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Obama on the Money - SOTU Edition

Bruce Krasting's picture




 

 

The Big O will give us the SOTU pep talk tonight. Obama will pound on the theme of income inequality in America. A Wordle of the SOTUS will look like:

 

Screen Shot 2014-01-27 at 7.17.10 PM

 

The President will be using language that misses the mark. The issue at hand is not just Income Equality, it's Wealth AND Income Inequality. The problem that Obama faces is that America does not tax wealth, it only taxes income. So until America gets around to a tax on wealth, the Prez is stuck with increasing income taxes (reducing deductions) for high income folks in his attempt at leveling the playing field.

To be sure, there is plenty of income disparity in the USA. The question is how much, and what has changed over time. I looked at data on all EARNED income over the past 23 years. The info come from the Social Security Administration (AKA Treasury/IRS). The link to this data, a few graphs of the results:

 

How many people make it to the 1% club every year? I was surprised that the number has not changed all that much over a 1/4 decade. The number of folks who made the financial limelight has varied by only 400k. It's worth noting however, that 2012 produced the largest number of 'fat cats' ever.

 

Screen Shot 2014-01-27 at 7.01.11 PM

 

What income level did it take to be in the 1% club?

 

baseincome_edited-1

 

How many total dollars have the 1% taken in each year? In 2012 the 1% raked in 1.05 Trillion. Four times what they made in 1990.

 

Screen Shot 2014-01-27 at 7.02.11 PM

 

What was the 1%ers total income as a percent of GDP? It's increased quite a bit over time, and it's the highest ever today.

 

Screen Shot 2014-01-27 at 7.01.38 PM

 

What is the 1%'s income as compared to total earned income? (A better way to look at this). This comparison shows a trend that should be a bit scary to those earning the big bucks. As of 2012 it was 17% of all income. 1% make 17%. That's pretty far out of whack.

 

Screen Shot 2014-01-27 at 6.59.01 PM

 

The numbers from SSA confirm that a small percentage of workers take home a huge percent of the pie. So what's Obama going to propose tonight? He can yack about a bunch of things that might make a small difference, but if he really wants to move the needle on inequality, he has to raise taxes on the 1%. The problem that O faces is that he's already tapped this well. Tax rates on the 1% are now at the highest level in a long time:

 

012614krugman2-blog480

 

One of the 1%ers, Tom Perkins, a heavy hitter with Kleiner Perkins Caufield & Byers. (VC - of course) , manged to get an OpEd letter at the WSJ. Tommy likened the rising sentiment against the 'haves' to a Nazi atrocity.

Kristallnacht was unthinkable in 1930; is its descendent “progressive” radicalism unthinkable now?

 

Looking good Tommy! Not....

4811e8542d1937a0d89b0a1b0465b52f

 

Mr. Perkins needs to get a grip. If he feels threatened today, he's going to be crapping in his pants tomorrow. Obama will be gunning for his pocketbook. And tonight, when O does call for higher taxes on the rich, half of the congressmen will stand and applaud.

 

classwar

 

 

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Wed, 01/29/2014 - 09:04 | 4379200 Shizzmoney
Shizzmoney's picture

Higher taxes on "the rich" = higher taxes on the plebs. 

The rich have hardly had their taxes raised.  They have many ways to get around these tax laws, and for the most part, the Fed also protects their assets by continuing their QE programs.

Want to raise taxes on someone?  How about getting GE and AAPL to pay their fair share, for fucking once?

Tue, 01/28/2014 - 23:13 | 4378246 novictim
novictim's picture

Couldn't this "Constitutional Scholar" have admitted, finally, that the NSA domestic surveillance program lead to illegal collection of data?

And what is he doing throwing in the talk about Israel now? WTF!

Tue, 01/28/2014 - 21:57 | 4377900 Walt D.
Walt D.'s picture

Higher taxes. The alcoholic needs another case of vodka.

 

Tue, 01/28/2014 - 21:54 | 4377880 Walt D.
Walt D.'s picture

Cap all taxes at 20% - nobody should be forced to work for nothing for more than 1 day a week.

