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Tax The Rich — Now!
We were given two choices to help pay for health care reform. The House plan would impose a 5.4 percent tax on people making over $500,000 a year. The Senate plan would tax “cadillac” health insurance policies, which often became so generous because they were given to working people in lieu of pay raises. Now it seems certain that the so-called cadillac tax will get into the final health care bill.
There’s no federal estate tax this year. Because of a dumb legislative fluke it is now zero percent. And while this is likely to be redressed sometime in the future, if the richest people in the country die now their heirs will not have to pay a penny in estate taxes to Uncle Sam.
A proposed transaction tax on stock sales, which for various reasons I’ve discussed in past posts is essentially a tax on the greedy Wall Street bonus babies now rigging the markets for their own benefit, is in Geithner limboland. Which is to say the bonus babies on Wall Street will have a continuing ability to feather their own nest while defiling ours without any tax disincentives to check their greed.
The most regressive tax in our national tax code, and one of the most regressive taxes on the planet, the payroll tax that funds Social Security, takes a big nip from those earning less than $107,000. It takes not a penny from those earning more.
In these ways, in so many ways, in virtually every way these days, the richest among us are getting a tax pass while in countless other ways, big and small, direct and indirect, less economically endowed Americans are getting shafted by government taxmen.
Even if the economic logic that decrees that without more equitable distribution of wealth you can’t have a flourishing economy doesn’t move you, the threat to our national comity being generated by this ongoing and growing inequity is well worth considering.
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85 Responses to “Tax The Rich — Now!”
The extent to which tax law is screwed up in this country is laughable. Here we have a country so rich in resources, infrastructure, educated labor force, and yet the idea that someone who amasses great material wealth by availing themselves of these tools shouldn't be required to give more than a token amount back again… well, as I said, it's laughable. Any careful look at tax history in this country will show how little the top ten percent pays these days as compared to nearly any other time in modern history – even while the uber-rich continue to get richer and the middle-class workforce struggles more and more to survive. The numbers aren't the only thing that's regressive.
Economic Analysis: Is the Income Tax Really Progressive?
When JFK got elected the top marginal tax rate was 91%, He reduced it to a whopping 70%. Today the top marginal tax rate is 35%.. We have spent 50 years of transferring the Tax Burden from the wealthy to the middle-class under Democratic and Republican Administrations. And before someone tell us that the top 10% pay more taxes than they ever have, let me point out that it's because they are wealthier than they have ever been.
Economist View – Is Our Tax System Helping Us Create Wealth?
Chart – Comparing Income Growth and Income Tax Burdens in 1961 and 2006
All that extra money that the wealthy used to pay in taxes was used to maintain and build the infrastructure, today it's used to gamble on Wall Street, with us the tax payers covering the losses.
PS. All that infrastructure is now paid out of local taxes…
Let me tell you whaat else takes a “big nip” out of the wallets of those of us who are struggling and unemployed-it's the $750-$3,500 fines and jail time that we may be facing if we do not purchase a product or service that we cannot afford… pure progressive brilliance–not!!
perhaps we need to focus our attentions elsewhere.
while tax reform is badly needed [and the estate tax should imho be permanently abolished] what we really need is labor reform.
imagine … a US with a thriving middle class [paying moderately assessed taxes!] … one where you don't worry about loosing your job if you don't put in all 65 hours in a work week … or loosing your job for attending your child's mid-day kindergarten graduation. imagine a world where we can't be laid off at the blink of an eye simply because the pennies flowing into your pocketbook are better spent accumulating in the CEOs … and one where mandatory overtime is paid for instead of being gratis by being feloniously labeled 'management' or 'exempt' … imagine offshore workers for american business concerns having to be treated with the same labor standards/wages/conditions/hours/overtime as [should be] here in the US.
imagination time over … back to your regularly-scheduled economic depression.
The most regressive tax in our national tax code, and one of the most regressive taxes on the planet, the payroll tax that funds Social Security, takes a big nip from those earning less than $107,000. It takes not a penny from those earning more.
It takes 6.2% of the first 107K they make just like everybody else, which is matched by the employer or the person himself if he is self-employed.
Mr' Silverstein is looking to turn Social Security into a better revenue source, instead of functioning as a pension/insurance plan as it was originally intended.
