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Five of a kind
Tax them China style
As a nation we are killing ourselves over the budget and the debt
ceiling. Did you see Obama on TV? He looks worn down. He does not have
the power to craft a solution.
That the USA has a consensual process of creating laws is one of the
things that make the country great. It is also one of those things that
just kills us from time to time. Today it is killing “us”, it may well
kill Obama’s chance to get re-elected.
I wonder if we should do this “China Style”. They do it differently.
There is not much debate or discussion. They just print an announcement
in the newspaper. They did just that the other day. So what are income
taxes in China? The answer is they are very high:
The highest bracket of 45% is for anyone earning above $145,000. Of
interest to me is that anyone with an annual income over $64K pays 35%
tax.
This chart looks at US tax liabilities by income group. The highest earners pay an average of about 25%.
If the Chinese marginal rates were applied in the USA it would generate about $1.5 trillion of additional revenue. The budget would be balanced overnight. Of course if the US did something like that it would trigger a massive depression. Why is that?
On underwater housing and unemployment
Reuters has a story out suggesting that there is a shortage of workers:
There
is ample evidence that unemployment is the critical problem today. With
that in mind I found this story to be interesting. Some thoughts:
A) I wonder how much this is a function of the underwater housing market. I hear this all the time:
“I would move to where I could get a better job, but the house is underwater so I’m stuck”
B) Should this trend continue there will have to be some wage increases in the manufacturing sector. That would be welcome, but also inflationary.
Put A and B together and what do you get? Stagflation. That would be Ben Bernanke’s worst nightmare.
On FX Algos
This web site
produced some interesting charts. Some of this I knew from reading Zero
Hedge. Some of it I was not aware of (the extent of this). I find this
very troubling.
This shows that 56% of all NYSE trading is now a result of Algo activity.
$ volume on the NYSE is all over the lot. I find estimates of about $200
billion a day. So $100 billion each day is being traded by the robots.
That’s not new news.
The FX market is going through the same transition as the equities
market. This chart suggest that over 50% of daily turnover is now
computer generated.
But the FX market is a giant compared to stocks. The estimates
are that the FX market volume is more than $4 Trillion each day. (I’m
not sure I trust all these numbers {I think FX turnover is closer to $8T
a day}).
Cut this up as you like. This look at the numbers suggest that as much
as $2 trillion of algo trading is happening in the FX markets every day!
Ten times more in $ terms than all of the NYSE.
Look again at the chart and note that way way back in 2004 Algos represented only 2% of volume. This is exploding.
I’ve noticed that FX markets have been “spikey” all year. I thought it
was just the backdrop of news that was causing the very rapid price
adjustments. Looking closer at what role the robots have in this makes
me re-think that.
I’m not sure when it will happen, but I think the dominance of robots in
FX is going to cause a “flash crash” one day. I just remind everyone
who plays in this sandbox that there will be no “regulator” who will DK
the millions of trades (trillions of dollars) when (not if) this
happens. The losses will be staggering. If you think you can sleep easy
with a stop loss; you're wrong.
Dumb tax breaks
Don’t worry about the railroads. They’re doing just fine. All the
numbers have been moving higher for this group. Trains now move about
45% of all goods. The industry is looking at 100b in revenues and has a
fat (mid teens) profit margin. Ask Warren Buffet. He owns BNSF. He
bought it in 2009, he’s making a fortune.
So why do I bring this up? I saw this and it pissed me off.
So our ‘friends’ who own railroads and are making a fortune are also
getting a tax break from the Feds for new ties that they lay. The tie
business seems to booming as a result.
My point here: We have the absolutely worst tax code that could exist.
We ought to throw the whole thing out the window and start anew. I
doubt that big shots like Warren B would like that very much, so it
won’t happen.
Let them drink water
OJ trading at a record high today. Who cares? Not the Fed.
I’m not blaming the Fed for the high price of orange juice. But I do think it’s a crime that both food and energy prices are exclude from Ben B’s definition of inflation.
I keep expecting the American people to wake up to the realities. They haven’t, yet.
I have confidence that they will at some point. It will take more
record prices for the things we consume for there to be a significant
collective reaction. It’s likely to be ‘noisy’ when it does happen.