 

Wed, 01/29/2014 - 03:37 | 4378858 Amagnonx
Amagnonx's picture

Abolish all taxes - they are theft and uneccessary.

Wed, 01/29/2014 - 11:07 | 4379634 Agstacker
Agstacker's picture

Revert back to pre-federal reserve days, taxes only on corporations and tariffs, no taxes on labor.

Tue, 01/28/2014 - 21:42 | 4377831 Johnny Cocknballs
Johnny Cocknballs's picture

Tax financial transactions and raise the cap gains rate, for fuck's sake.

 

The financial sector's growth has driven the economy, and in essence, it amounts to little more than trading around debt and insurance policies and making a shitload of money on the backs of productive labor.  No, there's nothing wrong with being wealthy, but you have to be a fuckin' asshole to think banks and stock brokers are net-adding value to the real economy....  there's absolutely no good reason not to put a small tax on financial transactions, and no reason at all not to capital gains.

The financial sector is the appendix of the body economic, and it is inflamed and threatening the rest of the body.

But the people who put Obama in office aren't interested in this.  But try telling people Obama isn't really helping with the income tax stuff.  I know Ivy League educated people, otherwise quite bright, whose brains fail to allow them to understand what a grift social security is and has been for decades {clearly, and very arguably, yeah, since inception} and they don't understand it because they presume anyone disagreeing with them politically must be inept at maths and basic logic.

Obama is right not merely because he says the right things, but because he is opposed by "the enemy" - and of course, when the GOP gets in, the same thing.  That is, most Americans aren't actually *thinking* - they are deciding to agree or not with something being "good" based on whether the other team is against it or not.

 

People trying to advertise themselves as unusually savvy like to say things like "it's not a democracy, it's a republic" are doubly wrong...  it's a federated republic, but that's in form only.  What we are is a Plutocratic Duopoly, and by having 2 teams for most people to disperse their political energy into, we get this masquerade... this Wizard of Oz... these political debates that may as well be the Globetrotters v. The Senators.

 

 

Wed, 01/29/2014 - 04:20 | 4378897 artless
artless's picture

"Tax financial transactions and raise the cap gains rate, for fuck's sake"

No No No. This is fucking moronic at best. Yes BRILLIANT idea. Fuck over the middle class slob who sells his house for a small profit OTHERWISE KNOWN AS A CAPITAL GAIN so you can penalize banksters and feel better about things all the while not addressing the root problem of fraudulent credit expansion made possible by FED policy and endorsed by your taxing Congress so it can run massive deficits and bankrupt te nation. Yes stifle capital investment-that will CERTAINLY kick start things.

WTF? Has everyone on this forum lost their fucking minds?

Yeah, great fucking idea. Create another tax to enrich the criminal class in DC.

Go back to the drawing board, forget this populist horse shit and try to learn something here while on ZH.

 

Wed, 01/29/2014 - 09:43 | 4379294 marathonman
marathonman's picture

Most of the 'capital gains' are simply inflation of the money supply.  So you pay 30% income tax when you sell an asset that has risen in value because the American dollar debt Ponzi caused your asset price to rise.  You lose real purchasing power on the trade, but you feel better about it because on paper its a win. It's a fools game! 

End this whole sick system.  End the Fed.

Tue, 01/28/2014 - 21:28 | 4377769 novictim
novictim's picture

My bet on the Obama State of the Union Address BS agenda 2014:

   

Economy: Blabber about how good the economy is now.  Platitudes about “moving forward, together!” and mealy mouthed references to the advantages of “free trade” and business incentives “to move this economy forward into the 21st century!”

- but no reference to the fact that 3 Americans are pursuing 1 job vacancy.

- only small push for increased minimum wage

- no call for trade tariffs

- no recall to a Green Infrastructure/grid projects that have failed to materialize

 

-NO Reference to Wealth Inequality...except with reference to raising the wage-slave wage by a couple bucks/hour.  No acknowledgement of the fundamental crisis of our economic system.  

