#46
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"Mankind, and woman kind have always risen to the challenges....Solutions will be developed but not over 6 or 12 months. There will not be a single solution, just as there is not a single cause of the run up.
Many smarter folks, than I, are out there and can tell us what the transfer of wealth internationally means. But in regard to the US, high oil prices are a wake up call for us to start living smarter. High oil prices are bad for the economy and make the poor (not us) even poorer for it hits them the hardest. That is a tragedy for it will impact the quality of life, education, and the future for their kids (because of education and services). Wish there was a single answer...We talk about drilling more (that will take years) and when you have the oil you need to have refinery capacity (which we have little of). As to Nuclear and Wind - the lawyers will get rich while it works its way thru the courts and that will also take years/ Using less is the only real short term answer and that will have to be world wide (although we use about 40% of the world resources at this time from what I read). PETE |
#47
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From the Oracle of Omaha:
A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the “hamburgers” they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
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Spectrum | Landshark | Cannondale | Gunnar |
#48
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As far as I'm concerned, if a person has billions and keeps it invested in factories and other types of businesses that create jobs and wealth for others, I don't see a problem with them not paying taxes on that investment. It's only when they cash out and start using the money for their own personal needs that I feel they should pay higher taxes. From my perspective it's in essence a form of consumption tax applied to income. As long as the rich keep their money working with others and not being spent on themselves to buy private mansions, yachts or airplanes, then why tax it? |
#49
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i'm a partner in a small business. so my desire for both more fair corporate taxes and capital gains taxes would impact me as well. i believe there is an inequity in the tax structure, but i must leave it to smarter folks to find some more fair scheme. and if warren buffet is a democrat, doesn't that tell you something? |
#50
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If I had a billion dollars to spend, I see a big difference between spending it on myself by buying a mansion, yacht, and private jet versus building a hospital, university, or building a new "General Motors". They may all create jobs equally during the construction/fabrication phase, but the longer-term effect it has on society is quite different. That’s why I feel that a billionaire shouldn’t pay taxes on his “paper” money as long as he doesn’t benefit directly from it. In many ways I like consumption rather than income taxes, but fear the transition would hurt the economy in the short-term. Corporate taxes I don’t like at all – mostly because I can’t make sense of taxing the corporations and then taxing the owners of the corporations again. |
#51
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Or did you have some other kind of "paper" wealth in mind?
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Spectrum | Landshark | Cannondale | Gunnar |
#52
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Quote:
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#53
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So much to respond to and so little intellectual power with which to do it:
I view the tax code as the 100-year history of back room deals to dole out favors to special interests. That puts the real payers and beneficiaries into a murky world best addressed by accountants, not taxpayers. That leads to confusion by voters and politicians alike, all quoting stats produced by third parties without any real insight to the full picture. Gee whiz staffers working past midnight to tweak the tax code to fit what a lobbyist wants or a politician can trumpet is not the path to the best tax system. My ideal tax code would be fairly flat but definitely progressive, as some can afford to pay more than others. For the sake of argument call it three rates, 10/20/30 with as few deductions as possible (don't want to kill the housing market even more than it is, so maybe phase out mortgage interest over 25 years). I want every earner to pay taxes, so that every voter is spending his own money when he votes for programs. I want the politicians to tell the populace, "we need to spend more money, so we are raising rates," not, "we need to spend more so we'll tweak some stuff and most of you will never feel it." Honesty and transparency, with simple arithmetic for all to see and judge, is the goal. Eliminate tax code manipulation as a target for lobbyists. If government wants to spend it (promise it to voters), they have to ask everybody for it. And don't put in a multitude of rates so that voters can be divided and conquered by targeting only a small segment of the population for a tax increase. Capital gains taxes are double taxation, or triple if the investment funds came from dividends. Is it really ideal to tax money multiple times? Maybe, but I'm just asking the question. Use estate taxes to prevent "excess" wealth build-up if desired, but don't force business sales to pay taxes. The Warren Buffet secretary quote reflects, IIRC, the fact that she was paying social security taxes on a significant portion of her income while he was not, and his income stream did not lend itself to the 35%+ federal rate one would think of for someone for his wealth. SS presumably will be meaningful to her retirement, so those taxes are forced savings (for a low return), whereas for him the SS payments would be meaningless, which is why the SS tax phases out at $105k (last I looked). When Barack raises the threshhold on that phaseout to much higher levels, he will ignore the benefits side of the equation (will the million-dollar-earner get a SS income commensurate with his SS taxes??) and thereby create a huge new wealth transfer from those who earn it to those who don't. Add those points of marginal tax to the higher earned income rates and the higher cap gains rate and the tax increase on the wealthy will be very large indeed, while an increasing proportion of the populace pays little or no tax and votes for people who want bigger programs. This ends one of two ways - higher taxes must move into the middle class or programs must be cut. If I were president, every program that is justified by "wouldn't it be nice if" would be cut. Only "it is utterly essential that" programs would be kept. No clue how many would make the cut, but we need to spend as little as possible via bureaucracy if we want to maximize the size of the economic pie that pays for all the programs. Super rich Democrats like Buffet and Gates don't care that much about taxes because they have way more than enough regardless of rates. Therefore they are not demonstrating great character when they moralize about taxes. It's people saving for retirement and college education for their kids who really get nailed by higher marginal tax rates at the upper end. $10-$20k at that level can pay for 6 months of college and leave junior less saddled by debt on her first job, or it could could compound from 45-65 and pay for 6+ months of living expenses in retirement. Whether a politician wants a super duper new fighter bomber (in his home state) or to provide free pills to every voter who earns less than $50k a year, it's the attempted savers who know they'll pay and who are fighting to achieve some margin of safety for their old age. That's why they have a knee-jerk instinct to lower taxes. If the tax system were flatter and only essential programs were funded (and defended by proponents) I think the prospect of more taxes would be easier to swallow. |
#54
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1centaur, thank you for your customary thoughtful and insightful answer. and thanks for taking the time to write it. it all seems spot on to me. we are in virtual full, violent agreement, though i may give mr buffet a bit more benefit of the doubt.
