Relevant and even prescient commentary on news, politics and the economy.

Due Process: Holder vs Colbert. Art or Reality. Choose.

Re-posted from last year is Dan Becker’s post:

Due Process: Holder vs Colbert. Art or Reality. Choose.
This is the object:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury,… nor be deprived of life, liberty, or property, without due process of law;

It’s all one sentence. Any questions?

This is Art:

The lyrics of Grand Funk Railroad’s Paranoid

Did you ever have that feeling in your life

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Ok class, let’s review before the exam (election)

I’m sure you are all feeling kind of blah. You have this final exam for this session and I can tell by your performances on the quizzes that you are still confused. The problem solving portions of the quizzes have been very telling. So lets review.
 
You’re taxes are not too high. It’s your income that is too low! Remember this and you will be able to solve enough of the problems to obtain a passing grade and graduate. And class, no one running today for president gets this. It is why President Obama looked like such a dufus in the debate. Romney took a step to his left… right into Obama’s policy space. Where does one go to gain more space when they have walled up the door to the left of them as President Obama has?
 
Let’s get something real clear from the beginning. Unless you are acquiring the majority of your money from money YOU ARE NOT A CAPITALIST 
 
 
Second: A MARKET IS NOT AN ECONOMY.

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Screw the Clinton tax rates. Lets party like it’s 1936!

 
Update: *Additional numbers added

Digby wrote a few days ago about the“grown-up” people coming to town to save America from the deficit. She listed a few of those people and their annual income.

 
Also, a few days ago the Senate had a vote on the tax cuts. Letting the Bush cuts go (I’m all for it and we can stop the payroll tax cut too as it is all stupid policy when the problem is declining wages/income going to labor) will return us to the Clinton years rates. People have noted just how little such a rise means to those at the top.
 
Well, in keeping with my define rich series and my series looking at the purpose of taxation, I thought wouldn’t it be interesting to see just what these 1%’ers might be paying if we went back to the beginning of the last great period of mass prosperity: 1936.
 
Yes indeedy, I say go for the brass ring. Let’s show our maturity and actually implement the lesson learned from our history, that period from around 1906 to 1932 and then 1936 to 1979.
 
While we’re at it, let us stop pretending that global trade is something new with an unknowable to man exotic force that we just have to accept as part of the expression of our DNA. There is RNA also (look it up).

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Due Process: Holder vs Colbert. Art or Reality. Choose.

This is the object: 

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury,… nor be deprived of life, liberty, or property, without due process of law;
 
It’s all one sentence. Any questions?
 

This is Art:

The lyrics of Grand Funk Railroad’s Paranoid
Did you ever have that feeling in your life
That someone was watching you?
You don’t have no reason that’s right
But still he’s there watching you
Someone is waiting just outside the door
To take you away
Everybody knows just what he’s there for
To take you away
 
vs the lyrics of Red Rider’s Lunatic Fringe 
Lunatic Fringe – in the twilight’s last gleaming
This is open season, but you won’t get too far
‘Cause you got to blame someone for your own confusion
We’re all on guard this time against the Final Solution
all on guard this time
 

This is the reality. 44% of our wealth is due to rule of law.

 
World Bank study on wealth in 2005 stated:
 
Worldwide, the study finds, “natural capital accounts for 5 percent of total wealth, produced capital for 18 percent, and intangible capital 77 percent.” “Rich countries are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity,” the study concludes. According to Hamilton’s figures, the rule of law explains 57 percent of countries’ intangible capital. Education accounts for 36 percent.”
 
Rule of law equates to trust.
 
 
 

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Guest post: Who Are the 1%?

Update: Mike Konczal also takes a  look at this question in Who are the one percent and what do they do for a living.


Update 2: Another source for historical trends on inequality is at The Center for Budget and Policy Priorities

by Taryn Hart 
    
Taryn Hart publishes at her blog Plutocracy files and has interviewed John Quiggen, Bill Black, Larry Mishal to name three economists

Guest post:    Who Are the 1%?