[...] “Off topic” – political news and more Posted in December 10, 2009 ¬ 6:43 pmh.adminComments Off One of the good guys [...]
I grew up during a time when the middle class was thriving and it was commonly accepted (even by republicans!) that this was a good thing! How's that for imagination! At the risk of beating a very dead horse, I have to observe once again, that our problems in this country can almost all be traced to greed and ignorance. Same old (but very formidable) culprits.
[...] din bloguri straine One of the good guysTax The Rich ? Now!US Economy Loses Another 85,000 Jobs in December 2009 ? 10% UnemploymentMassachusetts Democrats plan [...]
imagine … a US with a thriving middle class [paying moderately assessed taxes!] … one where you don't worry about [losing] your job for attending your child's mid-day kindergarten graduation.
If you want moderate taxes, you have to accept moderate benefits. If you want the government to manage the basics of your life like what times you're expected at work, you're asking for something expensive.
It's for your own good, ass.
One of big changes in this century, was the rise of people getting rich off of the government, instead of their own abilities. It's blatantly obvious that bankers, for instance, are getting massive rewards for their big screw-ups at taxpayer expense. The banks themselves are getting this treatment because the entire banking system is poorly designed for citizens or stability (or beautifully designed, if you're an owner, it depends on your perspective). It would make sense that the people that have the political connections to get a teat on the government cash cow, would also be able to use them to get preferential tax treatment.
In short, you'll have to change out the current political machines in order to fix the tax system.
Chalking problems up to greed is like chalking them up to breathing — it's a necessary part of us. The ignorance thing is solvable, and it's up to us to solve it, but there's a lot of interested (yes, greedy) parties that don't particularly want it to be solved. Distraction seems to be their favorite attack right now.
If you want moderate taxes, you have to accept moderate benefits.
i'm supposing that made sense, after a fashion, when you typed it; but it was completely lost in the translation.
something like 50% of the working population reportedly won't be paying income tax this year. wouldn't we be a lot better off economically if the middle class were contributing to something besides the tally of those on unemployment and food stamps?? .
A government that manages basics of your life like when you're expected at work will be expensive.
who said anything about managing the basics of one's life?? lets start with dispensing with 'management' and 'exempt' roles unless you're actually managing direct reports. IT is a field where that would make a humongous difference. being paid by the hour, if its good enough for lawyers, is good enough for the rest of us. and we'll likely charge by the quarter hour instead of by the tenth of an hour. its not at all uncommon in IT to be required to work many many extra hours [evenings and weekends] for no additional income because they can. no wonder 'productivity' is so high!
i'm not talking about managing any individual's life. i'm talking about freeing people from the onerous imposition of corporations into their lives, as shocking as that might sound. doing it the other way around hasn't worked so well. we've demonstrated that a vibrant, thriving middle-class is clearly in our national interests.
greed only becomes the problem when the greedy are successful enough at being greedy to exert control over [capture] those regulating them. then its a problem because the greed is unmitigated.
as to ignorance … you can at least educate people, so long as it doesn't interfere with their intake of american idol, dancing with the stars, or survivor. bread and circuses is alive and well.
Articles such as this are pure one sided and play on the current media frenzy.
I hope they do put a transaction tax so the individuals here can see how much of this tax will hurt the lives of the poorest Americans. Sure it will hurt finance companies but it will quickly flow down to the price of goods. This tax unlike others will hurt capitalism at its core but creating inefficiencies in free markets. Spreads on Forex, Stock markets, Real Estate and almost all traded items will increase. It will prevent efficient price discovery and the ability for effective arbitrage. The financial markets are used by main street to a HUGE extent. Procter & Gamble, Airlines, Car companies can hedge the price of commodities, currency and equity. By taking that away you are adding risk to their business or at the very least increasing the cost. For low margin items there will be a fairly large effect.
This is a TERRIBLE IDEA. But yeah tax the bankers… by hurting market efficiency. Sounds good.
Side note… taxing the rich… also a bad idea. You may or may not believe the trickle down theory… but you can't dispute the fact that venture capitalists/investors provide the majority of startup capital and feed innovation. That money comes from the rich… and they will move. If you didn't have to work… there isn't much reason to stay. The mobility of the rich is much higher than the average Joe. So in a way you are sacrificing short term pain (restructuing the tax system, financial regulation, asset devaluation) by funding the deficit with higher taxes.
