Solution to Global Financial Crisis

[viper84737]

eLadies and Gentlemen, I have been giving this all much thought for many years (before 2007, even, I saw this **** coming), and I had been unable to find any sort of solution, or even possible partial-solution to what has turned into yet another Global Depression. That is until now, possibly. I need intelligent minds to critique this idea, to find possibly loopholes and problems with it. I'm not saying it will be a panacea cure-all, but I believe it will at least set us on the right track and solve the significant majority of what has gotten us into this mess in the first place. So without further ado, here it is:

Tax individuals exactly the same as you would a corporation. That is to say, tax them AFTER expenses, not after income.
(That and for frig's sake stop printing money! This one's rather obvious, though, and they know it, too)

So what do you think? Keep in mind I'm looking for INTELLIGENT RESPONSES ONLY. So if you're here to stir the pot with mindless banter, go back to watching some TV. I recommend more Jersey Shore.

Take your time to think about the consequences of this, really think deeply here before firing off a response.

And thank you.

[biglandfarm]

Households would choose to buy more inferior goods, to save income instead. This would lead to recession in the short term, but I understand that the benefits outweighs the negatives. The chunk of that saving would provide a more conservative economy in the future.

hmmm

[fastar1]

If you've been thinking about it for so many years, do you care to draw a few connections for the rest of us who are just thrown into the deep end? I don't see any connection whatsoever between the method of taxation and the problem as I see it, which is governments, corporations and individuals extending themselves too much credit.

[Flashmonkey]

If you've been thinking about it for so many years, do you care to draw a few connections for the rest of us who are just thrown into the deep end? I don't see any connection whatsoever between the method of taxation and the problem as I see it, which is governments, corporations and individuals extending themselves too much credit.

+1

What we need to do is go back to a localized economy instead of this globalized cluster**** we're relying on at the moment. The problem that the U.S is having, IMO, is that a lot of their labour has been outsourced to other countries. The working class is out of work, the corporations continue to make a profit....the gap widens.

[viper84737]

Yes, the problem of issuing virtually unlimited credit upon a fiat currency is also there, and it needs to stop just the same. But my suggestion is tackling another angle of this: Why give corporations tax breaks and allow the rich to get richer while everyone else remains stagnant? This gap widens when the corporations can write off expenses while the individual can't. Should they not be treated more equally for everyone's benefit?

Outsourcing will eventually fade, it's just another supply/demand issue. Once BRIC catches up (once everyone catches up, really), there will be nobody to outsource to and things will equalize more. That's a few decades off, however.

On a very related note, check this out: http://www.businessinsider.com/what-...t-2011-10?op=1

[murf]

Yes, the problem of issuing virtually unlimited credit upon a fiat currency is also there, and it needs to stop just the same. But my suggestion is tackling another angle of this: Why give corporations tax breaks and allow the rich to get richer while everyone else remains stagnant? This gap widens when the corporations can write off expenses while the individual can't. Should they not be treated more equally for everyone's benefit?

k this out: http://www.businessinsider.com/what-...t-2011-10?op=1

because the govt needs tax dollars?

[Dresden]

eLadies and Gentlemen, I have been giving this all much thought for many years (before 2007, even, I saw this **** coming), and I had been unable to find any sort of solution, or even possible partial-solution to what has turned into yet another Global Depression. That is until now, possibly. I need intelligent minds to critique this idea, to find possibly loopholes and problems with it. I'm not saying it will be a panacea cure-all, but I believe it will at least set us on the right track and solve the significant majority of what has gotten us into this mess in the first place. So without further ado, here it is:

Tax individuals exactly the same as you would a corporation. That is to say, tax them AFTER expenses, not after income.
(That and for frig's sake stop printing money! This one's rather obvious, though, and they know it, too)

So what do you think? Keep in mind I'm looking for INTELLIGENT RESPONSES ONLY. So if you're here to stir the pot with mindless banter, go back to watching some TV. I recommend more Jersey Shore.

