Too much wealth?
by Linda Beale
Too much wealth? more dialogue on the issue
Several days ago, Jim Maule ran a post on the disproportionate number of wealthy Congress members–44% are millionaires, compared to about 1% of the population at large. A Tax Policy Determination Clue (Jan. 6, 2010). I picked that post up in the context of noting a number of links addressing the issue of wealth–what is rich, who’s rich (Jan. 7, 2010), and what are we doing about it.
One of my frequent readers, Peter Pappas, didn’t much like my comment that such disproportionate wealth in Congress was ultimately “bad news for ordinary Americans.” He didn’t comment on my blog or email me (as he sometimes has) but instead wrote a scathing critque on his own blog, in which he (i) accused me of hating the wealthy (using “evil rich” to categorize the topics of two posts I noted as worth reading, whereas anyone who has read much of my writing knows that I neither think the rich are evil nor think that the rich should get a pass on paying their fair share just because they have lots of capital), (ii) missed the point entirely of my fellow Angry Bear Tom Bozzo’s post , which suggested it worth noting –in considering what makes someone “rich”– that there are some who live off of capital income from financial assets and that salary as a percentage of income goes down precipitously as capital income goes up precipitously, which creates a significant cut off point in determining who is “rich” at the intersection of the two rapidly changing lines, and (iii) (after throwing around a few labels like “left wing” and “strawman argument”) proceeded to make the unsupported blanket and absolute assertion that “American millionaires … know what it’s like to struggle [because] their ‘unordinariness’ is less a byproduct of their wealth than it is a byproduct of the fact that, through diligent study, hard work and intelligence, they have managed to lift themselves out of the ranks of the ordinary and mediocre.” This is followed by another assertion later on–“why is it difficult for left wingers to acknowledge that wealthy people got that way through perseverance, hard work and sacrifice?” See Two Professors, an Angry Bear, and Hate the Rich Syndrome, Jan 8, 2010.
Huh? What about inherited millions? What about the lessening mobility between the ranks of ordinary (middle class) and the wealthy? What about the way the extraordinarily wealthy have outdistanced even the relatively wealthy? What about the fact that CEOs now average about 400-500 times the annual incomes of typical workers in their firms, whereas 40 years ago it was around 20 times? Did this concentration of wealth come about through “hard work, perseverance and sacrifice” or is much of it owed to the wealth of the prior generation and the ability of someone born into relative ease to make even more (with an elite college education, important contacts, and all the other appurtenances of wealth to boost the value of the money), as Maule also asks (see link below)? Aren’t there studies showing that most people who actually move up in the ranks of the upper class started out there to begin with–that a person whose father is decently well off has a much better chance of moving up than a person whose father is not? Except for the odd lottery or casino bet that pays off, there just aren’t many opportunities for an underprivileged kid from a low-income ghetto to even get a college education, much less move up the ladder of success, for all we like to claim we are more mobile than other societies. Getting started in a business? Takes someone to fund your startup costs–family and friends that are already middle class or already upper class must provide a great boost, don’t ya think?
Even those who do make it to millions may well have engaged in the “selfishness and greed” that Pappas says we “shouldn’t whine…about”. Well, I beg to differ. Admittedly, not every millionaire got there through selfishness and greed, but clearly much of the way wealth is accumulated is through greedy policies (firing workers, rather than reducing dividends to owners and salaries to upper class managers; moving from one locale to another to exploit a pool of needier workers; breaking unions to be able to offer even less in benefits, polluting rather than undertaking environmentally sound measures, etc.). To the extent that wealth is acquired by exploiting the poor, the naive, and the gullible or by polluting the world we live in or by taking subsidies from communities and then leaving them holding the (empty) bag, there is something wrong and we should point it out, perhaps even adopt tax and other policies that make it much more difficult for those with power to exploit those who do not have power (such as steeply progressive tax rates, more substantial estate taxation, higher taxes on polluters, facilitating unionization to give employees some power to push back against the greed of millionaire CEOs and owners, etc.).