The Fed is perpetrating the greatest theft in the history of man. This
will not go un-noticed for much longer. The pendulum is going to swing
the other way for the Fed. Today they have unlimited power and answer to
no one. When the pendulum does swing it will lop off some heads in the
process. I wouldn’t bet on Bernanke’s position in the history books. He
(and the Fed) could end up taking the brunt of the fallout for what is
surely going to come.
»
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I strongly suggest you educate yourself a bit before making a fool of yourself. The only people denying AGW are fringe wingnuts and people paid to do so. Follow the money.
You can only see things through the narrow prism of your self interests. I doubt very much of you are even capable of understanding the underlying cycles involved in climate. If you do indeed have had an education which allows you do evaluate the observed data and studies, you certainly have not shown it in any of your comments. You strike me as mis-informed ideologue that is living in your own version of an ivory tower.
'I doubt very much of you are even capable of understanding the underlying cycles involved in climate. If you do indeed have had an education which allows you do evaluate the observed data and studies, you certainly have not shown it in any of your comments.'
Flak, I take this to mean that you think you understand climate and its cycles. I believe that making this statement is proof that you misunderstand climate and its cycles. If someone goes to wikipedia and reads up on translation, they might think "hey, I understand how the ribosome works". But this would be like someone reading up on welding and making the jump to say "hey, I know how a car manufacturing plant works". Making that jump shows a severe level of misunderstanding information not understanding it. The Earth's climate makes the above examples of complicated systems look incredibly simple. You may know a lot of data on the Earth's climate but I would say you misunderstand a much greater amount.
Yes, to a point. They is a lot of stuff I do not fully understand and for that I rely on the interpretation of experts. But 20 years of experience in basic research gives two insights, one is how to read almost any data, two, I am also very aware of my limitations. With regards the poster debating me, it is very clear that he is in no position to deny AGW based on his knowledge; therefore, I am justified in accusing him of "faith based dogma".
This is by no means a proof of AGW, but just consider that we are dumping into the atmosphere over ~200 years, carbon that was naturally sequestered over a 200 million year time span. The rate at which it is being dumped completely overwhelms the steady-state carbon cycle. Sure there are some flawed and wanting studies supporting AGW, but overall, the evidence from many studies is pointing to that conclusion. When you have ~50 comprehensive analysis that point to a certain conclusion, each one with differing sensitivity (i.e. quality of data, control of systematic effects etc...), you cannot cling to the inadequacy of one or two possibly flawed studies as a rejection of the thesis.
The Economist Magazine went from serious doubts to believers over the past ~5 years based on the mounting evidence for AGW. In fact they regularly have excellent articles summarizing the latest peer reviewed findings.
There was a great quarterly letter by CHS last year that spelled things out from an asset management perspective and provided a checklist of rebuttals of the deniers arguments. Munich Re did a comprehensive analysis and decided that the premiums from weather related policies were not worth it. The smart money is lining up on the side of GW while not necessarily publicly accepting AGW. Follow the money, look at who is funding the deniers...
Perhaps your background in physics is the issue. The Earth's climate is a biological system. Saying 50 recent papers somehow proves where the Earth is going and what the consequences will be of that change simply elicits the exact same response I made above.
In terms of money, I don't see how you can say researchers, who receive their own buildings, where they get to do research, which consists of running computer models, somehow do not have a bias to perpetuate the idea that the government, which pays for those buildings and climate institutes and research, needs to create a climate salvation tax so the government can collect more money some of which will pay for the institutes, which say the government needs to collect more money. There is a huge bias within climate science for government intervention that doesn't exist to the same extent within physics or most biology (except public health) which further discredits their good results. The amount of horrible climate science research which gets accepted seems to confirm this bias. The fact that smart money is lining up behind GW is just an offshoot of the growing crony capitalism of the West. It is just a way to get on the climate salvation tax gravy train.
The mechanics of climate is physics not biology. Thermodynamics and fluid mechanics are squarely in the domain of physics. The impact on the ecosystem is certainly biological....
If Munich Re is dumb to pass up on fat premiums because their evaluation of risk tells them so and GW is a hoax, why is there not a host of re-insurers jumping in?
You obviously have not dealt with academic scientists if you think that they think AGW is their ticket to the gravy train...There are a lot of people that do research because they love what they are doing. Try spending 5 months living in a tent on an Antarctic ice shelf to get core samples...
