If you're going to suggest top earners pay the majority of taxes you need to look at the whole picture-- what percentage of income all people pay in taxes: federal, state and local. If you do, an entirely different picture emerges.
16
The reason we the top 20 percent pay that proportion of the taxes in this country is very simple. We take home more than 80 percent of the wealth.
9
So glad you asked, WCB! the top 1% earn 20% of income and pay 39.5% of income taxes collected. The bottom 50% earn 11.5% of income and pay 2.7% of income taxes collected. The situation is even more unjust than originally thought! The bottom 50% need a four-fold increase in taxes!
1
Simple grade school math. When a few take the lions share, little is
left over to spread down the line.
left over to spread down the line.
7
We all know how Republicans in Congress are PAID to vote (by corporate, political contributions) and how they vote. It's not entirely different with the Democrats, but the Dems need to put their votes where their mouths are and take the lead agains moneyed interests.
The top affluent 20% of Americans are sucking the oxygen out of the room for the other 80%, and this translates into better housing, better health care, better education for their young, more fun, and the smug, moralistic notion that they are somehow "better" and more "worthy." Many Dems are in this category and Hillary thought there were enough of them to get her elected. She calculated the numbers and ignored much of the United States and its citizens who are working to get by or striving to enter the top 20% themselves. But there were too many "deplorables" in among the bottom 80% in those places where they live and work. Hillary was fighting the odds but not Wall Street. I wonder why? I guess they had made her and her husband rich.
It is time for the Democratic Party to become the party of the Middle and working classes. And they have to mean it. The rich are taking care of themselves and each other, thank you....
The top affluent 20% of Americans are sucking the oxygen out of the room for the other 80%, and this translates into better housing, better health care, better education for their young, more fun, and the smug, moralistic notion that they are somehow "better" and more "worthy." Many Dems are in this category and Hillary thought there were enough of them to get her elected. She calculated the numbers and ignored much of the United States and its citizens who are working to get by or striving to enter the top 20% themselves. But there were too many "deplorables" in among the bottom 80% in those places where they live and work. Hillary was fighting the odds but not Wall Street. I wonder why? I guess they had made her and her husband rich.
It is time for the Democratic Party to become the party of the Middle and working classes. And they have to mean it. The rich are taking care of themselves and each other, thank you....
9
....and then there was the "death tax", the abolition of which will further enable the ultimate prize: an American aristocracy.
14
Thanks for the article, Dave.
I cut out part of it and emailed it to my Republican Congressman, hoping against hope that he might see the wisdom of a higher tax rate on the wealthy, our next big challenge in the Congress.
I cut out part of it and emailed it to my Republican Congressman, hoping against hope that he might see the wisdom of a higher tax rate on the wealthy, our next big challenge in the Congress.
8
Will we see motivated people protesting giving the 1% and large corporations the benefit of changes to a tax code which already favors them as we saw when changes to medical insurance markets were proposed? Or will we see passive grumbling?
The Ryan/McConnell plan was to implement a tax code plan which would lower those top rates. In that plan, health insurance was a warm-up, a detail to make this step easier.
If the demonstrations are not at least as large, the Republicans will cut the top rate, eliminate some of the middle class deductions, lower the total taxes collected and drown the federal government in a bath tub just as they have promised these past 20 years.
THIS, not health insurance, is the main event.
The Ryan/McConnell plan was to implement a tax code plan which would lower those top rates. In that plan, health insurance was a warm-up, a detail to make this step easier.
If the demonstrations are not at least as large, the Republicans will cut the top rate, eliminate some of the middle class deductions, lower the total taxes collected and drown the federal government in a bath tub just as they have promised these past 20 years.
THIS, not health insurance, is the main event.
12
The global corporations avoid paying their fair share of taxes(ALREADY FULL OF LOOPHOLES) through use of internationally available systems such as corrupt political influence....foreign headquarters for lower tax liability....multiple shell corporations and "foreign loss" offsets to hide profits....and outright bribery to obtain contracts non-competitively and cheaply in countries with few environmental or safety constraints and worker wages that barely sustain life.
Meanwhile,these corporation benefit from the infrastructure military protection ,and natural resources at home .Its the grand capitalist,always tottering,Ponzi scheme which, in serial booms and busts of economic bubbles, maintains wealth for the few and grinding survival subsistence for the many.......while mindlessly pillaging the earths resources ,without even concern for survival of
biosphere of life that sustains all life !
Meanwhile,these corporation benefit from the infrastructure military protection ,and natural resources at home .Its the grand capitalist,always tottering,Ponzi scheme which, in serial booms and busts of economic bubbles, maintains wealth for the few and grinding survival subsistence for the many.......while mindlessly pillaging the earths resources ,without even concern for survival of
biosphere of life that sustains all life !
18
I have discovered a great truth about money. Yeah, me, the non-economist, non-rich guy. It is this: there is nothing to buy with it or, more specifically, too much of it. When I say nothing, I mean nothing after a certain point. How many houses do you want? For Romney, Mitt, that apparently meant five, the last one being constructed while he was running for president to be equipped with the famous elevator for a car. How much convenience and satisfaction does that offer you?
What Americans want more than anything, and I confess I share some of this desire, is to be apart, to be away, far above the madding crowd. That's why the very rich live on big estates, to show they don't have to be meeting and talking with anyone. They've made it, you haven't. That's a big part of what big money offers, exemplified most wonderfully in the personal or corporate jet, costing perhaps ten thousand per hour, high above the crowded seats and screaming babies pushed into ordinary airline seats.
After that, what? A sad emptiness settles over a middle aged man drinking his scotch and soda, alone, at night in a house built for 30.
People who win big lottery prizes go through phases of elation, disbelief, fear and anxiety and, in many cases, a prolonged period of buying anything and everything. Then, they either go broke or wake up.
Why, then, do the rich want so much money? They take it because they can, because they tell themselves that they are special people who deserve...everything.
What Americans want more than anything, and I confess I share some of this desire, is to be apart, to be away, far above the madding crowd. That's why the very rich live on big estates, to show they don't have to be meeting and talking with anyone. They've made it, you haven't. That's a big part of what big money offers, exemplified most wonderfully in the personal or corporate jet, costing perhaps ten thousand per hour, high above the crowded seats and screaming babies pushed into ordinary airline seats.
After that, what? A sad emptiness settles over a middle aged man drinking his scotch and soda, alone, at night in a house built for 30.
People who win big lottery prizes go through phases of elation, disbelief, fear and anxiety and, in many cases, a prolonged period of buying anything and everything. Then, they either go broke or wake up.
Why, then, do the rich want so much money? They take it because they can, because they tell themselves that they are special people who deserve...everything.
20
The cold war ended and we had no plan. Rah rah capitalists just did what they wanted with the Eastern European carcass and have continued unchecked in most of the world. Capitalists have had a great picnic, they see the rest of humanity as ants, just brush us away/kill us. They are thinking of their next slice of pie, not for the greater good of humanity. Humanity is of no concern to them. The US went into Korea, Viet Nam, Panama, Afghanistan, Iraq, etc, each time with no clear end game and no clear way to act for the greater good. But hey, the GOP may lower billionaires' taxes again this year....who needs a plan for a greater good?
7
I have read many laudatory compliments of George Romney; so how did he not manage to imbibe more kindness and compassion into his son? "Corporations are people, my friend."
12
My father was an executive director of a social agency, Family Counseling and Crittenton Services in Columbus, Ohio. HIs salary was puny compared to those in corporate positions yet he managed dozens of professional social workers, psychologist and case workers and served thousands of clients. He was appalled at executive compensation but not out of jealousy rather disgust.
10
If only the son had shown the restraint of the father.
9
A lot of these super rich young Turks have made a lot of money developing new technologies like apps. Take an app like Uber -- that requires a very tiny initial investment and even when the company is well established it's certainly not employing anything like an American Motors employed in Romney's day.
What can be done when companies with huge worth only require tiny workforces and thereby almost all the money goes to one or two people who started the enterprise?
It's no coincidence that heads of huge Silicon Valley companies are starting to promote the idea of a guaranteed minimum income for all Americans. They understand the direction we are headed in with employment and they would like to find some way to "solve" the problem that keeps the finger from pointing at them, either for their innovations or for their staggering paydays.
We need modern, forward looking solutions to our modern problems. Rehashing history is useless at this point in time. The world has changed so dramatically it's not even worth talking about what happened in the past or who was to blame. We cannot find a single solution to our current situation in the past.
Why is it that our public intellectuals, think tanks and academics spend so much time rehashing the past and like zero time coming up with solutions for the present and the future?
Dennis D.'s comment (NYT picks) should be read by everyone. He speaks truth.
What can be done when companies with huge worth only require tiny workforces and thereby almost all the money goes to one or two people who started the enterprise?
It's no coincidence that heads of huge Silicon Valley companies are starting to promote the idea of a guaranteed minimum income for all Americans. They understand the direction we are headed in with employment and they would like to find some way to "solve" the problem that keeps the finger from pointing at them, either for their innovations or for their staggering paydays.
We need modern, forward looking solutions to our modern problems. Rehashing history is useless at this point in time. The world has changed so dramatically it's not even worth talking about what happened in the past or who was to blame. We cannot find a single solution to our current situation in the past.
Why is it that our public intellectuals, think tanks and academics spend so much time rehashing the past and like zero time coming up with solutions for the present and the future?
Dennis D.'s comment (NYT picks) should be read by everyone. He speaks truth.
4
US government has spent countless trillions on countless wars: Poverty, Vietnam, Drugs, Crime, Afghanistan, Iraq, Terror, you name them. Has it won any of these wars? I do not think so. So trillions are lost. Giving more money to the same people does not look like a great idea to me. Make taxes non-fungible, and then we will talk.
6
The title, "When the rich ...." had me expecting a list of different times. Well, it started with Father Romney some 50 years ago. I held my breath, going through the article; would it end before even one another example was named?
Hopes dashed....got to the end. When the rich....was that one time. It was almost like "When hell freezes over." Oh well, once is better than zero.
I see presidential candidate Romney didn't follow in his father's foot steps. Pity.
But I'm too cynical. I do think there was a time when Americans cared about more than money and had ethics. We still have a few of those around, but they're bucking the tide. May they continue bucking.
Hopes dashed....got to the end. When the rich....was that one time. It was almost like "When hell freezes over." Oh well, once is better than zero.
I see presidential candidate Romney didn't follow in his father's foot steps. Pity.
But I'm too cynical. I do think there was a time when Americans cared about more than money and had ethics. We still have a few of those around, but they're bucking the tide. May they continue bucking.
4
In the early seventies, I was given a raise of $25 a week (a decent amount for the time and my situation), only to learn that about 85% of it would be taken by taxes because the raise put me into a higher tax bracket. I was making $10K a year at the time! As a young single woman, I could barely keep my car on the road. Kudos to the 0.1% for gaming the system and keeping it all for themselves; they must be so proud.
11
Two observations:
1. No one with a good accountant paid at the rate of 91%; people structured their income in perfectly legal ways to avoid that. By the 1970s, government sanctioned "tax shelters"enabled many very wealthy people to pay very little in income tax.
2. The very high rates of the income tax from the 1940 to the Kennedy tax cuts of the 1960s were needed to pay down the debt from WWII. Oddly enough, the huge explosion in Great Society spending was preceded by the Kennedy cuts.
3. We need wage growth, not confiscatory tax policy.
1. No one with a good accountant paid at the rate of 91%; people structured their income in perfectly legal ways to avoid that. By the 1970s, government sanctioned "tax shelters"enabled many very wealthy people to pay very little in income tax.
2. The very high rates of the income tax from the 1940 to the Kennedy tax cuts of the 1960s were needed to pay down the debt from WWII. Oddly enough, the huge explosion in Great Society spending was preceded by the Kennedy cuts.
3. We need wage growth, not confiscatory tax policy.
6
It's not just the top tax rate that is driving down general economic growth. When the top earners are able to increase their pay by gimmicks such as stock buy backs then companies are not growing, they are just increasing the pile of cash that executives and shareholders are sitting on. Change the rules to promote company expansion.
Back in the 50's and 60's most companies paid dividends which increased when companies expanded and higher dividends meant greater demand for the stock and higher stock prices. Companies started moving to a "fast growth" model where dividends were dropping in favor of growing the companies faster. What has happened in many cases is the fast growth model has allowed share prices to rise faster than actual growth, to the benefit of executive pay plans.