Good Luck…from Canada.
I'm talking about freeing people from the onerous imposition of corporations into their lives.
Unfortunately working is pretty much by definition an onerous imposition, one we bear for the benefit of a paycheck.
It can be a pretty decent paycheck, especially for people who make quality-of-life tradeoffs for more money. Yes, IT people have to work odd hours and carry pagers, they need a lot of school, and they have to deal with hard technical problems. In exchange they make more than many people in jobs with two or one or none of those demands.
On the other hand, they bear little personal risk in business outcomes (as opposed to sales people paid on commission), they don't have to have 30 years of experience, they don't have to be good at schmoozing the press; so they make less than salespeople or senior executives.
If you don't like that bargain, obviously, don't go into IT.
price discovery?
efficient markets?
you're kidding, right? i mean, i'm thinking you're not, but given whats going on these days its kind of hard to take seriously … no offense.
RPTFLMAO…
Please you have to stop, I am going to hurt myself.
First Transcontinental Railroad
People getting rich off the Government is par for the course and always has been…
Yeah I agree. Prices in the markets are crazy and has been increasingly volatile. But of there has been a lot of information to digest and the response is somewhat rational. With all of the instability in the US and world political environment, I see it being very hard to assess a lot of long term macro issues.
But do you really think a tax designed to remove liquidity and a well arbitraged market is going to help? It is going to make things much more volatile by removing trading volume and increasing the weighting of that marginal investor. And it would disproportionately affect the people not responsible for this mess. Real Estate and Securitizing loans… are not highly traded issues. The expense would come out of other sectors of finance. Not efficient method of taxation. It would be like increasing gasoline tax to make the domestic automobile sector pay for its bailout.
Unfortunately working is pretty much by definition an onerous imposition, one we bear for the benefit of a paycheck.
i don't buy that. we don't pay people for the privilege of making them miserable. we pay them to perform some task or tasks we need doing. it may be general labor … it may involve expertise … perhaps both. its not sensible though to alienate your workforce like what is so common now.
Yes, IT people have to work odd hours and carry pagers, they need a lot of school, and they have to deal with hard technical problems. In exchange they make more than many people in jobs with two or one or none of those demands.
there was a time when some of that was true … now, not so much. pagers and cell phones are often part of the deal [except when the company decides to quit paying for them and is surprised when everyone turns them in]. depending on the discipline there isn't so much school involved. more often than not its aptitude more than anything. now, if you're going to be a network engineer or a developer, sure schooling comes into play. of course after you've got that schooling and look forward to a decent salary the CIO is looking to move your job to india.
as to the salaries … surprise … they've been diminishing over the years, certainly since the tech bust when we ended up with a lot more geeks than we needed. if you are in a call center you can expect a whopping $10 / hour and some of the most horrid overbearing conditions you might imagine, presuming your job hasn't been off-shored to the philippines. in point of fact there aren't many IT jobs not under threat of offshoring. there was a time when a decent desktop technician could expect $25 or $30 / hour but not so much any more. esp in the case of windows pc's its judged much easier to wipe the drive, drop a new image onto it and hope the user had his data backed up on a server somewhere. it doesn't take much more than a high-functioning monkey to do that. the examples go on and on but the bottom line is that the tech departments have done a marvelous job shoving jobs offshore and taking advantage of H1-B visa's in order to cut domestic wages and job security here in the states.
On the other hand, they bear little personal risk in business outcomes (as opposed to sales people paid on commission), they don't have to have 30 years of experience, they don't have to be good at schmoozing the press; so they make less than salespeople or senior executives.
you mean no personal risk like executives and such have no personal risk? in my many years of IT i saw one stupid idea after another come down from CIOs who had grand ideas that were totally ludicrous. when push came to shove it was the implementation that was judged to be lacking, not the idiocy perpetrated by those in the c-suite. my personal favorite was a 'lady' CIO who hailed from great britain … she would come up with outlandish stuff she'd read about in CIO magazine or something and demand it instantly be implemented. never mind if it worked … shove it in … it can be fixed later.
If you don't like that bargain, obviously, don't go into IT.
