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Green Catus ~ a point on your Space Program comments.



I happen to work in the industry on a variety of space programs. There are a few things being missed in your analysis.



Companies do not invest in basic research, they do applied reseach at best. In other words the average company will not sign off on spending a billion dollars to sit a bunch of geeks in a room to think about stuff with no clearly defined payoff. Companies will spend money on tweaking existing technology that has a clear path to profit.



EXAMPLE: This new fangled intersweb dohicky ya be typing on. Do you know how it came about? Corporate America would have been gladly polishing and driving down costs on snail mail services, phone services, and such. It took a government agency to invest in non profit related technology to create it. Now that it exists ... bam ... it gets polished and refined.



Long gone are the days were a lone geek can expand the boundries of science by falling asleep under an apple tree. If you look at expanding knowledge & technology as a solution someone somewhere has to suck up the costs. If you were talking about the pharmecuetical field you would be ranting about the cost of drugs. Why does a pill that costs a dollar to make retail for 100 dollars? The answer is the drug company is attempting to recover all the money that they lost on research while we as a consumer just want it to immediately become generic and cheap.



If you were in Europe basic research is DIRECTLY funded by the government as well as a ton of government subsidies into technology based firms. In America we are against government involvement as a principle (not going to touch the issue of whether ont we ever acheive that goal). If you look at trade agreements over import/export tariffs we get to hold our heads high and declare how innocent we are of government intervention in our poor old US companies and so we need shelters against these big bad subsidized foreign monsters.



In reality one of goals of NASA and other programs like it is an under the table subsidy for private US companies (Lockheed, Raytheon, Beoing, etc ... ) to perform this basic research. If you look at the mission statements and policies of NASA you will find clauses that require the free transmittal of all this basic research to others to commercialize. Who hasnt heard about memeory foam pillows "designed by NASA" ... guess what ... NASA designs and builds NOTHING. That was effort subcontracted out to a private company elsewhere.



Now one can argue ... but what about Xcom??? Realistically if you rely on strange eccentric bored billionaires to put together wacky science projects you may just as well end up with a bunch of Spruce Gooses ... And lets face the rich folks didnt get rich by pouring money down the rathole of basic research where sucess stories are by far the exception.



Does the system work? Does it work well?



It limps along. Can we produce things cheaper iterm per item? Of course ... but just like that pharmecuetical, the cost of the 1 dollar hammer is being raised to mask the costs of all the basic research costs that the company doesnt get paid for.



Then of course you have the blind leading the blind.



Congressional appointed lackeys tend not to have great science backgrounds. Those in the science based govenmental agencies they oversee are comprised of either the fanatically patriotic who like to work cheap or those wh cant cut it in teh private sector. When those two team up to write contracts to the private area you end up with contracts that say "build stuff that is cool ... more specifics to follow on how or what". If you think I am joking then you have never worked in aerospace.



Of course lets not forget the poitcal factor.



There was a wonderful political issue on the Space Station where for various material reasons a large ammount of gold was going to be used. "Thous shalt not put a gold plated station into orbit ... its political suicide!" So another MORE costly material was chosen just to avoid any potentially embarrising issues.



Go see the movie "The Pentagon Wars" for a humerous look at these issues ...



Bottom line the government exists to provide for the welfare of the society it serves and to undertake actions in which no other segment is capable of handling. And that covers basic science research today ... (even if you think it could be handled better and more honestly than they do).
 
<i>"Okay, I'll bite , who would do all the things I mention?"</i><p>


Just like any other product or service, anyone who wants to make money by fulfilling the supply for a demand? Whadda ya think?
 
Green Cactus





I don't understand what you are saying b/c it is all disconnected. First off....the FairTax actually increases the disposable income for every citizen that is paying taxes. It's not a tax rebate...rather it is discontinuance of the Federal Income Tax that we all pay now at a certain rate regarding our gross income.





