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Guest Post: Should The Rich Pay More Taxes?
Submitted by Azizonomics
Should The Rich Pay More Taxes?
It’s a multi-dimensional question.
The left says yes — income inequality has soared in recent years, and the way to address it (supposedly) is to tax the rich and capital gains at a higher rate. The right says no — that the rich already create more jobs and wealth, because they spend more money, and why (supposedly) should they pay more tax when they already pay far higher figures than lower-income workers?
Paul Krugman made the point yesterday that the tax rate on the top earners during the post-war boom was 91%, seeming to infer that a return to such rates would be good for the economy.
Yet if we want to raise more revenue, historically it doesn’t really seem to matter what the top tax rate is:
Federal revenues have hovered close to 20% of GDP whatever the tax rate on the richest few.
This seems to be because of what is known as the Laffer-Khaldun effect: the higher rates go, the more incentive for tax avoidance and tax evasion.
And while income inequality has risen in recent years, the top-earners share of tax revenue has risen in step:
So the richest 1% are already contributing around 40% of the tax revenue, taxed on their 34% share of the national income. And even if the Treasury collected every cent the top 1% earned, America would still be running huge deficits.
Yet the Occupy movement are still angry. A large majority of Americans believe the richest should pay more tax. More and more wealthy Americans — starting with Warren Buffett, and most recently Stephen King are demanding to pay more taxes.
King writes:
At a rally in Florida (to support collective bargaining and to express the socialist view that firing teachers with experience was sort of a bad idea), I pointed out that I was paying taxes of roughly 28 percent on my income. My question was, “How come I’m not paying 50?”
How come? Well, the data shows pretty clearly that it’s unlikely that revenues would increase.
They may have a fair point that capital gains above a certain threshold should probably be taxed at the same rate as income, because it is effectively the same thing. And why should government policy encourage investment above labour by taxing one more leniently?
But more simply, people like King think the status quo is unjust far beyond the taxation structure. A lot of people are unemployed:
A lot of people are earning less than they were five years ago:
28% of homeowners are underwater on their mortgages. Millions of graduates face a mountain of student debt, while stuck in dole queues or in a dead end job like Starbucks.
We live in dark times.
From Reuters:
Nearly 15 percent of people worldwide believe the world will end during their lifetime and 10 percent think the Mayan calendar could signify it will happen in 2012, according to a new poll.
With all this hurt, there’s a lot of anger in society. Those calling for taxing the richest more are not doing the same cost-benefit analysis I am doing that suggests that raising taxes won’t raise more revenue.
But they’re not unfairly looking for a scapegoat, either. While probably the greatest culprits for the problems of recent are in government (Bush, Greenspan, Obama, Bernanke) Americans are right to be mad at the rich.
Why?
This isn’t about tax. This is about jobs, and growth.
The rich, above and beyond any other group have the ability to ameliorate the economic malaise by spending and creating jobs, creating new products and new wealth. The top 1% control 42% of all financial wealth. But that money isn’t moving very much at all— the velocity of money is at historic lows. It should not be surprising that growth remains depressed and unemployment remains stubbornly high.
And every month that unemployment remains elevated is another month that the job creators are not doing their job. Every month that the malaise festers, the angrier the 99% gets. It is, I think, in the best interests of the rich to try and create as many jobs and as much wealth as they can. Class warfare is ugly. A divided and angry society, I think, will find it even more difficult to grow and produce.
So raising tax rates is not guaranteed to raise revenues, and cannot address the problem of deficits. America needs the richest Americans to pay more tax dollars — but only as a side-effect of producing more, and creating growth.
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Since "we are all created equal", everyone should be treated equally. This is the ultimate "FAIR". FAIR means everyone is treated EQUALLY. So everyone should pay a base/minimum tax to each taxing authority (Fed, state, local), no exceptions EXCEPT those with genuine non-self-inflicted disabilities that prevents them from making a living. Every able person should contribute equally. And NO ONE should pay more than the base/minimum tax, otherwise is a VIOLATION OF EQUAL, VIOLATION OF FAIR. THEN AND ONLY THEN should govts structure their spending based on ONLY THEIR INCOME FROM THE BASE TAX COLLECTED. OUTLAWED should be govt spending more than their base tax income. This is the ultimate FAIR system. Anything other than this is an UNFAIR SYSTEM where one or more people are taking advantage of (ie, fucking over) some other people.
