This page has been archived and commenting is disabled.

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

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 01/28/2014 - 13:48 | 4375673 Mercury
Mercury's picture

How many people make it to the 1% club every year?


Uhhh.....whatever that year's total population is divided by 100?

I'm pretty sure that's the way it works in Sweden too.

 

In the glorious future there will be no percentages I suppose.


Tue, 01/28/2014 - 15:29 | 4376382 kaiserhoff
kaiserhoff's picture

An Econ Prof at Illinois was always bitching about the poor, godforsaken, bottom 25%.

We did everything except hang him from his balls, but we could never convince him, that without full frontal Stalinism, there will always be a bottom 25%.

Tue, 01/28/2014 - 15:41 | 4376443 Mercury
Mercury's picture

No, there was a bottom 25% under Stalin too.

Tue, 01/28/2014 - 16:09 | 4376554 kaiserhoff
kaiserhoff's picture

Right you are, and well played;)

Tue, 01/28/2014 - 13:17 | 4375670 atomicwasted
atomicwasted's picture

Given the recent comments on other threads, most of the readers of ZH will stand and applaud with that half of the congressmen in praise of O's confiscation of more wealth for the government.

Tue, 01/28/2014 - 13:37 | 4375771 Lord Koos
Lord Koos's picture

Newsflash:  Must of the nation's wealth has already been consfiscated by. the wealthy, at the expense of the American worker.  

Tue, 01/28/2014 - 12:41 | 4375478 Cpl Hicks
Cpl Hicks's picture

"Unemployed" will be in his top three.

Tue, 01/28/2014 - 13:04 | 4375602 the grateful un...
the grateful unemployed's picture

and jobs will be in the bottom three. he got a lot out of Congress, now we see if he can get something back

Tue, 01/28/2014 - 12:35 | 4375456 AGuy
AGuy's picture

"when O does call for higher taxes on the rich"

O'Bama thinks that anyone working and not living on food stamps is "rich" and should be heavily taxed. The 1% will just take capital out or set up offshore businesses and get special tax laws that exempt them from progressive laws. Its the laws and regulations that have made the 1% rich, not free markets and liberty. People need to understand is that equality and fair pay cannot be legislated with progressive tax laws.

 

Tue, 01/28/2014 - 12:13 | 4375366 the grateful un...
the grateful unemployed's picture

words you may have missed FOREIGN AL-QAEDA MILITARY

http://www.bonnerandpartners.com/thank-you-congress/#.UufUEvvTkrh

if he's going to war with Congress first he better thank them for passing a bipartisan budget bill, most of the benefits of that bill went to the MIC.

now its time for POTUS to take credit. also words ON-THE-RUN and SOMALIA

then to balance the extended violence with a reference to domestic VIOLENCE GUNS GUN CONTROL VICTIMS

and time to declare victory on the economy VICTORY ECONOMY NEW-FED-CHIEF COOPERATION

and to pull all these disparate analogies a reference to THE-WAR-ON-POVERTY

little works like jobs will get shuffled back, nothing they can do about it, equality only so far as it mentions girls in foreign places who can't go to school and the need for America to be engaged (dronewise)

and NSA will ue tagged on the end of the sentence about SECURITY

the dictator in wraps takes off the wraps

 

 

Tue, 01/28/2014 - 12:11 | 4375345 John Law Lives
John Law Lives's picture

Sure.  Obumble cares SO much about income inequality... that he sat by idly as the Fed pumped the income of the 1% club year after year.  I don't remember him saying one word about Fed policy exacerbating income inequality whilst the stock markets surged higher.

Tue, 01/28/2014 - 12:27 | 4375429 Hedgetard55
Hedgetard55's picture

Undoubtably Lord Bathhouse is benefitting mightily from the FED pump. Think he gives a fuck about anything other than himself and where is next boy toy is coming from?

Tue, 01/28/2014 - 12:05 | 4375323 nickt1y
nickt1y's picture

The wealth divergence is due to CRONY CAPITALISM and FREE TRADE AGREEMENTS that only benefit the connected. End these and you will be ending the wealth divergence. BTW most of the congress critters are 1% ers and if they are not the soon will be.

Tue, 01/28/2014 - 12:04 | 4375318 Rainman
Tue, 01/28/2014 - 12:05 | 4375317 andrewp111
andrewp111's picture

Yeah. That's all we need. A federal wealth tax. If such a thing is imposed, the net result will be to wipe out the Middle Class completely, while hardly touching the big boys. So what else is new.

Wed, 01/29/2014 - 11:28 | 4379704 Vendetta
Vendetta's picture

They already have a plan called TPP to wipe out what's left of the middle class. 