The fact is, everybody can’t be millionaires in this country, and the fact that someone is or isn’t a millionaire has very little to do with whether that person has worked hard, shown perseverance and sacrificed. Pappas’ “rant” (his own term) in defense of the rich seems very ill-considered. We should be thinking about how to create a good standard of living for all, rather than defending the egregious examples of wealth accumulation that make it ever harder to sustain democratic institutions that can work for the benefit of all rather than the benefit of the powerful few. That is why I have chosen as the theme of this blog “democratic egalitarianism”–a philosophy that encourages policies that are directed towards sustaining democratic institutions and that recognizes that every policy will be redistributionist though many redistribute upwards (from middle class workers fired to managers and owners with higher capital gains that are preferentially taxed) rather than downwards (from the wealthy to those in the lower middle and lower classes). If we aren’t, as a society, making every attempt o move towards a fairer society with broad-based growth and reasonable distibution of resources, in my view, we will inexorably move towards a much less fair society in which the resources are constantly allocated to the advantage of the wealthy and powerful.
I see that Maule responded, asking “If a Wealth-Dominated Congress is So Great, Why are Taxation and Other Policies such a Mess? (Jan 13, 2010). Maule says much of what I say here and focuses on whether having wealthy and “successful” people in Congress is really better for the country than having more “ordinary” people who haven’t been able to acquire significant wealth. He concludes that this Congress could learn from the practical experience and wisdom of ordinary people. I heartily agree.
Denial is one way by which the issue of disproportionate distribution of wealth and income, as well as tax burden, is successfully answered by folks like Pappas. The total control of the media supports their sefforts iin this regard. Knowing the background of the person pushing a particular point or agenda helps to understand that individual’s purpose in so doing. “Treacherous pens and tongues,” have been a part of the landscape in all societies wherein the very few dominate the great many both politically and economically. It is simply a matter of human behavior and the proof of the matter is supported not by research minutia, but by a simple review of human history.
Pappas can be readily understood as his business is the representation of the wealthy before the IRS. His professional web site makes a point of assuring his clients and potential clients that his interest is in reducing their tax liabilities (though there is no mention of their responsibilities.) That is his right to do and I’d assume that his clients are pleased by his personal take on income distribution and tax policies in this country. The very notion that wealthy people all became that way through personal toil is a joke, having not even a h int of face validity. Members of Congress are another matter. It would be interesting to learn how many of those millionaires in our Congress got that way while representing their constituents in the Congress. Why we choose those millionaires to represents us is another matter best understood if we look back at media control. “When will the people be educated? Never.” It is the proliferation of those “treacherous pens and tonuges” that has always assured the control of the minds of the many by the scheming of the few.
Keep up the effort Linda. There is little more that can be done until the public decides to take back control of the media. The FCC under Bush and Clinton has made a joke of the concept of avoiding media ownership concentration. The air waves are operated under license from the government. The FCC is apparently more concerned with profanity than it is with propaganda and sedition.
“paying their fair share”
Linda if you lived a few centuries earlier you would be running around saying that everyone needs to pay their holy share in taxes.
It might be worth investigating whether your hypothesis, that that the rich are paying less than “their fair share”, is true or not. But sadly this statement is non falsifiable.
I don’t see how taxing the rich is going to make me happier. The government is never going to open a spigot from them to me; and politicians will always give me the minimum needed to get my vote. So backing a politician or a political party is a poor get rich quick scheme. And keeping government small by limiting its functions is the sound decision for the average person. If you can move up the corporate ladder or start your own business and make a ton of money that’s great. Otherwise enjoy your job, family, and middle class lifestyle that any American can achieve that studied and paid attention in high school and went on to college or learned a trade that pays well.
I’m sure that most rich people are paying something close to their minimum legal share of taxes. Some are hiding revenues and assets in illegal maneuvers to avoid paying them.
I also have no doubt that their legal share is not their equitable share.