No real effort will be forwarded to say "We are a decent and fair people and everyone deserves a dignified life in the USA and I am going to push to tax the wealthy and the corporations doing business here!."

 

 

Obama Care: Blabber about the Website now working and no acknowledgement of the crappy Non-Single Payer Insurance company payout that this stupid plan has taken.

 

War: Yippee!  We are getting ready to leave afghanistan and I killed Bin Laden!  Love me!  But be afraid...the Chinese are building a war machine and my sponsors in the defense lobby need your money.  Again, Love ME!

 

No mention of the Environment

 

Small reference to Financial reform, maybe a reference to Janet Yellen.

 

Shout out to the Oil and Gas industry for boosting domestic oil production.

No Mention of campaign finance reform.

---

I'm not expecting shit from the Republican party either.

What a clown show!

Tue, 01/28/2014 - 20:51 | 4377644 pondview28
pondview28's picture

The only solution is tax away the money? What an appalling lack of imagination. Like the government would do something useful with the money? Could the author have elucidated why he thinks this level of income and wealth difference is a problem? Hard to solve a problem if you never state what it is. Yes, we can all think of a zillion reasons, but what does taxing solve?

Tue, 01/28/2014 - 20:46 | 4377626 are we there yet
are we there yet's picture

The late american comedian Will Rogers said that he likes wealth sharing if he could share his with Rockifeller, but doesn't like sharing his money if it is with some borke bum. Things have not changed that much. The free lunch, free ride, something for nothing crowd is still looking for some other persons money.

Tue, 01/28/2014 - 20:38 | 4377594 yepyep
yepyep's picture

the solution is 0% taxes.

abolish the federal government.

Tue, 01/28/2014 - 20:27 | 4377548 robnume
robnume's picture

Wow, judging by the comments on this article, most of you fucks apparently belong to the 1%.

Wed, 01/29/2014 - 05:07 | 4378935 Seahorse
Seahorse's picture

Not so - this 'fuck' is living on very little while trying to start a business. I want rich people around, they are all our customers. Did a poor person give you a job recently?

Tue, 01/28/2014 - 20:22 | 4377533 Karl von Bahnhof
Karl von Bahnhof's picture

You guys are helpless.

You see how a powerfull minority together with fake leftist is cutting you blood dry and still scream "commie" help ! "he is socialist"

You are best sheeple ruthless capitalist can buy, suck dry and then sell for spare parts without paying the original bill (this will be paid by your children)

So called Libertarians are absolutely best dupes in our times. Serve accordingly.

Tue, 01/28/2014 - 21:29 | 4377770 Johnny Cocknballs
Johnny Cocknballs's picture

You're right, except for the bit about who the best dupes are.  That would be the Left, followed, immediately, by the Right.

Libertarians aren't a monolith, but even the stupid ones who think the apex of economics and philosophy was achieved by Ayn "poor man's Max Stirner" Rand are less duped than most.

If you truly want to see duped, read the Daily Kos, or the comments to Paul Krugman's columns. 

 

It will scare all the sand right out of your vagina.

 

 

Tue, 01/28/2014 - 19:58 | 4377454 tnquake
tnquake's picture

Already started, but in case you need an excuse tonight...

http://dailycaller.com/2014/01/27/daily-caller-state-of-the-union-drinki...

Not sure I will make it by 9PM!

Tue, 01/28/2014 - 19:49 | 4377416 yepyep
yepyep's picture

rich people arent the problem, government is the problem.

the only way these insanely rich people consolidate wealth is through control of the government.

 

so get rid of government.

Wed, 01/29/2014 - 10:14 | 4379431 LawsofPhysics
LawsofPhysics's picture

"rich people arent the problem, government is the problem." -  John Corzine is a "rich" person, quite frankly I think he has been a big fucking problem.  I don't think you understand how fascism works motherfucker.  Getting rid of government will require blood at this point as there is no way these fuckers will suddenly start to reward good behavior.

Tue, 01/28/2014 - 19:49 | 4377401 Spankrupt
Spankrupt's picture

but if he really wants to move the needle on inequality, he has to raise taxes on the 1%.

