Nick87
Well-known member
I mean the majority if restaraunt owners we know in our immediate area didn't receive any funding and they came put of it. Probably not totally unscathed. Who needed worse than them?
Fixing social security
- Thread starter Marshian
- Start date
ismith
Well-known member
That dude is just harshing your mellow, isn’t he?
There were other issues involved if they didn’t get PPP funds. I don’t know of any legitimate businesses that provided the proper paperwork through its bank that didn’t receive PPP funds. There were excess funds after the second round of funding.
Nick87
Well-known member
I'm not sure the particulars of it like you are. I just know several of them didn't. Hell if you look up nearly amy of them around us on the website they didn't get it.
Nick87
Well-known member
I just looked up about 15 or so restaraunts that I could think of where we lived in 2020 2 of them had loans forgiven for about 150k. My point still is if those other 13 restaraunts cam make it that were mandated to close there doors what the hell does a construction company that maybe slowed down a little, need much larger amounts to stay afloat?
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SAJ-99
Well-known member
Agree. It’s complicated. Some didn’t receive funding but probably could have and should have. Some businesses saw it as an opportunity to pull the plug because a lot of a banks ability to seize assets was shut off. Restaurants are notorious for not living long and changing hands (small towns maybe not as much), and then they were hit by increasing labor costs and shortages.
I think if we got a do-over we would do things differently and PPP wouldn’t look the same. But you don’t get do-overs. Americans seem to have this expectation that everything has to be cheap and work perfectly with zero negative consequences.
Nick87
Well-known member
Only first hand experience I have with it is owner of our company was saying how his banker called them up and said you better get on this train. So I'm guessing a lot of folks maybe not as close with there banker or who have a shitty banker didn't get the memo. Just an awful lot of money in the hands of a lot of people who didn't need it and some who didn't empty handed. Nothing new I guess lol.
Nick87
Well-known member
Well that's exactly what the snake oil salesman politicians are usually selling them on and promise them.
ismith
Well-known member
Sadly, I think 2034 is a best case scenario.
I’m a commercial banker. Every business knew about PPP funds and were asking its banker and other bankers for help. I worked 20 some days straight during the funding chaos to get the PPP funding to customers.
Paperwork wasn’t difficult but the backup approval at the Feds was long. Funds ran out on first round causing a slight panic but the second round was available quickly. Second round of funding was easier as everyone knew what to do.
I’d guess the restaurants were either bad at paperwork and unable to provide the right in formation, structured improperly somehow to qualify or they actually received the funds but still went out of business.
The three industries I saw take the hardest hits were restaurants, hotels and medical. I only saw restaurants go out of business in my area bit hotels took a lot of losses too.
Nick87
Well-known member
Was trying to think what else would have been worse than restaraunts. Forgot about hotels.
Surprisingly I can only think of one resaraunt that closed and that guy said it was just timing and was ready to pull the plug.
SAJ-99
Well-known member
I think the TBTF concern from the GFC is valid, even if the misinformation comes with it. To put it simply, you can’t let big banks fail. Our entire economic system revolves around them. We tried to make a point with Lehman and just about blew up the entire global economic system. It was a good example of making decisions knowing there won’t be do-overs.
SS is also TBTF. Every politician knows it. We just continue to see camps divided into either cut benefits of future retirees and let the system die or raise the cap and tax more to adequately fund the system. Until there is some middle ground that requires a little of both, we get no where. The clock continues ticking.
Can anyone explain why raising the cap on income for withholding is such a bad thing? Income is income. People making that much are probably investing more and saving taxes on capital gains. Seems like a double standard for the upper income bracket.
I can't explain if it is good or bad, but I can explain the history in terms of tax policy. In the tax policy debates, the reason is that since the SS benefit limit is capped, there should be some limit on the amount of wages or self-employment income that is taxed for SS.