Take your time to think about the consequences of this, really think deeply here before firing off a response.

And thank you.

What do you qualify as expenses, and how do you police it?
For example, if you qualify rent as an expense, then where is the incentive for people to buy homes. You will kill the real-estate market in a heartbeat.

Every family dwelling has a different set of expenses, based on personal situations. How do you expect 2 families of equal household income to be taxed differently..?

Sorry, I can't believe you spent much time thinking about this. The sure accounting/auditing department required to regulate something like this would employ 1/2 the country if not more.

[Brian P]

This proposal would lead to spending all available money on "expenses" and not saving anything at all (because it would be taxed away anyhow). No personal savings means when that person reaches the end of their working career for whatever reason, how will they survive?

Not a viable solution.

The US has enough trouble because mortgage interest is deductible (i.e. your income is effectively taxed after your mortgage interest expense) and this led to people staying in debt in the interest of maintaining tax deductibility of the mortgage.

A consumption-based tax (like our GST/HST and European VAT, etc) makes more sense.

[CanadianBiker]

+1

What we need to do is go back to a localized economy instead of this globalized cluster**** we're relying on at the moment. The problem that the U.S is having, IMO, is that a lot of their labour has been outsourced to other countries. The working class is out of work, the corporations continue to make a profit....the gap widens.

The working class wants cheap goods but also wants to get paid wages far beyond their value.
As for localized economies, even in the microcosm of GTAM, many people cross-border shop to save money. You could never enforce it.

[invictus43]

The problem that the U.S is having, IMO, is that a lot of their labour has been outsourced to other countries. The working class is out of work, the corporations continue to make a profit....the gap widens.

It's been happening for a hundred years..you can see the progression. In an industry I know a bit about, bicycles, there was a time when Europe was the manufacturing home for bicycles. The US also made them..and Canada. Then the Japanese took over a huge chunk of the manufacturing. Taiwan was cheaper so the production moved to Taiwan, then China. Soon it will be India and Cambodia. It's a race to the bottom. Hardly any bicycles are made in Japan for export now. Just as in the US and Europe, except for very high-end products. Cars, shipbuilding, clothes..all the same. I wonder when we'll run out of cheap places to build stuff..

[Flashmonkey]

The working class wants cheap goods but also wants to get paid wages far beyond their value.
As for localized economies, even in the microcosm of GTAM, many people cross-border shop to save money. You could never enforce it.

Agreed on the wages bit. The problem is very complex, but a lot of it has to do with the way our north american way of living has built up everyone's expectations over the last 20 years or so, along with the current way most major businesses are setup.

The whole attitude of banding together as a community to help support each other is pretty much gone. Everyone's out there for themselves and they want to blame everyone else for their problems; which is perfectly demonstrated with these occupy whatever protests going on all over the place. IMO, that's what separates this current generation with the generation that had to undergo the great depression in the 20's and 30's.

[Flashmonkey]

It's been happening for a hundred years..you can see the progression. In an industry I know a bit about, bicycles, there was a time when Europe was the manufacturing home for bicycles. The US also made them..and Canada. Then the Japanese took over a huge chunk of the manufacturing. Taiwan was cheaper so the production moved to Taiwan, then China. Soon it will be India and Cambodia. It's a race to the bottom. Hardly any bicycles are made in Japan for export now. Just as in the US and Europe, except for very high-end products. Cars, shipbuilding, clothes..all the same. I wonder when we'll run out of cheap places to build stuff..

Haha I think it may be a cyclical pattern. Eventually everyone in the U.S and Europe will be so desperate for work that they'll drop their wages and the rest of the world will be going to them for cheap labour.

Circlejerk of life.

[joet100r]

There is no solution. Every country in the world is in debt; every state/province is in debt and every city is in debt.
In the 20th century the eastern Europeans proved that Communism doesn't work and now we are proving that Capitalism doesn't work either. Sad thing is that a lot of debt is being held by pension plans (including CPP) so we are going to get it where the sun don't shine.

