government from raising their taxes. So my question to you today is this: What is the best way to confiscate money from the rich?

There must be some way to give the rich a spoonful of sugar to make the medicine go down. Somehow the impression of unfairness has to be mitigated so they comply willingly. Allow me to jump to some bad examples to make the point.

Suppose the next President made the following pitch. "This is a once-in-a-century cash crisis. To get us through, we are going to tax the rich heavily for the next ten years. In return, the rich will each get two votes in every election."

Now remember that the spoonful of sugar can be more psychological than economical. A double vote is the one sort of thing a rich person can't already buy. And it wouldn't have much impact on democracy because there aren't that many rich people. Everyone gets something. The poor get money, the rich get slightly more influence.

Or suppose the rich were required to fund alternative energy projects directly, and in return get some equity, like a mandatory venture capital model. I would much rather give my money to a specific venture with a tiny chance of payback, as opposed to the general tax fund.

I would also feel okay about a tax increase if 100% of the extra money went to buy healthcare for those who couldn't afford it, and I knew how many people that was. For example, if I got a tax bill from the government with a specific dollar amount, and next to it an estimate of the number of people it will give healthcare to, I couldn't feel so bad about it. I'll only get pissed if my money goes into some general fund to buy bridges to nowhere.

Or suppose Congress makes a deal with the rich, something along the lines of raising their taxes only if the government reforms something in particular that is widely agreed to need reform. I wouldn't mind paying extra taxes if it inspired the government to be more effective or efficient going forward.

Or how about requiring the rich to buy foreclosed houses, with a requirement that they rent them to others for the next 15 years? The rich can qualify for the lowest loan rates (or pay cash), so the credit problem would be solved. While the rental income wouldn't cover the loan and other costs, there is some potential that the investment could turn at least neutral when home prices rise in the future. Low income people would get extra places to rent, and rich people wouldn't feel so screwed if they owned property that had some chance of breaking even. And banks would be solvent.

And suppose you require the rich to install solar panels and other energy solutions to each foreclosed home they purchase, and optionally roll that expense into the mortgage. That would create lots of jobs and reduce national energy consumption at the same time.

In business school we learned that you can usually reach a deal whenever two parties put different values on things. Do you have any better ideas for how the government can confiscate money from the rich and make everyone happy about it?

 
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Sep 23, 2008
There will be plenty of finger pointing and covering up to go around. The "rich" don't have enough money to make everyone else rish. Confiscate all the wealth of the wealthiest ten percent and I'll bet it would not pay our debts for a month. Then what?

Seems like the first thing the country (congress) ought to do is stop spending more money than it is making - just like the average family has to (or should do) do.

The reality is, no matter how you structure it, the (mostly) hard working middle class will end up paying most of any tax increase. Because THAT is where most of the wealth is produced.

Sometimes we seem like a country of lazy, spoiled teen-agers who think our parents have an endless supply of money to buy us whatever we want - and who don't think we should have to have chores or responsibilites or consequences for our bad choices.
 
 
-5 Rank Up Rank Down
Sep 23, 2008
Why not cut all the loopholes that the rich have lobbied for inclusion out of the tax system.

that way, the rich will actually pay the same proportion of tax as the poorer people.
 
 
Sep 23, 2008
I don't condone theft by ANY name no matter who is targeted. Government caused this mess, more government won't fix it.
 
 
Sep 23, 2008
I don't really fall into the rich catagory, but I do pay taxes (actually pay not just loan till refund time) And it would feel a little better if we knew where all the money was going. I don't think raising taxes is the answer though, it hasn't worked in the past, no reason to think it will work now. the government needs to stop wasting vast amounts of the taxpayers dollars on things that have no place in the federal budget. If the state of Arkansas wants to build a museum there is no reason that the taxpayers in the rest of the states need to fund it. they also need to stop welfare. They don't do it well, witness the massive welfare fraud. Charity needs to go back to the local level. In the interest of brevity...ooops too late...I'll stop there
 
 
Sep 23, 2008
When royalty lost power to parliament, one of the first things to emerge big time was the bond market. Members of parliament were the rich. Once there was a constitutional monarchy, the monarch couldn't just demand money, could not just tax the rich. The rich said, rather than give you a pound we'll loan it to you. Like so many things that start out so well, we didn't seem to know when to quit on this one.
 