IT can be a great and challenging field … full of excitement and fun in spite of long hours and obtuse sales people/executives. but not in corporate america. the things wrong in IT … all of them … aren't because IT sucks … its because the people running the show are allowed to treat you … well … however they want to. there's always another puke in line to fill your shoes. the stories go on and on and on … of course they're not limited to IT.
and regardless of your vocation its not reasonable to expect someone to show up bright-eyed and bushy-tailed wednesday morning at 7am after being up til 3am correcting an outage created by some idiot who shouldn't have been allowed to tie their own shoes in the first place, much less make decisions at a corporate level. its even less acceptable to expect and require someone to be in the office all day saturday after working ten hours / day all week just because some idiot who can't spell “project management” decided on a delivery date without any consideration as to what it takes to get from point a to point b.
i'm not saying it should be all fun and games. there's a reason its called work and i have no problem with that. i don't even pretend to have all the answers. but frankly we aren't even having the discussion and it badly needs to be fixed. because IT aside things are bad and getting worse. our path is not sustainable.
There is a simple solution to your problems, it's called a Union. Now stop complaining and convince your fellow workers to either create or join one…
Good Luck!!! You'll need it…
for the record i was responding only to your comments about market efficiency and price discovery as i don't see any prices being discovered and there is no efficiency. i mean, c'mon … fannie? freddie? AIG? still being traded and with prices greater than zero?? i agree mark-to-market has some … issues … but mark-to-fantasy isn't exactly efficient and i would argue it hinders price discovery through opacity.
but i digress.
as to your question about taxation … my default answer to any tax issue is “no”. i particularly don't feel that the transaction tax [whats the name? alfred? dick? ah ... tobin ... thats it] would be a particularly good idea. with full disclosure i have to concede that i'm pretty active in the US equities markets and so have an even greater distaste than the average joe might. i do have to admit that if it could be logically applied only to HFT systems that i would probably drop my objection because in spite of their claims they're drying up liquidity rather than adding it and doing the markets no good in the process.
i'm simply in favor of sensible regulation and level playing fields. we wouldn't even have to be talking about this silly transaction tax in the first place if we'd simply applied the laws and regs already on the books [and of course regulated the OTC derivatives onto a managed exchange]. but that would have required honest public servants acting in regulatory roles instead of captured politicos who have no interest other than aiding and abetting the thieves running the show.
LOL !!! … oddly enough, i'm not exactly in favor of unions either. i see them in some circles as a necessary evil. and they wouldn't be necessary or even desirable if we had reasonable labor laws back on the books.
in any case … a delightful and thought-provoking debate … thank you very kindly … cheers
The problem with most of these arguments is that marginal tax rates do not determine what people actually pay in taxes. You really have to compare effective tax rates which take deductions, credits and other adjustments into account. You can see some comparisons from the CBO for every year between 1979 and 2005. What becomes clear is that the tax burden has gone down for everyone. Taxes have been reduced so much that almost half of Americans pay no income tax (though they still pay payroll taxes, obviously). What's also clear is that while marginal tax rates for the rich (top 10%) have gone substantially down (from 70% in 1979 to 35% today), their effective tax rates went down much less, from 29.6% to 27.4%, or just over 2%. So you see, marginal rates aren't very useful for determining what the actual tax burden is.
If you look at Table 1B in the CBO annex I linked to, it lists the share of federal tax liabilities borne by people of various income levels. The data here clearly show that more federal monies come from the rich than ever. The reason is that although taxes for the rich have been reduced over the years, they've also been reduced for everyone else to the point where almost half of filers pay very little or no tax.
Personally, I think what this tells us is that taxes are probably too low all around. Although I understand many liberals would like to see the rich pay for their new spending programs, I think it's fiscally dangerous to base government revenue on a narrow slice of the tax base because the revenue stream will be subject to the year-to-year fortunes of that slice. California has learned the hard way how badly revenue can tank when your tax base is too narrow and the groups you're taxing most heavily lose income. One aspect of the rich is income instability, meaning their year-to-year income can vary widely – much more than is typical for someone in the middle class. Tax revenue will also fluctuate which is fine for general revenues, but could spell fiscal trouble if it's tied to a program that requires stable funding. For enduring social programs I think it's much wiser to spread the burden – not only so that everyone has buy-in, but a wider tax base is more stable and more sustainable, both politically and fiscally.