For shits and giggles look up the entire world climate science budget and compare it to the money spent by lobbyists and deniers....
Start looking at this
http://www.usgcrp.gov/usgcrp/Library/ocp2009/ocp2009-budget-table1.htm
Now break it down into what is specifically AGW as opposed to simply climate studies....
"The mechanics of climate is physics not biology."
Perhaps for the Moon but not Earth. Biological systems are founded on physical laws but that does not mean they are explained by physics.
"You obviously have not dealt with academic scientists if you think that they think AGW is their ticket to the gravy train...There are a lot of people that do research because they love what they are doing. Try spending 5 months living in a tent on an Antarctic ice shelf to get core samples..."
I loved when my major professor told me that science is a labor of love and then demanded I repeat experiments until I get the results he expected because those were the "correct" results. It was largely a labor of love for him but he still needed to get the grant renewal to keep his lab going and pay the mortgage. You can say they don't get paid much but running a lab does pay well and allows you a great deal of freedom. Labeling adventures to Antartica as huge sacrifices made by selfless scientists seems to be a little desperate.
"Start looking at this..."
I see 1.3 bil in funding that largely would not be there if no one believed in a global warming disaster. And there is a lot of global warming research that is funded by NIH where biologists have been able to sometimes ridiculously link their research to the topic.
To be honest, this topic is boring to me. We'll get some GW panics whenever it gets hot but it is 2011 and no coastal flooding. No huge GW disasters as predicted. It is just a matter of time before GW is as well regarded as JW's.
You repeated them because it is easy to get things wrong... for example the Millikin oil drop experiment is extremely difficult to do...
Not all of the 1.3 billion is directly related to AGW, e.g. do you think studying the El Nino and La Nina cycles is some secret protocol of the AGW agenda?
Do you know what an entry level post-doc is paid? And what their chances of securing a permenant position in academia is?
BTW, in all this, you have provided nothing but empty rhetoric to refute the thesis of AGW.... I am also bored by this exchange so put up or shut up on the science of the topic.
"You repeated them because it is easy to get things wrong... for example the Millikin oil drop experiment is extremely difficult to do..."
No, I repeated them because they were poorly designed experiments that gave inconsistent results which even if they were consistent were too remote from the variable we were measuring to be conclusive. Didn't stop it from being published in a good journal or the grant from being renewed. The followup had similar issues and when I pointed this out very nicely to my major professor before I left he literally cried. This probably isn't as big a problem with physics but it is with science studying higher order systems. Your speaking for experiments conducted outside your field that you have no clue about (do you have any idea what the experiments were even studying?) might speak to your extreme overconfidence and projection of how physics research works on all research.
"BTW, in all this, you have provided nothing but empty rhetoric to refute the thesis of AGW...."
If you review where I budded in and went off on a tangent, it wasn't my intention to argue the legitimacy of AGW but rather your logic and overconfidence in your knowledge and understanding. If you want to label it empty rhetoric, that's fine. I believe the principle is critical for scientists to know if science is to continue to progress and I believe the ramifications of scientists not understanding this principle is the reason for the continuing scientific scandal occuring right now but that is never mentioned or talked about publically except in the most extreme cases of cloning sheep or finding viral DNA in the guts of kids with autism or emails showing proof of collusion to exclude those with differing opinions by top scientists within AGW research.
Almost all AGW related exchanges here at the hedge are classic examples of
1) The Downing Effect
or
2) The Dunning-Kruger Effect
In most cases of bad science, you will see that guilty stand to greatly gain financially....Always follow the real money, not scraps that are thrown at academia...
I rest my case. You may have the last word but don't abuse it.
"Almost all AGW related exchanges here at the hedge are classic examples of
1) The Downing Effect
or
2) The Dunning-Kruger Effect"
Are you agreeing with me or are you saying that everyone that questions AGW is overconfident in their cognitive ability (or in other words, you guys are dumb)? My original point was not that you are dumb or meant as an insult. It was to simply point out that admission of ignorance isn't very popular in science anymore to its own detriment.
"In most cases of bad science, you will see that guilty stand to greatly gain financially....Always follow the real money, not scraps that are thrown at academia..."Linking vaccines to autism was not a big financial boost to the lab in question. The very same lab published research which refuted their bad results without skipping a beat. The point is to get published and to make your topic important to get funding. Academia might not have a ton of money, only a couple tens of billion, but it doesn't take much when the system selects for publishing not for good science.