 

You can raise taxes on whoever the fuck you want. 50% is going to the military, and the other 50% is education, healthcare, interest on debt, social security and Egypt, to support pyramid tourism. Its not an income problem you fuckstick its a spending problem. Yep, tax wealth cause the IRS has earned that right more than silver spooned inheritors. End the fed bubble brain. Level the crony capitalism playing field. Get the fucking illegal immigrants out. Bruce, I would like to tax you for being a moron. A new moron tax. That will level the playing field.

Tue, 01/28/2014 - 18:08 | 4377030 ThirdCoastSurfer
ThirdCoastSurfer's picture

Wealth is like water. If you drink a cup of it there is not less of it, it is just somewhere you cannot get to it, for a while anyway.

If you make it there is more of it and it does not diminish from use.
It diminishes when the source of the wealth drys up.

Focus all you want on taking the water from a marsh to a desert, and the possible waste in the expense of the transfer, the desert will likely remain such and the marsh may dry up as the water will likely relocate somewhere away from both.

Tue, 01/28/2014 - 16:24 | 4376634 Hal n back
Hal n back's picture

the guys who created home depot got wealthy becasue they had a good idea , risked capital and put in a lot of hours--they deserve to be wealthy. So does Bil Gates and Michael Dell and and so did Steve Jobs  and others who created somethng. Unfortunately a significant amount of wealth is created in a questioable manner-like Dimon and ARubin and Blankenfield et al.

 

 

The GE guy who ran Home Depot for a year before he was fired with a multi million secverance was worthless.

 

Thats the inequality that needs to be fixed and shareholds have that responsibility cause its their money and mostly they abdicate their responsibility.

 

Tue, 01/28/2014 - 16:22 | 4376621 sangell
sangell's picture

I can see a wealth tax as being more equitable than a income tax. A lot of wealth is unearned. The old Henry George school of taxing land profits away. Now a guy who develops his property could be said to have earned his wealth but the guy upon whom fortune or influence smiled upon and an interstate off ramp make his land an ideal location for a gas station, restaurant and motel certainly didn't do much work for his profit. I knew hick farmers growing up who had the good fortune to have their dad's 40 acres cornfield become part of the DC suburbs and I'm sure there were more than a few orchard farms around Atherton that are now the hqs of mighty Silicon Valley tech firms while 40 miles away another guy is still picking apricots. Income, OTOH, typically involves years of effort. A slow rise up the corporate ladder, years of study to become a medical specialist , working thousands of hours to hit a baseball or golfball with no guarantee you'll ever be good enough to make the big money. A singer, composer or football players might only make big money for two or three years and that has to support them the rest of their life. No, I can see taxing wealth more heavily than income because anyone can win a lotto jackpot but if you do it year after year you are doing something beyond being lucky.

Wed, 01/29/2014 - 04:28 | 4378904 Axenolith
Axenolith's picture

Hey stupid fuck, most of the farms in Northern VA had to be sold off to pay the extortionist property taxes blown out from the pus in DC spilling over there...

A lot of wealth is unearned.

What fucking business of anyone else is that?

Tue, 01/28/2014 - 20:02 | 4377470 Spankrupt
Spankrupt's picture

Your tax thesis is well thought out, a sound policy for fiat re-distribution to more deserving members of society. Try ping pong for a hobby, not tax analysis.

Tue, 01/28/2014 - 18:05 | 4377012 the0ther
the0ther's picture

The asshats who clear out an open space to pave it over and put up a new shipping mall then call it "development" are terrible grifters. Let's see if we still consider it "development" twenty years from now when it's choked with weeds and wild animals are wandering through the interior of the mall. It's not development at all.

Tue, 01/28/2014 - 17:08 | 4376804 YogaAddict777
YogaAddict777's picture

Everybody who has no real wealth thinks taxing somebody else's life savings is a good idea.

It is theft.

