15.1% Poverty Rate -- But Why?

[Chris]

...Launched in 1964 by President Lyndon B. Johnson, the “unconditional war on poverty in America,” now in its 49th year....

From 1964 until now, the federal, local and state governments have spent $15 trillion in the War on Poverty — $12 trillion by the federal government and $3 trillion by state and local governments.

... the 2012 poverty rate “has risen to 15.1 percent of Americans, the highest level in nearly a decade.”

In 2012, “the federal government will spend more than $668 billion on at least 126 different programs to fight poverty,” in addition to “welfare spending by state and local governments which adds $284 billion to that figure,” writes Tanner.

On a per capita basis, this roughly $1 trillion a year in welfare spending “amounts to $20,610 for every poor person in America, or $61,830 per poor family of three,” explains Tanner.

...“Welfare spending increased significantly under President George W. Bush and has exploded under President Barack Obama,” states Tanner. “In fact, since President Obama took office, federal welfare spending has increased by 41 percent, more than $193 billion per year. Despite this government largess, more than 46 million Americans continue to live in poverty.”

Bottom line, “the poverty rate is perilously close to where we began more than 40 years ago,” after $15 trillion in spending, Tanner reports. “Clearly, we are doing something wrong.”

@ A Key Economic Lesson (http://spectator.org/archives/2013/01/02/a-key-economic-lesson). The Tanner citations are from The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail (http://www.cato.org/publications/policy-analysis/american-welfare-state-how-we-spend-nearly-$1-trillion-year-fighting-poverty-fail).


OK, so rather than just point to the problem, let's ask why, despite all these well-intentioned efforts, it is getting worse?

[Carygrant]

It is invariably a cycle , composed of many factors .
One factor is social immobility . Americans are insular and probably scared to move abroad unless they come from the more professional sectors .They also cannot believe that countries outside of their own offer greater opportunities in far more agreeable circumstances .
Certain Groups in the US must learn that they have to become Economic Migrants -- broadly the current Middle Class which will be squeezed unmercifully by economic circumstances over the next few years .
This is linked to falling Educational standards -- Americans fail to see and understand the larger picture -- that the Empire is in rapid decline and that Western dominance belongs to the East principally from now on .

[Banandangees]

http://upload.wikimedia.org/wikipedia/en/7/74/Pov_crossnatl.jpeg

GB must be having similar problems. I see where Ireland has 16% and UK nearly 14% poverty rate. They also lead all EU nations, Australia, the US and Canada in % non-working poverty rate.

http://en.wikipedia.org/wiki/Working_poor

[Chris]

It is invariably a cycle , composed of many factors .
One factor is social immobility . Americans are insular and probably scared to move abroad unless they come from the more professional sectors .They also cannot believe that countries outside of their own offer greater opportunities in far more agreeable circumstances .
Certain Groups in the US must learn that they have to become Economic Migrants -- broadly the current Middle Class which will be squeezed unmercifully by economic circumstances over the next few years .
This is linked to falling Educational standards -- Americans fail to see and understand the larger picture -- that the Empire is in rapid decline and that Western dominance belongs to the East principally from now on .

Can you explain what any of that has to do with the topic of poverty and why the war on it fails?

[Chris]

http://upload.wikimedia.org/wikipedia/en/7/74/Pov_crossnatl.jpeg

GB must be having similar problems. I see where Ireland has 16% and UK nearly 14% poverty rate. They also lead all EU nations, Australia, the US and Canada in % non-working poverty rate.

http://en.wikipedia.org/wiki/Working_poor

Hey, banan, long time no see. Hope all is well!

Let me post the image from your link:

http://i.snag.gy/yse2f.jpg

I would suggest that indeed, one reason poverty rates remain high is some have grown dependent on government and are trying to work their way out of poverty. And those who do work enjoy a high level of income mobility:

http://i.snag.gy/PQ4l9.jpg

From Tracking the same households over time shows significant income mobility (http://www.aei-ideas.org/2011/10/tracking-the-same-households-over-time-shows-significant-income-mobility/) which dispels the myth liberals repeat based on statistical groups rather than actual individuals and households.

[Alif Qadr]

@ A Key Economic Lesson (http://spectator.org/archives/2013/01/02/a-key-economic-lesson). The Tanner citations are from The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail (http://www.cato.org/publications/policy-analysis/american-welfare-state-how-we-spend-nearly-$1-trillion-year-fighting-poverty-fail).


OK, so rather than just point to the problem, let's ask why, despite all these well-intentioned efforts, it is getting worse?

The problems have increased because there are no real "community responses" to the problems of poverty. The most so-called "Civil Rights", churches and other institutions have bone is to point the people in the direction of government, and they still do it. There are only a few who actually teach self-reliance through pooling resources, opening businesses, stop wasting money on frivolous things, etc. This is why when the cocaine pipeline from Central America opened, the actual drug war began and still people continue with the old approaches and ignore the immense failures of such an approach.
Then again, this is my opinion of the situation.

[countryboy]

@ A Key Economic Lesson (http://spectator.org/archives/2013/01/02/a-key-economic-lesson). The Tanner citations are from The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail (http://www.cato.org/publications/policy-analysis/american-welfare-state-how-we-spend-nearly-$1-trillion-year-fighting-poverty-fail).


OK, so rather than just point to the problem, let's ask why, despite all these well-intentioned efforts, it is getting worse?
The way "poverty" is measured in this country is utterly retarded. As is the way hunger is measured. I'm sure true poverty is a bit lower.

The war on poverty fails because raw deal policies encourage "poverty".