Jack
The air waves are operated under license from the government. The FCC is apparently more concerned with profanity than it is with propaganda and sedition.
The government gets involved in the airways to bring about an orderly market, thus they provide a small limited service but they are not supposed to act as owners that controll free speach.
By the way, the fact that you use words like sedition demonstrates that you’re way out there in left field and don’t represent the thinking of most Americans. I think you need a civics class.
Peter Pappas is very wrong and I am a living example. I am a millionaire 40 year old and I have what I have because my parents and grandparents are wealthy. No one ever handed me a million dollars, but the benefits started with college and continue to this day. When I graduated, there were no college loans to pay off. My parents had also been saving for my education, etc. in an account in my name. When I graduated in 1988, it was worth about 75K. At the time I was receiving annual gifts in the amount of 20K from each of my grandparents (10K each) in the form of stock. By the time I was 26, I was worth about 225K and was able to put 30% down on a small house. I also used the money to put my wife through graduate school. A few years after grad school ended, we traded up to a larger house that needed a lot of work. Again I was able to tailor the downpayment to end up with a mortgage payment I felt comfortable with (P&I around 25% of my salary – my wife was not working steadily at the time). Home repairs and renovations were paid for mostly out of pocket. We used a HELOC occasionally but responsibly (like take out 30K for a bedroom to bathroom conversion and paying it back over the next 12 months).
All during this time, the gifts continued to arrive. My grandmother passed away, but my grandfater kept giving and started sending checks to my wife, too, so we still had 20K extra coming in every year. Somewhere around 2000 our net worth crossed 1 million. The busting of the tech bubble knocked us back somewhat but we were probably back above a million within a couple years.
We have two kids and trusts were set up for them a few years ago. My parents also got into annual gifting in order to reduce the size of their estates. The money coming in at this point is embarrassing. My mother, father and grandfather each give the maximum to me, my wife and 2 children. It amounts to 156,000 per year, and it’s tax free. Half of that goes into the kids’ trust accounts. Somewhere in 2006 or so our net worth probably crossed 2 million, but it has, of course, come down since.
So we are not American millionaires who got to where we are through hard work. My grandfather and father are the ones who made the money and they did it the old-fashioned way by achieving decent status within large companies, living well within their means and saving and investing constantly. I’ve always worked and I’ve always saved, but my family’s generosity has given me many advantages. I’ve never had to deal with college loans, I live in a house I can easily afford because I was able to make an 80K down payment and do over 125K worth of rehabing and renovating. I pay my credit cards off every month, I can deal with expensive surprises like a new roof or furnace without going into debt. My kids’ college is dealt with and I can afford to contribute plenty to my 401k. Now after the financial meltdown, my 401k is still worth over 400k, we have over 350K in equity in our 500K house (that’s assuming it’s dropped 20% from peak, the Case Schiller number for our area), we have 100k in cash, about 800K in stocks and over 200K in the kids’ trusts. I’ve never made more that 100K in salary and my wife has never worked more than 20 hours a week or earned more than 30k per year in the last 8 years.
Jack,
Just a small note: “His professional web site makes a point of assuring his clients and potential clients that his interest is in reducing their tax liabilities (though there is no mention of their responsibilities.) “
From a tax standpoint a persons tax liabilities ARE their responsibilities – nothing more. That’s his business. His business is not in counseling the rich (or whomever) on how much they should make or donate to charity etc.
Islam will change
BH, Thanks for sharing that.
J Goodwin,
More nits: ” Some are hiding revenues and assets in illegal maneuvers to avoid paying them. “
We have words for this – criminal tax evasion – and that makes them criminals. On the other hand if they are paying their LEGAL tax bill then you have no point.
“equitable” is totally in the eye of the beholder. Its a judgement call…..