Back in the 50's and 60's most companies paid dividends which increased when companies expanded and higher dividends meant greater demand for the stock and higher stock prices. Companies started moving to a "fast growth" model where dividends were dropping in favor of growing the companies faster. What has happened in many cases is the fast growth model has allowed share prices to rise faster than actual growth, to the benefit of executive pay plans.
3
Economies are a social phenomena which includes the behaviors of everyone, not just those who control the most wealth. When people who are rich control more and more of the new wealth being created, proportionally, it means that the productivity of the economy is not being shared with everyone and those who are not sharing are not earning more and so cannot afford to buy more. It means that while the rich are richer than everyone else, the economy is not expanding as rapidly as it would if all were getting a greater share. In effect, the rich are taking too much away to allow greater economic growth to occur.
13
All these GOPers pretend to care so much about the Constitution and tradition, but as usual, it is all talk. The Founders were totally opposed to the idea of an aristocracy and massive inherited wealth. They believed it made democracy impossible by empowering the few to wield influence that the rest of We the People could not match,
Of course, they were right. One look at the current distribution of wealth in our country, and the state of our democratic institutions, confirms all of their beliefs about income inequality and its effect on our nation.
And the GOP is still not satisfied. They have declared corporations are people; they have made it possible for the few to rule the country: now they are determined to completely eliminate the middle class with their "trickle down" scheme of stealing from the poor to give to the rich, leaving only the embarrassingly wealthy 1% and the 99% who must grovel for a subsistence level existence. And in what would be laughable if it were not real, they have created a "base" that has propelled one of the worst among them into our Oval Office. Even knowing that he is a danger to our existence and our planet, they are so addicted to power and money that they condone the abomination living in our White House.
Of course, they were right. One look at the current distribution of wealth in our country, and the state of our democratic institutions, confirms all of their beliefs about income inequality and its effect on our nation.
And the GOP is still not satisfied. They have declared corporations are people; they have made it possible for the few to rule the country: now they are determined to completely eliminate the middle class with their "trickle down" scheme of stealing from the poor to give to the rich, leaving only the embarrassingly wealthy 1% and the 99% who must grovel for a subsistence level existence. And in what would be laughable if it were not real, they have created a "base" that has propelled one of the worst among them into our Oval Office. Even knowing that he is a danger to our existence and our planet, they are so addicted to power and money that they condone the abomination living in our White House.
17
The wealthy decide how much tax they wish to pay and hire accountants to ensure that they pay exactly that percentage. If the percentage of their income due to go to taxes is too high for them to stand, Republican politicians are always ready willing and able to find deductions and gimmicks like passthroughs for them.
The rest of us have no choice in our personal tax rates and pay whatever those politicians tell us to.
Still the wealthy whine and moan over having to pay any tax at all...see the pitiful comments above claiming all taxes are slavery.
Trump is at the top of the list of entitled, undeserving, and abhorrent crybabies who have more than they need for a hundred lifetimes.
The rest of us have no choice in our personal tax rates and pay whatever those politicians tell us to.
Still the wealthy whine and moan over having to pay any tax at all...see the pitiful comments above claiming all taxes are slavery.
Trump is at the top of the list of entitled, undeserving, and abhorrent crybabies who have more than they need for a hundred lifetimes.
9
I wonder why Romney even went to work in the morning. Haven't we been told that if we don't cut taxes for the wealthy and compensate them lavishly they'll stop working, stop creating jobs.
8
From reading this, one might assume the benefit from the old top tax rate was that 90% of the income of our top earners was returned to the government, benefiting, assumedly, the nation as a whole. Another reading of it, which should have been spelled out, in my opinion, would be that those top earners, instead of taking more, and therefor adding more to the government coffers, were giving more back to their company, in salaries for the rest of its employees, or in investments - an overall win for the company itself. Imagining that situation for a smaller business looks like a windfall, with a substantial boost for everyone and everything, but step back and look at the larger picture. There is no single person at these larger corporations that is sucking in all the big money. There may be one that stands out, but generally there's a (boys) club hoarding the money at the top, like zombies eating the flesh of the living.
How many worker bees can be expected to understand what a guy does with his 100 million dollar a year salary - or even a 10 million dollar one? Imagine a George Romney Rule, and perhaps those at the top will not seem so parasitic.
One might expect a lot more support all around (especially those for a small government), if the options were spelled out: "Put more money back into your company, or it goes out the door, in taxes."
How many worker bees can be expected to understand what a guy does with his 100 million dollar a year salary - or even a 10 million dollar one? Imagine a George Romney Rule, and perhaps those at the top will not seem so parasitic.
One might expect a lot more support all around (especially those for a small government), if the options were spelled out: "Put more money back into your company, or it goes out the door, in taxes."
9
Let me channel my inner republican. Please read aloud in a shrill voice.
Fake News! Lies! The Free Market is the best answer since Jesus! Now repeat until foam is emanating from your mouth.
Any one who can create though knows this, including the 1%.
But it always comes back to the base and those who believe the myth of trickle down.
Lets see what the 115th and the orange baboon present to the American people.
A great and simple compromise. Lower corporate taxes raise individual taxes over 250K substantially and tighter llc's and was to hide $$
Fake News! Lies! The Free Market is the best answer since Jesus! Now repeat until foam is emanating from your mouth.
Any one who can create though knows this, including the 1%.
But it always comes back to the base and those who believe the myth of trickle down.
Lets see what the 115th and the orange baboon present to the American people.
A great and simple compromise. Lower corporate taxes raise individual taxes over 250K substantially and tighter llc's and was to hide $$
2
"...begot Mitt Romney, a highly successful and personally decent man who has made a couple hundred million dollars." Really? Mitt is a decent man? You mean the same Mitt that said 47% of us don't pay taxes? The one who acted like a vulture capitalist, broke up companies, drove thousands out of jobs so he and his buddies could make a profit? He has a vacation home in my state, we don't think too highly of him here. I know "little" people who have done manual labor for him and said he's a snobby jerk. He clearly didn't learn from Daddy Romney.
10
45 had a consciencectomy long ago...
7
When Mr Leonhardt tosses his open-ender "What's right? I don't know, but top-tier tax rates have been 90-percent.", is it supposed to be a bit of history and a provacative jumping in point?
Trump has already set-up the nation up for his BigTax Lie and now the Republican Congress is poised to wallop, if they can agree between an inside-the-fiscal-park home run or an over-the-far-right-fences for Mill Billionaire.
Instead of waxing poetic about what cuts they should make, shouldn't we be pointing out how each reform (tax increase / loss of service) will underwrite each For-Fat-Cats-Only tax cut.
What is more important? Loosing a bombastic piece of history that continues to divide? Or actually arming the natives with the knowledge of "tweek this, measure that", then all sides avoid a Little Bighorn.
Trump has already set-up the nation up for his BigTax Lie and now the Republican Congress is poised to wallop, if they can agree between an inside-the-fiscal-park home run or an over-the-far-right-fences for Mill Billionaire.
Instead of waxing poetic about what cuts they should make, shouldn't we be pointing out how each reform (tax increase / loss of service) will underwrite each For-Fat-Cats-Only tax cut.
What is more important? Loosing a bombastic piece of history that continues to divide? Or actually arming the natives with the knowledge of "tweek this, measure that", then all sides avoid a Little Bighorn.
1
The tax debate reveals how profoundly Reagan altered the American body politic. The trumpists simply push St. Ronnie's ideas into the domain of the obscene where no one is their brother's keeper.
There is no evidence that trickle down works, none. We can look to Equatorial Guinea, Angola and Congo for confirmation. Evidence that progressive taxation is the civilized life-affirming approach is overwhelming, as we can see in Norway, Sweden and Denmark.
So if the choice is between Equatorial Guinea and Denmark, the 0.1% will go for the former, together with Reagan and Trump. But why ~50% of US citizen voted against a gentle version of progressive taxation is an exercise in disbelief.
There is no evidence that trickle down works, none. We can look to Equatorial Guinea, Angola and Congo for confirmation. Evidence that progressive taxation is the civilized life-affirming approach is overwhelming, as we can see in Norway, Sweden and Denmark.
So if the choice is between Equatorial Guinea and Denmark, the 0.1% will go for the former, together with Reagan and Trump. But why ~50% of US citizen voted against a gentle version of progressive taxation is an exercise in disbelief.
14
Yes, yes..as you say, "there is no evidence that a modestly higher rate would hurt the economy. "... but pas problem. The right-wing thinktanks, academics, politicians and other very well placed, and paid, lackeys of the moneyed elite will not rest until we live in... in an era not unlike Louis XVI's of France? Well, que visionaries!... we are almost there!!
4
There is nothing wholesome, for the country or otherwise, about anyone making such extreme amounts of money as they do today. Who cares about giving billionaires incentive? Someone else will come up with the good ideas, they always have. But as our power structure shifts to one in which a few own everything, we will find that the only people who will profit from anything, coming from anywhere, will be the filthy rich.
Louis Linton exposed the reality. Having that much money, in a world of famine and servitude to poverty, is morally and intellectually indefensible and in the very worst of all possible taste. There is nothing refined, elegant, or sophisticated about greed or hoarding money. Only the disguising tropes made to justify it.
Tax their tacky pants off.
Louis Linton exposed the reality. Having that much money, in a world of famine and servitude to poverty, is morally and intellectually indefensible and in the very worst of all possible taste. There is nothing refined, elegant, or sophisticated about greed or hoarding money. Only the disguising tropes made to justify it.
Tax their tacky pants off.
14
He accused Hillary of NOT closing loopholes that allowed him to legally pay as little as possible. Will Trump close those loopholes or create an environment for his family and his millionaire friends to pay even less???
6
what possible tax policy could a selfish narcissist billionaire have in mind ?
let me guess - more for me, less for you ?
let me guess - more for me, less for you ?
8
"George Romney, a highly successful and personally decent man who thought that making even a couple million dollars a year was unseemly, begot Mitt Romney, a highly successful and personally decent man who has made a couple hundred million dollars."
Mr. Leonhardt, are you familiar with exactly how Mitt Romney made his money? If not, please refer to Matt Taibbi's circa 2012 series of aritcles and Romney and Bain Capital in Rolling Stone Magazine.
Mitt Romney did not inherit or perpetuate his father's personal decency.
Mr. Leonhardt, are you familiar with exactly how Mitt Romney made his money? If not, please refer to Matt Taibbi's circa 2012 series of aritcles and Romney and Bain Capital in Rolling Stone Magazine.
Mitt Romney did not inherit or perpetuate his father's personal decency.
6
"In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio."
Warren Buffett once said he liked to buy companies that had such good business models they could be run by a ham sandwich. The problem today is that many CEOs are ham sandwiches. Some are talented. Some are terrible. But they all get rewarded at ridiculous levels of compensation, regardless of whether they succeed or fail. They get a trophy for participation.
I'm all for allowing entrepreneurs, innovators, and successful company founders to be rewarded for their success. But I would venture that the vast majority of Fortune 500 CEOs are mediocre at best.
Warren Buffett once said he liked to buy companies that had such good business models they could be run by a ham sandwich. The problem today is that many CEOs are ham sandwiches. Some are talented. Some are terrible. But they all get rewarded at ridiculous levels of compensation, regardless of whether they succeed or fail. They get a trophy for participation.
I'm all for allowing entrepreneurs, innovators, and successful company founders to be rewarded for their success. But I would venture that the vast majority of Fortune 500 CEOs are mediocre at best.
7
No, it isn't a coincidence that the rich now have more income and are taxed less. But one is not the cause of the other. They are both due to the fall in the power of the US working class. And that is for two reasons.
1. Back in the day when corporations depended on massive numbers of semi-skilled laborers working together in huge factories, those laborers had the power to strike, or organize to withhold their labor in other ways. Our ruling class thought it necessary to compromise by accepting a smaller portion of the output.
2. During those years, the United States and other advanced capitalist countries were in a sort of "beauty contest" with Communism. As long as Communism appeared to be a viable alternative, our rulers thought they had to make things good for the workers, least they rebel.
But, in the last three decades, both of those dangers to our rulers have abated. So, now they can grab much more of the national income, and get taxed much less.
1. Back in the day when corporations depended on massive numbers of semi-skilled laborers working together in huge factories, those laborers had the power to strike, or organize to withhold their labor in other ways. Our ruling class thought it necessary to compromise by accepting a smaller portion of the output.
2. During those years, the United States and other advanced capitalist countries were in a sort of "beauty contest" with Communism. As long as Communism appeared to be a viable alternative, our rulers thought they had to make things good for the workers, least they rebel.
But, in the last three decades, both of those dangers to our rulers have abated. So, now they can grab much more of the national income, and get taxed much less.