Yes, the tax code can then be written on one page. Send the taxing authority (treasury dept) a one-time check on April 15th. No paycheck deducition, no tax lawyers, no IRS, no tax accountants - wipes out an entire parasitic empire instantly.
We WERE all created equal - but inheritance means we are no longer BORN equal.
This author is going back to the old 'trickle down' bollox of Capitalist theory.
The truth is, it's always been about property and property rights - as Proudhon pointed out - the day a man put a fence around a piece of land and declared it his was the start of the decline of humanity.
Nobody has rights to property as it's derived from natural resources - which are shared
Until someone meets God and he confirms ownership - then I'm afraid this tragic story will never end. Wars will be fought over property and people will die over property - property which is not owned by either party.
Until we have a system where private property is not sanctioned by law - but sanctioned by USE - then we will continue to have the fractious and violent world we live in.
Nobody has rights to property as it's derived from natural resources - which are shared
You have just quoted the singular, overriding objective of Marxism, and ascribed it as a flaw in the capitalist construct. You are lost beyond repair.
Private property rights - the ability to have autonomy over the disposition of one's labor and its returns - is the core of liberty.
Mayhem you are missing the point. We can now go take everything we want from Writingsonthewall because he/she doesn't own it (home/car/ipad/iphone/clothes).
The very second property rights are eliminated the people with power will take what you claim they can't have.
I'll add just ask the Native Americans how laughing at the Europeans for believing they can own the land worked out.
All I inherited was my,brutally handsome visage,but I don't envy anybody anything.Why do you?
I really haven't gotten anything from my parents and I hope they live for many more years. By the time inheritance comes into play for most us we have either made it or will blow what is given to us in a flash of green.
Absolutely. And every one should be paid the same for the same reason.
US citizenism at its best.
AnAnonymous said:
Ah, but that concept came from Chairman Mow's Little Red Joke Book.
Cannot understand why Chinese citizenism not wanting the credit to take for such Great Leap Forward.
Face savery, perhaps?
Or maybe chronology?
US citizenism is 1776.
That chinese citizenism fantasy is what? 2011? 2012?
But hey, fantasy is fantasy. And in a fantasy, chronology does not have to exist. Your fantasy, your call.
AnAnonymous said:
...or is it? Explain again Chinese citizenism theory of time-traveling Ben Franklinism sinking Easter Island in the days before 1776,July,4th.
Yes, you see, difficult for Chinese citizenism citizen to discern even what present year is being. With Chinese citizenism chronology warping, time runs in circles like a tiger chasing own tail.
So says the Great Leap Forward of Chinese citizenism scientificationism. Future and past mingle together, like when rain runoff from roadside poo dropping mingles with water of Yellow River, making it Brown River.
Much celebrated.
That you, Karl?
Fair treatment never yield equal outcomes. A fairly officiated game results in a winner and a loser. Get that concept through your head and try again. What you espouse is NOT fair and disincentivizes people from pursuing more productive labor.
WRONG! Fair and equal means taxman takes $1 from you, $1 from me, $1 from next guy, so on - without any questions asked. $1 = $1 = $1. You need to brush up on your math and your dictionary skills. Each individual is FREE TO PURSUE OBTAINING AS MUCH WEALTH AS DESIRED WITHOUT SOME OTHER MOTHERFUCKER STEPPING IN AND TAKING IT AWAY JUST BECAUSE THEY WANT TO FOR NO EARNED REASON. What DISINCENTIVIZES PEOPLE YOU BONEHEAD IS AN UNFAIR TAX SYSTEM IN WHICH THE MORE WEALTH YOU ACQUIRE THE MORE YOU ARE TAXED BY PEOPLE WHO DID ABSOLUTELY FUCKING NOTHING NOTHING NOTHING TO EARN EARN EARN IT YOU IDIOT.
SF,
Gotta pull a mia culpa here. I read the first few lines of your post and mistranslated your "fair" as being socialist, but never read through. My bad - regrets for the dagger throw, but appreciate your retort. I think we're on the same side of the fence here.