Islam will change
Well perhaps not you who appear to be a “plutodupe” (noelogism mine) but many others would be delighted to see the greedy gluttons (you know a couple of 40 million dollar homes, a yacht or two, a private plane, etc., etc.) brought down a few monetary pegs. Their taxes would also benefit the government that does something for the public (unlike them) and that is starved of revenue due to Bush’s tax reforms for the superrich. PS Keeping government small is code for making sure government doesn’t do anything for the poor. If you want the government smaller, buddy, tell it to stop the imperial wars and military expenditures.
buff,
I didn’t say otherwise. As noted, it is his right to practice his profession. i was poiinting to his motives in regards to his blog site and its content.
Nothing has changed!
Well most people have a sense of equity, but there are non-Christian people and greedy gluttons who don’t. Which are you? Tax evasion is not effectively enforced. The IRS was starved of funds needed to do a lot more audits of returns for the purpose of making it easier to cheat on taxes. And the people who send money illegally overseas to avoid taxes has not been really enforced. The US is dealing with it in a dilatory fashion. PS Islam won’t change and people who think it will don’t understand much about the world.
I would have to know your total net worth and what you do with it before further comment. You appear to be simply very lucky. If you are charitable and don’t need to live in a 40 million dollar palace and have a private jet, I would not call you a plutocrat. Nor would I call a person worth one or two million, nor three or four, a plutocrat. A plutocrat is a Wall Street banker/ speculator with a 20 million dollar salary and two 20 million dollar homes and a yacht, etc. Decent rich usually have a strong sense of obligation to share with others and work for those less fortunate. I hope you are among them. PS plutocrats are the people Krugman blogs about today who are thinking of suing to stop Wall Street banks having to pay back what the public gave them on the grounds that it is “unconstituional”.
http://www.ustreas.gov/press/releases/hp673.htm
The Treasury Department today released a study on income mobility of U.S. taxpayers from 1996 through 2005.
The study showed that, just as in the previous 10-year period, a majority of American taxpayers move from one income group to another over time. The study also recognizes that the dynamism of the U.S. economy significantly contributes to income mobility.
The key findings of the study included:
Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years. About 55 percent of taxpayers moved to a different income quintile within 10 years. Among those with the very highest incomes in 1996–the top 1/100 of one percent–only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period. The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996). Economic growth resulted in rising incomes for most taxpayers over the study period: Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation; Real incomes of two-thirds of all taxpayers increased over this period; and Median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.
http://www.ustreas.gov/press/releases/hp673.htm
The Treasury Department today released a study on income mobility of U.S. taxpayers from 1996 through 2005.
The study showed that, just as in the previous 10-year period, a majority of American taxpayers move from one income group to another over time. The study also recognizes that the dynamism of the U.S. economy significantly contributes to income mobility.
The key findings of the study included
* Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years.* About 55 percent of taxpayers moved to a different income quintile within 10 years.* Among those with the very highest incomes in 1996–the top 1/100 of one percent–only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.
* The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
* Economic growth resulted in rising incomes for most taxpayers over the study period:
* Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation;
* Real incomes of two-thirds of all taxpayers increased over this period; and
* Median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.
http://www.ustreas.gov/press/releases/hp673.htm
The study showed that, just as in the previous 10-year period, a majority of American taxpayers move from one income group to another over time. The study also recognizes that the dynamism of the U.S. economy significantly contributes to income mobility.
The key findings of the study included
* Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years.
* About 55 percent of taxpayers moved to a different income quintile within 10 years.
* Among those with the very highest incomes in 1996–the top 1/100 of one percent–only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.
* The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
* Economic growth resulted in rising incomes for most taxpayers over the study period:
* Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation;
* Real incomes of two-thirds of all taxpayers increased over this period; and
* Median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.
– Edit – Moderate
This is the kind of intolerable arrogance that you get from plutocrats who are used to ruling and running roughshod over the public. Incredible but its there.
http://www.nytimes.com/2010/01/18/business/18bank.html?hp
We very much need to pass a wealth tax, and a tax of at least 75% on all income over 4-5 million a year. Plus excess value taxes on homes worth more than 2.5 million for instance. Soak the rich was never so needed as now. To curb plutoarrogance.
http://www.chicagomag.com/Radar/Deal-Estate/June-2009/Housing-Bulletin-Dreaming-Big-near-Winnetka/
A wee peek at how the plutos live. You can get a good look on two blogs “Big Time Listings” and “Realestalker” among others. Eye opening for ordinary folks.