[Mainecoons]

This is not true at all. The "war" on poverty has resulted in a lot of affluent government workers. Only the intended recipients remain poor as most of the money gets eaten up in government overhead.

Why do you think D.C. is the richest place in America?

For the same reason that a cancer is the healthiest part of the dying body.

[Chris]

The problems have increased because there are no real "community responses" to the problems of poverty. The most so-called "Civil Rights", churches and other institutions have bone is to point the people in the direction of government, and they still do it. There are only a few who actually teach self-reliance through pooling resources, opening businesses, stop wasting money on frivolous things, etc. This is why when the cocaine pipeline from Central America opened, the actual drug war began and still people continue with the old approaches and ignore the immense failures of such an approach.
Then again, this is my opinion of the situation.

Agree, there are too few community responses, or responses from society.

But why is that?

[Chris]

The way "poverty" is measured in this country is utterly retarded. As is the way hunger is measured. I'm sure true poverty is a bit lower.

The war on poverty fails because raw deal policies encourage "poverty".

Yes, the fuller OP article speaks to that, how well-intentioned government policies have consequences that actually increase poverty.

[Mainecoons]

The poor will always be with us. But with the liberals in charge, we get to have a lot more of them.

http://static5.businessinsider.com/image/50e6ffcdeab8ea7e53000022-940-705-618-/moneygame-cotd-010413-1.jpg

[Chris]

Well, that's true, since "the poor" as a statistical group are simply the bottom percent. And they are increasing as liberal faith in government increases.

[Carygrant]

[QUOTE=Banandangees;210557

GB must be having similar problems. I see where Ireland has 16% and UK nearly 14% poverty rate. They also lead all EU nations, Australia, the US and Canada in % non-working poverty rate.

[/QUOTE]
Better than US 33% .
Poverty Ville.

[Carygrant]

Can you explain what any of that has to do with the topic of poverty and why the war on it fails?


How many times have I told you that reading books is a waste of time if you lack comprehension ?
A little knowledge is dangerous and you clinch the debate .

[Dr. Who]

@ A Key Economic Lesson (http://spectator.org/archives/2013/01/02/a-key-economic-lesson). The Tanner citations are from The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail (http://www.cato.org/publications/policy-analysis/american-welfare-state-how-we-spend-nearly-$1-trillion-year-fighting-poverty-fail).


OK, so rather than just point to the problem, let's ask why, despite all these well-intentioned efforts, it is getting worse?

The number one and most recent cause is the Global Credit Crisis precipitated by the subprime mortgage fiasco in the US which has had worldwide implications and is affecting most businesses on some level. As a result there are fewer people being employed and in particular young people.

The second recent cause is the migration of jobs to the 2nd world - I say migration, but really it is the result of government (Democrat and Republican) pandering to corporations and not imposing any tax consequences for moving their manufacturing, fabrication, IT and other industry offshore. This has had dire consequences insofar as many heretofor union jobs no longer exist and many of the high paying IT jobs have also disappeared.

The longer standing cause of poverty in America is the declining standard of education along with the unequal levels of education available in areas with depressed tax bases. The poor are less able to complete, are less able to obtain any form of employment as a result of their general lack of literacy. Compounding this problem is competition from other 1st as well as 2nd world countries with very high standards of education. These countries are gaining huge technological advantage and are outcompeting the US in many areas. Again, this ties in to some extent to point number two as one of the reasons jobs are moving offshore.

Ultimately you can keep throwing money at welfare, but it's never going to decrease poverty. Perhaps money that is being, IMO, squandered on military objectives, could be better spent on an education initiative, which will increase the US's viability in the eyes of investors. At the same time, there need to be consequences for those corporate citizens that benefit from the sale of goods in the US, but do nothing to provide employment opportunities.

[Chris]

The number one and most recent cause is the Global Credit Crisis precipitated by the subprime mortgage fiasco in the US which has had worldwide implications and is affecting most businesses on some level. As a result there are fewer people being employed and in particular young people.

The second recent cause is the migration of jobs to the 2nd world - I say migration, but really it is the result of government (Democrat and Republican) pandering to corporations and not imposing any tax consequences for moving their manufacturing, fabrication, IT and other industry offshore. This has had dire consequences insofar as many heretofor union jobs no longer exist and many of the high paying IT jobs have also disappeared.

The longer standing cause of poverty in America is the declining standard of education along with the unequal levels of education available in areas with depressed tax bases. The poor are less able to complete, are less able to obtain any form of employment as a result of their general lack of literacy. Compounding this problem is competition from other 1st as well as 2nd world countries with very high standards of education. These countries are gaining huge technological advantage and are outcompeting the US in many areas. Again, this ties in to some extent to point number two as one of the reasons jobs are moving offshore.

Ultimately you can keep throwing money at welfare, but it's never going to decrease poverty. Perhaps money that is being, IMO, squandered on military objectives, could be better spent on an education initiative, which will increase the US's viability in the eyes of investors. At the same time, there need to be consequences for those corporate citizens that benefit from the sale of goods in the US, but do nothing to provide employment opportunities.


The number one and most recent cause is the Global Credit Crisis precipitated by the subprime mortgage fiasco....

Are you saying poverty didn't exist before? Surely you jest.


Ultimately you can keep throwing money at welfare, but it's never going to decrease poverty. Perhaps money that is being, IMO, squandered on military objectives, could be better spent on an education initiative, which will increase the US's viability in the eyes of investors.

If government has failed at welfare and warfare what makes you think it can succeed at edication, especially when it has thus far failed at education already?


At the same time, there need to be consequences for those corporate citizens that benefit from the sale of goods in the US, but do nothing to provide employment opportunities.