Cool - Then I take back the idoit and bonehead charge. I'm as anti-socialism as they come. I was taking 'their' (socialist) lingo and turning it against them - which pisses them off. Another favorite of mine is to call them 'terrorists'. I'm all about hard work, making as much money as you can, and keeping it since you earned it - the govt earns very little of it, or at least shold earn very little of it. The govt needs to be A LOT SMALLER than it is. It needs to DO A LOT LESS than it is now. Turn back over to the PRIVATE SECTOR: ALL EDUCATION, ALL HEALTH CARE, ALL WELFARE VIA CHURCH, RED CROSS, AND LIKEWISE PRIVATE CHARITABLE ORGANIZATIONS WHICH I WOULD GLADY DONATE LARGE SUMS OF MONEY TO IF I WAS FILTHY RICH, ETC. So much of what the govt does can be done much much much better by the private sector, which is why we keep on a downward slope - govt growing bigger taking over more stuff and fucking it up. Hence, the $40,000 Volt.
Carry on, Sir.
And another thing, yes, there wil be losers. That's life buddie. Work hard and do good to win. In a fairly officiated game, each player gets a FAIR CHANCE to compete and win as much as they can fairly. To the victor goes the spoils. If you aren't better then tough shit. Work hard to get better and win. THAT'S WHAT MAKES FOR A THRIVING SOCIETY - COMPETITION. Karl hates competition and wants everyone to be the same no matter how hard of a worker they are, or how lazy they are. Karl wants the highly motivated people to be forced to have the same rewards/spoils as the lowly motivated people (ie, lazy-ass motherfuckers).
But, but they taught me in school that everyone is a winner!
Fair chance? fairly officiated game? Aint it the result of the professional sports rigged scene, in which, among things, competitors get paid to participate?
The ability of US citizens to dismiss the immediate reality at hand is somehow something to behold.
.
The ability of Chinese citizenism citizens to dismiss the contents of bowels on roadside and wiping with bare hand, if wiping at all, is somehow something gargantuous smelly to behold.
Income tax is an emblem of slavery. Should the "rich" pay more taxes? They don't pay taxes now. No one does. Taxes are extracted at the point of a gun. Where the fuck do you get off putting up this question for debate as if it's a valid issue? Fuck off and die.
Income tax is an emblem of slavery.
______________________________________
Even better, it is the emblem of slavery.
Forget about the story of pride of US citizen tax payers funding their government state society to crush and enslave stateless stories.
They are just disturbing stories.Nothing more.
Welfare recipients are the new slave owners.
AnAnonymous said:
Yes, sure, better to hear glorious tale of how patriotic Peoples Liberation Citizenism Army rescued Tibetans from lifes of peace and prosperity with defeating evil Tibetan Yeti monsters by trained chicken chunks under sublime guidance of General Tso.
A prideful aspect of genuine Chinese citizenism history, to be sure.
Life of peace and prosperity?
That is something. Torture, children abduction, slavery...
An analysis typical to US citizenism though. As expected from a US citizen.
AnAnonymous said:
Yes, that is something, the something of life in Tibet under forced Chinese citizenism. That Tibetans would now to prefer living among the Yeti monsters is somehow very something.
A denial and offuscation typical to Chinese citizenism though. As expected from a Chinese citizenism citizen, since self indiction does not exist in Chinese citizenism.
Just more face savery offuscation and denial.
Forget the rich for one moment. It would be nice if companies like GE or Goldman Sachs actually paid or didn't get huge payments from the UST. Better yet, let's dispense with the ludicrous idea that corporations are anything but a pass through and that these same corporations have individual rights. Then, let's adopt a flat tax on everyone and end all government welfare, corporate or otherwise.
Forget the rich for one moment.
_____________________________
Forever. And forget the recipe of the US of A success too.
It is better for fantasy to thrive.
.
Ah, ah, fantasy best thrives in native fantasy environment, that being Chinese citizenism.
Fantasy thriving into fantasy. You might be on something, send a script to Hollywood.
AnAnonymous said:
Made me laugh. Hollywood interest not being in weirdo Chinese citizenism fantasy.
Self thriving fantasy of Chinese citizenism too bizarre even for strange Hollywood standards.
Now documentary film about Chinese citizenism roadside crapping? Maybe...
problem is not whether the riches are paying enough tax ... the problem is why the riches are getting richer and poor getting poorer. The government, supposedly elected by the people for the people, is in fact elected by the riches and for the riches. Until political system change nothing will ever change.
The tax code is completely broken. All this noise about taxing the rich is a side show. It is something that can be used to political advantage (by both sides) without overly disturbing the status quo.
So the prevailing wisdom is "don't tax the wealthy because they just evade or avoid paying"? Jamie Dimon couldn't have put it better himself.