A week or so back, Dan from Angry Bear passed along this Boston Globe article. On its face, the article bemoans rising inequality through a comparison of two Massachusetts neighborhoods: Sherborn, the State’s wealthiest neighborhood and Springfield, a former working-class neighborhood that now resembles a globalized ghost town. Although the article quotes a Sherborn resident disavowing his status as a one percenter, the piece clearly implies that the upscale Sherbornites are one percenters.
However, as Dan correctly pointed out, Sherbonites are not the one percent: The median income of Sherborn is $190,000 per year; not peanuts, I know, but the lowest paid one percenters make $500,000 per year (even using a significantly narrower definition of income, one percenters make in excess of $330,000 per year). Moreover, the biggest gains over the past thirtyodd years have gone to the top .1%.
When Occupy Wall Street identifies its opposition as the 1%, it’s not talking about people who live in posh neighborhoods with great schools; it’s talking about people who can hire teams of lobbyists who live in posh neighborhoods with great schools. As Gordon Gekko put it:
I’m not talking a $400,000 a year working Wall Street stiff flying first class and being comfortable, I’m talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player, or nothing.
And keep in mind, that’s 1980s dollars. Given the scandalous increases that have gone to the top 1% since then, the amount required to be a player these days is several times that amount. And the problem with that kind of concentration of wealth is that it inevitably undermines the incentive for collective action required for social well being.
As Matt Taibbi has pointed out in response to the one-percenter meme that those who are so poor they don’t pay federal income tax have “no skin in the game,” concentration of wealth creates perverse incentives that ensure most of the mega rich are terrible citizens:
The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live in gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.
            *            *            *
Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors….
But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.
Nobody with real skin in the game, who had any kind of stake in our collective future, would do any of those things.
Nobel Prize-winning economist Joseph Stiglitz made the same point in May of 2011 (well before Occupy Wall Street), in a must-read Vanity Fair piece entitled, Of the 1%, by the 1%, for the 1%”:
[A] modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology…. America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.
None of this should come as a surprise—it is simply what happens when a society’s wealth distribution becomes lopsided. The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had.
Be clear: This is who Occupy Wall Street is talking about – the small class of people who have amassed so much wealth that they have no need for the social infrastructure that is the life blood of the 99% (even the 99 percenters who live in swank neighborhoods like Sherborn, Massachusets).
And suggesting that Sherborn is the 1% and Springfield is the 99% – when they’re both the 99% – seems designed to falsely frame the problem of inequality as the poor (Springfield) versus the well-to-do (Sherborn). Of course, in the realm of those set on denying or deflecting inequality concerns, improperly defining the opponents of the 99% is fairly mild. (See discussions of income-inequality deniers here and here). However, this particular sleight of hand has made more than one appearance of late and therefore, is worth reviewing a bit more closely.
David Brooks recently distinguished what he termed “Blue Inequality” of the mega rich from “Red Inequality,” which Brooks claims results from an education gap and is “much more important.” According to Brooks: “The zooming wealth of the top 1 percent is a problem, but it’s not nearly as big a problem as the tens of millions of Americans who have dropped out of high school or college….”
As Dean Baker immediately pointed out, Brooks’s Blue Inequality/Red Inequality thesis is absolutely unsupported by the data:

David Brooks Complains That He Can’t Get Access to Inequality Data

Actually he didn’t complain about his lack of access to data, but he probably should have given the column he wrote today.
Let me just pause for a moment to say: Snap! Good on Dean Baker for pointing out that Brooks’s argument flat-out ignores well-known inequality data. Alright, back to Baker:
Brooks purports to lecture the Occupy Wall Street crew about how they are focused on the wrong inequality.
He tells them that that there are two inequalities in the U.S. On the one hand we have the CEOs, the Goldman Sachs crew, the lobbyists and the other members of the one percent who have done incredibly well in the last three decades. Brooks calls this the “blue inequality”….
Brooks tells us that this is less of a big deal than the red inequality, which he defines as the gap between college educated workers and those without a college degree….
This is where Brooks lack of access to data is so important….
[S]ince the 90s, the wages of workers with high school degrees have not departed much from the wages of workers with just college degrees, the vast majority of the economys gains have gone to the top 1 percent.
Despite the blatant lack of empirical support and Dean Baker’s decisive take down, Megan McArdle dutifully picked up on the trope. And, of course, the Boston Globe piece highlights the education gap between the residents of Springfield and Sherborn and implies the gap between two communities is the result of the “one percent phenomenon.” However, these arguments – and, more often, implications – are clearly undercut by the data.
The mega rich Occupy Wall Street opposes do not live in “neighborhoods,” not even well-to-do neighborhoods like Sherborn. The top 1% – and probably more accurately the top .1% – live in gated mansions with private security. As Joseph Stiglitz and Matt Taibbi have pointed out, the mega rich have reached a level of wealth that completely insulates them from society. So, don’t be fooled: Occupy Wall Street is not opposed to the affluent. Residents of Sherborn and similar affluent communities – like all citizens who still have a stake in our country’s well being – are part of the 99%.