For a less sanguine view:
http://www.pewtrusts.org/our_work_report_detail.aspx?id=53554&category=596
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Warren E Buffett in the New York Times,November 26, 2006.
There are lots more Buffett quotes — many apolitical and quite funny — at http://en.wikiquote.org/wiki/Warren_Buffett
VtCodger,
Maybe Mr. Buffet should liquidate his holdings today, give it all away to the poor, and live the life of an ordinary Joe. Naahhh — being a rich bastard is too much fun to give up prior to nature making all irrelevant.
VtCodger,
Maybe Mr. Buffet should liquidate his holdings today, give it all away to the poor, and live the life of an ordinary Joe. Naahhh — being a rich bastard is too much fun to give up prior to nature making it all irrelevant.
OT: America the Beautiful
http://www.guardian.co.uk/world/2010/jan/18/guantanamo-investigation-harpers-interrogation
If all plutocrats were as modest as Buffett, there wouldn’t be much criticism. He lives quite simply as far as we know, takes something like a $100,000 a year salary. He does have a private jet out of business necessity. I am not awae of 40 million dollar homes or a yacht, etc.
He votes Democratis, has scant regard for Wall Street, although he has to deal with it, favors an inheritance tax and doesn’t plan to leave his billions to his children but to charity. Nor, unlike Koch, does he fund the screamers as far as I know.
I never heard a liberal demanding Ted Kennedy resign from the Senate becuase he had great wealth in his family and much of it was derived from illegal bootlegging.
Good for the goose, good for the gander.
Bush appears to disagree with Limbaugh, kinda, sorta….
http://news.yahoo.com/s/huffpost/20100117/cm_huffpost/426248
He does have a private jet out of business necessity
What a suspension of reality this requires – rationalizing on behalf of Buffett, an old liberal tradition. Berkshire owns NetJets – a private jet time-share, which caters exactly to whom? And why do you consider his private jet a “business necessity” but wouldn’t presume the same for a Wall Street banker? Buffett claims his tax rate is low, and I’m sure it is – except that by taking such a modest salary, he is shielding his income in the form of taking it through retained earnings in his roughly 1/3rd ownership of Berkshire, a classic tax avoidance mechanism.
Of course he favors an inheritance tax – he’s got mountains of lawyers that have set up trusts to give away to charity, specifically because he believes he can direct the money better than the government and will not be subject to such tax.
I also want to add to my previous post that I know six other people in similar circumstances. They are wealthy and comfortable due parents or grandparents, not as a direct result of their own efforts. Don’t get me wrong – none are lazy, all have always held full time jobs and have incomes in the 100K area. But none of us achieved this on our own – we all have what we have as a result of someone else’s success and generosity. For Pappas to imply or say outright that American millionaires all have what they have as a result of their own hard work and intelligence and “extr-ordianariness” is ridiculous. I have managed to be pretty smart about the family finances, but I never pretend that the money I have now is the result of my own intelligence and hard work. Someone gave it to me.
Hardly, Buff.
It means that I think that there is a difference between what is legal in the United States and what is equitable.
Conservatives think it all the time, I don’t know why it is criminal for me to suggest it as well. In fact, many conservatives seem to think that rich people pay FAR TOO MUCH, while those on shoestring budgets don’t pay enough (pure flat taxers, VAT proponents, national sales tax proponents). I also think that the system is inequitable, I just disagree on the direction.
MM,
I thought you were leaving for good? Your overwelming envy for the successful and rich borders on neurotic. It makes whatever point your trying to convey sound nuts.