I don't understand the statement "the situation that concerns me is when there is no disposable income at hand - there there is no "decision" to be made", or "That extra money might not cover the difference of income and necessities; thus, no savings." Please elaborate on this.





Take a look at your pay check and see how much is taken out in taxes. Then look at your bank account and see where you spend your money and calculate based on a 23% sales tax rate.
 
<i>"I personally believe we still need corporate taxes...however their is many inefficiencies in our tax code, I am sure AWGEE can attest to this."</i><p>


The tax code is silly.<p>


And if I may disagree that we still need corporate taxes. The idea that corporate taxes somehow actually tax corporations and somehow tax the rich is just another example of the socialist ideal without fact. Corporate taxes are an indirect and ineficient pass through to the consumer. All, <b>and I mean ALL</b> corporate taxes are paid for by consumers. And since they are actually a consumer tax, they affect the poor much more than they affect the rich.
 
<i>"It is not for me. It is for the economic welfare of this country. I am a patriot and love this country. And if that means that I have to into bankruptcy to do it, gosh darn it, I will go into bankruptcy. If I stop spending, the terrorists win. "</i><p>


I am unsure whether or not you are being facetious. No country, corporation, or individual can spend it's way to prosperity. This is a fallacy. A country, corporation, or individual can only save, invest, and produce in order to prosper.
 
Mino, you are looking at your own situation and extrapolating from there. Let's look at the bottom 20% of earners and their consumption needs. These are needs since they provide for shelter, food, health care, transportation. How much disposable income will they have after covering these costs - if any at all. What sacrifices are you expecting them to make to set money aside for savings?





Would I benefit from having only a 23% sales tax? Sure thing. But what is the social cost involved? Would I be happy with an effective taxation rate than someone making way more money than I do? No. I think that if this society gives you benefit of economic success, you owe it back in the form of a higher effective tax rate. Should I be a higher effective tax rate than someone making half as much as I do. By any means! I will gladly bear that burden.
 
Sorry I can not provide you with a link, but the bottom 20% of wage earners spend approx. 182% of their income and the top 20% of wage earners spend approx. 60% of their income.
 
Awgee said...."And if I may disagree that we still need corporate taxes. The idea that corporate taxes somehow actually tax corporations and somehow tax the rich is just another example of the socialist ideal without fact. Corporate taxes are an indirect and ineficient pass through to the consumer. All, <strong>and I mean ALL</strong> corporate taxes are paid for by consumers. And since they are actually a consumer tax, they affect the poor much more than they affect the rich."





I will side with you on this argument to an extent but not in all cases. IMHO, corporations should still pay a tax on their Net Income b/c they use govt infrastructure such as; electricity, roads, waterways, regulations...etc to better and protect themselves. At the sametime the US has one of the highest corporate tax rates in the world which can lead to competitiveness issues which we should resolve. On top of that foreign income for a majority of corporations is actually taxed twice which is also noncompetitive.





Green Cactus said...."These are needs since they provide for shelter, food, health care, transportation. How much disposable income will they have after covering these costs - if any at all. What sacrifices are you expecting them to make to set money aside for savings?"





You are missing the point. Right now when they make money they pay taxes and then depend on a rebate at the end of the year. The 20% bottom earners pay no income tax. So you are immediately increasing their income so they have more money for food, shelter, health care (which will still be govt sponsored), transportation...etc. Again I think you are missing the point.
 
<p>Awgee said,</p>

<p><em>"Just like any other product or service, anyone who wants to make money by fulfilling the supply for a demand? Whadda ya think? "</em></p>

<p>What makes you think there is enough profit in most of the things the government does? I doubt you will find anyone wanting to start a business to check the safety of our food. I wouldn't trust any private company doing it. Their motivation would be profit first and safety second. I trust the government more because it is not trying to turn a profit.</p>

<p>And good luck getting a private company to auction and distribute the electromagnetic spectrum. You wouldn't even be able to get the interested parties to agree on who should do the job.</p>

<p>I've seen enough in Iraq to know that I do not want to prioritize the military.</p>

