degas

Good points Budman. The silence after your questions, says volumes. Why do 50% pay NO taxes? Everybody is a stakeholder in our society and should pay taxes.

audere_est_facere

Don't they pay tax on the stuff they buy?

Budman

Sales tax is paid by everyone (sorta like a consumption tax) and is controlled by each individual State. It can range anywhere from 8% to zero (some States do not have a sales tax).

Well, I'll adjust somewhere down the line. Since I booked my trip to Italy, my accommodations have gone up about $10 a day, a $20 bottle of wine will not cost me $21, yada, yada, yada. That's not enough to keep me away.

Christina

Everybody pays tax on the stuff they buy, that doesn't make up for low income tax. Besides, sales taxes are local, not federal. Poor people pay a lot of tax as sales tax disproportionately to their income, and for wealthy, it's not so much. In the US, taxes are a much higher burden in comparison to income for poor or middle income people than the wealthy. I work in Virginia (but don't live there), and they actually tax groceries here, which I couldn't believe when I bought some items at a store. I've never lived in any other state where they tax basic food of all kinds. I have no idea about these figures being thrown around or whether half the people pay no income tax (obviously, if you are really poor you don't pay any, why would someone complain about that) or not. Yes, that is the concept of redistribution of the wealth, that is what a decent society is supposed to do for its population.

JeffreyJ

"Yes, that is the concept of redistribution of the wealth, that is what a decent society is supposed to do for its population."

Sez who? No one asked ME, and it is (or was) my money in the first place. I'm financially comfortable at this stage in my life, but folks, I started pretty much at the bottom, close to minimum wage jobs, and thru energy and diligence and deferral of immediate gratification, prospered. I took advantage of the opportunities that American society offers, not available in most European countries....bring on the snorts of outrage, those Euroworshipers among you!...and built something. I didn't see the more 'vulnerable members of society' around, offering to help load my truck at close of a trade show, when I was exhausted and my back excruciatingly painful. No, they were home drinking beer and watching the game, as would have been MY preference, too.

Now I'm told that decency requires that I redistribute my property among them? What nonsense. Ever hear the story about the grasshoper and the ant?

<grin> OK...that's my rant!

fishee

The top 1% of wage earners better damn well be paying at least 30% of the income tax -- it should be more. I'd love to pay a property tax but I can't afford to even buy property with my middle income salary -- meanwhile people in California (including my family) are enjoying the fruits of Prop 13 which froze property taxes while they're enjoying an insane windfall of equity. Hmm, and then those same people wonder why there isn't more money for public education, healthcare, etc, and blame it on illegal immigrants.

Jolie

Why should we pay taxes? Because we are a "country," not 300 million individuals fighting "every man for himself."

If anyone ever drove on a public street, had children who attended public school, enjoyed the freedom that our military protects, used the government's registrar office, hoped the government provides prison space for criminals, wanted to have police and fire protection, used the judiciary system, etc., then they did NOT achieve success "on their own."

angethereader

RufusT - I stand corrected. We went when I was pregnant with DS#3, not DS#2!

In 1985 the average was 1.28. When we were there in February I think it dropped to around 1.20 per 1 lb.

Regardless - I guess we timed that trip well! It was actually for a wedding, so we didn't plan it at all.

I'm a big planner so the sometimes strange plans of others were annoying. Ah well, I was only along for the ride.

Neil_Oz

"...it (foreign debt) is a measure of foreign investment in the US investments vs american ownership in foreign investments"

- actually it's that part of the total debt in a country that's owed to creditors outside the country. IMF: "Gross external debt, at any given time, is the outstanding amount of those actual current, and not contingent, liabilities that require payment(s) of principal and/or interest by the debtor at some point(s) in the future and that are owed to nonresidents by residents of an economy."

"...the US does NOT have the largest foreign debt in proportion to the size of the economy. for example, by the most relevant measures, australia has a foreign investment deficit (in relation to gdp) that far, far exceeds that of the US."