This wasn't meant to be insulting or a shouting match. I hope that you will consider my opinion going forward when reviewing new AGW research. How precise and meaningful are the measurements considering the size and complexity of the system they are studying? How reasonable is it to make any long term predictions on a system with this amount of size and complexity? Do researchers from climate science have a vested interest in inflating the importance of climate science? Does the current system of funding science select for actionable results be it good data or bad data? Are there any benefits from increased CO2 concentrations in the atmosphere? Are there any benefits from global warming? Does anyone even consider the possibility? If not, why not?
Here's the interesting thing about climate change, different from all prior scientific practice: The believers try to shift the burden of dis-proving the theory on to the questioners. Just like evolution...we're told that either it's true or more research is needed.
The data is in and it is very strongly in the corner that man-made global climate change is a hoax. Show us the correlations of unadulterated data in the equivalent of a double-blind test that show us conclusively what you believe to be true. And make sure you run the same tests against the other rationales for cyclical climate changes.
Radicals have been looking for the magic bullet to levelize economic liberty for longer than I suspect you have been around, and the theory of man-made climate change fit their bill because of the difficulty associated with disproving such a nebulous thing. But no one has proved it (nor will they).
And spare me your misplaced effort opining on my education, intellect, status, or anything else. You have no knowledge of me other than what I put here in pixillated silhouettes.
So put down the smart-mouth comments that you so relish as being the Maestro of Flak, get some substance, or shut up.
Aside from empty rhetoric what have *you* posted to dispel AGW? To my knowledge, SFA....
Could you in your own words explain the scientific basis for your disbelief in AGW? If you cannot then kindly shut up...the ball is in your court.
There is an old adage that goes as follows, "Where one cannot speak, one should be silent"
Thanks for making my point.
And if you must have something to elevate your tizzy, chew on this...
http://www.globalwarmingawarenessblog.com/globalwarming-is-not-due-to-manmade-carbon-dioxide.html
or this...
http://motls.blogspot.com/2004/09/sunspots-correlations-with-temperature.html
or this...
http://www.tmgnow.com/repository/solar/lassen1.html
Well, I did say your own words....so on that measure you fail.
Your first link are all denier arguments that have been refuted so many times it is not even funny. They are based on misleading junk science...
http://www.realclimate.org/index.php/archives/2004/12/index/#Responses
Re: Sunspots and what not
http://www.climate4you.com/
click on the "Sun" link in the menu and explain to me what you think you see. The above link is the data, not the spin.
Interpretation of Lassen is refuted here (among other places)
http://www.realclimate.org/index.php/archives/2005/07/the-lure-of-solar-forcing/
----
Why don't you go to RealClimate and tell the real climate scientists how they are all wrong.
Edit: I have 1:15 tee time... I check back later this evening.
I don't fail...I just ignore your childishness. None of what I referenced has been disproved, and your words don't do it. Only arguments and nothing empirical or conclusive.
Just go back to your original statement that "only the wingnuts" don't believe in (my religion) AGW. You even disguise it with an acronym. You don't care about the truth, as long as your agenda is advanced. I'm interested in reality, and your far from it, Mr. Pretend.
But as I say, it's not up to me to disprove your theory. But that's the way you lightweight types must play it, since there is no substance to support it.
The only thing you ever 'win' at is being more of a mouth-off than anyone else. You've been put in your place in this debate, despite your ongoing rant that you are smarter than me and everyone else.
Why don't I go to RealClimate and tell them they are all wrong? Why would I waste my time with something so worthless? Let them have their fun trying to align things to fit the one and only conclusion they have already determined.
You need to focus on the one question that overshadows all of this - WHY do people like you need man-made climate change to be true? You won't answer that question because you either don't know or you won't admit the reality.
Nice effort, but you lost.
I will grant that you can write reasonably well, but that doesn't cover the fact that you cannot deny the evidence for AGW. You offer old lame links that rehash all the usual myths, thoroughly rebuked many times.
I don't want AGW to be real; what I want doesn't matter. The scientific evidence tells me that it is real. It is you that are clinging dogma and faith.
And if you don't like my style, try to think about what you type first and don't be surprised if you are called out if deserved.