Tue, 01/28/2014 - 11:40 | 4375203 Imminent Crucible
Imminent Crucible's picture

Krasting's first error is "wealth isn't taxed, but income is, so the solution is to tax wealth too."

Um, no.  The solution is to tax neither. Both Washington and Jefferson would have put a musket-ball into the current wage-taxers.  The founding fathers specifically outlawed a tax on wages because it would "reduce the working tradesmen to slavery".  As it has.

Limited taxes on consumption and interstate/international trade should be all the revenue the government needs or gets.  "But...but...we couldn't have much of a government with no more revenue than that would provide!"   Exactly so.  No more fat Congressional pensions, no more Fed, no more fat lazy govt workers unions, no more worthless welfare classes on either Wall Street or the Bronx, no more useless wars and secret deals with narco cartels.

In short, NO MORE EMPIRE.  Step #1: Drop out of the formal economy, use their debt-money as little as possible, provide for your own needs without supporting the bloated hoards of zombies.  The train wreck is imminent; get as far from the tracks as you can.

Tue, 01/28/2014 - 13:38 | 4375754 F em all but 6
F em all but 6's picture

The income tax is NOT a tax on the wage. That would be a direct tax on property. within the context of the Social Security Act, the tax or witholding taken out of what you earn is an indirect excise or privilege tax. It uses the WAGE as a unit of measurement to calculate the (indirect) tax.

SIDE NOTE: Before the SS Act, "INCOME" was defined by the courts as profit and gain. Within the context of the SS ACT, INCOME is whatever Congress says it is. Wage income, gift income, barter income, ect.

 

As for the system that allows this. If you have an SS# then you have volunteeered into the system. You had to make application for the number which made you entitled to extraordinary protections paid for with money from the publics treasury. THAT is the basis of the privilege to be taxed and once the wage is the proper object of an excise, NO LIMITS can be imposed by the judiciary.

When you applied for the privilege, YOU WAIVED constitutional/judicial protections of Contract and Property in exchange for what is provided within the terms of the Privilege. Apparently, as all Amerikans found out, the scope of those privileges can be expanded  along with the excises needed to pay for it all.

Wed, 01/29/2014 - 04:41 | 4378916 artless
artless's picture

@ F em all

Wow. There's stupid as I noted above and then there's this inane shit. In case you forgot I had NO CHOICE IN THE MATTER. I was a fucking infant when I got my serial number. Try to do anything without it. And what exactly are these priviledges? That I get to fund the Free Shit Army and the shit for brains WWII generation's retirement in FL after they allowed this shit to happen?

Acting outside the SS (a wholly uncosntitutional law) will just end having guns pointed at them and their property confiscated. While I continue to move in that direction it is not feesible for me just yet. If you have found a way to do so the good for you. I still am stuck with the serial number-for now.

 

Tue, 01/28/2014 - 15:28 | 4376282 kaiserhoff
kaiserhoff's picture

and everything Dear Adolf did was legal too.

Your point is that the constitution is easily gutted for fun and profit?

We see that every day.

 

Tue, 01/28/2014 - 15:36 | 4376422 tip e. canoe
tip e. canoe's picture

i think his point is that we have all consented to our own enslavement by not being wise to the fine print.

Tue, 01/28/2014 - 13:33 | 4375735 atomicwasted
atomicwasted's picture

I agree with you.  I do point out that the Constitution prohibits taxes on interstate commerce, which when you think about it is for the best in terms of having one country.

Tue, 01/28/2014 - 11:38 | 4375194 Lumberjack
Lumberjack's picture

Every time he says "climate change or renewable energy" (think carbon tax) drink a shot filled with your favorite libation with a minuture iceberg floating in it!

Tue, 01/28/2014 - 11:28 | 4375127 ChanceIs
ChanceIs's picture

Bruce,

Am way dissapointed with you.  To be honest, I don't know what "tax" is.  Is it the net of one's intercourse with the government?  If one pays $100 in income tax and gets $800 for a cash for clunker, isn't he net positive $700 "tax wise?"

Two places in the Constitution and Bill of Rights refer to "equal tax."  If someone with gross income of $100K pays $10K in tax and the other in the cash for clunker deal receives $700, do we call this equal tax?

I don't care aabout the case above.  I would argue that tax includes any move by the government which results in an economic transfer.  Hence I would call Quantitative Easing a massive income transfer from granny on her CDs to bond and stockholders of the TBTFs.  I would call that a tax on granny and a "cash for clunker" for the foul enablers of the banks.

The problem isn't our tax code.  The effect of that is in the noise.  The problem lies in the government trying to pick winners and losers - and the ignorance and apathy of the population which tolerates it.