- That may be so (I haven't checked), but surely the most relevant measure is external debt as defined above. Foreign debt is certainly the Achilles' heel of the Australian economy, but it's not "far in excess" of the US. Per capita, the US figure is about US$33,300 and Australia's is US$25,500. If you adjust to take account of the US's higher per-capita GDP, the numbers are almost identical. So, not a good look for either country.

Another bad number for the US is public debt at 64.7% of GDP.

As I understand it, and I'm happy to be corrected, the short/medium term danger for the US$ lies in the fact that it's being propped up by huge foreign dollar reserves - China's holdings, aimed at keeping the dollar high, have been described as "the biggest vendor financing deal in history". Reserves are also used to pay for oil priced in US$. If (when?) oil exporters start pricing in Euros there'll be a fire sale of dollars, and in that event it's possible that China will seek to minimise losses by unloading some of their holdings.

travelinwifey

The first time my spouse and I went to the UK 14 years ago we had many meals at McDonalds because we were still paying off school loans. Today's currency rate, while discouraging, won't stop us. There's always Priceline and Hotwire and online auction sites for discounted lodging. I don't mind cutting back a little at home so we can still enjoy Britain. We are diehards though at Fodors, I am wondering what other US travelers will do these coming months. If there are any news articles about how the pound is affecting US travel to the UK I'd like to read about it...

ira

>Virtually all US auto's have been junk since the Model T. Witness how few of them have ever sold outside the US. <

At one time Ford was the largest car maker in the UK.

>I define socialism as public ownership of the means of production, distribution and exchange.<

I suggest that most folks would consider that to be Communism. However, as an old Anarcho-Syndicalist I am willing to let everyone define their own movements.

Unfortunately, as I have gotten older (and maybe wiser) I have developed a sneaking suspicion that Free Market Capitalism within a Liberal Democratic political system works best for everyone.

I stand ready to hear definitions of "Free Market" and "Liberal Democratic".

carioca4ed

Tee Hee !!!!I am over in Britain....The Sunday Papers over here seemed to be doing a lot about that now is the time to get your skates on and visit the people across the pond,and come back with armfuls of bargains !!!!But I kept thinking that unless you had a vast amount of cash to spend,wouldn't the price of the airfare and hotel put paid to the cash you would save ????So,no I am not planning to visit you all yet !!!!

superheterodyne

>> ><Virtually all US auto's have been junk since the Model T. Witness how few of them have ever sold outside the US. <

At one time Ford was the largest car maker in the UK.<<

The Fords sold in Europe have had extremely little in common with US Fords until the Focus !

A model such as the Crown Victoria is arguably an example of dinosaur technology (I know, it's being phased out...)

walkinaround

>>>>>>
- actually it's that part of the total debt in a country that's owed to creditors outside the country.
>>>>>>

congratulations on googling a quick definition but in fact there are many ways of defining this (as i stated).

in the context of the falling US dollar, you want to talk about the total foreign debt which includes public AND private debt AND other liabilities like stocks/shares.

doomsdayers will question the ability of america to continue to attract foreign investment...something that is needed to keep the dollar from tumbling. this is the argument. your definition completely misses the point of the argument...no matter which side of it you are on.

and on the topic of cars, alan makes a strange statement because you can't drive 10 feet in the uk without seeing a ford focus. i believe 4 out of the top 5 cars here in the UK are american brands (vauxhalls/gm and ford).

anyway, quality has little to do with popularity....renault and citroen are also very popular in europe.

hopscotch

The Roman Empire died on inflation and a debased currency. The nuts who run the USA read their book and are getting as much as they can in their wallet before the fit hits the shan.

JeffreyJ

"Why should we pay taxes? Because we are a "country," not 300 million individuals fighting "every man for himself.""

I won't argue with you about this, Jolie...I understand completely the necessity of paying taxes to support and build social capital. What I will dispute is statement that the point of paying taxes is to achieve a redistribution of income.

I will now apologize for my rant, and respectfully withdraw from this thread. I'm not on this board to debate social policies, but 'cause I love to travel!

Sue_xx_yy

Hal8999

Thank you for your comments about public versus foreign debt, like the comments of others, they are interesting.