We should be asking ourselves if it is even possible to balance the budget, or even reduce the deficit? Will the Federal Reserve and the US government just increase the debt anyway, to exactly the amount of debt they need to keep the ponzi scheme going?
And we should understand there is still a push for austerity measures which will have a negative effect on everyone but the rich. So maybe we shouldn't increase taxes on the wealthy, but they better not reduce the benefits for everyone else. If they do, it shows where their loyalties lie.
If Krugman thinks the rich were paying 90%+ in the 50s right in the middle of the Cold War, the Red Scare, I've got a bridge to sell him.
I agree. Even though people like to trot out that figure one could find out how accurate it is by totalling up the tax revenue from that time of supposed 90% tax and then divide by the amount of tax payers to see how many actually paid that. I don't think the people that use that 90% "fact" will be happy with the resulting actual facts.
Boy, you had me going there. I thought, hey this guy is on to something. But then this:
"The rich, above and beyond any other group have the ability to ameliorate the economic malaise by spending and creating jobs, creating new products and new wealth. The top 1% control 42% of all financial wealth. But that money isn’t moving very much at all— the velocity of money is at historic lows. It should not be surprising that growth remains depressed and unemployment remains stubbornly high."
While the rich do have money, and I definitely believe there is crony capitalism and its impact on the natural 'market' is what we are living with now, the 'rich' are not obliged in either a capitalistic system or this country, to part with their wealth for the good of the nation. If they feel that an investment at this time is not going to be something they will be able to recover through the course of business, they are not obliged to plan for and accept a loss.
The correct answer is that A) we need to get Obama and his ilk out of office (republican or democrat), b) we have to provide significant punishment to people who break laws, people like Obama, Sharpton, or OJ Simpson or Holder, Bush Or Geithner...just because they have money or fame, c) eliminate ALL subsidies, d) eliminate all earmarks and pet projects for senators. e) eliminate the fed or at least sit on it, thrown Bernanke in jail for the corruption. I say WE because we have to impose our will on these f**king bitches and bastards who think they are above the law. We have to all scream.
Since this won't happen, we might as well hand it all over to the communists and facsits and mooslims in our midst. We're all f**ked anyway.
Otherwise, good statistics and why taxing the rich will fail and probably kill what's left of industry in this country.
Taxes aren't just about raising revenue, folks. Many really bad people have been finally nailed by the taxman after other law enforcement means failed.
It is a really perverse system we have where self-employed bear a bigger tax burden and get nailed for back state and federal taxes far more often than the corporate tax cheats.
http://www.quatloos.com/Q-Forum/viewtopic.php?f=12&t=8366
There used to be a thing called "Noble Obligation" in which the nobility, the landed ones, had an obligation to provide for those less fortunate. Noblesse Oblige was the obligation to provide opportunities for the serfs and their families to take advantage of.
Today, the Rich are obsessed with getting richer and buying toys, the likes of which the average person can only dream of seeing, much less owning. They consider themselves the privledged few, their every whim to be catered to and their needs superseed all others, except someone with more money.
It is this arrogance that has built resentment. Instead of building things here, they took jobs overseas where they could be done cheaper and provide more money for the rich. Instead of concerns about the environment, they abandoned it to pillage and plunder other lands where the rules were non-existant, so they could get more money. They embraced Globalism not for the benefits it could provide mankind, but for the riches it could bestown upon them.
The Rich do not care about the poor, huddled masses, yearning to provide for themselves. They rail instead against the leeches that have made not just a lifetime, but several generations of living on the government teats, working the system so they don't have to labor. Instead of widows and orphans being provided for, we provide for the obese, the lazy and the criminal. Laws are also applied differently depending on how Rich you are and who you know.
The arrogance breeds resentment. Carnagie at least built libraries, spreading knowledge. Ford built cars to allow us mobility. Gates gives millions for research. There are those who are rich who work to better humanity, but there are many more who could care less about the "average man".
That was pre-1913. Today Ford and Carnagie would do the same thing as the oligarchs that run Apple.
As someone who is firmly in the top tax bracket, I am absolutely certain that most of the rich pay a much lower rate that the average guy. This is wrong. Although the tax rates appear to be progressive, our current tax system is totally regressive. This is basically what Warren Buffet is talking about.
There is a simple reason for this: Looholes. And the biggest is Capital Gains. Rich people have flexibility and can often arrange for their income in the form of capital gains instead of ordinary income. The tax rate on capital gains is 15%. This is such an obvious Trojan horse its amazing the American people haven't figured it out.