Should those citizens who benefit by the purchase those good and services also have to provide employment opportunities?

[Dr. Who]

Are you saying poverty didn't exist before? Surely you jest.



If government has failed at welfare and warfare what makes you think it can succeed at edication, especially when it has thus far failed at education already?



Should those citizens who benefit by the purchase those good and services also have to provide employment opportunities?

1) It is the most recent cause of worldwide unemployment. Unemployment numbers have skyrocketed since the G.C.C. and has affected young people at startling rates. Number two is less recent, but no less impactful. Of course poverty has always existed, but the new unemployed poor, used to be the tax paying poor and middle class workers. Governments are actually capable of doing the right thing if they are required to by the voters. It's not like they lack the inherent skill or ability - they just lack the motivation. Your last question does not make much sense to me. Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits. Otherwise they are simply a parasitic organism. Foreign companies are charged duty on their goods. Domestic companies should pay taxes and/or provide employment.

[Mainecoons]

Actually, I think that one of the startling things that has happened in my lifetime is that government, at least in the U.S., has evolved to be incapable of doing the right thing because the working levels have been corrupted with incompetent help, hired preferentially for reasons that have nothing to do with the job in hand or their qualifications for doing it, along with the management being taken over by leftist ideologues.

The government work force is overpaid, overprotected and needs a total overhaul. The first thing that needs to happen is that much of the things it has been allowed to get involved in beginning with Lyndoin Johnson and his disastrous "war on poverty" which was really nothing more than a "war on Republicans" to start with, need to go on the scrap heap of history. It is amazing that much of the current deficit can be attributed to the Federal government's grossly failed welfare programs. The rest can be attributed to its equally failed attempts at policing the world.

[Chris]

1) It is the most recent cause of worldwide unemployment. Unemployment numbers have skyrocketed since the G.C.C. and has affected young people at startling rates. Number two is less recent, but no less impactful. Of course poverty has always existed, but the new unemployed poor, used to be the tax paying poor and middle class workers. Governments are actually capable of doing the right thing if they are required to by the voters. It's not like they lack the inherent skill or ability - they just lack the motivation. Your last question does not make much sense to me. Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits. Otherwise they are simply a parasitic organism. Foreign companies are charged duty on their goods. Domestic companies should pay taxes and/or provide employment.

You didn't read the OP, did you. You're here to preach and practice your big government faith, regardless the fact that big government has failed to deal with poverty effectively.



they just lack the motivation

Because the big government you promote has disincentivized them from returning to work. See Mulligan on Redistribution, Unemployment, and the Labor Market (http://thepoliticalforums.com/threads/9384-Mulligan-on-Redistribution-Unemployment-and-the-Labor-Market).




Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits.

Why?

[Cigar]

I'm sure if we just gave the Rich larger Tax Breaks, all of this will just go away.

[Chris]

I'm sure if we just gave the Rich larger Tax Breaks, all of this will just go away.

Ever the government solution when it is government failing?

[Dr. Who]

You didn't read the OP, did you. You're here to preach and practice your big government faith, regardless the fact that big government has failed to deal with poverty effectively.




Because the big government you promote has disincentivized them from returning to work. See Mulligan on Redistribution, Unemployment, and the Labor Market (http://thepoliticalforums.com/threads/9384-Mulligan-on-Redistribution-Unemployment-and-the-Labor-Market).





Why?
"You didn't read the OP, did you. You're here to preach and practice your big government faith, regardless the fact that big government has failed to deal with poverty effectively."


Did you not ask: "OK, so rather than just point to the problem, let's ask why, despite all these well-intentioned efforts, it is getting worse?"

I spelled out some of the reasons it is getting worse. I have no specific faith in government, big or small. I would like to see smart government that benefits its citizens by providing a well skilled and educated population thatwould be in demand by industry rather than abandoning that population to increasing illiteracy and poverty by expending the common resources on big corporations who no longer have any allegiance to America. You simply color other posters words withyour own prejudice.

"Because the big government youvpromote has disincentivized them from returning to work. See Mulligan on Redistribution, Unemployment, and the Labor Market (http://thepoliticalforums.com/threads/9384-Mulligan-on-Redistribution-Unemployment-and-the-Labor-Market)".

You cannot "disincentivize" people from obtaining jobs that are not there or for which they are under qualified.. It may suit you to believe that all poor people are cut from the same mould - no doubt you believe that they are simply all lazy and don't want to work, but there are many different causes of poverty. Perhaps if you read more than political pieces, you would know that the US graduates millions of illiterate students from secondary school. How many jobs would they qualify for? Do you think that there are a surplus of unskilled labor jobs in the US? Certainly not any more. Are there welfare dynasties - yes. Do they represent the vast majority of welfare recipients - no. If you are an illiterate American by virtue of a broken educational system or due to your inability to speak the language, you will be underemployed. Is there racism and zenophobia at work - yes, and they are less able to compete for the available jobs. In your model of a working America, there would be the people who work, and the people who starve, some of whom would be working at sub-minimum wage.

Why maintain a dysfunctional welfare system? So that the world does not see people starving on the streets of the wealthiest country in the world. Think of the appearance of America to the world if they were to see children with swollen bellies on the streets. I think the US would lose all credibility. You also can't demand that people get jobs that are simply no longer there. I don't know where you have been living but entire cities have been decimated by unemployment recently.

"Why?"
Because a US based corporation that neither pays its share of taxes nor provides employment is, in effect, being subsidized by the tax payers, by virtue of the fact that said taxpayers must assume the corporation's share of taxes. People may be willing to have their pocket's picked when a corporation is providing employment, thereby increasing the number of tax payers, but providing welfare for wealthy corporations that are a net liability on the public balance sheet is either completely incompetent or criminal..