To conservatives I would suggest that you need to rethink your predilection for constant tax cuts. If you keep reducing taxes then most Americans will pay no taxes at all which doesn't strike me as fiscally or socially wise. You should also realize you get diminishing returns to the economic benefits of tax cuts when so many people pay no effective tax. Besides, we have run deficits almost my entire life and doing that is actually a tax increase on future generations.
Finally, those complaining about the unprogressive nature of the payroll tax – well, that's the way the system was designed, which was not as a wealth redistribution program. It was designed to be funded primarily by those who will eventually use the benefits and it was viewed as an earned right for all Americans who pay into the system. Personally, I would rather see means-testing for social security and medicare rather than tax increases on the wealthy and I believe that's more equitable than additional taxes.
Not an unusual position for people who work in IT, I have worked in IT for over 25 years and in that time I have seen enough to convince me of the desirability of Unions, but I have also observed that most IT people would rather see their jobs outsourced, and their wages driven down through the use of H1B visas than join a Union.
And the reason you had decent and enforced labor laws is that you had powerful unions who could keep politicians & corporations honest…
Its not reasonable to expect someone to show up bright-eyed and bushy-tailed wednesday morning at 7am after being up til 3am.
I'm a manager, and I pay people to make my headaches go away, including the reasonable ones, the unreasonable ones, and the ones that are a result of my own dumb ideas. The better you can do that, the more I'll pay you. If you can do it at 7 AM after four hours of sleep, I'll nominate you for sainthood.
But whether that's worth it to you is ultimately your call; I can't make it for you. And actually trying to guess where different people draw the line at “reasonable” is a whole headache of its own.
Why don't you just say “no” when someone asks more than you're willing to do? Why are you expecting that to be their job? You'd be making an active choice about your work/life balance, and that would have consequences, but a different balance sounds like exactly what you're wanting.
I'm a manager, and I pay people to make my headaches go away, including the reasonable ones, the unreasonable ones, and the ones that are a result of my own dumb ideas. The better you can do that, the more I'll pay you. If you can do it at 7 AM after four hours of sleep, I'll nominate you for sainthood.
child's play … esp after running release calls from 6pm to 6am and then working through the issues of backing out a failed release
heck, you're easy … if thats all it takes then i and a good number of people i know give the vatican a run for its money when it comes to headcount of saints … not that they are all that saintly.
Why don't you just say “no” when someone asks more than you're willing to do? Why are you expecting that to be their job? You'd be making an active choice about your work/life balance, and that would have consequences, but a different balance sounds like exactly what you're wanting.
we're not talking about “hey, would you mind coming in saturday for another five or six hours of free-for-me work on top of the fifty or sixty you've already put in this week?” … we're talking about “we need the team in tomorrow [saturday] morning at 7am … and don't make any plans for sunday either.” and you know what? i did say 'no' … earned me more than one conference with HR.
i and a bunch of others would have moved heaven and hell for the few good managers we worked for. they were in the minority and their services were no longer required after a time. management, as you undoubtedly know, is actually not that hard. you surround yourself with good people and take care of them. don't take advantage of them and don't mistreat them. stand between them and everyone else and they'll by god take care of you.
i just don't see where unions should be needed. its just more of an adversarial environment. everyone should be working together to achieve the goals that need to be met but the bottom line is that it isn't that way. the pukes at the top want to squeeze more and more for less and less. the folks on the other end rebel and want more and more to do less and less. after all, if the CEO is getting $15mm or $20mm for running the company into the ground folks figure it shouldn't be coming out of their pockets and i can't say i disagree.
you're right about keeping politicians honest though … if we could make any gains in that are it would make some huge differences. as it is they're owned and not interested at all in the folks they represent.
we're talking about “we need the team in tomorrow [saturday] morning at 7am … and don't make any plans for sunday either.” and you know what? i did say 'no' … earned me more than one conference with HR.
That would have been too much for me too. But obviously if my job were expecting me to work every weekend and not making it worth my while, something would have to give. Conferences with HR sound like a minor consequence–probably too minor.