THIS LAW EXISTS SO RICH PEOPLE CAN PAY LESS TAXES, PERIOD.
Trust me on this. Holding an investment for one year is not a long term investment. Any investment that is worthwhile is worth paying the taxes on.
Get rid of this simple loophole, and the whole thing immediately becomes vastly more fair. With this simple change even a flat tax would be much fairer than what we have now. It's not progressive, but it’s not regressive either.
There is another boondoggle tax law we can get rid of: deductible losses. Why on earth should we subsidize stupid investment decisions? Answer: we shouldn't. Your earn it, you pay taxes on it, you loose it all? Too bad.
This law comes out of the strange confusion between individuals and corporations. Let me help you: People aren't Corporations.
Corporations pay taxes on their income (profit) not their revenue. Effectively, individuals pay taxes on their revenue. This law kind of pretends that rich people who invest are corporations, and so losses should be deducted from their taxable income. Nonsense. The idea is that it promotes investment in riskier ventures. But in my experience it only promotes stupid investments, not risky ones. If an investment is a good one, it’s worth paying taxes on it.
Finally, the big issue with corporations is that their owners and executives can receive lots of very nice services, trips and gifts etc. which are treated as business expenses to the corporation. We need a perquisite tax: anything of value that transfers from a corporation to a human being is taxed as income. This includes salaries, dividends, stock options, royalties, dinners for customers or employees, travel, hotels cars boats planes ... EVERYTHING. Of course, the corporation will pay most of this tax, not the person to who it gets the service, but that's OK. Obviously, a corp. doesn't want its customers paying tax on a dinner the corp. treats them to, so the corp. just pays the tax. Apart this one perquisite tax, corporations would not have to pay any income tax. That's because everything else they do with money (hire people, build factories, make deals) is beneficial to the economy. A corporation cannot drink a $2000 bottle of wine, only a person can do that, and that should be taxed.
I have absolutely no problem with rich people. Sure, they spend some of their money on stupid indulgences, but most of it gets reinvested into society as pure capital. And that is the best kind of investment because its not debt, it’s real money. Without rich people (savers/investors) everything would be funded with debt.
On the other hand people only get rich because the society makes it easy. We subsidize all kinds business activities and development, which makes getting rich much easier. Bill Gates employs 80,000 people most of whom make very good use of their college degrees in making Microsoft successful. How much tax money went into subsidizing those 80,000 educations from K-12, to college to graduate school? Electricity, sewage, water, roads are all subsidized, and benefit Microsoft. In other words, Bill Gates really should pay his fair share of taxes. But his dividends are taxed at 15%, and every time he sells stock it’s a capital gain for another 15%. Hello?
So I have three simple ideas that reward intelligent behavior and make taxes fairer. Our stupid tax laws were put in with (mostly) good intensions, but the unintended consequences have bitten us in the butt.
My ex and I had a combined income in 1985 and again in 86 of 168,000, he claimed me since my exemption was worth more than my income and even then his accountant got him out of all federal income tax. ZERO, nothing, not a dime. I am sick to death of those that think the wealthy pay too much in taxes, what we need is a flat rate of 25% on ALL income no matter the source, no exemptions no deductions. Fill out a postcard with three lines, HOW MUCH WAS YOUR INCOME, MUTIPLY BY .25 = TAX DUE. And I refuse to pay income tax until what I pay is fairly matched by those that get the vast majority of benefits from our society with the least relative pain.
25%!
Egads. That's way too high! they'll still have money left over for useless social programs. I say 10% (like tithing) is fair for the services that the government is Constitutionally bound to provide. Anything else will be wasted. And, they must balance the budget. No deficits - ever. They need to learn to live within their (well, our) means. Period.
Geesh, 25%? Wow. Why not just make it 50% and let them feed, clothe and house us too?
Sorry, provide reasons for your conclusions or provide nothing at all here, it is not enough to say you just don't like what I posted. You don't like 25% is that it? But you do like having your turds go down a pipe where you never have to think about them, and you do like clean water from your tap? You like paved roads? You like that schools are open and kids learn or at least are taken care of while you work right? That there are cops to mess with the bad guys, courts to put them in prison, prisons to protect you and your property and family? That air traffic functions as it should, and the borders are as secure as we can make them? That street lights work, traffic signals work, and the road department fixes at least the worst of the holes.