[Chris]

I have no specific faith in government, big or small. I would like to see smart government....

Ah, so you have faith in what you hope government could be. Why? In the case of poverty it has done nothing but fail. Do you think if you throw smarts enough and money enough at a problem, then government will solve it?



You cannot "disincentivize" people from obtaining jobs that are not there or for which they are under qualified..

The Mulligan piece is a study that presents data you can disincentivize. I suggest you read it before commenting. It's not a matter of belief. The study wasn't about the poor. And I'm not interested in your straw men, sorry.



Why maintain a dysfunctional welfare system? So that the world does not see people starving on the streets of the wealthiest country in the world.

Why do you think people would starve? What evidence do you have for this? I'm not interested in emotionalism.



Because a US based corporation that neither pays its share of taxes nor provides employment is, in effect, being subsidized by the tax payers, by virtue of the fact that said taxpayers must assume the corporation's share of taxes.

You're avoiding answering the question. Let's recall that this was you claim and what I asked why about:


Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits.

Let's try again, why? Why do companies that profit have to pay more taxes or provide employment?

[Dr. Who]

Ah, so you have faith in what you hope government could be. Why? In the case of poverty it has done nothing but fail. Do you think if you throw smarts enough and money enough at a problem, then government will solve it?The Mulligan piece is a study that presents data you can disincentivize. I suggest you read it before commenting. It's not a matter of belief. The study wasn't about the poor. And I'm not interested in your straw men, sorry.Why do you think people would starve? What evidence do you have for this? I'm not interested in emotionalism.You're avoiding answering the question. Let's recall that this was you claim and what I asked why about:Let's try again, why? Why do companies that profit have to pay more taxes or provide employment?I am growing weary of your game of questions. Outline your thoughts and I will respond.

[Chris]

I am growing weary of your game of questions. Outline your thoughts and I will respond.

Earlier you said:


Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits.

Let's try again, why? Why do companies that profit have to pay more taxes or provide employment?

Weary, or can't answer with your canned answers?

[Dr. Who]

To be quite clear, I stated that corporations should pay their fair share of taxes. Were they paying their fair share, there would be no argument. Emphatically, they do not pay their fair share. They are given specific tax breaks intended to encourage supposed employment opportunities. When a corporation accepts tax reductions predicated on hiring and instead reduces employment and relocates that employment to foreign lands, they are taking advantage of the tax payer. Were a private citizen to commit the same offence, they would be accused of fraud. If that does not sufficiently answer your question, you are being deliberately obtuse.

[Chris]

To be quite clear you said exactly what I quoted you saying.

Now you add an obtuse fair share.

So now I ask how do you determine what's fair in addition to why?

Cite an example of a tax break predicated on hiring.

[Mainecoons]

To be quite clear, I stated that corporations should pay their fair share of taxes. Were they paying their fair share, there would be no argument. Emphatically, they do not pay their fair share. They are given specific tax breaks intended to encourage supposed employment opportunities. When a corporation accepts tax reductions predicated on hiring and instead reduces employment and relocates that employment to foreign lands, they are taking advantage of the tax payer. Were a private citizen to commit the same offence, they would be accused of fraud. If that does not sufficiently answer your question, you are being deliberately obtuse.

Uh, genius, did it ever occur to you that the customers of business are the ones who pay taxes?

Do you understand even on the most basic level how business operates? For example, do you understand that it adds up all the costs of doing business, including taxes, and that plus a modest profit is used to price what they sell?

Taxes on business have only one result: They raise the cost of the product or service to the consumer. And in the case of businesses who would like to sell stuff in other countries, they make the business less able to compete and export goods or services provided by American workers.

Companies outsource for a very simple reason: The U.S. with its burdensome regulations and highest in the world corporate tax rates, plus double taxation of dividends, is no longer a good place to do business. As the American consumer becomes poorer and poorer because his country's economy is dying the death of a thousand knives as a result of government, he has less and less money to spend, while at the same time the people in developing countries have more and more to spend, giving them greater power over the market, which gives them greater power to determine where stuff is made and sold and by whom.

I'm afraid we have here yet another example of just how dismal is the state of American education when it comes to teaching people about the private economy and where wealth comes from.

[Chris]

Uh, genius, did it ever occur to you that the customers of business are the ones who pay taxes?

Do you understand even on the most basic level how business operates? For example, do you understand that it adds up all the costs of doing business, including taxes, and that plus a modest profit is used to price what they sell?

Taxes on business have only one result: They raise the cost of the product or service to the consumer. And in the case of businesses who would like to sell stuff in other countries, they make the business less able to compete and export goods or services provided by American workers.

Companies outsource for a very simple reason: The U.S. with its burdensome regulations and highest in the world corporate tax rates, plus double taxation of dividends, is no longer a good place to do business. As the American consumer becomes poorer and poorer because his country's economy is dying the death of a thousand knives as a result of government, he has less and less money to spend, while at the same time the people in developing countries have more and more to spend, giving them greater power over the market, which gives them greater power to determine where stuff is made and sold and by whom.

I'm afraid we have here yet another example of just how dismal is the state of American education when it comes to teaching people about the private economy and where wealth comes from.

Indeed, there's that too, The Santa Claus Principle (http://thepoliticalforums.com/threads/10022-The-Santa-Claus-Principle): "From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. (…) Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will have to foot the bill themselves for the subsidies."

Good point.