<p>I don't think you've really thought through what you are suggesting. I give you concrete examples of problems with your statements, and you come back with vague, general, terse, hand-waving assertions. When I was in grad school, we would read research papers with writing like this. We referred to these parts as "Magic Happens Here" sections.</p>
 
<p>mino wrote</p>

<p><em>T!M you said


"If someone is poor and can barely afford the necessities of life, will they really put money aside (proportionally so than a person making a boatload) and save it?"</em>


</p>

<p>I didn't write that; green_cactus did.</p>
 
<em>"The 20% bottom earners pay no income tax. So you are immediately increasing their income so they have more money for food, shelter, health care (which will still be govt sponsored), transportation...etc. Again I think you are missing the point."


</em>


They don't pay income tax and have more money to spend - yet when they spend it they will be hit with the same "fair" tax of 23%. In the current system their effective tax rate is around 10%. If they spend all their money on their necessities their tax rate just went up to 23% (more than doubled).
 
<p>No problem, I just wanted to clarify.</p>

<p>I think the whole tax system is all about job protection for politicians anyway. There is a wonderful cycle involved for politicians using taxes as a way to get elected:</p>

<p>Step 1. Promise tax breaks to whatever group/demographic/business will help you get elected. Note that there is no reason these groups can't be opposed to each other. A single politician can promise opposite things. Or, different politicians can promise separately.</p>

<p>Step 2. After any of the groups in or not in step 1 get fed up with the complicated tax system, promise them you will simplify the system.</p>

<p>Step 3. Go back to Step 1. </p>

<p>It is really quite brilliant. I see no way we will ever get away from it. If we move to the FairTax system after this 2008 election (which would be Step 2 above), we will then see politicians in 2010 going to Step 1 and promising to add some tax adjustments/complications to benefit various groups.</p>
 
awgee, you can find the graph from the NYT article (from a few days ago) on digg - is that were you are pulling your number from? For anyone else interested check it out at





http://www.nytimes.com/imagepages/2008/02/10/opinion/10op.graphic.ready.html?ex=1360299600&en=9ef4be7cf82e4353&ei=5124&partner=digg&exprod=digg





as in, I'm too lazy to make it a hyperlink.
 
Mino, from your link "Assuming [billionaires] and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent." I think this should have been phrased as "spend <em><strong>as much</strong></em> as their income earn on the wealth each year". I seriously doubt it that a multi-billionaire would spend <strong>all </strong>of his 10% ROI. At that point it's a fallacy that the effective rate is going to be 23% (and thus higher than the 15% on capital gains right now).
 
OK, so with the prebates there is a progressive structure based on consumption. I give you that. But the plot stops too soon and assumes annual income = annual consumption. Once you factor in the savings that it is supposed to be encouraging it tends to become regressive on the upper incomes. I guess the middle class would get hosed. On higher incomes the effective rate should be diminishing but this graph conveniently excludes that effect.





<img src="http://www.fairtax.org/images/content/pagebuilder/14459.jpg" alt="" />
 
<i>"I've seen enough in Iraq to know that I do not want to prioritize the military."</i><p>


Of course not the military, but I am not going to address each and every example.



<i>"I don't think you've really thought through what you are suggesting. I give you concrete examples of problems with your statements, and you come back with vague, general, terse, hand-waving assertions. When I was in grad school, we would read research papers with writing like this. We referred to these parts as "Magic Happens Here" sections."</i><p>


I will make it distinct for you. Anything the Constitution specifically calls for government responsibility is a government responsibility. Anything not mentioned in the Constitution is not to be interferred with by the government. If it is not profitable, then no one wants it bad enough and it is unnecessary. The "Magic Happens Here" is actually the idea that government can control a aspect of society without taking away individual freedoms.<p>


How long ago did you get out of grad school? I hope you can laugh about this next statement with the humor with which it is intended.<p>


It will probably take you a few years of real world to unlearn all the nonsense they teach in grad school.
 
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