However, the debt being discussed was the US national debt, as opposed to the US external debt (see bob brown's post above.) The claim was also that the US national debt was the highest in the world, not just the G8 or Western world, and so as small an economy as Malawi's is, we have to consider its rank. Remember, too, that while Malawi may not figure large in an absolute way, someone pointed out that absolute size of debt is misleading, it fairly should be expressed relative to the size of the country's GDP.

But I'm actually grateful for the confusion, since it has stimulated discussion about the the relative importance of the two kinds of debt, and I'm eager to learn about this.

So I shall defer to others to settle whether foreign owned debt necessarily indicates a bad thing. I would only lend money to someone whom I have confidence will be able to repay such money. So, while I'll accept there is a bad side to foreign-owned debt, could it not also reflect confidence of foreigners in the US economy? (Again, we're not talking the idea of debt per se, but the portion of it that is foreign-owned.)

Also, on the subject of cars: does it not make a difference (I'm truly asking the question, I don't mean it as rhetorical) whether the cars are actually being built in the US? Junk or no, US auto jobs of whatsoever brand are being exported out of the country, presumably because of high labour costs. I always struggle with grasping economic policy, but isn't that one of the reasons the Bush administration is allowing the US dollar to fall, to recapture employment for the American worker?

flanneruk

Sue xx:

Everyone struggles to understand economic policy. With luck, that includes the government: the darkest hours in my country's economic history were when we had a prime minister who had a degree in the subject.

Your question hits the real complication in all this straight on the head. Does a cheaper dollar mean more things are made in the US? Generally speaking, no: for the last fifteen years countries like Britain and America with chronic payments deficits have generally kept or reduced those deficits irregardless of the currency rate.

To simplify crudely: most of the goods all those Londoners are going to be buying in New York this month will be stuff Macy's has imported from China, while most of the other money they'll be spending will go as remittances to the waiters' and chambermainds' Costa Rican families, or to the foreign shareholders in the hotels' holding companies. Back home, it doesn't matter to American factory workers whether I buy a Ford or a Citroen, since the car will be made - and designed - in Europe. But the couple of hundred pounds' net profit the Ford Company might make from my purchase will look better on Ford Inc's quarterly results, as they'll buy more dollars.

So some Ford shareholders will do better. But not the whatever percent who are European or Asian funds, since -translated back into hard curencies - those dividends will be just as bad or good.

Obviously, when currencies go mad in the way the Zimbabwean dollar has over the past decade, in countries as spectacularly maladministered, fluctuations can have huge effects. But the kind of fluctuations we see between major currencies really don't matter all that much any more.

Yes, currency fluctuations can kill speculators, or legitimate traders operating on tight margins. But, given how globalised just about everything is nowadays, a 10 or 20% change in a currency's value has surprisingly little effect in reasonably well-managed countries (which, even a hardline Bushophobe like me has to admit, is a category that obviously includes the US).

A declining dollar might make New York a more attractive weekend break for many people round here. But only if their bonus isn't linked to the sterling value of an employer that measures its profit in US dollars.

And any honest economist (doubtless a fairly small category) would have to accept that the winners and losers from almost any fluctuation are pretty randomly distributed around the place.

alanRow

<<< but isn't that one of the reasons the Bush administration is allowing the US dollar to fall >>>

ALLOWING - ha ha ha ha. I don't think the US administration has much input to this one - unless you believe the current levels of US debt are a deliberate plan by the Bu-shites

ira

Hi All,

Interesting discussion on the size of the US foreign debt, value of the dollar compared to other countries, taxes, etc.

Sounds as if it is the 80's again with Reagan as President.

I don't have the figures at hand, but IIRC,

the Japanese were telling us how to run our companies and our economy,

the Yen was up so high that a square foot of property in Tokyo was equal in value to the entire New York Stock Exchange (an exaggeration),

the National Debt nearly tripled from 1980 to 1988,

foreigners were buying Treasury Notes in record amounts and our National Debt was moving out of the hands of US citizens.

If you stand still long enough, it all comes around again.