5
Having such tax rates for the rich (but turn into myths that would affect the middle class) is unthinkable in this day and age. We are ruled by selfishness, lack of perspective taking, and insatiable greed.
2
It is impossible for Mitt Romney to be a "personally decent man". The relish he took in destroying our economy and the towns and lives it supported to line his pockets belies that.
You might want to look a bit deeper at yourself if you thought for one second that the tax cuts reagan et al made would do anything but exactly what they did. As it was intended they do and predicted they would when they did it.
Our system was previously designed to keep it stable. The taxes and regulations kept us safe and the greed of Capitalists properly under control by controlling what they could make and what they could charge. It ensured that profits were reinvested in the economy to make new jobs. If profit wasn't invested in creating new products, industry or jobs it was taken by the IRS, to be invested in the economy to create new jobs.
It was an adult system designed by adults who thought long term and were not overly vain or selfish.
You know the thing Mitt Romney fakes so well as his psychopathic self destroyed our economy along with the rest of the vultures all of whom were/are pawns of the British Empire.
You might want to look a bit deeper at yourself if you thought for one second that the tax cuts reagan et al made would do anything but exactly what they did. As it was intended they do and predicted they would when they did it.
Our system was previously designed to keep it stable. The taxes and regulations kept us safe and the greed of Capitalists properly under control by controlling what they could make and what they could charge. It ensured that profits were reinvested in the economy to make new jobs. If profit wasn't invested in creating new products, industry or jobs it was taken by the IRS, to be invested in the economy to create new jobs.
It was an adult system designed by adults who thought long term and were not overly vain or selfish.
You know the thing Mitt Romney fakes so well as his psychopathic self destroyed our economy along with the rest of the vultures all of whom were/are pawns of the British Empire.
3
i am no conservative-but the government taking 91 percent of someones earnings is-Obscene.
1
That rate kicked in at what would be about $2 million today and only on income above that level. A previous poster noted that when he was in that bracket, his actual rate was closer to 45%.
5
Well first of all your take is dead wrong. No one paid 91% just as no one pays 30% today.
The design of the system was to set the rate at 91% for very high earners leaving them the option of investing their money in the economy to keep it going to avoid those taxes. It controls for greed and works for the whole nation by creating jobs. You can check but the rate of investing in American Industry dropped in proportion to the lowering of taxes and regulations that prohibited exactly what was done causing the problems they were meant to prevent when they were removed.
The folks who have been cutting taxes and regulation fully intended to cause exactly the harm they caused and create what we have today.
The design of the system was to set the rate at 91% for very high earners leaving them the option of investing their money in the economy to keep it going to avoid those taxes. It controls for greed and works for the whole nation by creating jobs. You can check but the rate of investing in American Industry dropped in proportion to the lowering of taxes and regulations that prohibited exactly what was done causing the problems they were meant to prevent when they were removed.
The folks who have been cutting taxes and regulation fully intended to cause exactly the harm they caused and create what we have today.
6
There also was a time when the rich did not want to appear vulgar and flaunt their wealth. And old money was quite different from new money. The newly-monied were often the show-offs.
7
Per the argument about higher taxes suppressing entrepreneurship: If you had the choice to work for amount X, or to implement a great idea and make twenty times X, which would you choose?
If I had a great entrepreneurial idea, I would pursue it at anything less than 100% taxes. That is what entrepreneurs do. It is who they are.
Nobody who has any entrepreneurial talent pays any attention to marginal tax rates.
Nobody who has any entrepreneurial talent pays any attention to marginal tax rates.
8
Greed and America are synonymous .. in fact, if you are wealthy in America, you can break the law and buy your freedom ... how many people were incarcerated following the Global Financial Crisis?
Trump will make the wealthy wealthier because he lacks a social conscience due to his intellectual inability to feel empathy.
With the advent of mass automation and artificial intelligence with the consequent increase in unemployment, American society is headed for insurrection and civil disobedience and when this happens, the wealthy will flee to the safe havens they use to evade taxation.
Trump will make the wealthy wealthier because he lacks a social conscience due to his intellectual inability to feel empathy.
With the advent of mass automation and artificial intelligence with the consequent increase in unemployment, American society is headed for insurrection and civil disobedience and when this happens, the wealthy will flee to the safe havens they use to evade taxation.
7
It is naive, perhaps even idiotic, to speak about tax rates. The real issue is tax deductions and tax loopholes which make tax rates a chimera. Mitt Romney during the 2012 campaign admitted that his tax rate was 14%. Even a cursory examination of who paid what reveals that individuals with an income of 1 million dollars or more paid between 12% 22% in income taxes. The same applies to the corporate rate of 35%. No one pays near this and many privately held companies pay no income tax at all year after year. And why eliminate the estate tax (death taxes)? For a couple filing a joint return the first 11 million dollars are exempt from taxes. Of course President Albatross wants to eliminate this as it affects his family. Any bets that this "horrendous tax burden" won't be eliminated?
JD
JD
9
The habit of political writers going along with the sick linquistic trend of speaking about politics as if it were a sport, "looking for a legislative win" is very worrisome. It degrades all arguments and debate into a question of opposition, rather than an effort to work together to produce policies that do "the greatest good for the greatest number". This was the credo of Gifford Pinchot, the first head of the newly formed U.S. Forest Service, in the Teddy Roosevelt administration. This guiding principle simply makes the most sense and should be at the heart of most governance. In this vein, of course taxes need to be raised for those most able to pay. We fought two hugely costly wars on credit, and we let the architects of the 2008 crash take away billions in capital gains that was barely taxed, while a million Americans lost their homes with no debt forgiveness or mortgage rate moratoriums to staunch the bleeding. We continue to go backwards into the future. We cannot sustain this .
7
Taxation is theft, no matter how much it is.
3
It was the culture that resulted in the high tax rates, not vice versa. You have to also see how homogeneously white and male the entire labor force was at the time. And also, there was not so much to buy with all that money as there is today, and global trade was not sufficiently developed to offer a cornucopia of all imaginable products and services to anyone, anywhere. And, there was a strong belief in the good of the government to take care of things and everyone. All this has changed in the meantime.
4
Mitt Romney was personally decent???
A personally decent man would not avoid military service by hiding in France, and then claim, "I really wanted to serve in Vietnam, but it wasn't meant to be."
"It wasn't meant to be?"
My son didn't mean to be but served 27 months in Iraq as an Army captain.
A personally decent man would not avoid military service by hiding in France, and then claim, "I really wanted to serve in Vietnam, but it wasn't meant to be."
"It wasn't meant to be?"
My son didn't mean to be but served 27 months in Iraq as an Army captain.
5
Excellent article. The rich have access to better education, better contacts, better accountants, better lawyers, better lobbyists, better networks. So, over time, they slowly manipulate the system and the laws so that they become even richer and more powerful. In some cases it is blatantly overt—but so often it is an outcome of the human evolutionary trait to protect your “tribe”.
On the other side, there is a creeping sense of disillusionment. They know the system is against them, but it is hard to put your finger on the specifics. Everything is purported to be fair. Work hard enough and you, too, can be just like me. The fact that this is true for a tiny handful of people keeps the majority from protesting too much.
Nobody mentions the word plutocracy. But the US surely is one and Australia is not far behind.
On the other side, there is a creeping sense of disillusionment. They know the system is against them, but it is hard to put your finger on the specifics. Everything is purported to be fair. Work hard enough and you, too, can be just like me. The fact that this is true for a tiny handful of people keeps the majority from protesting too much.
Nobody mentions the word plutocracy. But the US surely is one and Australia is not far behind.
6
One example of the “tribe” protecting itself is CEO pay: The pay of CEOs and MDs of large public companies is far-outstripping the pay of the average employee. As the article states, in the 1960s the typical chief executive made only 20 times the average worker wages; today it is over 270 to 1. Ask a CEO and they will say it was not their decision, it was the decision of the remuneration committee made up of board members of the company. But they are in the same “tribe” so it is in their interests of the members of the committee to keep recommending higher and higher payments. Sometimes the remuneration committee says that they are following the recommendation of outside remuneration consultants. But the consultants also recommend higher and higher pay levels so that they can be re-employed each year. (These are the people who are on the fringes of the tribe and are hoping to be admitted.)
Another example is the election of Mr. Trump. Much of his platform was based on how he was going to help lower-income workers with more employment and higher wages. So far the opposite is happening. Despite all that he said, the likelihood that at the end of his presidency the only thing that will have changed is that the super-rich will be even richer and more powerful.
It reminds of the classic “The Castle” by Franz Kafka. No matter how hard the protagonist tries to reach the castle, no matter what strategies he uses, he never really makes any progress.
Another example is the election of Mr. Trump. Much of his platform was based on how he was going to help lower-income workers with more employment and higher wages. So far the opposite is happening. Despite all that he said, the likelihood that at the end of his presidency the only thing that will have changed is that the super-rich will be even richer and more powerful.
It reminds of the classic “The Castle” by Franz Kafka. No matter how hard the protagonist tries to reach the castle, no matter what strategies he uses, he never really makes any progress.
7
We are not in the 1% but we are upper middle class and I get upset when I see that the Federal government took over $50,000 in taxes last year from us, not because I don't feel sorry for poor people or want to live "high on the hog." We happen to have a high functioning autistic child who I want to make sure is taken care of after we are long gone. I don't want him living off the government dole or becoming homeless when we are no longer here to care for him. It would bother me to know that my child cannot fend for himself and had no one to turn to when he's 40 or 50 years old. He is able to work a low paying job making $10 an hour but was unable to pass any classes in the local community college. I will be setting up a trust fund for his future care. My son has no siblings and his cousins couldn't care less about him, he is not their responsibility.
2
This op-ed makes some very good points.
For any tax reform plan, we should:
1. Tax all dividends* and capital gains as ordinary income.
- Why should the tax code penalize income earned from wages, and favor passive income from investments?
2. Eliminate the step up basis for inherited stocks and investments.
- This is the biggest windfall for inter-generational wealth transfer, much more significant than the estate tax.
* I would exempt current year taxes on reinvested dividends. Adjust the cost basis, and tax the compounded dividends as part of the capital gains when the shares are eventually sold. This would be fair to small investors, and would largely eliminate the incentive for public companies to play games with stock buybacks as opposed to increased dividends.
For any tax reform plan, we should:
1. Tax all dividends* and capital gains as ordinary income.
- Why should the tax code penalize income earned from wages, and favor passive income from investments?
2. Eliminate the step up basis for inherited stocks and investments.
- This is the biggest windfall for inter-generational wealth transfer, much more significant than the estate tax.
* I would exempt current year taxes on reinvested dividends. Adjust the cost basis, and tax the compounded dividends as part of the capital gains when the shares are eventually sold. This would be fair to small investors, and would largely eliminate the incentive for public companies to play games with stock buybacks as opposed to increased dividends.
4
Thank you for spelling out the steps that led us from the 1950s to here.
This is so important and so rarely discussed. We clearly did much better with the higher top tax rates, and Democrats should keep focused on this goal, which is essential to having the resources to address the many needs of our people.
This is so important and so rarely discussed. We clearly did much better with the higher top tax rates, and Democrats should keep focused on this goal, which is essential to having the resources to address the many needs of our people.
7
One thing missing from your article is why we felt it was necessary for a 91% tax rate during the 50's and 60's. It was not as many today may believe, used to fund social programs for the "undeserving takers" living among us. In fact, Eisenhower may have been the last true Jeffersonian President, who believed that every generation was responsible for the public debt accumulated during their lifetime. Jefferson also believed that every war should be fully funded as a disincentive for us to declare war.
Unfortunately, that attitude no longer exists, as a number of Americans are quick to "Bang the War Drums" as long as they do not have to pay for it, or send their sons and daughters, as well as themselves to actually fight in the war.
On another note, I don't know how much of a disincentive a 91% tax rate is for an entrepreneur, since it is likely their business would be incorporated and subject to a lower tax rate than the 91% personal tax rates in pace at the time.
Unfortunately, that attitude no longer exists, as a number of Americans are quick to "Bang the War Drums" as long as they do not have to pay for it, or send their sons and daughters, as well as themselves to actually fight in the war.
On another note, I don't know how much of a disincentive a 91% tax rate is for an entrepreneur, since it is likely their business would be incorporated and subject to a lower tax rate than the 91% personal tax rates in pace at the time.
5
The rate was meant to encourage investment. You could lower your taxes a lot by investing the money. It also only applies to a very few people. it was mainly corporations that were targeted for making sure they reinvested their money to keep on creating jobs and keeping their factories up to date and research into new products and improvements of old was kept up.