Tue, 01/28/2014 - 18:02 | 4377007 sangell
sangell's picture

Actually I am fairly well off in the net worth department as compared to most though its all relative. A guy with a million looks rich to a guy with 100,000 and a guy with 10 million looks like a pauper compared to a guy with $100 million and that guy feels like shit compared to a low level billionaire. My income kind of sucks though because of ZIRP and my risk aversion to stocks and bonds at these levels so I am don't pay ANY tax. You take care of that for me and I'll just live on 2 or 3 per cent of my assets and a small pension.

 

Tue, 01/28/2014 - 17:25 | 4376859 kaiserhoff
kaiserhoff's picture

and it may be the work of several generations, taxed again and again, in countless evil and unseen ways.

Envy is a powerful force, but once you destroy or drive out the capital base, and eat someone else's seed corn, your are well and truly in deep shit.

Wed, 01/29/2014 - 11:16 | 4379663 Vendetta
Vendetta's picture

"but once you destroy or drive out the capital base"  it wasn't driven out, it was led out by 'trade agreements'.  They are just as eager to sell their products back in the US markets as before aren't they?

Tue, 01/28/2014 - 15:51 | 4376475 Save_America1st
Save_America1st's picture

Alex Jones had Bob Barr on last Thursday.  He was a Congressman for 8 years back in the Clinton era.  He was the one who brought up the charges of impeachment against Clinton and got enough co-signers to make it happen. 

Bob Barr is a legal bad ass, ex-CIA, and a statesman along the lines of Ron Paul.  Look him up.

Here's the kicker:  Bob Barr is running for Congress again this year in Georgia and it sounds like he's easily going to win it.  And when he does win, he will be one of the baddest mother fuckers in Congress, and he's going to go after obama immediately with the same charges of impeachment that he used against Clinton. 

Here's the interview on Alex Jones...you all gotta listen to it:  http://www.youtube.com/watch?v=24clEFBWqUg

Barr said he pulled out the impeachment paperwork he used against Clinton and dusted it off...then he updated what needed updating and crafted it for impeaching obama...he said it was easy given all the evidence against obama and his usurpation of the Constitution. 

And since he already served 8 years in Congress previously, he gets all his seniority back...that means he can't be marginalized as some rookie freshman Congressman.  He's a legal wizard and knows how to work Congress inside and out.

He's going to be obama's biggest nightmare and will quickly build a coalition against obama and the rest of the treasonous scum in Congress.  I think we're going to see a lot more of the rats scurrying off the sinking ship once Barr gets back to town.

Here's his website...send him a few bucks, cuz we need this guy in D.C. big time to fight the fight up close and personal against obama and the rest of his scummy little miscreant crew.

http://barrcongress.com/

Pass the word around to everyone you email and let's help make sure Bob Barr gets back to D.C. so we can get this impeachment rolling!!!

Tue, 01/28/2014 - 20:33 | 4377576 Bear
Bear's picture

Impeachment is a joke - just a bandstand move. It cannot happen since it requires 2/3 of the Senate to agree on the articles. That means 67 Senators would vote against the guy they are trying so hard to protect. It's their futures on the line. It is an impossibility for it to happen.

If Benghazi, Fast and Furious, NSA, IRS, Drones, Robert Gates, Syria, a stream of absolutes lies and Obamacare can't touch this guy, how do think that stretching (obliterating) the Constitution will matter?

Tue, 01/28/2014 - 19:38 | 4377379 PaJoad
PaJoad's picture

Where was Bob Barr when George Bush and Alberto Gonzales were trampling the Constitution? Sounds like you're pushing a right v left argument rather than if a politicians lips are moving....

Tue, 01/28/2014 - 18:08 | 4377028 the0ther
the0ther's picture

Is this the same Bob Barr who has Koch Brother cock down his throat right this very instant? There's only one RP and I doubt Bob Barr is comparable. Seems like a self interested partisan hack. But educate me I'd like to believe otherwise.

Wed, 01/29/2014 - 04:40 | 4378913 Axenolith
Axenolith's picture

What is it with lefttards and the "Koch Brothers"?  Like, the leftist progressofascist forces of darkness has pretty much every western nation locked up and all the rich oligarchs playing "liberals" like marionettes with people like Soros and Buffet writing the scripts and you find ONE PAIR of wealthy guys who back a "republican" ideology and you just about rub the skin off your dicks jacking off over it...