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#55
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I agree it's very helpful to have Centaur's expansive comments here. . . it's a wealth of information for those of us who don't grasp the big picture in finance/economics etc. I don't know about Gates et al, I don't think most Democrats truly relate to people like that.
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#56
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On Nuclear Fuel
One issue with nuclear power is the fuel. Currently, prices are very low. This was because demand was declining, and major user were able to set up long term contracts with suppliers at excellent prices. Well, those prices are going up, and when contracts start to come to an end, prices will go up a lot. That's without the possible supply issue.
Fixing the energy problem is going to require a multifaceted approach. Depressions and recessions help too, because they lower demand [Paraphrased from our graduate energy class and a Duke power talk.] |
#57
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An awful lot of good comment here. Thanks for all the thoughtful posts.
In answer to the original question, yes, I will likely be working a bit longer and retire later than expected. I will be doing that so as to assure both my standard of living when I retire and long into the future since I don't plan on being dead anytime soon. I'm fortunate that I can even think about it with some sense of security, but on the other hand a bit jaded that my plans didn't quite work out. I feel let down by the politicians, those richer than me that cheated others less fortunate out of money, and the corporate scoundrels that found ways to swindle money out of everything they could. Let me explain why. For the last 20 years I've saved significant amounts of my income for retirement. Almost never less than 15% and at times up to 20%. I saved for a down payment on a house, built another and added sweat equity to it, paid off the mortgage while I drove my 100k plus mileage used vehicle around. I don't scrimp but I do live well within my means. I will admit that I am debt averse, and have only bought one new car for my wife in 20 years. I had the goal of retiring at age 55, this year. Moderate historical rates of return in mutual funds could have secured the capital I needed to retire, but since 2001 stuff has virtually been in the toilet, and now it is worse. With perfect hindsight perhaps I could have pulled everything out last October and cashed it all in to be held in liquid assets. However, like a previous poster said if I were an expert in timing then I would be rich already. Perhaps I could have taken advantage of the dot.com stuff in the mid 80's, gambled on some business (and perhaps lost it all), but I took the course I thought was safe and less risky to my family and simply worked and saved. What it has gotten me is a sour feeling in my stomach and a bad taste in my mouth from the platitudes our president has been serving us on a platter about how they are making our world more safe. In reality, the lack of attention to domestic policy while squandering trillions in Iraq has while at the same time reducing the burden on those most able to shoulder it has contributed to the situation in which we now find ourselves. I'm not a financial genius so I don't ahve any answers about what to do. What I will probably do is keep working, buy as much now while prices are down and hope that things will get better after the next election. I'm thankful I don't have to worry about my house price as I'm not selling anytime soon anyway. In the meantime, I'm mad as hell and frustrated that powerful people have gotten away with scandolous actions at mine and other decent peoples expense. B |
#58
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Not for nothing, but if I was anywhere close to retirement and all my retirement "capital" was tied up in stocks, I'd either be foolish or in the company of a good crystal ball.
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Atmsao (according to my semi anonymous opinion) |
#59
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I remember when my dad tried to retire . . . he didn't like it, so he went and asked for his office back. It was gone, of course, but his old employer (a university) let him come back and moonlight. |
#60
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If you have the stomach for it,
read this. http://www.fooledbyrandomness.com/fortune.pdf
The net is that a very small number of events have extraordinarily large influence over ultimate outcomes. Over time, I've concluded, that the stock market, somewhat like the lottery, requires you to be in it to win it. And, to be in it with the greatest sense, albeit illusory, of security is to invest in companies that are in sound, understandable businesses run by sober management whose shareholders won't allow them to manage the company for their personal benefit. I do not intend to retire from retirement. On the other hand, if my wife retires I'll kill her. I know she would hate it and I couldn't bear to see her suffer. keno
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What you don't see with your eyes, don't invent with your mouth. |
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