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Income Mobility

Lifted from comments from Daniel Becker’s post here, reader PJR provides links to two good sources:

Another data-driven study indicates income mobility is down at the same time that inequality is up, saying “Overall, the evidence indicates that over the 1969-to-2006 time span, family income mobility across the distribution decreased, families’ later-year incomes increasingly depended on their starting place, and the distribution of families’ lifetime incomes became less equal.” Check out the charts/data in the back (I wish data went further back in time, but this is pretty good). Some of the charts, and good commentary, is [also available] at Jared Bernstein’s place [edited for functionality, readability]

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Define Rich, Part III. What the tax tables of yore say.

 By Daniel Becker

Randolph Duke: Money isn’t everything, Mortimer.
Mortimer Duke: Oh, grow up.
Randolph Duke: Mother always said you were greedy.
Mortimer Duke: She meant it as a compliment.
A while ago (an understatement) I posted on the question of what is rich. The first dealt with what issues to consider in defining rich. The second was looking at the issue of getting rich if that is even what one wants to do. The “rat race”. I don’t believe most people really want to be rich. I believe most people when thinking about being rich are thinking about what it would take to remove the fears of events that would make one’s life either very difficult in a world that requires money to remove risk or drastically different from what one’s life was. I’m thinking things like losing a job, debilitating injury or illness possibly resulting in physical disability or Louis Winthorpe III.
This all ties into “The American Dream”. The “Dream” is not just an ideology of governance and social philosophy. It is also a life style and thus requires a specific level of income. I have posted on this issue also and noted just how high in income we have driven this “Dream” such that two people with bachelor’s degrees just starting life together may not be able to have it.
Now that we have entered a period where taxes are on everyone’s minds such that there is serious consensus to raising taxes, maybe we need to see what we had in the past to know what we need now. I am sure most readers are aware of Mike’s work defining what rates appear to effect economic growth the best. If I recall correctly the number for the top 1% was around 65%. I have also suggested that there is a range as to how large a share of the income the top 1% should have. That number for the top 1% is not to be above 15% and not to much below 10%.
I should also mention my postings on taxation’s purpose. Specifically I looked at taxing from the perspective of the legal profession as oppose to the economic profession. The conclusion was that there was one main reason for taxing. It is to fulfill the directive of our constitution: equality of power. It is to assure the concept of one voice one vote. If there was ever a time in our history to raise taxes in order to assure this directive it is now in the age of the Citizens United ruling. President FDR referred to the issue and those with the one voice multiple votes do to their monied power as “economic royalty”. I like that phrase and I wonder why it is not used as are retort to those who use “class warfare” as a guilt trip.
Let’s get started.


I have constructed 4 sets of data using the tax rates of 1936/37, 1945/46, 1965/67 and 2010. I chose 1936 because it is a tax rate increase after the economy had turned north based on Mikes posting. I chose 1945/46 because it is another adjustment that happens right after after WWII. I chose 1965/67 because it is the decrease often spoken of fondly. Of course 2010 is because that is where we are at.