What I'm trying to get Who to explain is why just because a company profit does that entail them paying more taxes and providing jobs. I just can't imagine a business operating that way. You create jobs based on its being profitable. Who has the cart before the horse.

[Peter1469]

Yes to the above.

And also sometimes communities offer tax cuts for businesses to come into the community and hire locals. Not a dumb move.....

[Chris]

Yes to the above.

And also sometimes communities offer tax cuts for businesses to come into the community and hire locals. Not a dumb move.....

San Antonio and Texas bent over backwards to get Toyota here, and of course that means jobs. My point is say after a time the bottom drops out of the auto market, is Toyota obliged to add jobs even it makes running the plant at a loss and having to close it down, in which case all jobs are lost? I say no.

[Peter1469]

San Antonio and Texas bent over backwards to get Toyota here, and of course that means jobs. My point is say after a time the bottom drops out of the auto market, is Toyota obliged to add jobs even it makes running the plant at a loss and having to close it down, in which case all jobs are lost? I say no.

I agree that they have no obligation beyond any initial agreement to stay around. Often a municipality/state will offer a company tax breaks for 10 years for relocating. If the company does relocate for the tax benefits it should be penalized for bailing out sooner than 10 years. In the business legal community it is called due diligence. Research the deal and the market. If it is a good deal take it. If it is not a good deal say no. The free market includes risk.

[Chris]

Indeed, any contracts made should be honored.

[Dr. Who]

Indeed, there's that too, The Santa Claus Principle (http://thepoliticalforums.com/threads/10022-The-Santa-Claus-Principle): "From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. (…) Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will have to foot the bill themselves for the subsidies."

Good point.

What I'm trying to get Who to explain is why just because a company profit does that entail them paying more taxes and providing jobs. I just can't imagine a business operating that way. You create jobs based on its being profitable. Who has the cart before the horse.

If corporations paid the 35% notional tax rate bandied about by economists, you might have a point, however as the following will illustrate, they do not:

http://en.wikipedia.org/wiki/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg The U.S. federal effective (http://en.wikipedia.org/wiki/Effective_tax_rate) corporate tax rate has become much lower than the nominal rate because of tax shelters (http://en.wikipedia.org/wiki/Tax_shelter) such as tax havens (http://en.wikipedia.org/wiki/Tax_haven) as well as numerous loopholes.

http://en.wikipedia.org/wiki/File:US_Corporate_Profits_1947-2011.jpg US corporateprofits after taxes 1947-2011

The Congressional Budget Office pointed out recently that corporate tax receipts as a percentage of corporate profits tumbled to just 12.1 percent in fiscal 2011, the lowest ratesince 1972 (http://api.viglink.com/api/click?format=go&key=9292a89875833d3830a2d19c626b7012&loc=http%3A%2F%2Fwww.huffingtonpost.com%2F2012%2F0 8%2F29%2Fcorporate-tax-rate-us-2012_n_1839693.html&v=1&libid=1357859086484&out=http%3A%2F%2Fthinkprogress.org%2Feconomy%2F201 2%2F02%2F03%2F418171%2Fcorporate-taxes-40-year-low%2F&ref=http%3A%2F%2Fwww.google.ca%2Furl%3Fsa%3Dt%26rc t%3Dj%26q%3D%26esrc%3Ds%26frm%3D1%26source%3Dweb%2 6cd%3D19%26ved%3D0CH0QFjAIOAo%26url%3Dhttp%253A%25 2F%252Fwww.huffingtonpost.com%252F2012%252F08%252F 29%252Fcorporate-tax-rate-us-2012_n_1839693.html%26ei%3D1EjvUIGHHaa22gXL2oHICg% 26usg%3DAFQjCNFATRO8ygFy1mR_r_RkhOvGN3Rhyg%26sig2% 3Dm4Xoi2Dajfh4CysnteTVrw&title=Companies%20Desperately%20Fleeing%20Super-Low%20U.S.%20Tax%20Rates%3A%20Report&txt=tumbled%20to%20just%2012.1%20percent%20in%20fi scal%202011%2C%20the%20lowest%20rate%20since%20197 2&jsonp=vglnk_jsonp_13578593658212).

Your particular economic model consistently proposes the naive assumption that corporations, free of their tax burden, would invest their increased profits in domestic employment and that the capital would remain in the US market. This may have been true during the first half of the 20th century when large American business was primarily family owned or controlled, unlike current corporations. Corporate stock is traded worldwide, with the result being that a certain portion of those profits necessarily flow to foreign investors. Then there is the return on investment (ROI) factor. Shareholders who receive an annual report and who see where the corporate dollars are spent, will not be satisfied with an average ROI, when they could have so much more. Shareholders, not being known for altruistic behavior, will demand a larger share of the pie. Why should a corporation hire domestically, especially when labor costs, being a significant portion of overhead, can be reduced by locating labor intensive operations off shore. If the cost of labor in the US exceeds the cost of taxes plus labor in a third world location, particularly with tax incentives thrown in, the jobs will still remain off shore, even if corporations were charged no tax whatsoever in the US. Family owned companies once felt morally compelled to provide employment. The current corporate philosophy has no such impediment. There are only three factors that might compel a corporation to remain in the US - availability of the appropriate skill set; punitive import taxes on foreign produced goods, which would make those goods uncompetetive or by reducing the minimum wage of labor sufficiently to offset the combination of minimal corporate tax plus labor cost in the third world. I would suggest that were the US to remove the tax burden from corporations, third world governments would likewise forego taxes on US companies entirely to ensure that they retain the employment.