What you claim to "grant" is irrelevant, Mr. bogey master. You came up short, just like the global warming religion which you worship.
I'm moving on to something (and someone) of substance.
Brilliant. Plan to keep drawing taxes from imports that you hope to kill! Great revenue model.
Great ideas. Kill multiple birds. Yet no one in power is talking about any of this.
Exactly. Close the borders. Stop sweatshopping the working class. End "free trade". Tariff all imports, force the jobs to come home. But that will require getting rid of demicans, republicrats, and their Tribal-Bankster masters. A hard road, but will be made easier when their debt Ponzi collapses.
And don't you love that NO ONE (least of all the Tea Party candidates, by the way, who mostly support ever more "free" trade, including Ron Paul who I agree with entirely 50% of the time but disagree with entirely the other 50%) in power is talking about this. I heard crazy hair Trump talk about it, but he's a cartoon.
the payments system is so broken and polarized by dumbocrats and repulinazis... i swear... these republican shop owners i knew started firing and laying off folks 'the layoffs will continue till morale improves' after obama got elected... a bunch of jeckyl and hyde cheerleaders for the 'status quo' lolz
.
i wish by not voting people would get smarter... so i vote?
I don't like the way my tax money is spent. I don't get a check. I don't really giva shit about anyone I don't know --and I don't want to know anyone. Taxes are immoral and a violation of the rights promised to me by the Bible.
Just protect the borders from the cretins and I take care of my own happiness with all the guns and ammo I've been stockpiling.
Fucking collectivist scum! ..... who's with me?
Perhaps you should stop reading Leviticus over and over.
"no man is an island" said a far wiser soul than you. So if you don't like taxes I suggest you stop driving on the roads that tax money paid for or using electricity delivered on a grid your taxes paid to build.
You are such an ignoramus. If the borders need to be protected it is from cretins like you
Certainly we should, who all use the roads, pay for them.
BUT, before I go whole hog on agreeing to do so, I want to know the profit margin of the contractor who got the government contract. I want to see his P & L. And so should you and everyone else who pays the tax.
I want to see how much of our money he is paying to politicians in the form of graft, outright cash, or other perks; I want to see how much he is taking out for himself, his son, daughter, and other relatives, and how much he is paying himself in perks. I want to see the dividends, and deferred compensation, pensions, and all benefits. Who those payments are for to fictitious employees, mistresses, and the like.
I want full and total disclosure of every single fucking dime that enters and leaves the premises.
Don't you? And if not, why not?
We would be capable of producing nothing if not for our glorious overlords! All praise omniscient, wise beauracracy!
You have zero imagination if the government is the only answer to these needs.
WHY do you believe that only Govt is capable of these things? Check your premises.
Fucking collectivist scum! ..... who's with me?
LOL. line of the year.
An army of two. Anyone else?
Bruce, regarding the tax comparison, I believe the tax numbers quoted for China and the US are not comparable. Since in China, you basically only pay that amount for income tax. Whereas in the states, you have FICA, SSA, and all the others. I think it would be more conclusive to lump all federal taxes together and use those numbers for demonstration. I think you may find by doing that that taxes in China are perhaps lower than the US.
Agreed. I'm no expert in Chinese income taxes. I just found it interestng that they raised the top brackets with no discussion. The same argument is tearing our house down.
Chinese have started complaining about the income tax. Not street protests, but middle class people asking where their money is going. Shanghai residents also bitch out the government when money is wasted. Rich people have "gray income" that they don't report, such as from businesses, rentals, etc., so the high rates aren't such a big deal. There is something like FICA here, but it's an actual savings program run by government.
I'm a big believer in social mood and I think it's driving the markets here. Your articles are great Bruce because you tap into this. The main thing is I'm looking at it from the perspective of mood; the public is negative and angry and that is driving politics and markets, not the other way around. "We" want a big fight and we're going to have one.
They can make the tax rates in China 90%, or Russia, it doesnt matter. The systems are so ineffective and so filled with corruption that the wealthy pay what they want in those systems.
Oh, came across this... I thought it exhibited true seeing hindsight..
http://english.aljazeera.net/indepth/opinion/2011/07/2011771074476381.html
Reagan was a nice guy, great orator, strong charisma. His world view was simplistic to the extreme though, he did not understand that the sociopaths need to kept in line...