This posting would be hugely long if I post on all 4 periods at once, so I have broken it up. Let me first and I think most importantly note that we people today have no idea just how much we were willing to tax ourselves to have the society that we now refer to as “the good old days”. Not only did we have the tax tables of 1936, that table eventually had a 10% surcharge added to pay for the war. Yes, another reason to consider the generation that fought the 1st and 2nd world wars the greatest generation. There was a 7% surcharge for the Vietnam war, though that number became less as time passed. Still, we knew that if we wanted to do exceptional things, we had to tax ourselves exceptionally. Also, the early taxation made no distinction for single or married, never mind filing joint or separate. Everyone paid the same rate. Most interestingly, with the current table, the people who comparatively get screwed are those who are married and file separately. All the rates kick in at a lower income than even those who are single. The other thing we don’t seem to understand is that all the tax rhetoric we have been hearing since Reagan we’ve heard before virtually to the word.
Andrew Mellon, Treasury Secretary 1921 to 1932 :
Generally speaking, Mellon argued that tax burdens were too high. Steep rates, he insisted, served only to stifle incentive and foster tax evasion. “Any man of energy and initiative in this country can get what he wants out of life,” he wrote. “But when initiative is crippled by legislation or by a tax system which denies him the right to receive a reasonable share of his earnings, then he will no longer exert himself and the country will be deprived of the energy on which its continued greatness depends.”
Worse yet, Mellon argued, high rates didn’t even raise money. By encouraging both legal tax avoidance and illegal tax evasion, they eroded the tax base and reduced overall revenue. Lower rates, he said, would actually raise money by spurring economic growth and reducing the incentive for tax avoidance. “It seems difficult for some to understand,” he complained, “that high rates of taxation do not necessarily mean large revenue to the government, and that more revenue may actually be obtained by lower rates.” In particular, Mellon insisted that high rates distorted investment decisions, boosting the popularity of tax-free state and local government bonds. Indeed, Mellon made these tax-free bonds a regular target of his reform attempts, but Congress resisted his plans to eliminate them.
Atlas Shrugged wasn’t even written then!  What we don’t hear much of are the original concerns and reasoning for progressive taxation. Teddy Roosevelt:
1906…We should discriminate in the sharpest way between fortunes well-won and fortunes ill-won; between those gained as an incident to performing great services to the community as a whole, and those gained in evil fashion by keeping just within the limits of mere law-honesty.
1907 regarding an income tax:…while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man.
No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country–a ruin  which would bear heaviest upon the weakest, upon those least able to shift for themselves.
At this moment, I want to mention corporate taxes. There are lessons to be learned from it’s history. I think it is a factor in understand more completely the issue Mike is focusing on: taxation and GDP growth. Wrap your minds around the fact that from 1936 to 1943 there were 6 years that corporate tax collections were greater than personal income tax collections. 1943 was the best year for this as personal income tax collections were 68.1% of the corporate tax collections. Just one year later it flips to corporate tax collections being 75.3% of personal income tax collections. In 1944 $34,543 million in total for the two taxes was collected vs 1943 $16,062 million in total.  In fact, personal income taxes remain in the mid to high 40 percent of total revenue collections from 1944 to present. The corporate share of total revenue peaks in 1943 at 39.8% and declines to hover around the 10% level with a few ventures into the single digits. Most notably 1983 the corporate share was 6.2% and 2009 it was 6.6%.
First up is our current tax table. I used the “married filling jointly” as that would be consistent with the other tables. One big rule of this series of postings: DO NOT concern yourself or me about the deductions that exist. They do not matter for this presentation and for all intent and purposes we can consider the income to have already gone through the deduction calculator and is now ready to have the tax table applied. This is because, these tables only apply to adjusted gross income.
You will notice that the table is calculated out to $,1,000,000 of income. I did this in order to keep all the tables going to the same income level. The 1936 table actually has rates for incomes up to $8 million. That is $8 million in 1936. (Using my favorite money converter that would be $301,000,000 in unskilled labor or $573,000,000 in GDP/capita.) Going to $1,000,000 in income also allows one to see what happens at the top when the rate no longer rises.
A very important concept to understand is that not every dollar is taxed at the single percentage rate as you go up the income ladder. Thus, there are two columns in my charts. The “Marginal Tax” is the additional money paid at the top of the bracket for the corresponding rate. The “Total tax” is the actual money paid up to that level. It is the “effective rate”. In simple terms, if you are at the 35% level, you 
are not paying 35% on all that you earn. Instead you are paying the amount based on your income being divided up into the number of brackets that exist. For 2010, there are 6 brackets, thus you have six different incomes so to speak.
This is what it looks like as a graph.
When the rate maxed out, I divided the range to $1 million into even parts so that the tax paid for each additional income level is the same. For the 1945/46 and 1965/67 data sets I converted the net income to 2010 dollars. I used the “unskilled labor” and GDP/cap as those are the 2 factors suggested as being the best for knowing what income equivalents are over time. The 1936 data set is converted to 1967 dollar because the numbers just get crazy. For example, a net income of $3840 is $145,000 in unskilled labor and $275,000 in GDP/cap. Though it is only $60,400 via the CPI. Which doesn’t say much for today’s median family income. It also gives us a clue as to just how much money is considered “rich”.
Next posting, I will start presenting the historical data sets. I’m still thinking about the best way to do it as what is important is the comparison among the data sets.  Maybe post just the data charts and later the graphs or maybe one data set and it’s graphs at a time. 

