Income Gap
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I've always had a feeling that the dollar is going to take a tumble due our drunken sailor spending and regardless of what "the experts" theorize about increasing exports, it will ultimately leave us, the little people, screwed. Personally, I plan on investing in more foreign currencies when I build up some more liquidity. The truth is the appetite for American goods isn't what it used to be.
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The Almighty
"The truth is the appetite for American goods isn't what it used to be."
That is probably due to the fact that we have become more service oriented as a country. We leave the manufacturing to those that can do it as efficiently as we can at a more economically viable price.
When you combine all European countries together, yes, they have caught us. That was the whole reason behind creating the EU and Euro to begin with. They wanted a direct challenger to the US dominance.
Our out of control spending has certainly hurt us and helped add to the decline in the value of the dollar. I personally think we will continue to see the US allow the dollar to decline.
That is probably due to the fact that we have become more service oriented as a country. We leave the manufacturing to those that can do it as efficiently as we can at a more economically viable price.
When you combine all European countries together, yes, they have caught us. That was the whole reason behind creating the EU and Euro to begin with. They wanted a direct challenger to the US dominance.
Our out of control spending has certainly hurt us and helped add to the decline in the value of the dollar. I personally think we will continue to see the US allow the dollar to decline.
uscitizen
Villified User
We are a consumer based exonomy. 2/3 of our economy depends on what consumers buy, not what we make.
Our downward slide is inevitable, the only question is how far down we slide.
The national debt, personal debt loads and near record low personal savings rates, near stagnant wages, etc add up to a dismal near term future.
Our downward slide is inevitable, the only question is how far down we slide.
The national debt, personal debt loads and near record low personal savings rates, near stagnant wages, etc add up to a dismal near term future.
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The Almighty
US... true, we are consumer based. But if more manufacturing is done outside of the US, it means we drive up the trade deficit when we buy foreign produced goods. If consumer spending drys up (and I agree we are in for a downturn in consumer spending) then it will also tend to HELP the trade deficit as we will likely be buying less foreign goods (especially if the dollar continues to weaken.
uscitizen
Villified User
yes but consider that as things get tighter, people will seek out the cheapest stuff to buy....
Starbucks and specialty places will close first...Wally world will survive.
"That is probably due to the fact that we have become more service oriented as a country. We leave the manufacturing to those that can do it as efficiently as we can at a more economically viable price."
I still get a sense that we are economically cannabalizing ourselves. Yes. Returns are good at moment, but at what cost? And I've also been contemplating on whether or not economic success is a zero-sum gain. I'm starting to think that it is.
I still get a sense that we are economically cannabalizing ourselves. Yes. Returns are good at moment, but at what cost? And I've also been contemplating on whether or not economic success is a zero-sum gain. I'm starting to think that it is.
How do you mean? You mean personal economic success?
I think we'll get another "Great Communicator" within the next decade or so who will once again turn that around. I think that there is a ton of greatness left in the US and that the "golden age" has yet to be reached.
We spend so much time talking about how the world has declined from the past, but I was there for some of that past and it wasn't all that powerfully great. We can continue to reach for more, and we will. We have barely scratched the surface of what we can do when we really put our minds to something.
Basically - third world's becoming developed nations.
Actually, my boyfriend had an interesting idea which I think is a good idea.
Here it is:
Basically, you know how the super-riche invest a $hit load in municipal bonds which we all know is tax-free? Well, he suggested putting a % income limit on how much of your income is tax-free. He suggested 90% but I'd personally be flexible to this idea. So if you've got $5M invested in municipal bonds that yield $250K a year tax free you'd only be allowed to have $25K of that tax-free and you'd have pay regular income taxes on the rest. This way you really wouldn't hurt the middle class.
Here it is:
Basically, you know how the super-riche invest a $hit load in municipal bonds which we all know is tax-free? Well, he suggested putting a % income limit on how much of your income is tax-free. He suggested 90% but I'd personally be flexible to this idea. So if you've got $5M invested in municipal bonds that yield $250K a year tax free you'd only be allowed to have $25K of that tax-free and you'd have pay regular income taxes on the rest. This way you really wouldn't hurt the middle class.
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The Almighty
Lady T... not all muni bonds are tax free anymore. Many are now subject to AMT. The vast majority (I think actuall all... but leaving room for possible exceptions) that are not subject to it are the actual city/state bonds and bonds for non-profits. The city and state bonds are effectively taxed in that they are issuing their bonds at yields lower than taxable bonds of the same maturity that have similar risk. The non-profits get the exemption due to the fact that they are non-profit and are providing a public service... ie... the non-profit retirment facilities.
The loophole your boyfriend is suggesting is already closed. The remaining munis, although federal (and sometimes state) income tax-exempt are subject to AMT. AMT was created for the sole purpose of making sure the wealthy didn't do exactly as you suggest.
If you further tax them as you suggest, it will simply lead to them transferring their money into taxable income producing investments that provide a higher yield. If they are going to get taxed they are going to make the pre-tax income as high as they can. So you would in effect hurt the state and local governments and the non-profits ability to raise funds at the lower rates.
Bottom line... his idea is already in place.
The loophole your boyfriend is suggesting is already closed. The remaining munis, although federal (and sometimes state) income tax-exempt are subject to AMT. AMT was created for the sole purpose of making sure the wealthy didn't do exactly as you suggest.
If you further tax them as you suggest, it will simply lead to them transferring their money into taxable income producing investments that provide a higher yield. If they are going to get taxed they are going to make the pre-tax income as high as they can. So you would in effect hurt the state and local governments and the non-profits ability to raise funds at the lower rates.
Bottom line... his idea is already in place.
uscitizen
Villified User
Yeah LadyT, I can see your point, but the whole tax free idea on muni bonds is to encoureage investement in our infrastructure which is crumbling already...A hard call to me....
Now we might need 2 classes of muni bonds, necessary and frivilous. Like bonds for Stadiums and such be considered frivilous and fall under your rule, but public water projects be considered necessary.
Now we might need 2 classes of muni bonds, necessary and frivilous. Like bonds for Stadiums and such be considered frivilous and fall under your rule, but public water projects be considered necessary.
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The Almighty
"Now we might need 2 classes of muni bonds, necessary and frivilous. Like bonds for Stadiums and such be considered frivilous and fall under your rule, but public water projects be considered necessary."
Already done.... that is what the Alternative Minimum Tax was created for.
Already done.... that is what the Alternative Minimum Tax was created for.
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The Almighty
US... it does go further. It also eliminates many deductions that the wealthy (and now many middle income) families were using. They include long term cap gains, some depreciation and a host of other deductions. I was simply addressing Tiana's muni question.
That said, AMT needs to be addressed and adjusted for inflation. Since its creation in the early 70's (I think) it has included more and more families creating a greater tax burden on the middle class.... which was never intended. Again our politicians at the time lacked foresight.... which should be no surprise.
That said, AMT needs to be addressed and adjusted for inflation. Since its creation in the early 70's (I think) it has included more and more families creating a greater tax burden on the middle class.... which was never intended. Again our politicians at the time lacked foresight.... which should be no surprise.
http://www.marketwatch.com/news/sto...={E13E9513-7C14-46F8-BD55-CF57F8E85239}&dist=
TianaOWNED
.I didn't realize they'd be subjected to AMT.
My bad. I was @$$ wrong.
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