Tue, 01/28/2014 - 15:29 | 4376364 Oracle of Kypseli
Oracle of Kypseli's picture

Comment withdrawn

 

Tue, 01/28/2014 - 12:56 | 4375552 orez65
orez65's picture

"... and the ignorance and apathy of the population which tolerates it."

As left wing loney comedian Bill Maher said: "The only exceptional thing about Americans is their stupidity"

I arrived at the same conclusion but from the right.

But it is an stupidity based on generosity and naivety, not moronic 

For us that have had to struggled to survive it is incomprehensible that they have done well for so long. 

In general, the American population is well educated and yet they don't have a clue about the meaning of money.

They trust their Government officials!!! Deep in their hearts they love their mutated form of Government.

Consequently they are being robbed of their wealth and liberty in plain sight.

Wake up America, you are the collateral for the dollars being printed by the Federal Reserve.

Your liberty has ended. The United States has been transformed into a giant Gitmo. You complained about the prisoners there being denied Habeas Corpus and you allowed the Military Defense Authorization Law to deny all Americans Habeas Corpus!

A sad day for America because of your stupidity!!

Tue, 01/28/2014 - 11:18 | 4375091 Mi Naem
Mi Naem's picture

"And tonight, when O does call for higher taxes on the rich, half of the congressmen will stand and applaud." 

Need to get a screen capture on that so that they can later be standing for the firing squads. 

Tue, 01/28/2014 - 13:39 | 4375773 atomicwasted
atomicwasted's picture

Then you'll also want to screen cap the Perkins thread for ZHers with the identical opinion.

Tue, 01/28/2014 - 11:16 | 4375082 Azannoth
Azannoth's picture

Problem is the 99% are far from a homegeneous group, there are the takers and the makers more or less evenly split at 49% each, with the makers still having to care for dependants and pay taxes ofc.

So this is not really a fight between the 1% and 99% its between the 1%+takers(49%) against the tax paying MINORITY

Tue, 01/28/2014 - 11:13 | 4375063 squid427
squid427's picture

So is Bruce a proponent of wealth tax as well as income tax?

Tue, 01/28/2014 - 11:32 | 4375158 kaiserhoff
kaiserhoff's picture

Bruce always thinks the government needs more money.

I think the government is like Jackie Onassis.

"There is no amount of money in the known universe, that she couldn't spend, and still feel unfulfilled."

  True of Jackie, my ex-wife, and all known governments.

Tue, 01/28/2014 - 15:25 | 4376360 disabledvet
disabledvet's picture

what happened with the ACA again? This is not the fault of taxpayers.

I think "the folks" really are gonna be upset with what Government is doing with all that money.

I do think comparing a "war on billionaires" with Kristalnaacht is truly disgusting.

was it billionaires that were on the front lines liberating concentration camps?

totally fits in the age in which we live I'm afraid.

"Government is but an abstraction."

Tue, 01/28/2014 - 20:49 | 4377633 New_Meat
New_Meat's picture

dv:

"I do think comparing a "war on billionaires" with Kristalnaacht is truly disgusting."

How about a manufactured thang?

You are disabled, how is your digestion?  Just wonderin'

Worth your while to look over "Operation  Hummingbird" and its intent and outcomes.

Might also be worth your looking into the supporters of the so-called "OWS" movement, see how the Canadian influence and the U.S. so-called PR organizations were involved.

- Ned

Tue, 01/28/2014 - 11:29 | 4375135 Hedgetard55
Hedgetard55's picture

Dude, where have you been? Haven't you ever eread any of his previous posts? Lefturd all the way.

Tue, 01/28/2014 - 10:56 | 4374974 Blano
Blano's picture

You think "God" is going to be part of the word cloud?

Hahahahahahahaha!!!  Good one.

Tue, 01/28/2014 - 11:26 | 4375132 Hedgetard55
Hedgetard55's picture

Where were "me", "my", "I", "myself" and "let me be perfecty clear" in that word cloud???

Tue, 01/28/2014 - 20:41 | 4377606 New_Meat
New_Meat's picture

obviously stripped out, 'cuz if they were in, they would be in countless drinking games.  And therefore, most of the working folks/taxpayers would be knocked out within the first 20 minutes of the show.

Then, tomorrow, the GDP would get slashed as all of the hangovers hit ;-)

- Ned

Tue, 01/28/2014 - 11:15 | 4375074 whatsinaname
whatsinaname's picture

whatever happened to Nat Gas it was to fuel the recovery ?

Tue, 01/28/2014 - 20:37 | 4377596 New_Meat
New_Meat's picture

Carbon, when it is combusted, becomes C02, the most evilist gas in the world, colorless, tasteless, odourless, plant food, the more of which gives green plants more food.

a) it would fuel an actual economic recovery (can't have that) and,

b) it would warm peoples' houses at a non-.gov controlled manner.

can't have neither of these situations goin' on.