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Monetary policy. I’m sorry, it’s just not doing it for me.

By Daniel Becker
Stock market is up, Profits are up and banks are safe. So what? Unemployment is somewhere between going down and I can’t get no satisfaction. Housing values are still falling

A new nationwide survey from real estate Web site Zillow.com says the value of U.S. homes fell 3% from January 1 to March 30 — the steepest quarterly decline since 2008.

 
I know, I’m suppose to care. Bigger picture and all. But frankly, when I read comments such as that by Mark Sadowski’s:
 

Since Bernanke’s Jackson Hole speech the steep rise in stock prices has increased household wealth by some $5 trillion. The rise in inflation expectations has helped to ease the household debt deflation problem. Consumption has been the bright story in the BEA numbers last two quarters,…

I just get all “A vineyard? Really?” Now I know Rebecca’s post is about looking for some indication that things are better though tipsy and Mark is responding that with: No, things are rather solid in the “we’re moving forward” category.
I’m going to be bold here and state right out that I’m speaking for the middle-class. (Those of this class can correct me if I’m wrong.) Five trillion dollar in new stock market wealth is not reaching us. I’m happy for you all that are now more wealthy, but really, you’re only a small percentage of the population and thus your success is not representative of how well We the People in total are doing.

Before I go further, let us do a little simple math (for you stat manipulators, the key word: simple. Add more complication as you wish in comments.) I am allowed to do this, keep it simple because I’m not an economist. Or am I?
Let’s say that 81.2% of all stock is owned by the top 10% of wealth gatherers. (table 9). Let’s say there was 100 shares at $1 each for a total value in stock on 8/31/10 of $100. That $100 became $129.80 by 5/2/11.(S&P closing numbers)  But, I’m going to round off all of this to keep it really simple. 100 shares. 80 shares owned by 10 people. 20 shares owned by 90 people. Fast forward 9 months and now the $100 is $120. Still 100 shares. (We’re excluding splits, initial offerings and anything else that would increase the number of shares, simple.)
So, 10 people now have a total worth of $96. The 90 people are splitting up $24. Both saw a 20% rise. Hooray! But here’s the issue, an additional $1.60 will do a lot more than an additional $0.04. The issue is coin in the pocket. For the middle-class, it’s just not happening.
Let’s add a some more fun facts to this Yahoo party.   I used:  Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—an Update to 2007 by Edward N. Wolff, Levy Economics Institute of Bard College, March 2010
 

As of 2007, 38% of all households have stock via pensions and of that group it represents 31.4 % of all stock. (Table 14b, 14c) Unfortunately, the middle 3 quintiles 65.1% of their assets are their house, 12.9% is pension, 3.6% is stock held in some form. Darn few of the middle-class have any stock at all and what they have is tied up.
So again, that 29.8% rise… ain’t feeling it. I ain’t feeling it in customers in my shop. I ain’t feeling it in volume of sales in my shop. I ain’t feeling it in dollar’s per sale in my shop. Guess what I ain’t gonna do? I ain’t gonna hire anyone.
Let me leave you with this. Let’s say we manage to move 5 more people into the group that has 80% of the stock for a total of 15 people. They each have $5.333.  (Finance likes to measure as if they are using micrometers.) The remaining 85 have $0.235. The 85 have 5.9% more wealth to start. 9 months later, the 15 people have $6.40 each. They have $1.067 more. The 85 have $0.282.
Certainly $0.047 more to those in the 85 group is not going to make them go out and buy flowers. However, 5 more people have more than a buck to spend and in my shop that buys one carnation that will last 2 to 3 weeks.  As I noted before, buying that flower for one’s self has major positive benefits for one’s personality. I have a better shot at selling that 1 carnation when there are 15 people that could purchase it than when there are 10. That mean’s there is a better chance that there will be one more happy person and thus push the consumer confidence index up.
That my middle-class friends, is the power of policy designed to promote income and wealth equality vs just wealth increases.  I want me some of that there policy. 
A vineyard. Really?