Another reason that does not get mentioned much these days was that we kept taxes high on corps to keep them small enough to drown in a bathtub so they cold not do what they have colluded together with the GOP to do, destroy our government. s ability to control them. That was the real power behind reagan's decade of lies about how government was the problem that lead to him being elected president.
Another reason that does not get mentioned much these days was that we kept taxes high on corps to keep them small enough to drown in a bathtub so they cold not do what they have colluded together with the GOP to do, destroy our government. s ability to control them. That was the real power behind reagan's decade of lies about how government was the problem that lead to him being elected president.
4
I am not sure which would offend our founding fathers more: this article or the comments.
Our tax system is already ridiculously high. What this article and most of the comments fail to mention are FICA taxes, state taxes, property taxes, sales taxes, toll taxes, and user fees. Add it all up, and many citizens pay north of 50% in total taxes. After Insurance expense (thanks, Obamacare) very little is left to shelter, feed, cloth, educate and entertain our families...much less save for a healthy retirement.
Our tax system is already ridiculously high. What this article and most of the comments fail to mention are FICA taxes, state taxes, property taxes, sales taxes, toll taxes, and user fees. Add it all up, and many citizens pay north of 50% in total taxes. After Insurance expense (thanks, Obamacare) very little is left to shelter, feed, cloth, educate and entertain our families...much less save for a healthy retirement.
2
I have paid north of 50% total taxes before. That was during the highest income years of my life. If you are paying that much, you are doing extremely well financially.
Our founders are rolling over in their graves these days. But not because of taxes.
Our founders are rolling over in their graves these days. But not because of taxes.
5
I don't buy the idea that enormous salaries are needed to motivate top talent. Take Albert Einstein. He made only a tiny fraction of what top CEOs make - yet obviously was WAY more capable. Why didn't he need fabulous compensation?
The answer is simple. People of great competence don't need staggering rewards - their work is what they live for. This leads to the obvious conclusion that most of these CEOs are not really that smart. They're just incredibly greedy, and good at convincing their Boards that they deserve way more than Albert Einstein got.
The answer is simple. People of great competence don't need staggering rewards - their work is what they live for. This leads to the obvious conclusion that most of these CEOs are not really that smart. They're just incredibly greedy, and good at convincing their Boards that they deserve way more than Albert Einstein got.
13
The author needs to include the other elements of his "higher taxes are good" equation, because what he presents simply does not work. The math, I mean. It doesn't work. Romney declined large bonuses, so he didn't get the money to spend or invest (which actually is a good), and the government got 90% of nothing. His son earned and took the money to spend/invest (still a good thing) and the government got 39.6%, or 20%, or some other substantially-larger-than-zero slice of tens or hundreds of millions of dollars.
I'm pretty sure I know what the answer to this bad math situation is, but the author fails to explain how tax revenues equal to 90% of nothing is better than tax revenues >0% of some big number.
To answer the unasked question that truly underlies all of this: George Romney realized that he needed to maintain solidarity with his workers, because without his workers he would have no product to sell. Today, bosses need not care about their workers in those industries where "the workers" are now located in low wage countries.
Finally, there's the "rich man's war, but poor man's fight" aspect of our social contract, and how that has changed since the photo of George Romney was taken.
I'm pretty sure I know what the answer to this bad math situation is, but the author fails to explain how tax revenues equal to 90% of nothing is better than tax revenues >0% of some big number.
To answer the unasked question that truly underlies all of this: George Romney realized that he needed to maintain solidarity with his workers, because without his workers he would have no product to sell. Today, bosses need not care about their workers in those industries where "the workers" are now located in low wage countries.
Finally, there's the "rich man's war, but poor man's fight" aspect of our social contract, and how that has changed since the photo of George Romney was taken.
2
With the likes of Warren Buffet and Bill Gates giving the majority of their wealth to charity (when our president can't keep his promise to make a donation, or use other people's money instead) and still promoting a higher tax rate for the wealthy, why push for more tax cuts to the "job creators"?
4
President Trump donated $1 million to Harvey relief. he has also donated his salary to Antietam battlefield restoration and to the Dept of Education
1
No, he actually hasn't yet. He has said that he was going to donate to these causes, but hasn't. I'm sure there'll be a great production, breaking news..when he actually does. I'm not going to hold my breath and I'd suggest you don't, either.
4
A higher income tax rate discourages the best from earning more just as the Estate Tax discourages the ultra wealthy from accumulating more - not so well. More importantly, we should want to reward the good stewards who grow their assets and punish (or at least not reward) those who do little or nothing useful with their wealth.
A more efficient tax system would tax all three tax bases: income, consumption, and wealth; to enable the lowest rates and eliminate the political rational for tax expenditures. A 4% VAT, 8% C corporation tax and no payroll taxes is all that is required for revolutionary business tax reform.
Individual and social security tax replacement is all about accumulating family wealth over a lifetime. Done right, it requires consideration of both wealth and income – inversely. Choose any income tax rate ranging from 8% to 28% and pay the corresponding wealth tax rate of 2% down to zero. Since wealth accumulation (i.e. economic mobility) is the goal, each taxpayer would be able to save up to $500,000 wealth tax free (for retirement, health care and education). The ultra-wealthy might even elect to pay some wealth tax in years of high income to take advantage of an additional rule that would reduce estate taxes by lifetime wealth taxes – (imagine a fair estate tax).
Inverse taxation contains a built in measure of how well wealth is turned into income. The current system simply encourages non-taxable economic income at the top that can't be shared.
A more efficient tax system would tax all three tax bases: income, consumption, and wealth; to enable the lowest rates and eliminate the political rational for tax expenditures. A 4% VAT, 8% C corporation tax and no payroll taxes is all that is required for revolutionary business tax reform.
Individual and social security tax replacement is all about accumulating family wealth over a lifetime. Done right, it requires consideration of both wealth and income – inversely. Choose any income tax rate ranging from 8% to 28% and pay the corresponding wealth tax rate of 2% down to zero. Since wealth accumulation (i.e. economic mobility) is the goal, each taxpayer would be able to save up to $500,000 wealth tax free (for retirement, health care and education). The ultra-wealthy might even elect to pay some wealth tax in years of high income to take advantage of an additional rule that would reduce estate taxes by lifetime wealth taxes – (imagine a fair estate tax).
Inverse taxation contains a built in measure of how well wealth is turned into income. The current system simply encourages non-taxable economic income at the top that can't be shared.
3
We have enough wealth in this country and the means of production to provide a good, healthy, happy life to almost all of our citizens. The distribution of wealth is the problem, and taxation determines distribution in large measure. Income inequality threatens to rend the United States asunder.
The alluded to George Romney never graduated from college. He was a stalwart member of the Mormon priesthood. Nonetheless, he was a highly intelligent, insightful person, a leader, and a man of moral superiority. (Although he experienced a few bumps in the Nixon administration.)
Imagine if Mitt Romney had run on his father's platform, and incorporated such things as a highly progressive tax code (taxing the wealthy more) and implementing the Massachusetts health care plan over the 50 states?
Romney may have been president, and we would not have had Trump.
Alas, Romney fils is a corporate raider who is much different than his father. I never understood Mitt Romney who initiated several corporate acquisitions in which industries were shut down or jobs off-shored, and then complained that too many people were taking entitlements.
That is not leadership. Romney renounces his father's philosophy, and took Gipper Reagan's economic ideas and ran with them. The problem is compounded by neo-liberal ideas being not much different.
The alluded to George Romney never graduated from college. He was a stalwart member of the Mormon priesthood. Nonetheless, he was a highly intelligent, insightful person, a leader, and a man of moral superiority. (Although he experienced a few bumps in the Nixon administration.)
Imagine if Mitt Romney had run on his father's platform, and incorporated such things as a highly progressive tax code (taxing the wealthy more) and implementing the Massachusetts health care plan over the 50 states?
Romney may have been president, and we would not have had Trump.
Alas, Romney fils is a corporate raider who is much different than his father. I never understood Mitt Romney who initiated several corporate acquisitions in which industries were shut down or jobs off-shored, and then complained that too many people were taking entitlements.
That is not leadership. Romney renounces his father's philosophy, and took Gipper Reagan's economic ideas and ran with them. The problem is compounded by neo-liberal ideas being not much different.
5
It's more than naive to expect a wealthy business owner to work harder (investing in new products and operations that create new jobs) when he or she can just keep the money delivered by the current tax system.
5
Just lower the taxes on the non-top 1%, and that should be adequate. Middle class Americans have been taxed unfairly, and taxed even more heavily in the form of skyrocketing deductibles and premiums as a result of Obamacare. If Democrats want a shot at winning the next election, lower the taxes on the middle class and stop increases in government spending and stop causing healthcare deductibles and premiums from growing.
1
One thing to keep in mind is that "income" for the wealthy is defined differently today. Back when top tax rates were 70% or 90%, there were many ways to receive untaxed income. Company cars, company-paid memberships in country clubs, lavish meals at company expense, pied-à-terre apartments paid for by the company (sometimes for a mistress), home renovations, .... Rules about income are tighter now, and most of these forms of income now must be reported and taxed.
I often wonder how much of the increase in inequality of income is just better reporting of actual income of the top earners.
I often wonder how much of the increase in inequality of income is just better reporting of actual income of the top earners.
I find Mr. Leonhardt's argument about George Romney and higher marginal tax rates compelling.
I was self-employed for most of my life until recently. Tax cuts did not cause me to invest in my business. Higher demand, and the potential for higher sales, were what motivated me to invest and grow my business. Any tax savings I got went straight into my pocket and not into business equipment or growing the economy. Why spend it, unless the business is also growing?
There were a few times when I was on the fence about whether or not to invest. In these cases, higher marginal rates actually encouraged me to buy equipment. If my marginal rate was 33%, I could effectively invest in equipment for my business at 33% off, after deducting these expenses. If taxes were lower, I would have been less inclined to buy the new equipment (and stimulate the economy).
Trickle down economics is a fraud.
Tax cuts do not stimulate business investment.
Don't eat the yellow snow.
I was self-employed for most of my life until recently. Tax cuts did not cause me to invest in my business. Higher demand, and the potential for higher sales, were what motivated me to invest and grow my business. Any tax savings I got went straight into my pocket and not into business equipment or growing the economy. Why spend it, unless the business is also growing?
There were a few times when I was on the fence about whether or not to invest. In these cases, higher marginal rates actually encouraged me to buy equipment. If my marginal rate was 33%, I could effectively invest in equipment for my business at 33% off, after deducting these expenses. If taxes were lower, I would have been less inclined to buy the new equipment (and stimulate the economy).
Trickle down economics is a fraud.
Tax cuts do not stimulate business investment.
Don't eat the yellow snow.
9
I think that when is now.
The surveys I have seen all suggest that a majority of the super-rich favors higher tax rates on themselves. So maybe not much has changed.
The surveys I have seen all suggest that a majority of the super-rich favors higher tax rates on themselves. So maybe not much has changed.
1
Anybody who wants higher taxes is free to pay them right now. Get the check in the mailbox tonight!
The US will become a failed state, and a very dangerous place, if the current trends towards greater income inequality continue. The tax rate for the nobility (the top 1%) is one factor among many that are driving us towards open, violent, class warfare. Many Americans, having tasted a life better than that of a feudal serf, will openly rebel against being ruled as serfs by the nobility. Given that many of the Americans who are well-stocked with firepower are also unlikely the least obedient-compliant, the tragedy that could unfold sooner or later would be bloody, chaotic, and apocalyptic. We are societal by nature, but also violent by nature when threatened. Paranoia does strike deep, and it is alive and well, and there is a man with a gun over there, and he may be right to warn us to beware.
4
In a global economy, it doesn't even matter if companies are American. What matters is that workers get paid a living wage.
5
Personally collecting billions is obscene. We must find a pathway to substantially increasing, progressively, taxes on the wealthy for the good of the nation.
11
Since wealth is capitalism's scorecard, why would any successful person ever stop trying to make money? Should the Yankees have been stopped at eleven World Series wins so at least one team would have the same record? Or should they be barred from the championship until all eight teams that have never made the WS have won at least a pennant? Should Bill Gates have stopped at Windows 3.1? For the average person, what's the limit on trips to Disney? Perhaps once a decade? Two in a lifetime? No further costs until at least 75% of the US population has stayed with Mickey? Where does it stop.
1
We already have that. The top 1% of taxpayers paid a 27.1% individual income tax rate in 2014, compared to 3.5% for the bottom 50%.