Management, as you undoubtedly know, is actually not that hard. you surround yourself with good people and take care of them.
That's easier said than done, and that's only half the job description. The other half is getting as much work done as possible.
You're comparing the creation of the railroads (a one-time act, BTW) to:
Endless farm subsidies to factory farms.
Fannie Mae, Freddie Mae, Ginnie Mae, and Sallie Mae (well, maybe not so much on Sallie)
Government protected medical monopoly (the AMA).
Government enhanced legal monopoly (the ABA).
Bank bailouts
The Federal Reserve (remember that it's ultimately a privately owned corporation, the interest on our debt goes to them, and we don't even know who “them” really is.)
Protected Peanut farmers (You can grow peanuts and eat them, but you can't legally sell them.)
Pork projects made to help one company get rich.
“Regulations” that are made to protect existing industries from new competition.
And probably quite a few that I've forgotten or don't even know about.
Yeah, that sounds about equal.
“The most regressive tax in our national tax code, and one of the most regressive taxes on the planet, the payroll tax that funds Social Security, takes a big nip from those earning less than $107,000. It takes not a penny from those earning more.”
I'll give you the benefit of the doubt and assume that you were just taking poetic license and aren't really suggesting that the last sentence there is actually factually accurate.
In any case, payroll tax aside, I'm not opposed to ending tax loop-holes and other favorable tax treatment given to the super rich. The very rich are paying more of the total share of taxes than they have in the past, but as others have pointed out that's actually *despite* the fact that their marginal tax has lowered compared to other segments. It is due to the fact that the very rich have an increasingly greater share of total income. On the other hand, the evidence that I've seen suggests that the tax code is may be too progressive at the lower end of the ladder (http://gregmankiw.blogspot.com/2009/11/poverty-…). So the tax code, in my opinion, may be both too progressive (at the bottom of the ladder) and not progressive enough (at the top of the ladder).
But what I object to most of all is the tone of this post. Let's debate what is fair for the rich and the middle and the poor to pay. Let's talk about the impact of the tax code on our economy. But pitting one class of people against another isn't going to help anyone. The increasing wealth gap in our country is troubling, but I'm not sure how punishing the rich helps those at the bottom. Why not try to investigate and mitigate the cause of that trend (why are the rich getting richer while the poor can't seem to get ahead?), rather than just patching over the problem with redistributive tax policy?
“I grew up during a time when the middle class was thriving and it was commonly accepted (even by republicans!) that this was a good thing! “
I agree, JSpencer….. Totally.
We had a huge middle class AND a huge industrial economy with high-paying low-skill jobs. Then we shipped most of that overseas or to Mexico. Now all that is left is a small industrial base, a huge service sector, lawyers, and healthcare professionals. That's pretty much it. It's very hard to maintain a middle class with that kind of employment choice.
“i'm not talking about managing any individual's life. i'm talking about freeing people from the onerous imposition of corporations into their lives”
I'm all for that. But it depends on your proposed path to this life-without-corporations lifestyle. You'd have to set up a standard wage for every specialty or craft in the US. Unions do this now with skilled crafts (welding, pipefitting, carpenters, etc). We could have the DOL draft and enforce per-job wage standards – but that will drive the far right completely nuts and would be presented as “price-fixing”.
What's your proposal?
Everyone should have to pay SOMETHING in taxes, even if it is only five dollars a year. It's utterly ridiculous that 47% (if I recall) of Americans pay no federal income tax. Meanwhile, my husband and I are getting the bad news that we owe ANOTHER $3500 in federal income tax, on top of all that we've paid this year. Thousands and thousands of dollars, it makes me ill to think about it.
We are in an era where most people at the bottom of the socioeconomic ladder pay nothing, and the rich pay a lot, but they're so rich, that it means very little to them. Meanwhile, the middle class is getting squeezed by increasing energy costs, the cost of borrowing money, the cost of college, you name it. We're the ones shouldering the burden of paying these bills and I feel completely tapped out. Just sickened by the amount of money that goes directly from my pocket to the various taxes we pay. And I'm a Democrat!