In 2013 we removed the wage/SE income cap on which Medicare tax is paid, a change that relieved a lot of pressure on the Medicare solvency. We did not change the SS cap at that time.
SS is currently 6.2% (employee) and 6.2% (employer) = 12.4% on the first $168,600 of wages or self-employment income.
Medicare is currently 1.45% (employee) and 1.45% (employer) = 2.9% on all wages and self-employment income.
For those who are not tax nerds, know that passive income, such as capital gains, dividends, interest, rents, royalties, and other forms of income are not subject to SS or Medicare. When you apply lower capital gain/dividend rates, taxpayers who make most of their income via capital gains/dividends pay a far less combined (payroll and income taxes) tax rate than the average American worker.
That difference is one of those tax policy debates we have in the US as to what should receive tax preference; capital or labor, the two main components of economic systems. In our country, over the last 50 years, we've seen a big change in our tax policy decisions that give preference to those earning their livelihood via capital gains and dividends, and far less preference to those earning their livelihood via wages/labor/self-employment.
There are people who really geek out on those kind of tax policy debates. There are economists who have made entire careers debating the pros/cons of each side.
Thanks @Big Fin I didn't think about the benefit limit. Although, it would SEEM that folks making that much or more would be less reliant on benefits in retirement. Agreed, difficult subject. To make things worse is the people who are making these decisions pretty much do so for their benefit and we're just along for the ride.
406dn
Well-known member
- Joined
- Dec 12, 2019
- Messages
- 2,269
This isn't the first time you'd be wrong.
I don't disagree with anything you have written. The TBTF industries should be treated like any other business/industry. If they make bad decisions, take bad risks, etc. and failure/bankruptcy is the result, then so be it.
On the discussion between taxing capital or labor, I don't think you can compare without going into the rationale of why capital has been treated differently. It is a bit of a chicken and egg discussion since one feeds the other. Part of that rationale though is driven by the desire decades ago to encourage the populace to to take on the responsibility for their own financial health and retirement planning as the defined benefits model transitioned to defined contributions. And to be fair, this was driven in part by companies looking to reduce their long-term liabilities and future financial exposure risks. But it also put that decision making in the hands of the individual who could potentially realize a better return than some account manager or business owner whose motivations weren't necessarily to benefit the investor/employee but rather benefit their own agenda. And as companies failed, promised pensions evaporated with them. So employees were at the mercy of someone else for their retirement livelihood. Not really an appealing position to be in. Did the preference to incentivize capital investments help prime the pump for new development in the US relative to high tech? From my perspective, I would say yes.
Does this model still work as the US economy has shifted more and more to a service oriented one? Hard to say. Manufacturing industries that were the backbone of the middle class really started to nosedive toward the end of the 1990's. Lots of reasons why that happened and as you note, tax policy nerds and economists have made a career off of analyzing the pros and cons around that subject. The service industry doesn't seem to be structured to support a similar capital-centric investment model so the opportunities may be more limited as a result. But I don't see a return to defined benefit model working in the service industry either. Too much mobility in the workforce as people job-hop from one employer to the next and service-based companies rise and then fail on short time spans.
VikingsGuy
Well-known member
Unfortunately there are some parts of the economy that are too central to everything just to push them into a decade of bankruptcy litigation without creating another Great Depression or Panic of 1893. We do have to bail them out at times, we have no real choice.
However, we should make the bailout incredibly painful on the humans who made the choices. They should be fired, should have to payback losses they caused, should be barred from similar positions of responsibility in the future, and have past bonuses and stock gains clawed back. The nation needs the TBTF companies to survive, but it doesn't need those responsible for the failure to be happy about the aftermath.
Any time we are talking about government funding, it is in large part driven by the tax policy of our country, which if a Representative Republic reflects the will of its people, then the tax policy adopted by the elected Representatives should reflect the will of the people.