What's obscene is a greedy Big Government that is $20 trillion in debt, raking in record high revenues and still wants more, more, more! For the good of society, Big Government greed must be reigned in!
What's obscene is a greedy Big Government that is $20 trillion in debt, raking in record high revenues and still wants more, more, more! For the good of society, Big Government greed must be reigned in!
1
Tax reform simple: A wealth based tax system where each person pays their share of the U S annual spending based upon their net worth to total US net worth. No deficits. Any deficits made up next year. Very fair as the tax is imposed on those according to their wealth.
2
What you describe is government sanctioned punishment for success. There needs to be a limit to taxation, even under a flat tax policy. Does anyone making $1 million really use 33 times as much government services as someone making $30,000?
1
So, you intend to charge billionaires and secretaries at the same rate? I s that your definition of fair? Let's say we base it on how much income you have left over for every hour you worked. That way the Secretary and the CEO would make the same amount after taxes. Sounds fair to me. I know the hardest jobs I ever worked at were the lowest paying, and CEOs certainly don't work as hard as some migrant worker picking tomatoes in Florida.
The main reason that letting corporate CEO's and other members of our 1% keep much more of their pre tax income has not benefitted average Americans via "trickle down" in recent decades is that the "investments" they now do with the extra money are ones that move trillions of dollars to China, Mexico etc and build factories and create millions of jobs in those no rights societies and so keep their one party dictatorships and corrupt oligarchies in power. Nice going you moronic and greedy American business-political leaders! You've managed to shove millions of us into poverty and simultaneously make our enemy, who will probably attack us in 10 years, into a major military power. Why this was not realized and stopped 30 years ago is a testament to the organized crime associations between our treasonous and exploitive 1% and our political class that they have revolving door and political contributions bought off.
15
Perhaps we should pay more attention to the deductions and exemptions provided the rich, rather than the marginal tax rates. Definitely, capital gains should be taxed as ordinary income. Why should investment income be valued more highly than income from work.
We probably need to continue allowing deductions for charitable giving and municipal bond interest, but there should be ceilings. Likewise for mortgage interest and property taxes.
Aside from these items there are myriad, arcane deductions which only the rich can take advantage of. We don't need them.
We probably need to continue allowing deductions for charitable giving and municipal bond interest, but there should be ceilings. Likewise for mortgage interest and property taxes.
Aside from these items there are myriad, arcane deductions which only the rich can take advantage of. We don't need them.
6
Mostly agree with you. The mortgage interest deduction, however, has done nothing except drive up housing prices, while enriching real estate and banking interests. Other countries get along just fine without it, and home ownership rates are just as high as in the U.S. Canada and the UK are notable examples.
If the mortgage interest deduction were intended to help the middle and lower income citizens afford housing, then there would be a reasonable cap on the amount of the deduction. Another way that federal housing policy favors the wealthy is that the deduction is allowed for second homes (including of all things RVs). Further, one can buy a house, keep it a few years, and sell with no tax due on the price increase. That has driven the average price of housing up, up, and up, in part by causing people to buy far more house than they need in order to get the largest tax free gain possible.
None of this is beneficial to the lower and middle income among us, only the upper income folks.
If the mortgage interest deduction were intended to help the middle and lower income citizens afford housing, then there would be a reasonable cap on the amount of the deduction. Another way that federal housing policy favors the wealthy is that the deduction is allowed for second homes (including of all things RVs). Further, one can buy a house, keep it a few years, and sell with no tax due on the price increase. That has driven the average price of housing up, up, and up, in part by causing people to buy far more house than they need in order to get the largest tax free gain possible.
None of this is beneficial to the lower and middle income among us, only the upper income folks.
5
If Trump indeed wants to "Make America Great Again" (whatever that means), I think it's safe to assume that the period of time he thinks America was great (post-16th amendment?), the top tax rate was much higher than it is today. But of course we know that won't make America great in his eyes.
6
The more the filthy rich sequester among themselves the less every dollar is worth.
When my husband got out of the Navy 44 years ago we had it figured that if he could make $100 a week take home, we'd be able to live a very good life.Buy a house, a new car every 5 years or less, take nice vacations.Now he earns over $60,000 a year & we get a new car every 15-16 years, live in an apartment (comes with his job), manage to with luck squeeze out a nice vacation every few years, & don't totally panic over retirement.But, it's not the same level we had back then. Why? Money is worth less.
I grew up with 5 cent Hershey bars. Now they cost over a dollar & are smaller. "Pound" cans of coffee are 3 times as much & weigh well under a pound. Bread that was ten cents a loaf is now (cheap store brand) 99 cents a smaller loaf.None of which matters to those who do nothing but sit in an office & make sure others do the real work & get millions in salary & bonuses if they manage it, while practicing their putting. While those doing the work are earning less buying power than ever & getting further behind. Really good companies give those that do the work very good bonuses in a good year. Maybe give the dead weight at the top ridiculous bonuses too, but, who cares. It's taking care of those who are the ones who make you money that is important. Either by making your widgets, taking care of your customers, or selling your stuff. The population is getting smaller, so filling jobs will be harder
When my husband got out of the Navy 44 years ago we had it figured that if he could make $100 a week take home, we'd be able to live a very good life.Buy a house, a new car every 5 years or less, take nice vacations.Now he earns over $60,000 a year & we get a new car every 15-16 years, live in an apartment (comes with his job), manage to with luck squeeze out a nice vacation every few years, & don't totally panic over retirement.But, it's not the same level we had back then. Why? Money is worth less.
I grew up with 5 cent Hershey bars. Now they cost over a dollar & are smaller. "Pound" cans of coffee are 3 times as much & weigh well under a pound. Bread that was ten cents a loaf is now (cheap store brand) 99 cents a smaller loaf.None of which matters to those who do nothing but sit in an office & make sure others do the real work & get millions in salary & bonuses if they manage it, while practicing their putting. While those doing the work are earning less buying power than ever & getting further behind. Really good companies give those that do the work very good bonuses in a good year. Maybe give the dead weight at the top ridiculous bonuses too, but, who cares. It's taking care of those who are the ones who make you money that is important. Either by making your widgets, taking care of your customers, or selling your stuff. The population is getting smaller, so filling jobs will be harder
5
I don't know what sort of people were recruited into the CEO class in the old days, but today's CEOs are a bunch of narcissists with an obsession for earning superfluous wealth that rivals the alcoholics obsession for ethanol.
Both groups are pathological, but the mass media resorts to something close to idolatry when covering these wealthy narcissists. Of course, the media is owned by these sickos, so you won't get any honest account of their pathology.
The survival of the planet depends on wresting their hands from the levers of power.
Both groups are pathological, but the mass media resorts to something close to idolatry when covering these wealthy narcissists. Of course, the media is owned by these sickos, so you won't get any honest account of their pathology.
The survival of the planet depends on wresting their hands from the levers of power.
13
Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.
It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.
Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. ..."
seekingalpha article/1543642
http://seekingalpha.com/article/1543642
It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.
Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. ..."
seekingalpha article/1543642
http://seekingalpha.com/article/1543642
4
The take-home message is, progressive taxation works. And even at a 90% tax rate, plenty of people will accept an additional $1 million of income to keep an additional $100 thousand. Which is way more than the median household income in America.
The second problem in our society is wealth. Capital gains aren't taxed as income, so the accumulated wealth of the wealthy climbs with little restriction. And most of that wealth can be (with a bit of planning) passed on to the next generation, creating a system of inherited wealth. Or, as they used to call it, royalty. So we need a progressive tax on wealth, too.
The second problem in our society is wealth. Capital gains aren't taxed as income, so the accumulated wealth of the wealthy climbs with little restriction. And most of that wealth can be (with a bit of planning) passed on to the next generation, creating a system of inherited wealth. Or, as they used to call it, royalty. So we need a progressive tax on wealth, too.
11
From what I can see online, the average Southerner seems to think that s/he is paying too much in taxes, though property taxes here are about 1/10 of what they are in the Northeast. Likewise, they do not want to pay more in income taxes.
While few want to pay more in taxes, I'd gladly do so (within a fair limit) if it meant better schools, better health and better living conditions for the most vulnerable among us.
Meanwhile, these other people with modest but living incomes like mine scream that they should pay nothing. They don't seem to understand that it's the right who need to pay more, even if we in the middle pay a little more.
The rich don't invest the money they don't pay; they buy more luxuries that they don't need. The poor and lower middle classes tend to spend what is left over from lower tax rates.
In other words, the Republicans and Trump in particular have it backwards. So do all the people they've duped with their trickle-down economics that doesn't work.
While few want to pay more in taxes, I'd gladly do so (within a fair limit) if it meant better schools, better health and better living conditions for the most vulnerable among us.
Meanwhile, these other people with modest but living incomes like mine scream that they should pay nothing. They don't seem to understand that it's the right who need to pay more, even if we in the middle pay a little more.
The rich don't invest the money they don't pay; they buy more luxuries that they don't need. The poor and lower middle classes tend to spend what is left over from lower tax rates.
In other words, the Republicans and Trump in particular have it backwards. So do all the people they've duped with their trickle-down economics that doesn't work.
9
Since you're so eager to pay more in taxes, you're free to do so. You're free to write a bigger check, move to a high-tax state, and take no deductions. Go ahead!
1
The Constitution is based on the idea of checks and balances - on power.
There we have agreed on the need for safeguards against the abuse of power -
in the form of limits on the amount of power an office or a group or an individual
may command. As the saying goes, 'power corrupts'.
But the same goes for wealth. We have not agreed on the need for safeguards
against the abuse of wealth as a form of power. We especially need limits on the amount of wealth an office or a group or an individual may command.
We have long recognized these needs, and even set informal limits through
the use of budgets. But we have been generally been reluctant to limit individual
wealth, as if it was some untouchable sanctity, vastly different from power.
Where did we get this idea?
There we have agreed on the need for safeguards against the abuse of power -
in the form of limits on the amount of power an office or a group or an individual
may command. As the saying goes, 'power corrupts'.
But the same goes for wealth. We have not agreed on the need for safeguards
against the abuse of wealth as a form of power. We especially need limits on the amount of wealth an office or a group or an individual may command.
We have long recognized these needs, and even set informal limits through
the use of budgets. But we have been generally been reluctant to limit individual
wealth, as if it was some untouchable sanctity, vastly different from power.
Where did we get this idea?
5
Part of the reason that political discourse has deteriorated is that few focus on the facts. This opinion piece states that tax rates used to be 91% which is true. However, very few actually paid those rates due to numerous loopholes and deductions. For example, interest on credit cards and automobile loans were tax deductible. I was employed during that period and my income would have placed me in the 91% bracket but I paid an actual rate of 45% due to those deductions and tax shelters. I paid accountants and attorneys to achieve that rate and their fees were also tax deductible. My point is that the statutory rate is irrelevant since it is only the effective rate paid which influences behavior. My effective federal rate today is 40%, only 5% less than 40 years ago because more types of income are being taxed and far fewer credits and deductions are permitted. I do not know if 40% is the right number, I can only state that the world has not changed that much regarding effective income tax rates. Therefore, the thesis that high tax rates caused certain cultural norms about money in general and among American CEOs in particular regarding high pay is unsupported and highly suspect.
2
Why should anyone have to work until May 2nd for the government? That's 40% of the year.
1
Stewart, You are correct but the "taxes!" line was to get people riled up to support the less well understood actual reasons for attacking government to destroy the best pro Citizen pro Society regulatory system that ever existed.
Leave Capitalism Alone, We live in a Self Governing nation so you are not working for the government you are working for yourself to build yourself a nation to live and thrive in. You will have noticed the deterioration of that nation since the crazy cut tax and reg crowd has been winning elections.
Leave Capitalism Alone, We live in a Self Governing nation so you are not working for the government you are working for yourself to build yourself a nation to live and thrive in. You will have noticed the deterioration of that nation since the crazy cut tax and reg crowd has been winning elections.
Thank you, David. What you say should be obvious to any observer but apparently is not. I wish that Republicans in Congress would pay attention.
There is no excuse for the absurdly high "compensation" now paid to many corporate executives.
There is no excuse for the absurdly high "compensation" now paid to many corporate executives.
11
"A top rate of 90 percent clearly has the potential to drive away entrepreneurs. But I am convinced that the current top tax rate, 39.6 percent, is too low."