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What's your proposal?
i don't think we need to go so far as wage/job standards. and i wouldn't want the gov't to be setting them anyway. simply starting by dropping the exempt status for management jobs that clearly aren't management would make a huge difference.
my biggest contention is that this is one of the debates we most need to have [not that the grand no party would let us have it] but that it isn't even being discussed. given what i've seen lately wrt corporate control of congress [irony: because of said controls this can't happen] i would be in favor of pretty radical changes … to the point of corporations [those actually incorporated; not private entities] having structural wage controls … something along the lines of maximum combined compensation ratios for those int the c-suite as compared to the average / median wages at the company of everyone not in management. the CEO and his corrupt BoD can pay themselves whatever they want so long as it isn't greater than 35X the average or median pay of everyone else at the company.
as to offshoring … offshore away, but the same standards we set up here would have to apply there. and if there is a wage arb going on then 50% of the difference should be paid to the gov't in taxes with no opportunity for write-offs. the CxO's want to pay a pittance wage to enslaved kids overseas and charge the same prices over here that they always did. the savings aren't being passed along … they're being pocketed. thats not sustainable. continuing on that path we won't have the wages and salaries over here to support much of anything, and i think thats some of what we're seeing already. this depression was ignited by a credit bubble bursting but people got pushed to the wall and their spending got the better of them. you can't continue to spend and increase what you're spending at a 21st century rate whilst paying late 20th century wages.
there are many topics to be covered within this subject; i don't pretend to have all the answers … but i do have ideas. we need to be having this discussion at a nat'l level
You said and I'll quote: “One of big changes in this century, was the rise of people getting rich off of the government, instead of their own abilities., I just pointed out that this sort thing has always happened and gave you the most notorious example from the nineteenth century…
In the nineteenth century we also had the homestead act that gave land to the settlers, another nice government giveaway…
2009 Tax Rate Schedules
Damn those lucky duckies. They aren't paying taxes cause they don't earn anything…
DQ, the tax rates are a start, but you also have to consider the exemptions on that income. The net of it is that the bottom 50% of households pay less than 3% of the income tax. And their share of the tax burden has been *falling* for a decade. Yes, the same decade George Bush was in office.
Federal income tax is only part of the story; we also saddle the poor with sales taxes and road tolls and surcharges and pass regulations that drive up the base prices of many of the things they buy. On the other hand we also give them endless handouts and services–so many, according to AdelinesDad's link, that they can make more money staying poor.
good points all … and lest we forget … the lower and middle classes get squeezed even harder by imposing fees and judgements to fund gov't that in no way are legislated. the formerly great state of CA is a perfect example right now. the governator wants to add speed sensors to traffic lights … not to make intersections safer but to collect more revenue.
if thats what they want to do … thats fine … but we need to end these funding games. new rule: henceforth any and all monies collected will not be delivered to a budget related to the one imposing/collecting the fine. dollars collected by speeding tickets for example should go into the fund paying for court-appointed attorneys. that would end a lot of these games right in their tracks.
For the simple reason that their income has been falling for the last decade… I am sure that most of them would happily pay more taxes if they got more income.
I am sure that most of them would happily pay more taxes if they got more income.
I have yet to meet anyone who was happy to pay more taxes under any circumstances.
Most of the regulations that we have are there to protect people, ie. to insure that when you order a burger at McDonald's, it is made primarily of beef and not of rat meat.
Sure. The poor (as well as everyone else) have to pay a little more for that protection. And for protection from spilling hot coffee on their coochies. And for posted calorie counts and a trans-fat police to protect them from getting fat. And for many other protections that sensible poor people might well decline if they had the option to keep the money instead.
Not sure if you're being sarcastic or not, but yes, even people who earn “nothing” have the ability to pay a token amount toward the tax burden in this country. According to this article,
http://money.cnn.com/2009/09/30/pf/taxes/who_pa…
more than 47% of the people who file federal tax returns will not pay any federal income tax at all, and some of them will even get a refund, anyway! Sixty nine percent of people who earn less than $50,000 will pay no federal income tax, at all.
From what I have read other places, it is married couples that pay 75% of all federal income taxes, even though they file only 40% of all returns. How is this sustainable?
And when the kids of these parents go to college, they are frequently not eligible for tuition assistance, since their parents “make too much money”. College bills of $50,000 or more (and that's a conservative estimate) are due to hit me in the next few years, so my sympathy with those crying poor is strained. Especially since it is me and mine that are paying the bills in this country, and receiving little of the benefit.