In tax policy debates, the term "fair share" is used. The "fair share" concept goes back to the Romans when people we assessed taxes to reflect what land and other values were protected by Roman armies and government. Since then, there have been revolutions in many countries over what is the "fair share."
So, what is the "fair share" and how can that fair share be used to fund government obligations, in the case of this discussion, Social Security as a backstop of the majority of the working class?
"Fair share" debates go back to the beginning of taxes. It is normally framed as people/entities contributing a share of income/wealth commensurate with the benefits they derive from the common services, infrastructure, institutions, and stability provided by Government.
"Fair share" requires an accounting of what is paid by the taxed person compared what benefit do they receive from government and institutions. Taxes paid a pretty easy calculation.
The arguments in that "fair share" discussion are usually around the hard part of that equation - what benefit is received by a person/entity from the common services and stability provided by Government. It's not easy to quantify benefits received for the wealthiest people/companies, but methodologies exist.
Most don't want to do a full accounting for what their benefits are, as that is more difficult and requires examination at both the micro and macro level. And when done, it can be uncomfortable accounting for those benefiting the most.
Dramatic examples often work well for the benefit of illustration. Since Jeff Bezos was brought up in this thread, let's use him as an example, though there are thousands of people/companies we could use.
What benefits has Jeff Bezos derived from the institutions provided by US/state governments that can tax him as a citizen? What would be his financial picture absent the benefits from our society and our institutions supported by government? With his billions, for which I have no problem with him having, one must ask:
- How do you measure the financial benefit Bezos and his businesses realized from a US market system that allows the most efficient exchange of capital in the world? A system dependent upon trust and credibility, provided in large part by agencies of the US Government.
- How do you measure the financial benefit Bezo and his businesses get from a country whose Government can pledge the "full faith and credit" to provide the accepted currency for transactions and provide a level of liquidity that allows markets to flourish?
- How do we measure how much Bezos and his businesses benefitted when Congress decided in 2009 that many of the biggest in Wall Street were to big to fail or when Congress decided to pump trillions into the US economy during COVID, or when he gets sweet deals from Congress? Yeah, we all benefited, but whose wealth and income would have taken the biggest hits without such intervention?
- How do you measure the financial benefit Bezos and his businesses derived from infrastructure in the forms of highways, airports, ports, and other transportation for goods and services?
- How do you measure the financial benefits to Bezos and his businesses from an educated and trained workplace and the institutions that provide such training and education?
- How do you measure the financial benefit Bezos and his businesses get from US military and foreign policy system that provides relative stability for a functioning global economy?
- How do you measure the benefit to Bezos and his businesses from (insert the infinite other benefits that arise from being a US Citizen)?
I could go on and on about the many financial benefits derived from institutions, infrastructure, stability, security, and financial markets that comes with operating in the US and being a US citizen, which we all benefit from to some degree. How do we measure to what degree Bezos-types benefit?
Most would say you do that measurement by calculating how much of Bezos' wealth and income can be attributed to his talent and how much is attributed to the government and institutions he benefited from? Some of these tax theorist have a method for doing just that. I'll explain.
Some argue that the "fair share" benefit derived by a Bezos-type billionaire should be measured using the delta or "with/without" methodology. In other words, what is the delta between their current wealth and income derived with the benefits of the US institutions, and compare that against what their wealth and income would be without such, say if they were citizens of Afghanistan or Sudan or the poorest and most dysfunctional countries in the world. Dramatic differences between operating in the US and those countries I mention, yet that is the methodology to the "with/without" forumula.
So, what would Bezos financial picture be if he was operating in Afghanistan, compared to what his wealth has become from operating in the US? I think we can agree with his business mind, he'd be a successful opium dealer in Afghanistan. But, likely not in the Top 5 wealthiest people in the world.
If it was merely Bezos' talents, he should be able to accomplish the same results, regardless of the government and institutions he is part of. Yet, using this "with/without" methodology we see it is not merely his talents, rather this method makes a compelling case that his success is more a function of the government and institutions in the US that allow for great wealth accumulation by those with talent.