- Ned

Tue, 01/28/2014 - 11:15 | 4375073 Bruce Krasting
Bruce Krasting's picture

I made up a Wordle of things that I think O will say. One of them was "God Bless America".

I'm certain he will say these words in his closing sentence.

b

Tue, 01/28/2014 - 15:32 | 4376396 tip e. canoe
tip e. canoe's picture

you forgot "9/11" ;~)

will be fun to compare yours with the actual.

Tue, 01/28/2014 - 12:40 | 4375473 the grateful un...
the grateful unemployed's picture

side bet he says ENEMIES-OF-AMERICA before he says GBA

Tue, 01/28/2014 - 11:22 | 4375053 kaiserhoff
kaiserhoff's picture

Bruce must have meant "Allah".

I would love to see an honest journalist take that lying fool apart.  A few of my favorite questions.

1 Why are your Occidental transcripts the biggest secret in the world?

2 Are you gay?

3 Where did the fraudulent birth certificate come from?

4 Where were you born?

5 Why does no one remember you at Columbia, of all places?

6 Is Mossad blackmailing you?  Using what?

7 Have you ever done an honest day's work?

8 Who yo daddy be?

9 Was your mother bat shit crazy?  Is there a shred of evidence to the contrary?

10  Do you hate America?  How about the Wookie?

 

Tue, 01/28/2014 - 11:29 | 4375146 y3maxx
y3maxx's picture

...+10 for Comic relief Kaiserhoff....and throw Political correctness out the window one time. ...and speaking of Political Correctness, Dr. Ben Carson for President speaks on Crooked Lawyers, Education and Political Correctness... http://www.youtube.com/watch?v=PFb6NU1giRA

Tue, 01/28/2014 - 10:51 | 4374945 johnnyarrowmaker
johnnyarrowmaker's picture

Social engineering - good description of EXACTLY what is going on.

Social engineering by the 1% ers, with the 99% footing the bill.  They have the money, the media, and the mentality - they believe they are right.

Psycopaths, the lot of them.

Tue, 01/28/2014 - 10:49 | 4374940 kaiserhoff
kaiserhoff's picture

So, Bruce finally comes out of the closet as a card carrying Commie and goes full retard in the same post.  WTF?

Third grade math, Bruce.  The number of people in the top 1% can only change as a function of the total population.

Listen to the accountants, not the eCONomists.  Stealing everyone's savings will make zero difference.  The federal debt is not 17 Trillion.  It is somewhere north of 170 Trillion.  How will your bat shit, thieving, parasite commie taxes impact that?

 

Tue, 01/28/2014 - 12:46 | 4375493 ConfederateH
ConfederateH's picture

I too would expect Bruce Krasting to be at least minimally aware of what the consequences of his marxist wealth tax would be.  The middle class were sold the income tax by Wilson and the New England progressives like Krasting on the premise that only the top 1% would pay.  Now all those 1% pay fancy revolving door tax lawyers and lobbyists to protect their income from taxes, while the middle class end up paying for the 50% parasites that never pay any income taxes as well as the 20% government workers that pay their taxes with stolen loot.

So what would happen if there was a wealth tax?  Well the parasites would get zero-savings wealth-tax credits just as they they get zero-work income tax credits.  Soros, Buffet, Gates would escape without ever being tied to their foundational and trust wealth.

But the remaining slice of middle class, what happens to them?  Well they get the IRS inspecting all their property down to PM's, guns and even canned goods.  Count in any real estate and financial wealth as well.  Life insurance policies and automobiles as well.  All reported anually with draconian penalties, prison, felony convictions and the loss of the right to bear arms.

Thank you so much for thinking of us Brucey boy.  And Fuck You Too.

Tue, 01/28/2014 - 10:46 | 4374926 ISEEIT
ISEEIT's picture

Social engineering is never going to reduce societies ills. Corruption is a feature of our species and the only way to fairly contend with that is by strictly and universally limiting opportunity to abuse power.

In other words, DE-consolidate.....

Won't happen till after the collapse, if then.

Tue, 01/28/2014 - 10:44 | 4374919 LawsofPhysics
LawsofPhysics's picture

Fucking paper-pushing shill.  Better take that last chart back to 1945 if you think the top 1% have it so bad.

Tue, 01/28/2014 - 14:36 | 4376051 Ned Zeppelin
Ned Zeppelin's picture

Take it back to the end of WWII and then bring it forward and Bruce's curious "pity the rich" theme today evaporates.

Obama is a lame duck - doesn't matter what he says.

Do NOT follow this link or you will be banned from the site!