I'm sure you will now say - so what. If the corporation makes money and pays it to US shareholders, the shareholders will in turn pay taxes and all will be well. Would that were true. A significant number of US shareholders are also corporations and in the absence of corporate tax, would also pay no taxes. Private shareholders would pay taxes, assuming they were not sufficiently wealthy to take advantage of the various tax shelters and loopholes currently available. If the solution to the problem was as simple as removing corporate tax, it would have been done long ago. At the moment the biggest incentive for corporations to remain in America is the availability of skilled labor, as not surprisingly the illiteracy rate in many third world countries is over 60%. However the third world is rapidly catching up and so is technology. Many jobs will soon require no human input. Without a requirement for human labor, the corporations may come back, but absent any taxation, the profits will do little to benefit America.

[Chris]

If corporations paid the 35% notional tax rate bandied about by economists, you might have a point, however as the following will illustrate, they do not:

http://en.wikipedia.org/wiki/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg The U.S. federal effective (http://en.wikipedia.org/wiki/Effective_tax_rate) corporate tax rate has become much lower than the nominal rate because of tax shelters (http://en.wikipedia.org/wiki/Tax_shelter) such as tax havens (http://en.wikipedia.org/wiki/Tax_haven) as well as numerous loopholes.

http://en.wikipedia.org/wiki/File:US_Corporate_Profits_1947-2011.jpg US corporateprofits after taxes 1947-2011

The Congressional Budget Office pointed out recently that corporate tax receipts as a percentage of corporate profits tumbled to just 12.1 percent in fiscal 2011, the lowest ratesince 1972 (http://api.viglink.com/api/click?format=go&key=9292a89875833d3830a2d19c626b7012&loc=http%3A%2F%2Fwww.huffingtonpost.com%2F2012%2F0 8%2F29%2Fcorporate-tax-rate-us-2012_n_1839693.html&v=1&libid=1357859086484&out=http%3A%2F%2Fthinkprogress.org%2Feconomy%2F201 2%2F02%2F03%2F418171%2Fcorporate-taxes-40-year-low%2F&ref=http%3A%2F%2Fwww.google.ca%2Furl%3Fsa%3Dt%26rc t%3Dj%26q%3D%26esrc%3Ds%26frm%3D1%26source%3Dweb%2 6cd%3D19%26ved%3D0CH0QFjAIOAo%26url%3Dhttp%253A%25 2F%252Fwww.huffingtonpost.com%252F2012%252F08%252F 29%252Fcorporate-tax-rate-us-2012_n_1839693.html%26ei%3D1EjvUIGHHaa22gXL2oHICg% 26usg%3DAFQjCNFATRO8ygFy1mR_r_RkhOvGN3Rhyg%26sig2% 3Dm4Xoi2Dajfh4CysnteTVrw&title=Companies%20Desperately%20Fleeing%20Super-Low%20U.S.%20Tax%20Rates%3A%20Report&txt=tumbled%20to%20just%2012.1%20percent%20in%20fi scal%202011%2C%20the%20lowest%20rate%20since%20197 2&jsonp=vglnk_jsonp_13578593658212).

Your particular economic model consistently proposes the naive assumption that corporations, free of their tax burden, would invest their increased profits in domestic employment and that the capital would remain in the US market. This may have been true during the first half of the 20th century when large American business was primarily family owned or controlled, unlike current corporations. Corporate stock is traded worldwide, with the result being that a certain portion of those profits necessarily flow to foreign investors. Then there is the return on investment (ROI) factor. Shareholders who receive an annual report and who see where the corporate dollars are spent, will not be satisfied with an average ROI, when they could have so much more. Shareholders, not being known for altruistic behavior, will demand a larger share of the pie. Why should a corporation hire domestically, especially when labor costs, being a significant portion of overhead, can be reduced by locating labor intensive operations off shore. If the cost of labor in the US exceeds the cost of taxes plus labor in a third world location, particularly with tax incentives thrown in, the jobs will still remain off shore, even if corporations were charged no tax whatsoever in the US. Family owned companies once felt morally compelled to provide employment. The current corporate philosophy has no such impediment. There are only three factors that might compel a corporation to remain in the US - availability of the appropriate skill set; punitive import taxes on foreign produced goods, which would make those goods uncompetetive or by reducing the minimum wage of labor sufficiently to offset the combination of minimal corporate tax plus labor cost in the third world. I would suggest that were the US to remove the tax burden from corporations, third world governments would likewise forego taxes on US companies entirely to ensure that they retain the employment.

I'm sure you will now say - so what. If the corporation makes money and pays it to US shareholders, the shareholders will in turn pay taxes and all will be well. Would that were true. A significant number of US shareholders are also corporations and in the absence of corporate tax, would also pay no taxes. Private shareholders would pay taxes, assuming they were not sufficiently wealthy to take advantage of the various tax shelters and loopholes currently available. If the solution to the problem was as simple as removing corporate tax, it would have been done long ago. At the moment the biggest incentive for corporations to remain in America is the availability of skilled labor, as not surprisingly the illiteracy rate in many third world countries is over 60%. However the third world is rapidly catching up and so is technology. Many jobs will soon require no human input. Without a requirement for human labor, the corporations may come back, but absent any taxation, the profits will do little to benefit America.






Still waiting for you to answer simple questions.

But, let's look at your latest wall of words:


If corporations paid the 35% notional tax rate bandied about by economists

What economists?


The U.S. federal effective corporate tax rate has become much lower than the nominal rate because of tax shelters such as tax havens as well as numerous loopholes.... The Congressional Budget Office pointed out recently that corporate tax receipts as a percentage of corporate profits tumbled to just 12.1 percent in fiscal 2011, the lowest ratesince 1972.