As for complaints about the IRS – Talk to the Dems. They have been running the IRS budget since the 2006 election and own all parts of the government sine 20 Jan 2009. I think your so far out on the fringe left that not even the Dems would have you. Don’t feel bad tehre are a few on this site that regularly post that are out of the Dem-Rep mainstream. ilsm being one I can think of quickly.
Islam will change. As practiced by all the leading Islamic countries it is incompatible with western liberal civilization. Either it will change or be destroyed. My bet it changes into something that can co-exist with western liberal values much like the Catholic church has since the 14th century. But that change will almost assuriddly be violent….
Islam will change
J,
I agree. There is a big difference between what is legal and what is equitable. No argument here. Just “equitable” is a value statement and differs by person. My version of equitable is probably different from yours, etc. Legal is what the IRS gets for its cut. Its what your owed and has zip to do with equitable.
I laugh becuase of the three examples of new-idea taxation, two get there support from the left and one from the right. Interesting…
Islam will change
“He votes Democratis”
Translate – D good, R bad. Nothing else matters….
MM I thought you were leaving?
Islam will change
Another view which contradicts the Treasury study has recently been published in the Washington post: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnews Based on my own admittedly limited experience, I would say that things aren’t good now and haven’t been for a long time.
May I add that in the office I managed, several of my lower-graded employees over the years received public assistance, MediCal and food stamps. There was no fraud involved–their full-time federal jobs just didn’t pay enough to keep them off welfare. This situation is common in our armed forces and many service industries. Upward mobility is hard to come by for people in lower-paid jobs. And, I add my thanks to BH for his contribution here. NMO
BH
Someone gave it to me.
Then why did you go though the ruse of showing up at a job and pretending to work? Anyway, that’s not what you meant.
If you want to give back then give back to your children. Give a scholarship to a caddy at your country club or a tennis ball boy at your tennis club; give to your college so they can create new scholorships; give to your local museum, theater, or symphony.
Or, on the other hand you can vote for democrats and have them tax and take your money to build bridges to nowhere, provide agricultural subsidies, build public transportation systems in far away areas, or in general expand the welfare state. And so what if they never say “thank you” — after all they only made you do what was fair.
Look more closely at how moves are made and who moves. Also consider the dates. Also consider that moving from a deep poverty 10,000 a year to a somewhat less impoverished 15,000 a year counts as a HUGE mobility leap, though it still lands the person in poverty, while moving from millionaire status (or even “half a millionaire” status) to that plus $5,000 is an insignificant trifle.
What I am talking about in the blog post is the real mobility of the rich compared to the rest of us and the question of whether the long-taken-for-granted notion that Americans are TRULY mobile–poor can move into palace, etc.–is real. Anecdotal evidence suggests that it is not–the poor are more and more consigned to long-term poverty, and the lower middle has trouble moving to upper middle and near impossibility moving to wealth. Some wealthy do lose their inherited riches (including to scammers like Madoff), and some do move from middle to rich, and no doubt that it still much better than in many other countries. But it isn’t really the dream that many people assume it is–the dream that leads lower-middle income people to object to an estate tax, just in case they are worth more than $2 million some day.
There is a study that I need to find the cite of but probably can’t do it right now that concluded that about two-thirds of the rich had well-to-do fathers and either stayed the same or got richer. That is the main source of upward mobility from the upper-middle class into the ranks of the wealthy, and that is the real advantage of assets.
it isn’t a question of demanding that any one person resign from Congress, but of asking whether it is wise for Americans to have a process that appears to require someone to be rich in order to get elected.
None of the subsequent comments refute the Treasury study. The Pew study, specifically states, “The findings indicate that the American economy promotes upward mobility over two- and ten-year periods just as well as it has in the past.” Articles like the WaPo’s fail to point out that while median household income hasn’t been growing, the average number of persons per household has been declining, so the per capita income actually has been growing.
The Fed’s Survey of Consumer Finances has similarly affirming data, with the real growth in income in the lowest quintile the second fastest (if memory serves) and substaintial real growth within every income quintile from the beginning of the survey through 2007 (the most recent data available).