[nfq]

How 'bout we listen to some rich folk:

http://www.mediaite.com/tv/warren-bu...-five-minutes/



-No Further Questions.

[fastar1]

This proposal would lead to spending all available money on "expenses" and not saving anything at all (because it would be taxed away anyhow). No personal savings means when that person reaches the end of their working career for whatever reason, how will they survive?

Presumably savings for retirement would be considered seperately as an expense, and remain tax-free so at least people could retire. Still though, people would make a point of having no savings = no taxes = bankrupt government.

Or maybe withdrawing from savings would be considered income, so taxable? In which case only retired people would be paying the bill for the rest of the population LOL!

[Myztyk]

The working class wants cheap goods but also wants to get paid wages far beyond their value.
As for localized economies, even in the microcosm of GTAM, many people cross-border shop to save money. You could never enforce it.

+1. You've got people pushing brooms in factories making more than nurses.

You've got people putting door seals in cars making more than the middle management marketeers and finance people who make the decisions who influence how the company will make money 5-10 years from now.

And they've both got more job security to boot. Unions like to moan and ***** about how they are victims...but the white collar middle management people suffer long before the union even begins to feel pain. Of course that will get no sympathy on this website.

The funniest thing for me is these broom pushers and door sealers all have pensions right? These pensions are required to make money in excess of influx of funds because of the massive amount of people reaching the retirement age. How do these companies make money? By owning big chunks of the companies their people work for! They are the ones squeezing their own employees!! Sad people don't realize this.

[BrianZ]

The working class wants cheap goods but also wants to get paid wages far beyond their value.
As for localized economies, even in the microcosm of GTAM, many people cross-border shop to save money. You could never enforce it.

The working class are the people who actually contribute to the economy. If you are not actually producing something you are a burden on the economy. I no very little about economics but like everything else in life I like to go back to basic principles. The whole idea of an economy is to make our lives easier. We need the basics first, food, shelter and warmth. Then we need comforts like, health care, transportation, clothing, etc. The more people that are producing these things the better. Anyone else is a burden on the economy. Let's look at a few examples of who is productive and who is non-productive:

Productive:

Farmer
Manufacturing employee (auto worker, carpenter, electrician, etc)
Teacher (makes future workers more productive)
Engineer

Non-productive:

Real-estate agent
Professional athlete
Politician
Entertainer
Stock trader

IMO we have far too many non-productive people and too few productive people, and the non-productive people are taking more than their fare share of the proceeds.

[LiNK666]

It's an obvious solution that's been apparent to most of the world for a very long time. Don't trust old white people.

[fastar1]

It's an obvious solution that's been apparent to most of the world for a very long time. Don't trust old white men.

Fixed.

[viper84737]

Skyler: In whatever manner corporations are policed and their expenses are legitimized. Every corporation has a different set of expenses, too, but they can write them off and pay tax on the remainder. Can you and I do that? Nope.

BrianP: I'm in full agreement with taxing consumption rather than production. Taxing production is a complete disaster. If we can't be taxed on post-expense revenue, why allow corporations to be treated this way? I would prefer to be taxed after expenses, and even in this manner, corporations DO pay taxes, after all, so it's not like taxing them after expenses means they get to go ahead and operate with full impunity. I call for equal tax structures for both individuals and corporations to prevent corporations from getting too far ahead, which is exactly what has happened here. You disagree with taxing profit only, ok, let's tax corporations pre-expenses too. Pick one, and apply to both, is what I'm saying.

BrianZ, your definition of "productive" assumes perfect knowledge by others. Real-estate agents are useless to me because I am smart enough to do the work myself, and have the time to do so, but not everyone is and does, respectively. So to them, there's productivity in letting someone else handle that aspect of their lives. This holds true for the other jobs you listed, too.