 

Tue, 01/28/2014 - 15:34 | 4376420 Sun and Moon
Sun and Moon's picture

The President decries the 1% while having done more to help them than any other president before him. QE has been the biggest gift to the rich ever conceived. Unfortunately for him, this only works for so long. Fortunately for him, it usually works until you are into your second term.

Tue, 01/28/2014 - 15:11 | 4376296 ebworthen
ebworthen's picture

Bruce, you need to move beyond the progressive/conservative paradigm - it is a distraction.

The real problem is that the society itself is based on parasitism versus production.

You got it right that Perkins is an idiot.

Tue, 01/28/2014 - 20:34 | 4377584 Bear
Bear's picture

When the parasites take over the host dies ... they have taken over and we are just waiting to be eaten up

Tue, 01/28/2014 - 14:52 | 4376171 q99x2
q99x2's picture

He successfully robbed the poor. Now for the Doctors, Lawyers, Judges, Police Officers, Firemen, Nurses, FBI agents, DHS management and top level military. 

Tue, 01/28/2014 - 15:05 | 4376257 kaiserhoff
kaiserhoff's picture

Yes, let's have a pity party for the over paid, over fed, never worked gubbermint drones.

Tue, 01/28/2014 - 14:02 | 4375870 moroots
moroots's picture

Alcoholics don't get better until they stop drinking.  Giving them more booze enables their unhealthy addictions.

As it is with government and taxes.  Lost in the noise about the debate over taxes is that the government has spent itself into a deficit EVERY YEAR except for one since World War 2.  It's time to cut them off, not give them more.  

Wed, 01/29/2014 - 04:43 | 4378920 Axenolith
Axenolith's picture

Unlless you give them gobs of high proof booze and a fistfull of quualudes or a sack of heroin.  Then all you have to do is clean up the shit and vomit and get rid of the body and you can get on with life...

Tue, 01/28/2014 - 14:57 | 4376211 DOT
DOT's picture

WWII is too far back for me, I will go back to the sixties and note that never has the National  Debt declined.

http://research.stlouisfed.org/fred2/series/GFDEBTN

Tue, 01/28/2014 - 13:59 | 4375859 onlooker
onlooker's picture

BK

 

Good to have you back. Have you heard much from your Greek guy lately?

 

Appears you have addressed a sensitive area with this one.

 

Keep up the opinion and information flow here at ZH.

Tue, 01/28/2014 - 13:37 | 4375762 gibbs
gibbs's picture

Funny how people who call for higher taxes or wealth taxes are always the ones who either don't have any, like talking heads and bloggers, or those who would be exempt from them.

Tue, 01/28/2014 - 23:14 | 4378248 dexter_morgan
dexter_morgan's picture

Uncle Warren comes to mind. RAISE TAXES he says, but doesn't lead the way by example does he.

Tue, 01/28/2014 - 20:39 | 4377599 Bear
Bear's picture

Or those who have so damn much it doesn't matter as they would rather be seen as 'social justice' champions and wooed by every Hollywood and DC elite.

Tue, 01/28/2014 - 18:16 | 4377071 John_Coltrane
John_Coltrane's picture

Its called envy and its one of the seven deadly sins for a good reason-its debiliating and useless.  I believe sloth is another one of them.

Tue, 01/28/2014 - 13:40 | 4375759 Lord Koos
Lord Koos's picture

1.  There has been a "class war" going on for decades.  This war was not started by "the libs" but by the elite, and they have won the war. The public sector continues to be gutted as more and more wealth is amassed in fewer and fewer hands.  

2. "Wealth redistribution" has already occurred. It has "trickled up" to the haves, creating more have-nots in the process.  (see #1)

3. The wealthy and large corporations are not paying their fair share in taxes, with individuals and corporations keeping their money in off-shore havens, and with capital gains income taxed at a much lower rate than most American workers pay on their income.

3. Obama really had little to do with this situation, and he will have little effect on the problem as well.

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