This assumes that humans are only motivated by personal profit. As if to suggest that a high top tax rate would discourage people from working hard or being creative. I think this is a very limited and quite cynical view of human nature. We are motivated to work hard for all sorts of reasons - to help others, leave a legacy, to be recognized for achievements, and so on. Just look at some world class Olympic athletes who sometimes receive next to no financial reward (and limited fame) for years of striving to be the best. Money is only one motivation.
It's quite simple in the end. If you want to pay for infrastructure, education and social programs, you tax where the money is.
This assumes that humans are only motivated by personal profit. As if to suggest that a high top tax rate would discourage people from working hard or being creative. I think this is a very limited and quite cynical view of human nature. We are motivated to work hard for all sorts of reasons - to help others, leave a legacy, to be recognized for achievements, and so on. Just look at some world class Olympic athletes who sometimes receive next to no financial reward (and limited fame) for years of striving to be the best. Money is only one motivation.
It's quite simple in the end. If you want to pay for infrastructure, education and social programs, you tax where the money is.
7
I'm disappointed a pundit as well-informed as Mr. Leonard would not more precisely say what he thought the top-marginal income tax should be other than higher than forty percent and less than ninety. I'd expect something more opinioned from a pundit. I've read Dr. Krugman and other economic bloggers cite research that it could safely approach 60-70 percent without inhibiting people from working. That figure would also have the salubrious effect of inhibiting gross inequalities of wealth and possibly return our country to a functioning democratic republic.
7
I am a little confused by the commenters who believe they pay too little in taxes, or that they owe more to the country (or others) for giving them the opportunity to accumulate wealth. To me, I would think that this dilemma can be solved by those individuals in a matter of moments without relying on tax reform legislation and they can eliminate any personal excess by stroking a check to their favorite charity or to the government for application to specific programs or agencies or reducing the debt. I am sure that there are a few people who actually do this but I suspect that the vast majority are either wringing their hands or giving it lip service. Also, I believe that many of the societies that lean towards socialism have much higher tax rates...for everyone (starting in some cases with people who earn as little at US$ 12,000).
2
You're not confused; you're too clever by half. Any single one of us cannot change federal policy or meaningfully reduce the national debt by writing a check. When someone says his taxes are too low, they're not suffering from guilt; they're pointing out from personal experience that higher taxes at their income level wouldn't appreciably change their lifestyle. The rest of us need to hear that because too often all we hear is "job-killing taxes" nonsense.
Yes, "socialism" loosely classifies societies in which the national government takes a larger role in the economy, particularly for health and education. Yes, income taxes kick in earlier than ours does. But there is also an array of subsidies, from public housing to day care, and guarantees for life's necessities.
Here we pay payroll taxes on the first dollar and have no assurance of good schools or decent housing, much less 20 days of paid vacation. Remember, most people pay more in payroll taxes than income tax. Social security alone is 15% of the first 100-odd thousand when the employer's contribution is counted.
Yes, "socialism" loosely classifies societies in which the national government takes a larger role in the economy, particularly for health and education. Yes, income taxes kick in earlier than ours does. But there is also an array of subsidies, from public housing to day care, and guarantees for life's necessities.
Here we pay payroll taxes on the first dollar and have no assurance of good schools or decent housing, much less 20 days of paid vacation. Remember, most people pay more in payroll taxes than income tax. Social security alone is 15% of the first 100-odd thousand when the employer's contribution is counted.
2
It is interesting that the wealthy think everything should be on a per person basis when it allows them to avoid paying more in taxes (e.g., limit SS contributions) but they should have an influence proportionate to their wealth when it comes to setting taxes or political power.
Shouldn't we say instead that the wealthy pay more in dollars because they have more to lose? The basis of their wealth is predicated on US protections like the rule of law, military protection, etc.
The poor & lower middle class may actually be paying a higher marginal rate based on more penal sales taxes, use taxes, and inability to access most "special" tax deductions of the wealthy.
Thus, the wealthy are not doing everyone else a favor by paying a higher percentage of total taxes, they are really paying insurance for their wealth with the poor supplementing them with higher marginal taxes the poor pay.
Shouldn't we say instead that the wealthy pay more in dollars because they have more to lose? The basis of their wealth is predicated on US protections like the rule of law, military protection, etc.
The poor & lower middle class may actually be paying a higher marginal rate based on more penal sales taxes, use taxes, and inability to access most "special" tax deductions of the wealthy.
Thus, the wealthy are not doing everyone else a favor by paying a higher percentage of total taxes, they are really paying insurance for their wealth with the poor supplementing them with higher marginal taxes the poor pay.
5
The top tax rate should be 50%. And capital gains should be taxed as ordinary income.
9
We already have a minimum wage.
What's needed is a Maximum Wage.
If the Maximum is set as a multiple of the minimum, then we no longer need to worry about raising the minimum, because it would automatically go up, every time the highest paid earners are allowed to get more.
We should also institute some type of coitizen reward (for Patriotism) for people who pay the highest taxes. Celebrate and reward such behavior as a kind of civic heroism. And consider it a national disgrace for those with wealth to try and avoid taxes.
Once we have patriotic taxation and more equitable earnings, we can use the resulting public purse for a myriad of necessary infrastructure improvements. Things like buying up flood prone areas, razing their structures and providing parkland, which won't cause suffering and hardship when flooded and can be used recreation when dry.. Roads and bridges can be improved. A national fast rail system instituted. National healthcare for all. Etc.
This wealthy nation cannot long endure if only some people have all the perks and none of the pain.
We can do so much better by sharing and caring.
What's needed is a Maximum Wage.
If the Maximum is set as a multiple of the minimum, then we no longer need to worry about raising the minimum, because it would automatically go up, every time the highest paid earners are allowed to get more.
We should also institute some type of coitizen reward (for Patriotism) for people who pay the highest taxes. Celebrate and reward such behavior as a kind of civic heroism. And consider it a national disgrace for those with wealth to try and avoid taxes.
Once we have patriotic taxation and more equitable earnings, we can use the resulting public purse for a myriad of necessary infrastructure improvements. Things like buying up flood prone areas, razing their structures and providing parkland, which won't cause suffering and hardship when flooded and can be used recreation when dry.. Roads and bridges can be improved. A national fast rail system instituted. National healthcare for all. Etc.
This wealthy nation cannot long endure if only some people have all the perks and none of the pain.
We can do so much better by sharing and caring.
10
What we need is for the bums at the bottom 50% to start paying their fair share!
The bleeding heart liberals' disingenuous focus on rates is laughable. The unit of measure for taxes is dollars. Someone paying 10% of a $million is still paying more in taxes than most people make. And 10% is what the tax rate should be for everyone. If good enough for god (tithing) uncle Sam can live on 10%. AND we need to stop supporting half the world. Europe, Saudi Arabia, South Korea, Japan, Israel can pay for their own defense for a change. I had been saying that for years long before Trump did. No more welfare, food stamps, medicare. People who want to help the needy can contribute to charity.
2
How do you propose to sustain the government on a tax rate of 10%? God doesn't need the tithe; so it's not a valid comparison.
The original 'bleeding heart liberal', Jesus Christ said that it would be easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven! That was God speaking through Jesus. jesus also spent quite a bit of time and effort extolling the virtues of aiding and helping the poor! Perhaps he would not be so fastidious about a maximum tax rate of 10%!
1
20 years ago I watched a movie called Disclosure ( Michael Douglass & Demi Moore) where I will never forget a very telling line I heard and if I remember correctly is goes like this:
"A millionaire is just a frustrated billionaire."
Too much is never enough for these greedy people. They would happily take candy from babies.
"A millionaire is just a frustrated billionaire."
Too much is never enough for these greedy people. They would happily take candy from babies.
11
Greed is out of control in America. Greedy Big Government is raking in record high revenues and it's still not enough. Greedy Big Government has run up $20 trillion debt and it's till not enough. Greedy unions are demanding that people doing a job worth $9/hour be paid $15/hour. The top 1% pay 40% of income taxes while the bottom 40% of "Americans" pay a miserly 2.7%, and the rich still aren't paying enough to satisfy the greedy Left
1
Yes, back when patriotism included paying your share for well-being of the country. Now too many of the uber rich believe they are doing the rest of us a favor just by being rich. And patriotism has been twisted into anti-government.
13
America needs a man like George Romney today to help keep our democracy strong !
1
How about tax cuts for corporations who are not disproportionately paying executives at the expense of the lower paid workers. Give the workers better pay get a tax cut. Keep it for executives get a higher tax rate.
7
After 45 years of trickle down, the results are clear. This failed conservative socioeconomic experiment needs to be ended
15
The results are clear: The Reagan tax cuts created the greatest economic expansion in history
1
Trickle down has proven out to actually be piddled on.
GOP Greed over people The super wealthy have so much money they don't know what to do with it. The rest of us are trying to keep our heads above the water. We need to pump more money into healthcare, schools, and infrastructure, and all the Republicans want is less regulations that protect our health, and giving the super wealthy even more money to park overseas to avoid paying taxes. Shameful.
4
And thanks to Citizens United, instead of paying taxes, the super rich can spend billions buying congressmen and funding think tanks to propagandize ordinary people into voting against their economic interest so that those super rich can further concentrate not only their wealth but their political power.
The likes of the Koch brothers are the neo-colonial powers. Whereas sovereign nations used to invade countries, subjugate the indigenous population to their will, and then extract as much wealth as possible, it is the uber rich doing that.
The likes of the Koch brothers are the neo-colonial powers. Whereas sovereign nations used to invade countries, subjugate the indigenous population to their will, and then extract as much wealth as possible, it is the uber rich doing that.
4
Taxes have very little to do with the growth of most successful American companies. Sam Walton built Walmart at a time when taxes in America were much higher and he never once cried about being asked to pay his fair share of the burden. Amazon, Google, Facebook, Microsoft, etc are a result of strong intellectual property laws and a liberal immigration system that attracts the brightest foreign students to study then work in America (BTW on the tax crazy west coast). ExxonMobil, JPMorgan Chase, Johnson & Johnson, etc all flourished under the globalization policies of the Clinton era (when American last raised taxes on the rich). In fact since George Bush's great tax giveaway, America suffered massive income disparity, economic catastrophe and anemic post-recession recovery, that was all blamed on the democratic president who spent his time thanklessly trying to fix that big fat mess. The only thing lower taxes has done is create this hyper speculative environment where America is increasingly manufacturing fewer products while Wall Street traders take home small fortunes for wild and risky speculation driven by ridiculous levels of financial leverage simply because tax policy smiles on them.
6
Maybe it's not that past CEO said no to getting richer, but that they alsorecognized their duty to employees, customers, the public. That's unfashionable today for status conscious CEOs. It's a power thing.
This column leaves out the big factor that business also recognized unions. About 1/3 of the workforce was once unionized-- this meant bargaining power that should be normal in any democracy. It helped raise pay/benefits for non union employees also as a norm.
That norm changed to profit before all, to send millions of jobs offshore, with trade deals signed by both parties, and pay cuts and destruction of unions with no ability of govt to interfere.
See NYT editorial --- Union’s Loss Is the South’s Loss, Too, Aug 12. Right to work laws and their widespread negative.
Today, Germany and other advanced countries have higher union membership than the US. Unions sit on corporate boards for input into policy. There are US lawmakers now talking abou this for America, land of equality.
We need a column on that alone, Mr. Leonhardt since it's a sharp difference.
This column leaves out the big factor that business also recognized unions. About 1/3 of the workforce was once unionized-- this meant bargaining power that should be normal in any democracy. It helped raise pay/benefits for non union employees also as a norm.
That norm changed to profit before all, to send millions of jobs offshore, with trade deals signed by both parties, and pay cuts and destruction of unions with no ability of govt to interfere.
See NYT editorial --- Union’s Loss Is the South’s Loss, Too, Aug 12. Right to work laws and their widespread negative.
Today, Germany and other advanced countries have higher union membership than the US. Unions sit on corporate boards for input into policy. There are US lawmakers now talking abou this for America, land of equality.
We need a column on that alone, Mr. Leonhardt since it's a sharp difference.
4
it would've been a good idea to publish the ratio of ceo's pay to the ordinary 'folks' in other countries. i'm pretty sure they're nowhere as close as the american discrepancy. and, believe it or not, there are plenty of wealthy countries on the planet. also, all of them probably have national health care plans that are superior to the usa.
3
2 things to expect from this inept Congress' attempt at "Tax Reform".
1) For the Dems, they will be using this as a platform to attack Trump on his lack of transparency regarding his own returns (as they should honestly), IF they decide to engage, we'll probably hear a lot about closing corporate loopholes and some middle class tax breaks.