Guess what, it takes more than 25% of GDP to provide basic services such as these and not because government is some huge ogre that wants to run your life, it is because flawed and failed capitalism cannot and will not provide for such basic services at a price average men can pay. I do not know about you but if our favorite capitalist corporations are the example I for one will not settle for them providing prison services, water, sewers, courts, schools, sidewalks, air travel, ports, healthcare, or anything else. Private capitalism is so corrupt it makes government look like a cloud covered in angels.
I am a 100% disabled vet, how do you propose private business take care of that? And do not give me bullshit about how I would not be a disabled vet if government were smashed, I am what I am and YOU have to pay and the fact that you do not like that is irrelevant. You are lucky to have got off as easy as you did.
By the way, I would have NO PROBLEM with making it 50%. It would still leave the rich with 50% of their theft and ill gotten gains.
No number you could pick would have magical powers, not the laughably low 10%, not a punishing 90%. 50% actually sounds quite nice. 25% would work too, at the federal level. I have no problem with 70. And I have no interest in the whining of those that do not like it no matter what it is, there will always be children that want to bitch, they have a universal quality, it would not matter what the rate of taxation is they will whine till they die. The demand infrastructure but they REFUSE to pay for it, they want to be defended but they will not fight, they are as addicted to the tit of the government but they will condemn the government because some slut can get an abortion at their expense.
I say that you all can go fuck yourselves. We have what we have because this is what YOU gave us. Maybe YOU should look at what YOU demand before YOU say government should shrink. The USA has the government that is just what her people demand it to be. And because YOU pricks can't be just and fair to all citizens like me then I require the intervention of a very powerful central government to protect my rights. If YOU respected my rights I would not need and support that great expense, but no, YOU have to have special rights denied me. So, again, fuck off and die, 50% it will be.
Too many stupid arguments in this article. The rich CANNOT create wealth and jobs if the government prevents the free market from working. We should be working towards eliminating government altogether because all it does is destroy wealth.
It's not the tax rate for the wealthiest folks is too low, (it isn't); it's that only the minority of them actually pay at that rate. The majority have used their wealth and influence to create loopholes legal deductions to shield their incomes from taxation. This is why many of us prefer a true "flat tax". But we are dreaming if we think that a truly fair tax system could ever be devised.
The problem really isn't the income tax, it is tax shelters and capital gains rates. Why is earned income taxed at a much higher rate than capital gains? Investment income isn't earned through labor, so it should be seen as a windfall, not as income earned.
Tax capital gains at 90% and you'd see the bullshit IPO market vanish. Overnight equities would drop to real values. The pump and dump insider share grants would vanish and corporations would actually need to produce something of value to make management rich.
The problem is plain and simply the stock markets. By rewarding fraud with millions of dollars the incentive to actually create a self sufficient economy isn't there. Why work for a living when you can just scam the investment market and walk away paying 1/4 the ammount of tax you would if it was earned income.
Adr, exactly talking about icome taxes should be irrelevent; unless its about lowering taxes on middle SES who dont suck.down social services... it is and will always be about death taxes and wealth!
While we are talking about election campaign rhetoric-
Obama's new slogan:
"At Green Shitter we Measure Success one Food Stamp at a Time."
Why would the "rich" employ anyone that partakes in or sympathises with OWS. Screw the dirty hippies. You want to yell and scream about how much the rich suck - welcome to lifetime unemployment. At least till one of you becomes the next Steve Jobs. Then they can hire all you dead beats.
Ya know, this morning I heard two ultra-airhead females (if they were guys I would refer to them as vagina girls, but these two idiots weren't intellectually capable of locating their own vaginas) on some moronic NPR show (The Takeaway, and I wish they were gone) discussing this.
The hedge fund airhead stated:
"Profits, as a percentage of the GDP, are at an all-time high."
"While wages, as a percentage of the GDP, are an an all-time low."
Duuuuuuh.....those profits, though, are based upon the packaging, and endless repackaging, of debt: the fantasy finance sector.
Also, profits are at an all-time high precisely because wages are at an all-time low --- due to decades of labor arbitrage (offshoring of jobs, importing of foreign scab workers) resulting in labor deflation.
Evidently neither of those two airheads, like Paul Krugman, can't do arithmetic ---- it's just toooooo haarrrrd for them....
The problem is a system that allows some dumbass to pay 119.9 million for a 1895 pastel piece of art and where the auction company made 12.9 million in commission for 12 minutes of work.