Yes, and, so? My question is why are they obligated to pay more, pay what you call their fair share--whatever that means?


Your particular economic model consistently proposes the naive assumption that corporations...

Can you point to where I said anything of the sort?


I'm sure you will now say - so what.

So what? My initial question still stands unanswered:

You claimed:


Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits.

Why do companies that profit have to pay more taxes or provide employment? Justify your claim.

[Dr. Who]

Yes, the fuller OP article speaks to that, how well-intentioned government policies have consequences that actually increase poverty.

The article also says the following, which you choose to ignore:

But more important, the concept behind how we fight poverty is wrong. The vast majority of current programs are focused on making poverty more comfortable—giving poor people more food, better shelter, health care, and so forth—rather than giving people the tools that will help them escape poverty. And we actually have a pretty solid idea of the keys to getting out of and staying out of poverty: (1) finish school; (2) do not get pregnant outside marriage; and (3) get a job, any job, and stick with it.

Consider: High school dropouts are roughly three and a half times more likely to end up in poverty than those who complete at least a high school education.
31 If they do find jobs, their wages are likely to be low. Wages for high school dropouts have declined (in inflation-adjusted terms) by 17.5 percent over the past 30 years.32 At the same time, children growing up in single parent families are four times more likely to be poor than children growing up in two-parent families.33 Roughly 63 percent of all poor children reside in single-parent families.34


Yet with the exception of some education programs such as Pell grants and some job training programs, little of our current welfare state encourages—and much discourages—the behavior and skills that would help them stay in school, avoid unmarried pregnancies, find a job, and save money.

[Chris]

The article also says the following, which you choose to ignore

Oh? When my point is: "the concept behind how we fight poverty is wrong"? Those policies, however well-intentioned, are wrong and do more harm than good in that "The vast majority of current programs are focused on making poverty more comfortable" thereby making people dependent rather than independent of government. Indeed, "little of our current welfare state encourages—and much discourages—the behavior and skills that would help them stay in school, avoid unmarried pregnancies, find a job, and save money."


And the answer to my question was?

[Dr. Who]

Since your questions lack any specificity, it is difficult to know what you are asking. I specified that education was key to resolving the problem of poverty and I stated that I thought welfare is dysfunctional. If you choose to limit the concept of education in general to the existing standard, that is not my fault. Specifically, I have answered one or two of your questions in another post.

[Dr. Who]

Why don't you simply state what function corporations have in society. If the answer is none, then we have nothing to discuss.

[Chris]

Since your questions lack any specificity, it is difficult to know what you are asking. I specified that education was key to resolving the problem of poverty and I stated that I thought welfare is dysfunctional. If you choose to limit the concept of education in general to the existing standard, that is not my fault. Specifically, I have answered one or two of your questions in another post.

You claimed:


Companies who profit from the people, either need to pay much higher taxes or provide employment in exchange for their vast profits.

I asked why that is. Why do companies that profit have to pay more taxes or provide employment? Justify your claim. How simple a question do you want.

So far you've posted walls of words about everything but that.

[Chris]

Why don't you simply state what function corporations have in society. If the answer is none, then we have nothing to discuss.

If all you want to do is dance around the question and try to put the burden of justifying your claim on me there is no discussion to begin with.

Why do companies that profit have to pay more taxes or provide employment?

[Chris]

Here's an example of the problem:


The Obama administration now proposes to spend millions more on handouts, despite ample evidence of their perverse effects.

Shaun Donovan, secretary of the Department of Housing and Urban Development, says, “The single most important thing HUD does is provide rental assistance to America’s most vulnerable families—and the Obama administration is proposing bold steps to meet their needs.” They always propose “bold steps.”

In this case, HUD wants to spend millions more to renew Section 8 housing vouchers that help poor people pay rent.

The Section 8 program ballooned during the 90s to “solve” a previous government failure: crime-ridden public housing. Rent vouchers allow the feds to disperse tenants from failed projects into private residencies. There, poor people would learn good habits from middle-class people.

It was a reasonable idea. But, as always, there were unintended consequences.

“On paper, Section 8 seems like it should be successful,” says Donald Gobin, a Section 8 landlord in New Hampshire. “But unless tenants have some unusual fire in their belly, the program hinders upward mobility.”

Gobin complains that his tenants are allowed to use Section 8 subsidies for an unlimited amount of time. There is no work requirement. Recipients can become comfortably dependent on government assistance.

In Gobin’s over 30 years of renting to Section 8 tenants, he has seen only one break free of the program. Most recipients stay on Section 8 their entire lives. They use it as a permanent crutch.

Government’s rules kill the incentive to succeed....

@ How Government Handouts Foster Dependency (http://reason.com/archives/2013/01/09/how-government-handouts-foster-dependenc)

Government solutions tend to be solutions to problems created by government, ad nauseum.

[Cigar]

So why don't go where the real money is at, Corporate Handouts?

[Chris]

So why don't go where the real money is at, Corporate Handouts?

You mean paychecks?

[Dr. Who]

Here's an example of the problem:



@ How Government Handouts Foster Dependency (http://reason.com/archives/2013/01/09/how-government-handouts-foster-dependenc)



Government solutions tend to be solutions to problems created by government, ad nauseum.

Since the direct goal of the program is to provide safe, and sanitary housing in the private market for very low-income families, the elderly, and the disabled it has had varying success. The primary goal of the program as stated, is not to provide upward mobility, it is to replace the housing stock previously provided by project housing (which is generally being torn down), as well as to disperse concentrations of low income people in poverty ghettos. Low-income is defined as being 50% of the median income in the county or metropolitan area in which the family chooses to live, though preference is given to those at 30% of that median income. Your post implies that all recipients of vouchers live on welfare, as opposed to the fact that a large number are actually the working poor, elderly or disabled people. What "work requirement" would you impose on the non-welfare category or are these people not entitled to a decent place to live?