2) For the Repubs, we can expect a lot of what we saw with health care, many factional disagreements, coupled with some hilariously laughable attempts to blatantly transfer wealth to the top 1%, remove consumer protections or pieces of the code that prevent exploitation, followed by some pundits spouting trickledown economics mumbo jumbo.
I have zero expectation that anything will come from this attempt at Tax Reform, if something does manage to come out it will most likely be mess and the private sector can have fun attempting to figure out how the changes will affect their tax return processes going forward.
Seriously though, get your popcorn, because we have a "billionaire" President who refuses to release his tax returns, has filed for six bankruptcies, and ran on (seemingly randomly) removing regulations and lowering the corporate tax rate.
Unless congress comes out of the gate with a bipartisan bill that actually addresses the growing wealth inequality of the middle class and simplifies returns for the average American... have fun with this one Congress, I'm sure POTUS won't tweet or complicate the process at all ;)
1) For the Dems, they will be using this as a platform to attack Trump on his lack of transparency regarding his own returns (as they should honestly), IF they decide to engage, we'll probably hear a lot about closing corporate loopholes and some middle class tax breaks.
2) For the Repubs, we can expect a lot of what we saw with health care, many factional disagreements, coupled with some hilariously laughable attempts to blatantly transfer wealth to the top 1%, remove consumer protections or pieces of the code that prevent exploitation, followed by some pundits spouting trickledown economics mumbo jumbo.
I have zero expectation that anything will come from this attempt at Tax Reform, if something does manage to come out it will most likely be mess and the private sector can have fun attempting to figure out how the changes will affect their tax return processes going forward.
Seriously though, get your popcorn, because we have a "billionaire" President who refuses to release his tax returns, has filed for six bankruptcies, and ran on (seemingly randomly) removing regulations and lowering the corporate tax rate.
Unless congress comes out of the gate with a bipartisan bill that actually addresses the growing wealth inequality of the middle class and simplifies returns for the average American... have fun with this one Congress, I'm sure POTUS won't tweet or complicate the process at all ;)
3
Of course whipping up tax the rich hysteria is always easy. Notice how rich are saying "Tax us more!" only after they got rich (including numerous times in these comments). So self serving and hypocritical. The problem is then whoever wants to get rich will not be able to but those who are already rich definitely secure their position. For those working for money the only way to ensure they will have secure retirement and send kids to college is to save. That however will be impossible if currently floating definitions of "rich" will define those based on incomes and raise taxes on them. A family of two professionals together making 250k is considered rich by the current tax code. I don't think they feel rich with kids to educate and mortgage to pay and I don't think they would want to be taxed more.
2
So....start it at 500k. Or as Obama era tax raisers wanted to do, raise the tax rate on income that exceeds 250K.
1
It was not true of most executives. Greed was as much a part of that universe then as it is now. There were exceptions, just as there are now. What tempered the greed then was a lack of power, not culture or values. The finance industry had yet to take full control of the country's capital distributing it all over the world for their own benefit. If you want to look at a similar time to now, you need to look to the trusts of the late 19th century before government intervened to break up those trusts.
4
You're certainly correct. Search for the Studebaker bankruptcy and read about the executive exploits. The PBGC exists today because of them.
One thing is to cut out special deductions for the rich. Deductions for state and local taxes and for mortgage interest are two of the largest. They only benefit the rich...incomes need to be pretty high for those deductions to have an advantage over the standard deduction.
Are Dems willing to go along, cut those deductions for the rich and raise the standard deduction?
Are Dems willing to go along, cut those deductions for the rich and raise the standard deduction?
3
CA is the largest contributor of federal income tax dollars. It is very expensive to live in CA and no, income does NOT "have to be pretty high" for deductions for state and local taxes and mortgage interest to make sense. Lifelong dem here-- this is NOT the way to solve our problems.
5
I wholeheartedly endorse Mr. Leonhardt's call for grassroots political action, on a par with--if not greater--than that which defeated recent attempts to 'reform' healthcare legislation, to defeat any upcoming attempts to pass another tax cut for the wealthy! If this is still a democracy, let's prove it and make our voices heard!
2
A large part of what has happened since the trimming of upper tax rates has involved the enormous display of wealth.
Look around. Living evidence is everywhere.
McMansion is an actual word. Lavish homes in multi-locations. Incredibly expensive private educations, whether at prep schools or colleges.
The rich are not only getting richer, they are openly separating themselves from everyone else. With little, if any regard, for the people who do the word which puts them there.
Tax cuts. Yeah. That's what we need more of.
Look around. Living evidence is everywhere.
McMansion is an actual word. Lavish homes in multi-locations. Incredibly expensive private educations, whether at prep schools or colleges.
The rich are not only getting richer, they are openly separating themselves from everyone else. With little, if any regard, for the people who do the word which puts them there.
Tax cuts. Yeah. That's what we need more of.
4
At what income level did that 90% (or 91%) marginal rate cut in? As some readers may not focus on, that marginal tax rate only hits the income over that line. What was the line in 1960? What would that translate to in 2017 dollars? Without knowing that, it is not possible to hazard a guess as to whether that 90% rate would deter useful entrepreneurs. I expect it would not.
1
$400,000 was the top income tier in 1960. That translates to 3.2 million in today's dollars.
1
$400,000 or about $3.6 million on 2016 dollars.
https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of...
https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of...
The difference between the upper and lower economic classes has increased dramatically since the era of George Romney. People like him, who believe that there is such a thing as “too much money”, are hard to find these days because of the entrepreneurial spirit that has been embedded over multiple generations due to tax reductions. The top one percent of this nation has used the idea of a trickle down economy to justify their endless wealth with the trickle down economy which, unfortunately, is not a proper justification for them. The idea of a trickle down economy, where the rich can earn enough so that they provide for the poor, had the tragic flaw that those who had money would not be inclined to share it. In order to find a balance between capitalism and equal opportunity, people in the upper class – especially the top one percent – need to develop the mindset that George Romney and the people in his generation had and the people in the lower class need to learn that they have to provide for themselves. It's about time that we go back to the way things were so that we can draw the bridge between the top one percent and the rest of us so that capitalism can benefit everyone and not just a select few.
1
I am entrepreneur - I create some of the most high-quality furniture money can buy. Yes I get paid, but money would not have been enough to get me to go through all the effort to develop the skill and technique my work requires. I wanted to create something great! Entrepreneurs who want to create a great product or service are not the same as businesspeople who see entrepreneurship as the fastest way to big money. Truly creative people would do great work, even under the old, higher tax rates for high earners. Back to common sense!
6
Ah, yes, the two faces of capitalism. Creative capitalism (you) and manipulative capitalism (those other you speak of). You can never get a proper answer to whether capitalism is good or bad until you separate the question into two questions Then, creative capitalism = good, and manipulative capitalism = bad.
I don't think I'm naive for believing that there are many successful people today who truly do not care about making another $1 million a year, but they are (yes) forced to by the hamster wheel of modern capitalism, where everything is being reduced to a number with a dollar sign. Corporations "have to" pay their executives at the top market rate, or they would be deemed to have second-class talent. Law firms have been disclosing their partner profits and again do not think they can live with being second-rate, for purposes of talent recruitment and general respect. Some of these lawyers and board directors might well be happy being like George Romney, but peer pressure demands otherwise.
Now, where did this peer pressure to view income and profit as the only thing worth thinking about? Wall Street.
Now, where did this peer pressure to view income and profit as the only thing worth thinking about? Wall Street.
1
Rather than a 'flourishing economy', what lowering marginal rates did was (unwittingly) unleash the greatest challenge to the public institutions of the American republic in its history barring, perhaps, the Civil War: the rise of private power substantial enough to challenge the state itself.
How?
By raising the stakes of success and failure, in business, banking, and the politics surrounding the policies that affect those interests. When the government is taking 90% of every top-tier dollar, the incentive to lobby government for economic advantage through policy changes in Washington moves from the individual (corporate officers, shareholders) to the group (ie the entire company). Things like taxing unearned income less than earned income don't make much sense in such an environment.
Looking for loopholes in the electoral system to gain an unfair national political advantage (the GOP's 2010 Red Map Strategy), or ignoring a constitutional mandate for the Senate to consider SCOTUS nominee, only make sense when the stakes are high enough to challenge the notion of any 'greater Good' that supersedes the desire to control government on behalf of the wealthy donors demanding it. As in the Gilded Age 120 years ago, we've--again--upset the balance between the Individual and the community in the mistaken belief, essentially, that Greed is Good. Our current president, along with massive income inequality, is an avatar for the logical conclusion of that mistaken belief.
How?
By raising the stakes of success and failure, in business, banking, and the politics surrounding the policies that affect those interests. When the government is taking 90% of every top-tier dollar, the incentive to lobby government for economic advantage through policy changes in Washington moves from the individual (corporate officers, shareholders) to the group (ie the entire company). Things like taxing unearned income less than earned income don't make much sense in such an environment.
Looking for loopholes in the electoral system to gain an unfair national political advantage (the GOP's 2010 Red Map Strategy), or ignoring a constitutional mandate for the Senate to consider SCOTUS nominee, only make sense when the stakes are high enough to challenge the notion of any 'greater Good' that supersedes the desire to control government on behalf of the wealthy donors demanding it. As in the Gilded Age 120 years ago, we've--again--upset the balance between the Individual and the community in the mistaken belief, essentially, that Greed is Good. Our current president, along with massive income inequality, is an avatar for the logical conclusion of that mistaken belief.
3
There was, at one time, a general consensus that anything that is derived from society should eventually be put back into society.
These days that mindset no longer exist - replaced by tax favoritism brought upon in large measure by the political efforts of the super-rich - who have successfully lobbied for unique breaks, the allowance of tax havens and loopholes galore.
My personal feeling is that taxation should not present either a burden or barrier towards the achievement of individual success. But once success has been achieved at some level - yes, society should rewarded for creating the means for that success.
These days that mindset no longer exist - replaced by tax favoritism brought upon in large measure by the political efforts of the super-rich - who have successfully lobbied for unique breaks, the allowance of tax havens and loopholes galore.
My personal feeling is that taxation should not present either a burden or barrier towards the achievement of individual success. But once success has been achieved at some level - yes, society should rewarded for creating the means for that success.
3
Before one passes critism on the Presidents plan one should also review the impact resulting from lowering taxes. Many of the successful fortune 100 companies have been able to expand as a result of lowered taxes. The pendulum can swing either way. Concrete studies need to be conducted to find set adequate tax for all classes.
Before you make suggestions for the US, you may want to clean house in Nigeria. The Nigerian income tax rate is 24% on income over about NGN3,200,000 (about USD8850 at current exchange rates) and the annual per capita income in Nigeria is less than USD6,000. Americans with such low income levels would pay no income tax at all. The corporate income tax rate in Nigeria is 30%, excepting small businesses with annual sales under NGN1,000,000 (about USD277) annually that are taxed at 20%. That is in addition to the petroleum taxes and additional tertiary education tax. If lowering taxes causes businesses to expand, perhaps it is Nigeria's tax rates that are inhibiting its economic development (take away oil and what is left?).
play the game monopoly. it is the essence of capitalism,and in that game, and in unfettered capitalism the game always proceeds until 1` person has all the money. There is more to the taxation policies of the 60s that kept affluence in check. In the 60s and before, there was no internet, the kings of industry lived in the same town as their employees went to the same church, the same town that their kids both went t o school in.. Shame for gluttony and avarice tempered the desire to make as much as we can. Our new world does not have those restraints built in. To recapture that limit, the government must make taking higher wages much less effective towards wealth as reinvesting those dollars into payroll. Taxation of unreasonable income is a good first step.
2
Other elements of the pre 1980s tax code were the huge number of deductions that were available.
Buy a car, get a sales tax deduction.
Also a normal sales tax deduction based on income and other large purchases.
All interest from homes to cars to credit cards also deductible.
Made a bunch of money in one year, or if you incurred nice pay increases, you could income average and your taxes would be lower for a year or two based on your good fortune.
While each of these made tax preparation even more daunting than today's prep, each of these provided a tax benefit if one used their money to help society via home, car, large appliance, etc purchases.
And don't forget the tax benefits of some of the corporate benefits including pension and profit share programs that enabled the rank and file to share in corporate growth and good fortune.
Buy a car, get a sales tax deduction.
Also a normal sales tax deduction based on income and other large purchases.
All interest from homes to cars to credit cards also deductible.
Made a bunch of money in one year, or if you incurred nice pay increases, you could income average and your taxes would be lower for a year or two based on your good fortune.