Reagan was a nice guy, great orator, strong charisma. His world view was simplistic to the extreme though, he did not understand that the sociopaths need to kept in line...
Obama is a guy, orator, with some visible charisma. His tainted view is simplistic, dead wrong, and so radical that he wonders why everyone else doesn't get it. And he is a sociopath, so there is no hope of keeping himself in check.
Do not think for a minute that given the ability and the lens of time to evaluate Reagan and find him lacking makes me any more of an Obama supporter....
The dichotomy of what passes for thought and analysis on this site is getting depressing....
Sorry, didn't realize you were the standard-bearer.
It's interesting that you assume my comments were an examination of your view of Obama, which they weren't. But carry on...
Your condescending sarcasm was implicit....
Like the ones working for Bush that tried to kill him?
Looks to me like the sociopaths made sure to keep him in line, since he was not one of them.
Doesn't the chart about Income Tax tell it all? The tax code has been used to reward unproductive (not necessarily illucrative) activity. Putting aside partisan politics, it is very clear that the US started sliding with the Financialization of the economy. Start fixing that and you are on the way to sanity....
The tax code has been used to reward unproductive (not necessarily illucrative) activity.
How so? Are you personally increasing in productivity and regressing in your tax liability?
Really, really like the algo comparative charts, Bruce....good job and thanx. Been quarreling with a broker friend about this...can't wait to shove the charts up his arse.
It doesn't take much to be considered a high frequency trader. Check the definition.
The discomfort level will have to move up several orders of magnitude before the sheeple even begin to find things distressing enough to take to the streets. All the talk on this and other websites and blogs may try to insinuate a discomfort level that is high enough to cause a flash mob of the Egyptian or Grecian order but me thinks not!
Bruce, your articles are always welcome reading for me, however I'm in the "reset can't come fast enough" crowd. I am tired of all the hulabaloo regarding the imminent collapse, the oligarchs are killing us and the fatcats are getting rich on the backs of the sheeple crap. While all of it is true, the elasticity of the american psyche is far greater than anyone on this site can fathom... just sayin
DaddyO
I think that a reason why there is no 'reset' going on is that so many things have been delayed. DC has (successfully so far) pushed the can down the road. If there had been no tarp/HERA/Fannie/Freddie/ZIRP/QE1/QE2 the reset button would have been hit by now.
We are now out of those bullets. The American psyche is strong, as you suggest. It will get tested pretty hard over the next 24 months.
Bruce... I second the sentiments about your posts. They are one of the few things I loo forward to on ZH.
You posting of Chinese tax rates harkens me back to the Jimmy Carter days in the late 1970's. Do you remember the marginal tax rates back then?
As much as you would like to believe, we are not out of bullets-- though, I wish too, the process of pushing that reset button will begin in ernest. Bernanke can help kick the can down the road all the way to November 2012. But it's all dependent on people keeping faith in the U.S. dollar. Luckily for the Oligarchy, the dollar has a butt-ugly sister called the Euro-- and no matter how stoopid we look from a policy standpoint, the EU and ECB look even worse. Bernanke and Obama couldn't have found a better time to extend and pretend.
Of course, the only thing getting in the way is commodity prices. The "gold is not money" quote will haunt Bernanke for ages. Gold becomes money when a populace loses faith in whatever fiat a central bank endorses. Bernanke will make people forget about Neville Chamberlain.
Bruce,
Are these rates REALLY too high?.
Is this their total taxes paid?.If it is, then they are still lower than we are,maybe not on paper but in real $$ paid out.
Do they pay any other kinds of taxes?.
If not,they are still lower than we are for the same brackets.
There seems to be a difference amongst statutory, effective, and nominal tax rates.
Therein lies the problem. If it's a tax, collect it in its entirety and then disburse from gross receipts for any allowances or other previously so-called "deductions". Then you'll have a better metric for measuring what taxation does (or not). Have all levies in hand and then you'll see a government reluctant to let go of those dollars. Like if you had all your paycheck without any deductions taken out before the balance is delivered to you. You could actually SEE what portion of your money is being stolen. Payroll deductions should be rolled back to zero! If quarterly payments to the Treasury were made by each and every worker there would be some accountability demanded.
.gov will never do it, too much truth telling...