The process that creates this wealth in so few hands is what revolutions are made of.
Obscene examples of wealth should not be held in high regard but shamed for not using wealth in a more productive way. There are thousands of innocent children dying of starvation and sickness EVERY day, yet wealthy people spend 120 million on a piece of art. Lovely just lovely.
"There are thousands of innocent children dying of starvation and sickness EVERY day, yet wealthy people spend 120 million on a piece of art. Lovely just lovely."
So, you want to control how everyone spends their money? What happens when someone decides that you are spending too much on whatever pleasures you indulge in (latte's, hopium, leftist/socialist membership dues, etc.)?
Besides, all of those victims you are bemoaning already get millions of dollars in contributions every year. It is just pilfered by politicians, rebel generals and others that have always exerted their power over those who are unwilling to stand against them (or are unable to).
It's their money, let them waste it as they see fit. Besides, the auction house employs lotsa people and has to pay for insurance, security, facilities, etc. It all rolls down hill to keep some folks employed.
Not quite prick.... don't put words in my mouth. I did not say to take away or tax anyone's money. I said we should not hold such transactions as moral.
If you think 120 million is good to buy art instead of helping others you are a lost soul and God save your soul.
So, suddenly you find that you're paying ten times as much as anyone else for everything. What do you do? History suggests the obvious: don't pay it. Have dinner with one of your friends from another company you do business with and make it a business expense. Buy yourself a company car. Shift from an S to a C corp. The company will pay the legal bill for the move. Use business travel to go to Paris and haul the wife and kids along on freebie tickets with your milage bonus.
The reason nobody cared about the 91% top tax rate is that nobody ever paid it. The wealthy aren't stupid. They didn't become wealthy by paying more than everyone else.
Buffet can get Immelt to take him to dinner on GE, which for some reason doesn't pay any taxes. Does that suggest anything to you folks? Repeat after me, Immelt's company paid NO taxes. Now who's his buddy and has his back, do you suppose?
If you raise the cap gains tax, nobody will sell out a gain and redeploy. They can borrow against the untaxed principle by using margin, and live off of that. They'll be taxed against the depleted amount when they die. But there will be no interest in new investment. Watch what happens to the unemployment rate under these circumstances.
"Taxing the Rich" is just an excuse for politicians to raise everybody's taxes. If you don't believe it, just hold on to your wallet and wait until the Obamacare law is fully implemented.
I am skeptical that we can grow our way out of the debt we have accumulated barring the advent of nearly free energy such as cheap cold fusion, and even if we could grow enough we would have to change how it gets distributed because as it is all increases in new income go to the top 10% or fewer in household wealth. What would be the point of vast new economic growth when only a very few get the rewards and most of you insist that not be taxed? The point of trying to grow your way out of debt is so that you have new tax revenue streams with which to pay debts down, but if you refuse to tax those thta have anything to tax then forget it.
The alternative on the spending side is called austerity and we have all seen how well that works in the eurozone, it doesn't. All they have created is more debt, more unemployment and more social chaos but not solved a single problem.
We could take everything the "rich" have and it wouldn't get us out of the current debt mess. This mess was created by politicians using social programs and government spending to buy votes for their re-election. We don't have a revenue problem, we have a serious spending problem.
Hello, Tyler? Is that really you? I thought this might be a guest post from Ilene (left, mostly).
This is a good observation,
"The rich, above and beyond any other group have the ability to ameliorate the economic malaise by spending and creating jobs, creating new products and new wealth. The top 1% control 42% of all financial wealth. But that money isn’t moving very much at all— the velocity of money is at historic lows. It should not be surprising that growth remains depressed and unemployment remains stubbornly high."
But what, exactly, should they spend their billions on? Caviar? Yachts? Stocks or Bonds? Maybe a high-end sports car or two? How is that gonna pick up our economy? Now, the Fed is doing its level best to make saving that money a losing proposition (ZIRP), and since they are still stubbornly holding on to it, I guess the leftist feel the only way to get that money back into circulation is to snatch it from its rightful owners (in the form of egregious taxes) and distribute it "fairly" and in a manner "that will benefit more people".
Now, I'm not rich, but once they tax the folks above me into the dirt (or force them to expatriate), then it won't belong until you, I, and the rest of us here are "the new rich" and deserve to be taxed at a higher rate.
"But what, exactly, should they spend their billions on?"