EVERYONE should pay something, everyone should contribute.
Thiago is right on the mark here. And, I'll bet 99% of the population can't explain, nor even guess, how many jobs are created from efficient, liquid, and well arbitraged markets.
The unemployment from this recession, WILL, I repeat, WILL last longer if they pass this transaction tax. For just the tip of the ice-berg, Google “Irene Aldridge Transaction Tax” for an explanation. She summarized the obvious. She didn't touch on, the unquantifiable effect, from companies having to pay a higher price to hedge away risk.
For the uneducated swill believing general public, I ask the following, (rhetorical) question:
If the government can simply create jobs, with a tax, why is there ANY unemployment?
I don't think I qualify as a member of the uneducated, swill-believing general public. Or a swill- peddling public member for that matter when it comes to financial and market matters, inasmuch as I've been writing about business and economics for more than 30 years and spent a fair amount of that time as a senior editor with Bloomberg, the world's foremost financial reporting service. Let me nonetheless comment to this poster that I've heard his world-will-end twaddle every time anything that threatens the excessive profits and useless churning practices of Wall Street's bonus babies proposed. No, a small Tobin tax would not impair market efficiency or liquidity — except for the giant flash traders whose efficiency and liquidity contributions benefit no one but themselves. The notion that it would keep companies that need really useful hedges from doing so is nonsense —since such hedges are not half-second numbers and a piddling transaction tax would have only a piddling effect on their hedging decisions. Without belaboring all the overdone or outright made up rationales for opposing a Tobin tax, here's the most important thing to remember about such a tax — it would help redirect capital away from casino trading and into useful economic purposes. Case closed!
I'll ignore the pile of envy and wrongful resentment on this thread and just address the following complaint:
“[T]he payroll tax that funds Social Security, takes a big nip from those earning less than $107,000. It takes not a penny from those earning more[.]“
I hope the author of this isn't agitating under the delusion that ending the “cap” or “ceiling” to income on which this tax is levied (which actually makes sense) will rescue or save Social Security. It won't.
It doesn't matter if advocates of ending the cap choose to be low-life thieves, deliberately, and insist that the future benefits of those that would be paying new taxes if the cap were eliminated, didn't get their benefits adjusted (raised), as they obviously should.
Whether benefits were adjusted or not, eliminating the cap on income subject to tax would not rescue or save Social Security. It merely would delay the onset of deficits (which is the point where Social Security would truly be failing — it would at that point require new taxes, redirected revenue, or borrowing in order to continue to pay benefits in full) by a few years. That's all.
A previous poster suggested I was “uneducated swill” for opposing a Tobin tax. This poster hints I might be one of those “low life thieves” who opposes eliminating the ceiling on payroll taxes without concurrently increasing the benefits of people who would pay additional payroll taxes in consequence. Hmmm. Such a load of negative baggage to carry around. But I shall nonetheless endeavor to bear up under the load.
About my payroll tax suggestion. I advocate eliminating the cap and taxing people with incomes above the present limit, while not adjusting upward (capping) the benefits these people ultimately receive to the present limits. Is this fair? Will these higher income people be taxed more without getting back more? Of course! So what. Haven't you noticed that no one gets back in the form of benefits exactly the amount they pay in taxes? No one. Almost all my own taxes go to pay for things in places I never visit, and a goodly amount on things I don't especially approve of. That's what a tax system does. It redistributes wealth.
I'll ask you to step back a moment, if you will, from the specifics in my post. I'm trying to get across the point that someone (other than our present Chinese bankers) is going to have to pay for all the things the government is doing or plans to do, and service the huge debts we are running up. I think the most well-fixed segment of our population should come up with that extra money. They can best afford to do so. And if other segments of our society are obliged to do the job it would not only be morally repugnant but economically foolish and socially disruptive.
You know, I've never agreed with a creating a new tax when a simple regulation (fixed interval trading) would do. But if hysteria and name-calling without concrete facts are the best arguments against it, I may have to change my mind.
Again, you do a beautiful job of equating one-time give-aways to permanent teats.
Also, the homestead act was really a wealth transfer — from the natives to American citizens. You might want to consider that before using it as a symbol of great American giveaways.