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Joseph Stiglitz: Of the 1% by the 1% for the 1%

by Daniel Becker

This is an interview of Joseph Stiglitz on Democracy Now regarding his article in the current Vanity Fair.  He discuss the issue of income inequality, taxes, etc and how it has set us up to be less of a land of oportunity than what old Europe was.

A few quotes:

The question was, if people were getting rewards for contributing to our society, a theory that was in the 19th century called “marginal-productivity theory,” then you could say, “OK, those who contribute more should get more.” But what we saw in that crisis was that these titans of the financial industry got mega-bonuses while their companies were making mega-losses.

And with this one percent getting so much, there’s only one place really to get that extra revenue. The good news is it’s relatively easy. You have 25 percent—almost 25 percent of the income in the upper one percent, you raise their taxes by a few percentage points, and you get an awful lot of money.

This raises a very important point that I raise in my article, which is that much of the wealth of this one percent comes not from hard work, not from innovation, but from good investments in Washington, investing in political capital.

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Let the tax cuts go and you actually stick it to the top for real.

By: Daniel Becker (DOLB)

On Countdown (12/9/10), Keith had on Thomas Buffenbarger, president of the International Machinist Union. It was a chance for an “I told you so moment”in that Mr. Buffenbarger noted while campaigning for Secretary Clinton that President Obama would not be a fighter. Go watch the episode.

I made my position on of Obama clear after the 60 Minutes interview. Mr. Buffenbarger’s comments only reinforces my position as to understanding President Obama as does Obama’s latest “negotiation”. Surprisingly, only 4 comments were made. Too bad, the nation would have been more prepared for this latest act in “Obama the Negotiator. Not!”

But, that is not what got me regarding Mr. Buffenbarger’s interview. No. It was that he confirmed something I have been thinking since Obama stated his compromise policy after this current midterm elections.

…when Bush put the tax cut’s in place, very few of the members I’m privileged to represent noticed any difference in their pay check. And so, if the tax cuts were to go away, and we go back to the tax rates of then, our members would see very little change in their tax rates again.

Exactly. Has not the argument been that the cuts did little for the middle class? Then what is the problem with letting them go? I know for me it meant very little difference. Though, I realize having “meaning” is different for all so, here is a very nice chart I saved from 2005 looking at the tax cuts and what they meant for the various income groups.
First, let me say that when I initially viewed this chart years ago, I thought: How appropriate. Those who most likely think the republican party was watching out for them via tax cuts because they were in that top part of the food chain, were actually getting screwed too. Yeah, the one who you believes loves you is taking you for a ride. Those in the $100K to $300K range of income by 2015 were projected to pay a higher percentage of the share of national income taxes than they had before the cuts. And, even those above the $300k to the $1.5m range were getting much less of a break than their income relatives above them. Poetic justice? Just goes to show, that even those with significant incomes have no real conception of how small theirs is compared to the incomes of the upper echelons of this nation. But hey, you keep believing you’re just like them. It’s what they want.

More to the point of this post. Look at the “Average yearly tax savings” line for those from the lowest to the $383K level. I realize everyone’s situation is unique, but really, the range of the cost of the loss of the tax savings is virtually zero to 2.5% if your at $160K or 1% for those at $383k. As a share of supporting this nation, you/we have been screwed. I ask you all. The bottom 99%. Wouldn’t you like to really stick it to the economic royalty in this nation? Is 1% to 2.5% to much to give to finally get reality into the income tax?

You there in the 95 to 99% category. Your 2001 share of income was 15%.   Your projected share of the taxes in 2015 is 18.5% A ratio of 0.81. For your senior income family members the ratio in 2015 is 0.74. Still feeling loved?

Look at it this way. Based on this 2005 chart. The bottom 99% paid 75.3% of all income taxes before the tax cuts. Our projected share for 2015, the very tax cuts Obama et al have just negotiated to keep is 77.1%.

Who loves you now, baby?

Mr. Buffenbarger ended noting that his members understand that paying taxes is a privilege and is an act of support of our country. It is paying our way. So what do you say. Let’s show those at the very top just how unpatriotic they are. Let the tax cuts go and stand proud because honest American justice has prevailed.   You just screwed the biggest screwer of them all…The American Economic Royalty.

That is what the real Tea Party was about.

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