According to Keynesians it does not matter - aggregate demand is aggregate demand. However, experience with the stimulus packages show that it does matter what the money is spent on. This is why it did not create any economic growth or jobs.
The author's pseudonym is at the top of the page in italics, just like every other article...
"The author's pseudonym is at the top of the page in italics, just like every other article..."
RIGHT YOU ARE! And I missed that. Sorry Tyler, whewwww! Thought you had been exposed to some second-hand hopium.
Silly me, should read this stuff more carefully...
Sorry.
The rich shouldnt pay more taxes. On normal income no. Capital gains yes... Gordon Gekko: "The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."
What happens in America is that someone who works hard and in many ways contributes more to society then the walmart trust fund kids; this latter person gets taxed to death at 50k... with debt salary, BS mortgage, student loans, atm fees, et al. This person doesnt use the police, 911, unemployment, or disabilty... meanwhile Mit and others hide their wealth and exploit loopholes and pay minimal taxes overall... everbody is happy when we all get a piece of the pay/benefits pie... but to see CEOs lead their companies to failure while getting tax breaks on millions, will cause joe six pack (eventually) to revolt in a bloody mess; especially as the US led by lobbyists continues to gut an already hollowed out economy via globalizatiom; and ships (continualy) infrastructure off to 3rd world countries until we are one... perception is reality; and where most of the world looks like/ appears to be snake eating its tail or parasites killing the host. Until collapse.
Failure to see Obama, Bernke, Romney as nothing more then puppets for the muppets controlled by the elite is utter blindness. It's death taxes vs. Wage slavery. It's perception vs. Reality. Does taxing the rich, change the bottom line, NO; but hiding behind charts and graph when the little guy keeps getting squeezed eventually leads to blood in the streets, which 9 times out of 10 is a bad thing. I see NO frank discussion about this and for obama to pretend and play politics over this makes me sick. Love or hate Ron Paul that nutty ann rand old man, at least he is trying to havelower a real debate over such topics. The US is nothing or rather its simply Rome on the verge of the collapse/ failure of globalization and value based on fictions and CDS... we stabd on the verge of another dark ages; better hoard your ant black plague/ malaria pills. ENJOY! !!
another misleading post. Do you due diligence please
the reason why the tax share of the 1% went up so much is clear. Cf Chart 2
Their share of the US revenue went from 8% in 1980 to 22% in 2007.
and thir share of Federal Tax income double from 19 to 40%.
No sign of inequality here! no one ask for a 90% tax rate, but at least a level above the average 99%.
I love people that want to force the bottom 30 to 20% to pay a same % of tax as the top.
Do you have any idea what it is to live with less than 25K per year like almost 30% of the US population.
And you want them to pay a federal tax of 25%? remember they already pay local tax, sales tax...
http://www.taxfoundation.org/news/show/250.html
It's not the tax rate that caused the gap between rich and poor. It is a combination of things starting with a broken economic system where inflation must exist or the system collapses. Inflation always enriches the rich more than the poor. Stop federal reserve printing and the gap will improve. Nothing removes the gap between rich and poor like an economic downturn, provided it is allowed to work itself out.
Of course, money printing is just a symptom of a deeper problem of citizens thinking that the collective will of the majority trumps the rights of individuals, such as the individuals right to control their own time and the money they earn with it. When to take all that power from individuals and give it to government you create a system suceptible to corruption. All you need is the right spin and a tinge of dishonesty and you can sell people on giving up more freedom and deploy all that power enacting policies that enrich those with the power and will to influence government to their advantage. How many of the ultra rich are going to get even richer taking advntage of the opportunities built into the new healthcare laws?
If you want equality between rich and poor then favor smaller government with much less power to tilt the scales in favor of anyone. Because as long as the power exists to tilt the scales you will have a system that can also use that power to make tile the scales in favor of politicians richest friends. And neither of them will have a vested interest in you or your problems, only in what they can get out of the deal.
Holy Shit! The solution is bleedin' obvious. Don't tax the rich at all. It's worth a go, should send high end retailers through the roof and save the world.
Launch the 1 terabyte iPad! Tax deductible!
How about a flat rate.
And nobody gets to work the situation so that they pay less.
No write-offs, exemptions, or deals...
Azizi, usually your posts are very impressive, interesting and fairly accurate. What's happened?
Azizi, usually your posts are very impressive, interesting and fairly accurate. What's happened?