So, using that "with/without" method, what should be his "fair share," whether income taxes, estate taxes, or helping fund SS/Medicare beyond what he gets from SS/Medicare?
What would Bezos-types be willing to pay as their "fair share" if told they must operate in a fourth-world country and pay almost no taxes, or by paying a "fair share" they could operate in the US with higher taxes and help fund SS/Medicare disproportionately to the benefit they get from SS? What would they pay for the benefits of operating in the US? I suspect they'd be willing to pay a lot more than what is currently paid as their "fair share."
The delta in this "with/without" method, is where some would claim to be a good starting point to calculate a billionaire's "fair share." The method does do a good job of sorting out what is purely the results of a person's talent, compared to the value of the government institutions that helped create their wealth.
Would the billionaire-types benefit from paying more in SS taxes than what they'll receive? When measured as a total package of operating as a US citizen, it's a no-brainer.
I know it's a dramatic illustration yet makes us think hard about "fair share." We could do the same calculation for companies who need the US to be their global peacemaker or enforcer, asking what would those company balance sheets look like if not for young Americans going in harms way, often to the disproportionate benefit of the TBTF industries.
Again, these are tax policy topics, with tax policy debates determining how/if we keep SS solvent. I have no idea where the debate will end up, but history gives us a pretty good indicator that when we discuss the long-term solvency of SS, it will take similar paths to when we debated divesting workers from defined benefit pension plans and deciding they should mostly "go it alone" with defined contribution plans. History says the little guy, both worker and small business, is going to get a lot less priority than the TBTF and billionaire-types who benefit in ways that are harder to measure, yet are benefitting to degrees measured in billions, not 6.2% of a W-2 wage.
In tax policy debates, the term "fair share" is used. The "fair share" concept goes back to the Romans when people we assessed taxes to reflect what land and other values were protected by Roman armies and government. Since then, there have been revolutions in many countries over what is the "fair share."
So, what is the "fair share" and how can that fair share be used to fund government obligations, in the case of this discussion, Social Security as a backstop of the majority of the working class?
"Fair share" debates go back to the beginning of taxes. It is normally framed as people/entities contributing a share of income/wealth commensurate with the benefits they derive from the common services, infrastructure, institutions, and stability provided by Government.
"Fair share" requires an accounting of what is paid by the taxed person compared what benefit do they receive from government and institutions. Taxes paid a pretty easy calculation.
The arguments in that "fair share" discussion are usually around the hard part of that equation - what benefit is received by a person/entity from the common services and stability provided by Government. It's not easy to quantify benefits received for the wealthiest people/companies, but methodologies exist.
Most don't want to do a full accounting for what their benefits are, as that is more difficult and requires examination at both the micro and macro level. And when done, it can be uncomfortable accounting for those benefiting the most.
Dramatic examples often work well for the benefit of illustration. Since Jeff Bezos was brought up in this thread, let's use him as an example, though there are thousands of people/companies we could use.
What benefits has Jeff Bezos derived from the institutions provided by US/state governments that can tax him as a citizen? What would be his financial picture absent the benefits from our society and our institutions supported by government? With his billions, for which I have no problem with him having, one must ask:
- How do you measure the financial benefit Bezos and his businesses realized from a US market system that allows the most efficient exchange of capital in the world? A system dependent upon trust and credibility, provided in large part by agencies of the US Government.
- How do you measure the financial benefit Bezo and his businesses get from a country whose Government can pledge the "full faith and credit" to provide the accepted currency for transactions and provide a level of liquidity that allows markets to flourish?
- How do we measure how much Bezos and his businesses benefitted when Congress decided in 2009 that many of the biggest in Wall Street were to big to fail or when Congress decided to pump trillions into the US economy during COVID, or when he gets sweet deals from Congress? Yeah, we all benefited, but whose wealth and income would have taken the biggest hits without such intervention?