 
-6 Rank Up Rank Down
Sep 23, 2008
I really like the idea of an increased tax for healthcare to those who can't afford it. If the rich saw their taxes going somewhere helpful (helping American citizens avoid crippling debt due to medical bills instead of funding constant warfare) perhaps it wouldn't shed such a negative light on a slight tax increase.

Personally, I was just married, used what little money we had to treat ourselves to nice honeymoon, only to find ourselves in the emergency room during that time, then again once we returned home. followed by an expensive surgery. Two weeks married and we've already accumulated more debt in medical bills then either of us have been in in our lives. She's a student, and I work a tech job that "just can't afford to give me a raise" which offers no medical insurance. In order to qualify for goverment assisted medical aid, i'd have to be making less money then what it would take to pay off my monthly bills. so we'll be spending the next few years our of lives paying off medical debt, and searching for a plan with premiums that wont cripple us financially. forget buying a house, even the thought of having kids is scary right now, how do people afford them?

Its nice to build a financial plan, and then watch it all fall apart when one of us has medical problems. The system is certainly broken.

Great ideas Scott! But don't forget to take a break on the lighter side of life here and there, your humor posts have always brightened my day! Thanks for helping me laugh, and think!
 
 
-8 Rank Up Rank Down
Sep 23, 2008
Scott Adams for president!!!!!

Seriously, why can't any of the current crop think like this? As hard as it would be to get a cartoonist elected, I think Scott would do a pretty good job.
 
 
Sep 23, 2008
When taxes are cut, revenue to the treasury goes UP. It worked in the 20's, 60's, 80's and 00's. However Govt spending seems to increase at a faster rate when the greedy congress sees more money rolling in.

Additionally, the percent of tax burden on the rich also increases when taxes are cut. Today the richest 1% are already paying 39% of all taxes (up 2% this decade), the top 5% pay 60%. The top 25% pay 86%. The bottom 50% pay less than 3% of the total. How much more can they expect the high achievers to pay before they quit achieveing (aka a tax increase).

Conversely, when taxes are raised revenue to the treasury goes down. This is why you can not simply tax yourself to prosperity.
 
 
+2 Rank Up Rank Down
Sep 23, 2008
I don't have any good ideas, but I do have a bad one:

Make the rich people's money absolutely worthless like these current unregulated bailouts are doing, if something has no value then they won't care about it anymore (they'll just be p*****).

For the record, I'm all for keeping the economy solvent and I agree if something isn't done soon there could be a collapse that rivals the Great Depression (Bernake knows the Fed alone can't keep us going right now), but throwing money at something doesn't automatically restore confidence in a failing system, even in the short term, as we're seeing daily now on Wall St.
 
 
+1 Rank Up Rank Down
Sep 23, 2008
Start by telling them how bad it could be. If you listen to the talking heads, this is the worst financial crisis since the Great Depression (if not worse than that). In the 30 years that followed the Great Depression, the top tax rate was no lower than 63% and topped out in the 90% range. [Source: http://www.truthandpolitics.org/top-rates.php]
So if we "only" take 50% of any income after the first 2 million (arbitrary number alert!) we can show them how much we are letting them (and by "them" I mean "you") keep.
Changing subjects, I have recently started reading your books. Don't get too excited though, I Weaselishly let the market determine the price and borrowed the book from the library.
 
 
-8 Rank Up Rank Down
Sep 23, 2008
Okay Qualifications. I believe rich is when any one person with no family makes over 100k or if there is a family 100k 40k*each additional member of the household..

Luckilly I do not apply.

We allow them a complaint system that if they complain they will be summarilly executed. Its not there money its the countries money. :P

No but seriously. If someone benifits from the "American Dream" disproportianately more than the average person than that person should have absolutely no proplbems paying disproportiiante taxes.
 
 
Sep 23, 2008
A couple of things. One, for those accusing Scott of being socialist and happy about it, it seemed to me that the point was that (1) Scott has money, so (2) like it or not, the government is going to take some of it to fix current problems. I don't really think he *wants* to bail out everyone else per se, just that it's inevitable (and he's probably right).