[Chris]

Since the direct goal of the program is to provide safe, and sanitary housing in the private market for very low-income families, the elderly, and the disabled it has had varying success. The primary goal of the program as stated, is not to provide upward mobility, it is to replace the housing stock previously provided by project housing (which is generally being torn down), as well as to disperse concentrations of low income people in poverty ghettos. Low-income is defined as being 50% of the median income in the county or metropolitan area in which the family chooses to live, though preference is given to those at 30% of that median income. Your post implies that all recipients of vouchers live on welfare, as opposed to the fact that a large number are actually the working poor, elderly or disabled people. What "work requirement" would you impose on the non-welfare category or are these people not entitled to a decent place to live?

From the link:


“On paper, Section 8 seems like it should be successful,” says Donald Gobin, a Section 8 landlord in New Hampshire. “But unless tenants have some unusual fire in their belly, the program hinders upward mobility.”

You call that varying success? Some spin.



Your post implies that all recipients of vouchers live on welfare...

Please, point out where anything of the sort is implied.

[Dr. Who]

Actually my comment had nothing to do with the quote from Gobin. Having read more than one article on the success of the voucher program, it appears that it works better in some areas than others. The demographics of the community i.e. racial and/or cultural factors, come into play. African Americans, in some states, tend to be wary of moving into all white neighborhoods, and may remain in poor areas. There are also often significant delays in being able to obtain the vouchers, priority lists that are not adhered to in practice etc.

The quotation "But unless tenants have some unusual fire in their belly, the program hinders upward mobility.” places all recipients into one basket. What upward mobility would you expect from the elderly or disabled and what more effort would you expect from the working poor? How is the program hindering their upward mobility?

[Cigar]

You mean paychecks?



Maybe that describes you

[Chris]

Actually my comment had nothing to do with the quote from Gobin. Having read more than one article on the success of the voucher program, it appears that it works better in some areas than others. The demographics of the community i.e. racial and/or cultural factors, come into play. African Americans, in some states, tend to be wary of moving into all white neighborhoods, and may remain in poor areas. There are also often significant delays in being able to obtain the vouchers, priority lists that are not adhered to in practice etc.

The quotation "But unless tenants have some unusual fire in their belly, the program hinders upward mobility.” places all recipients into one basket. What upward mobility would you expect from the elderly or disabled and what more effort would you expect from the working poor? How is the program hindering their upward mobility?

Of course there are other factors.

How much the programs hinder depends on the person.

Hinders with disincentives.

[Chris]

Maybe that describes you

Are you interested in discussion or just BS?

[Mainecoons]

Since when has Cigar brought anything other than partisan BS to this board?

I used to have a number of apartments rented to Section 8 tenants. They were the worst and most destructive. The program did make changes at some point which made it easier for us to charge the taxpayers for the damage these people did.

The welfare/dependent mentality was absolutely ingrained in these tenants.

[lynn]

In 2010 our government spent 4.6 million on welfare benefits so where do you get trillions to fight poverty?

[Chris]

In 2010 our government spent 4.6 million on welfare benefits so where do you get trillions to fight poverty?

The OP links to an article that links to another that links to the source study, also linked in the OP. What it says is this:


this year the federal government
will spend more than $668 billion on
at least 126 different programs to fight poverty.
And that does not even begin to count welfare
spending by state and local governments, which
adds $284 billion to that figure. In total, the
United States spends nearly $1 trillion every
year to fight poverty.

So where's your data and definition of "welfare benefits"?

[Peter1469]

In 2010 our government spent 4.6 million on welfare benefits so where do you get trillions to fight poverty?

Only 4.6M? :laugh:

[Mainecoons]

In 2010 our government spent 4.6 million on welfare benefits so where do you get trillions to fight poverty?

See the post below yours. You get an "F" on your homework for yesterday. :grin:

[Chris]

This is a gem: This Week in Poverty: An Antipoverty Contract for 2013? (http://www.thenation.com/blog/172287/week-poverty-antipoverty-contract-2013#):


An Antipoverty Contract for 2013 wouldn’t guarantee a win on one or any of these five issues this year. But it could engage people who currently aren’t being reached by the antipoverty movement; demonstrate why the movement’s policies are good for the entire nation; and offer an opportunity for people to work together for these and deeper reforms moving forward. I would be interested in constructive comments below, as well as in e-mails to weekinpoverty@me.com.

Among the "solutions" offered is "Raise the Minimum Wage". But this same old same old is well known to reduce the number of jobs available to the poor.

Walter Williams, Minimum Wage, Maximum Folly (http://capitalismmagazine.com/2005/03/minimum-wage-maximum-folly-2/): "...one effect of minimum wages is that of discriminating against the employment of low-skilled workers."

[lynn]

In 2010 our government spent 4.6 million on welfare benefits so where do you get trillions to fight poverty?
Sorry wrong figure, for 2013 it is estimated that the federal government will spend 422.3 billion on welfare which is 10% of government spending. But whose fault is that since they allowed big corporations lobbyist to make laws so they could take our jobs overseas.

[Chris]

Sorry wrong figure, for 2013 it is estimated that the federal government will spend 422.3 billion on welfare which is 10% of government spending. But whose fault is that since they allowed big corporations lobbyist to make laws so they could take our jobs overseas.

The ones who allowed it, of course.

Thanks for returning and correcting the number. Welcome to the forum!!