- How do you measure the financial benefit Bezos and his businesses derived from infrastructure in the forms of highways, airports, ports, and other transportation for goods and services?
- How do you measure the financial benefits to Bezos and his businesses from an educated and trained workplace and the institutions that provide such training and education?
- How do you measure the financial benefit Bezos and his businesses get from US military and foreign policy system that provides relative stability for a functioning global economy?
- How do you measure the benefit to Bezos and his businesses from (insert the infinite other benefits that arise from being a US Citizen)?
I could go on and on about the many financial benefits derived from institutions, infrastructure, stability, security, and financial markets that comes with operating in the US and being a US citizen, which we all benefit from to some degree. How do we measure to what degree Bezos-types benefit?
Most would say you do that measurement by calculating how much of Bezos' wealth and income can be attributed to his talent and how much is attributed to the government and institutions he benefited from? Some of these tax theorist have a method for doing just that. I'll explain.
Some argue that the "fair share" benefit derived by a Bezos-type billionaire should be measured using the delta or "with/without" methodology. In other words, what is the delta between their current wealth and income derived with the benefits of the US institutions, and compare that against what their wealth and income would be without such, say if they were citizens of Afghanistan or Sudan or the poorest and most dysfunctional countries in the world. Dramatic differences between operating in the US and those countries I mention, yet that is the methodology to the "with/without" forumula.
So, what would Bezos financial picture be if he was operating in Afghanistan, compared to what his wealth has become from operating in the US? I think we can agree with his business mind, he'd be a successful opium dealer in Afghanistan. But, likely not in the Top 5 wealthiest people in the world.
If it was merely Bezos' talents, he should be able to accomplish the same results, regardless of the government and institutions he is part of. Yet, using this "with/without" methodology we see it is not merely his talents, rather this method makes a compelling case that his success is more a function of the government and institutions in the US that allow for great wealth accumulation by those with talent.
So, using that "with/without" method, what should be his "fair share," whether income taxes, estate taxes, or helping fund SS/Medicare beyond what he gets from SS/Medicare?
What would Bezos-types be willing to pay as their "fair share" if told they must operate in a fourth-world country and pay almost no taxes, or by paying a "fair share" they could operate in the US with higher taxes and help fund SS/Medicare disproportionately to the benefit they get from SS? What would they pay for the benefits of operating in the US? I suspect they'd be willing to pay a lot more than what is currently paid as their "fair share."
The delta in this "with/without" method, is where some would claim to be a good starting point to calculate a billionaire's "fair share." The method does do a good job of sorting out what is purely the results of a person's talent, compared to the value of the government institutions that helped create their wealth.
Would the billionaire-types benefit from paying more in SS taxes than what they'll receive? When measured as a total package of operating as a US citizen, it's a no-brainer.
I know it's a dramatic illustration yet makes us think hard about "fair share." We could do the same calculation for companies who need the US to be their global peacemaker or enforcer, asking what would those company balance sheets look like if not for young Americans going in harms way, often to the disproportionate benefit of the TBTF industries.
Again, these are tax policy topics, with tax policy debates determining how/if we keep SS solvent. I have no idea where the debate will end up, but history gives us a pretty good indicator that when we discuss the long-term solvency of SS, it will take similar paths to when we debated divesting workers from defined benefit pension plans and deciding they should mostly "go it alone" with defined contribution plans. History says the little guy, both worker and small business, is going to get a lot less priority than the TBTF and billionaire-types who benefit in ways that are harder to measure, yet are benefitting to degrees measured in billions, not 6.2% of a W-2 wage.
JP Morgan Chase is a $3.9T bank. You let Chase fail and the U.S. economy is doomed. Chase is the bank cleaning up other bank issues by buying small, weak banks as they fail instead of having the government do it.
The solution to TBTF is to never let the companies get TB.