Most of these surveys/studies are based on income quintiles, so unless 10k vs. 15k is a stratification for the lowest income quintile (it almost certainly is not) or 1,000,000 to 995,000 the example is moot.
I’ll readily acknowledge that income quintiles are correlated with parental income, but (1) the correlation is not perfect, and (2) should be, as part of [my] incentive for generating wealth/income is to create advantages for my heirs.
Cantab,
Excuse me, but those bridges to nowhere in Alaska were Republican projects. And it’s largely those rural Congress Critters that support ag subsidies…and most of them are Republican. Democrats do want public transportation systems, but not to “far away areas.” Democrats are pushing for northeast corridor routes; it’s the GOP that wants to make sure AMTRAK stops at every podunk town in rural nonwhere.
There’s another problem with wealth that no one here has really mentioned, and that is that sooner or later wealthy people die and leave estates. There is some pretty overwhelming empirical evidence that people who receive large inheritances quickly drop out of the labor force and “retire” early. So if you believe in supply side economics, you should support a hefty estate tax because it keeps people in the labor force.
2slugs:
Not sure I understand this:
“So if you believe in supply side economics, you should support a hefty estate tax because it keeps people in the labor force”
It would not be the first time I didn’t understand something that was obvious either.
2slugs:
Not sure I understand this:
“So if you believe in supply side economics, you should support a hefty estate tax because it keeps people in the labor force”
It would not be the first time I didn’t understand something that was obvious either.
Slugs,
So what? Its not like they put their money under the matress. More likely they put their money to work funding investments. Investment funds from the rich provide a vital positive social function for this country.
Slugs,
So what? Its not like they put their money under the matress. More likely they put their money to work funding investments. Investment funds from the rich provide a vital positive social function for this country.
A republican populist movement is necessary but not sufficient to keep taxes low and government lean. The democrats offer nothing. With a Brown victory tomorrow we get another chance at doing it right. Hopefully another Timothy McVie wont come along to save Obama and we won’t be subjected to a fool like Ross Perot.
Yes thats right all any American has to do is study and pay attention in high school and then you will be guaranteed a solid middle class lifestyle. Everyone is better than average here in Lake Woebegone.
Sounds like communism to me.
Contab,
Keep striving to make your serf’s cottage all you can make it.
Teddy Roosevelt said: “The rich have an obligation to support the government which makes the country a safe place to become and stay rich.”
You could consider a worker who has a $10,000 net worth who makes $40,000 a year paying about 40% of his networth in federal taxes to a wealthy man who pays 3% of his networth in taxes.
There is class warfare and the laboring serf class have not realized they have lost.
run75441,
Wealthy people tend to leave large estates. People who inherit large estates tend to retire earlier than they otherwise would. That shrinks the labor force, which is the same thing as shifting the aggregate supply curve to the left. If you have an NBER account you might find this paper interesting.
http://www.nber.org/papers/w12386
Cantab,
You’re missing the point. After the productive guy or gal kicks the bucket, that wealth ends up being inherited by less productive people. What happens is that the heirs consume that wealth in the form of retiring earlier. There is in investment….there is disinvestment. And to make matters worse, not only is there disinvestment, but people end up withdrawing from the labor force. The net effect is that society is less productive.
Cantab,
You’re missing the point. After the productive guy or gal kicks the bucket, that wealth ends up being inherited by less productive people. What happens is that the heirs consume that wealth in the form of retiring earlier. There is no investment….there is disinvestment. And to make matters worse, not only is there disinvestment, but people end up withdrawing from the labor force. The net effect is that society is less productive.
***Maybe Mr. Buffet should liquidate his holdings today, give it all away to the poor, and live the life of an ordinary Joe. Naahhh — being a rich bastard is too much fun to give up prior to nature making it all irrelevant.***
FWIW, Buffett announced the largest charitable contribution ever by a private individual a few years ago — 37 Billion dollars. The majority of his assets. Was that what you had in mind?