Beyond that, I think even a purely fiscal incentive could work if done right. Specifically, the current problems are just that -- current. Get past them, and the future is a brighter place (or else, what's the point?). I am not an economist, but I think if the tax hikes that fix the current process were presented literally as tax loans to the government, that it wouldn't be that bad -- in essence, the government takes, say, $10,000 from you this year, and in exchange, you get a note that is good for a $10,000 tax credit but you can't redeem it for X years, where X might also be based on some sort of lottery system so that everyone can't take the credit at the same time, and the face value of the note comes with an interest rate that is at least as good as inflation.

Then, the rich know that they'll get their money back eventually, they won't lose money, and the government gets to bail itself out now, and has a few years to fix things up. The rich still lose the opportunity cost value of their money... but that's far better than just throwing it down the hole never to be seen again that taxes provide.

If you make the terms decent enough, a lot of rich people (I think) would voluntarily purchase this kind of an 'investment' - faced with the government shamefacedly stealing from you outright, or allowing you to buy your way out of the situation, most rich people probably take door number 2 (again, I think). I'm not rich, but I know if I voluntarily give the government $5,000 today on the promise that I get $6,000 5 years from now, I feel much better about that then the government taking $2,000 from me today for nothing (for me).

Aside from that, I don't even know that the government can tax its way out of this problem. The rich have money, sure, but it's not just sitting around in a mattress - it owns stock in companies, it's in bank account and money market funds that are used to provide the credit lifeblood of the economy. Forcing the rich to come up with cash means they pull it from investments / stocks / banks / etc., which isn't going to help the current problems. So for any tax to work, it's going to have to come from newly earned money - dividends, interest paid, and paychecks, etc - we can't tax existing wealth, because it's probably more or less inaccessible and pulling it makes things worse, so we have to tax newly created wealth, it seems to me.
 
 
Sep 23, 2008
The way you raise money from the rich is the way they are doing it right now. Enage in policies that deflate the currency, and you have effectively raised taxes across the board. All current obligations become worth less, and everyone pays more for everything without even realizing they've been had. Its the only politically palatable way these days. Yes, its horribly regressive, and the rich stay rich, relatively speaking.
 
 
0 Rank Up Rank Down
Sep 23, 2008
Uhmm.., poor people do have money, because there are a lot more of them. All the poor people 'normal' people together have more money then all the rich people together. And that's where the money is going to come from.

I thought it was obvious.
 
 
Sep 23, 2008
I have to concur with risingstarlp- giving the goverment more money is not the solution and will only encourage more of the same nonsense going on now. We could all stand to be more libertarian (except for the wacky stuff).
 
 
-4 Rank Up Rank Down
Sep 23, 2008
How about if we give the American people two options:

1) Let the rich pay more taxes to bail out the system that made them rich and keeps them rich.

-or-

2) Let the system collapse. If there is a depression, use the $700 billion to help only those who desperately need food, shelter, health care, etc.

Who do you think would flinch first, the rich or the poor?
 
 
Sep 23, 2008
Scott, basically you want more government control, more laws, and more socialism. The real way out of the credit crisis is close to what the fed is doing right now, taking care of problems as they crop up, and keep the financial system and economy on its feet. Higher taxes are not necessary to take care of the problem. Lower spending in upcoming years can pay down debt without increased taxes (which will only hurt the economy and the increase in tax revenue will be an under 100 percentage, probably somewhere around 50, of the decrease in economic activity, which means that wealth will be reduced overall, which suggests a decrease in the standard of living. The government needs to get completely out of health care and need only act as a regulator. If anything, an increased tax credit would be a good idea, and regulation to increase insurance plan choices which could be done by removing the state by state nature of insurance plans, as they exist now.

Medical coverage is not a right, and trying to claim it is ridiculous. It shows up no where in the constituition. Without an amendment, political leaders should stop discussing universal healthcare plans. Without the issue of rising government liabilities of health costs, the other problems we face are less complex to solve. Medicare has 28% fraud right now, the country can't afford more of that type of waste.
 
 
-1 Rank Up Rank Down
Sep 23, 2008
I went to the trouble of registering just to come in and say the obvious: the government can confiscate money from the rich at gunpoint. Isn't that how they're doing it now indirectly? Pay your taxes or be escorted to jail byarmed and jackbooted thugs?
 
 
 
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