All in all, I kind of admire Mr Buffett despite his sometimes ruthless business practices.
Y’know, you could do worse than to spend some time studying Buffett, his opinions, and why he thinks what he thinks. You might learn something. There’s a far better chance I think of profiting from studying Buffett than from studying the confused maunderings of purported “economists” at the University of Chicago.
Linda:
If you are getting response you either have a following in agreement or a following in disagreement. In either case you are impacting the crowd with your words. I read their words and didn’t find much to base a stance upon.
Poor stupid Americans. Caught, or rather duped, in two strangleholds. One the Israel stranglehold over our foreign policy that puts us at endless war with Islam at a cost of billions and billions every year, and two the stranglehold of the Wall Street plutocracy on our economy and politics that deprives the masses of health care, and of government assistance to the needy, and that shifts wealth and income upward to those who disdain and dispise the masses. Stupid because some clever propaganda makes the people support the people who take advantage of them and who piss on them and tells them that what would be good for them is wrong. Incredibly sad. And there isn’t much to be done about it, so powerful are the stranglers.
sorry…despise the masses
Here you go. isn’t it JUST Terrible that banks might have to suffer a bit to become stronger and better capitalized. So awful that the poor pathetic bankers can’t play their “get rich quick” games and then when the lose, shove the losses on the public. So very awful. So terribly unfair to those poor poor poor bankers.
http://www.housingwire.com/2010/01/18/mayer-brown-tells-clients-to-brace-for-costly-capital-reform/?utm_source=rss&utm_medium=rss&utm_campaign=mayer-brown-tells-clients-to-brace-for-costly-capital-reform
Dear Mr. Brown in Mass thinks it is just awful that the bankers might have to pay back money to the people. He supports the suit to stop this terrible outrage that bankers don’t like. Everything for the bankers; screw the little people. Sure, that’s what America is all about.
http://baselinescenario.com/2010/01/18/wall-street-suing-over-bank-tax/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29
http://www.ritholtz.com/blog/2010/01/congress-invites-paulson/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
Plutocrats can’t be ordered to do anything. Only nobodies can be “ordered”. Plutos have to be “invited” or “asked” oh so politely so they don’t get mad. If they got mad, just think what terrible things they might do to us. They might stop giving money to Congresspeople and then what would happen? Out of the clutches of the plutos who knows what our government might do.
run,
In either case you are impacting the crowd with your words. I read their words and didn’t find much to base a stance upon
Neither did the column.
VtCodger,
There’s a far better chance I think of profiting from studying Buffett than from studying the confused maunderings of purported “economists” at the University of Chicago.
Can you be specific?
Slugs,
After the productive guy or gal kicks the bucket, that wealth ends up being inherited by less productive people.
Again, so what. The money left to the less productive heir is usally put in the hands of a capable investment manager. I don’t share this craving that once a family moves to the investment class we need to drag them back to the daily grind. Rather, we shoud just wish them good luck and get on with our lives.
Margery,
sorry…despise the masses
There is nothing stopping you from copying your rant, deleting it, correcting it, and re-posting a correct rant.
Cantab: “Anyway, that’s not what you meant.”
You got to be kidding me with this statement.
Why should I do all that when I can just amend it? “Rants” are often truths we don’t like to hear. And for which we have no answer.
VAT and a sales tax are coming from the “left” but they’re both in my view heavily regressive (and VAT is in addition intellectually dishonest because it’s just a way of pushing a tax that people don’t realize they’re paying).
I’ve said it before and I’ll say it again that income taxes are IMHO the best ones, with a high floor (I don’t actually favor an EITC because I think that we should have living wage regulation instead, and you could make that same argument for a high floor if you wanted), and that if you’re going to have sales taxes, you should have them structured the way they are here in Massachusetts, with significant exemptions for common goods like food and clothing. At least you blunt the regressive impact in that case.