While each of these made tax preparation even more daunting than today's prep, each of these provided a tax benefit if one used their money to help society via home, car, large appliance, etc purchases.
And don't forget the tax benefits of some of the corporate benefits including pension and profit share programs that enabled the rank and file to share in corporate growth and good fortune.
1
A lower tax rate only works if, ironically, government is charged with providing our citizens more, like healthcare, education, and childcare.
Having one provider cuts out high administrative costs and waste. I don't mind losing my tax deductions if I don't have to deal with paying private health insurance, college costs, and childcare.
Having one provider cuts out high administrative costs and waste. I don't mind losing my tax deductions if I don't have to deal with paying private health insurance, college costs, and childcare.
1
What is the purpose of taxation, to punish the successful for their success as Obama apparently believes? Is it to raise revenue to fund the federal government?
MR. GIBSON: “And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?”
SENATOR OBAMA: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.”
MR. GIBSON: “And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?”
SENATOR OBAMA: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.”
2
I'm not sure if I'm reading your comment correctly... but wouldn't you say if a billionaire pays $30 in taxes and their secretary pays $30 in taxes, the secretary is being punished? Considering the $30 proportionally to the secretary would be something in the millions for his/her boss?
1
@Andrew
In context to Obama's response, I question the purpose of the taxes -is it some ambiguous notion of "fairness" (which I cannot get any "progressive" to define) or is it to raise revenue?
In context to Obama's response, I question the purpose of the taxes -is it some ambiguous notion of "fairness" (which I cannot get any "progressive" to define) or is it to raise revenue?
Perhaps Obama's reply was fumbled, but clearly what he meant is that all income should be taxed as earned income, it in fact it is the income of the individual. Hedge fund manager, walmart heir-- does not matter-- they need their income to be taxed as income-- same as the bricklayer who builds their mcmansions, same as the people who manage walmart stores.
How can a president who won't release his tax returns presume to make tax policy for millions of honest, hard-working, tax-paying Americans?
17
You're right! By refusing to release his tax returns, President Trump is in clear violation of Federal Law, specifically USC...uh, uh, ummmmmmm, uh, I mean in violation of the Constitution, Article aahhhh, uuuhh, uuuuummmmmmm, aaah..
If the fascist left wants a law requiring presidents to release their tax returns then they need to pass such a law by proper Constitutional methods. The Left can't just make up laws as they go along
If the fascist left wants a law requiring presidents to release their tax returns then they need to pass such a law by proper Constitutional methods. The Left can't just make up laws as they go along
David, you fail to mention (as do others) that the change in earnings structure to the benifit of the very wealthy is causing two other major problems:
1) Stagnant wages lowers ability to save for retirement.
2) Earnings going increasingly to the very wealthy, have caps on taxes supporting social security and medicare. This increasingly underfunds these important safety net programs and, no surprise, leads to calls to cut the programs due to lack of funds.
1) Stagnant wages lowers ability to save for retirement.
2) Earnings going increasingly to the very wealthy, have caps on taxes supporting social security and medicare. This increasingly underfunds these important safety net programs and, no surprise, leads to calls to cut the programs due to lack of funds.
7
On other problem of the rich re-characterizing their income as non-income is that they don't pay social security on those earnings. If they don't pay social security the system is starved of needed resources and republicans get to say "the system is going broke." The rich aren't worried because they don't plan to need social security.
4
Social security maxes out at about 120k. Even ordinary income beyond that level is exempt. To keep social security solvent, raise the limit, perhaps to 160k or more.
4
Or assess social security taxes on all income, regardless of source or amount.
1
Why is it that the phrase "tax reform" has become synonymous with "tax cuts"? And why in the next breath do we declare that "tax reform" must also be "revenue neutral." We citizens used to understand that our government needs to raise revenue in order to make our country run in a manner beneficial to all. After all, we all breathe the same air, drink the same water, drive the same highways, share the same rail lines have equal access to our national parks and monuments, etc. Noblesse oblige used to be alive and well in our country. What happened to us?
5
What happened is that the elite don't contribute. The bottom 50% constitute an elite, they pay nothing in taxes, they get paid by Big Government to not work, they get free ObamaPhones, free shelter, free food, free clothing, free education, free transportation, etc, etc, etc
I grew up in this period of change you are addressing. While unstated, companies were concerned with profits flowing three ways; to the community, to the workers; and to the stockholders. Obviously, a rare thing now and one that the economics and stock market penalizes. But to those few companies that do so, they flourish and are successful places of employment.
I believe that the loss of real progressive rates is at least associated with this change as you write. But also is the education given to young business persons. We need to teach ethics and morality as well as tax law, investment and stock market methodology, and economic theory.
As Houston demonstated, we are much stronger working as a community. People had obvious pride in helping others.
I believe that the loss of real progressive rates is at least associated with this change as you write. But also is the education given to young business persons. We need to teach ethics and morality as well as tax law, investment and stock market methodology, and economic theory.
As Houston demonstated, we are much stronger working as a community. People had obvious pride in helping others.
2
I agree with the author, even as a conservative Republican. I think it's time for multimillionaires to pay a bit more so we can pay off the deficit.
5
Except for the small detail that this approach has never worked. Greedy Big Government is collecting record high revenues and it's still not enough to cover spending. An alcoholic can't get sober by drinking more
Raising the tax rate on higher-incomes would not only be morally and socially right but is critically needed to help pay for neglected infrastructure repairs and innovations.
4
Higher incomes already pay higher rates. The top 1% of taxpayers paid a 27.1 percent individual income tax rate in 2014 compared to the 3.5% rate paid by the bottom 50%. The top 1% paid 40% of income taxes collected. Big Government is raking in record high revenues and still running a deficit. Is there any amount that's enough??
3
The top 1% made almost all the income gains since the Grest Recession. The tax code is already skewed to give them massive tax breaks. They also pay the least rate of any western country.
Those who have the money pay taxes as the price of civilization
Those who have the money pay taxes as the price of civilization
3
The author stated the optimum tax rate lies above the current rate but significantly less than 90%. Your argument that the poor are not paying their fair share is ridiculous.
2
Strong chances that Current high income to low income ratio of 270:1 doesn't take into account full compensation package.
It is not uncommon to see an executive walk away with total earning package valued at $50 million a year or more while the lowest income may barely hit $40,000 (a unionized employee in north eastern states). The ratio now exceeds 1000:1
Another aspect the author has missed is stating that fixed income families on low end have barely any loop holes and deductions to take. Those on high end, with numerous investments, have many opportunities to take deductions to lower their tax burden. The net effective tax thy may pay would be much less than what's on paper.
Someone dig up Trump's or Romney's returns and let whole US see them.
It is not uncommon to see an executive walk away with total earning package valued at $50 million a year or more while the lowest income may barely hit $40,000 (a unionized employee in north eastern states). The ratio now exceeds 1000:1
Another aspect the author has missed is stating that fixed income families on low end have barely any loop holes and deductions to take. Those on high end, with numerous investments, have many opportunities to take deductions to lower their tax burden. The net effective tax thy may pay would be much less than what's on paper.
Someone dig up Trump's or Romney's returns and let whole US see them.
9
It's funny to hear the wealthy complain about progressive taxes as though they are bound by the one person, one vote mythology of democracy; the same wealthy who legally funnel as many votes in terms of money as they are allowed into the political campaigns of those who favor legislation favorable to them.
5
The rich get richer my making more money either by enjoying the increasing wealth from a growing economy or by taking an increasingly greater proportion of the new wealth being created. We have been living in a people of steady but very low economic growth for four decades and the drastically lowered tax rates which have generated deficits for regular common public institutions and infrastructure operations for those four decades have meant that most of the new wealth has been and continues to concentrate amongst the very wealthy. They are prospering even while the rest of us are getting by with little left over, which makes for an economy that cannot grow very fast. The lie told by a lot of politicians who assert that the wealthy are job creators is base upon the false assertion that the wealthy not the masses create economic growth. Economic growth occurs from the growing wealth of the entire country resulting much greater demand for goods and services offering greater opportunities for making a lot more money in the real economy. It's a big and all inclusive system, not just a small elite of investors which produces a rapidly growing economy. It means that to keep the economy growing at high rates and steadily so, requires the best use of resources, which means the workers who do most of the consuming need to share in the increasing productivity or the whole system cannot grow fast enough to benefit everybody.
2
I agree with your theory - up to a point. When marginal tax rates got high, some might say excessive, the wealthy did not merely choose not to bother pursuing additional personal income, many bought into tax shelters to protect their additional income from the taxman. As often as not, the shelters and the people who created and sold them were fraudsters, the shelters an obvious vehicle for illicitly circumventing the tax laws. The shelters offered such opportunities as purchasing investments in real estate deals designed ultimately to collapse of their own excessive debt weight but also to create large immediate net operating losses for the partners/investors; investments in record or stamp "masters" from far off places like Guam; and even investments in non-existent coal mines. A dollar paid to the shelter promoters for a partnership interest entitled the wealthy "limited partner" to immediately deduct a multiple of the investment -- sometimes twice as much, more often four, five and even nine times as much. If one bought enough high multiple "shelter" one would not only wipe out all tax liability, but also amend prior year tax returns and recoup previously paid taxes. So, if history is a guide, while increasing the individual tax rate may cause some to decide not to pursue excessive lucre, others will merely continue to accumulate as much as possible and find a way to avoid the impact of the higher rate.
I would add this rule to the upcoming tax reform: "Any financial structure providing tax reduction with value exceeding the tax basis value of the direct investment made by the benefitting entity is an illegal tax avoidance structure."
1
It's somewhat comforting to know that for every greedy, self-promoting, lying Trump there is a decent, self-effacing, honest George Romney to create somewhat of a balance. Well, maybe not in equal numbers, but there are enough good people with intelligence and integrity to keep the Trumps of the world from destroying our country - I hope.
4
Simple human nature. Reward greed, get greed in return. And is it a surprise that the class that gets to set their income for themselves and their peers (and are on each other's compensation boards) will suppress the income of those not in their class? That just means more money out of their pocket. That is life since 1980's Reagan. Sucks to not be a millionaire.
8
My friend works for a private B2B company that USED TO treat workers well, pay, bonuses, etc. Then it needed capital to grow. Once they got outside capital, every scrap of profit goes to investors. Wages stagnated, they even had to implement a new tier of lower worker pay, and the better paid, older employees are the first to get laid off. The company CEO said 2016 was the best year they ever had, thanks for all the hard work, sorry, no bonuses because all the profit flows to the capital investment firm. That's an example of capital shooting itself in the foot - experienced people riffed, new people leave because of crappy pay, performance suffers, and customers take their business elsewhere. THEN where are the profits?
8
I'm shocked that profits actually flowed to those who provided the capital. From now on, those with capital should be required to provide capital out of the goodness of their hearts with no expectation of any profit at all.
The reality is that those returns on capital result from the efforts of the labor; try running a company with capital only and no labor -- good luck! Capital should be compensated fairly but so should labor. For capital to take all the gains created by labor is not good ... for capital, for labor, and for the company.
2
There is a systems that values labor and capital equally. It's called communism and it has failed.
The principle of a "flat tax" being "fair": everyone pays the same % of income for Federal taxes ("same" defines "fair"). First question: % based on net or gross? Remember if you choose 'net' (after deductions) many/most corporations and/or rich indivd's can (and do) zero out their income thru deductions. Question 2: Does 10% (just an easy math #) of a $30,000 income family mean the "same" (have the same impact) as it would a $1,000,000 family? $30,000 = $3,000 What could they buy/pay with that? (Maybe a year's health insur bill?) They are left with $27,000 to live on. The million $$ family = $100,000 and that IS a lot of $ - BUT it leaves them with only $900,000 to live on.
Another way to view "flat" is Fed $ returned to states in the form of grants, subsidies, etc. Many states that pay the least in Fed. taxes (usually because lots of poor people) get more in return than they paid in. How about a new 'flat' proposal (for argument sake) - each state can only have back 50% (again just easy #) of what they paid in. That means the richest states get the most money back - do they need it as much as the 'poor' states who now get only half of what they had before? The point being = flat always benefits the top/rich - always. And "same" does not equal "fair".
Another way to view "flat" is Fed $ returned to states in the form of grants, subsidies, etc. Many states that pay the least in Fed. taxes (usually because lots of poor people) get more in return than they paid in. How about a new 'flat' proposal (for argument sake) - each state can only have back 50% (again just easy #) of what they paid in. That means the richest states get the most money back - do they need it as much as the 'poor' states who now get only half of what they had before? The point being = flat always benefits the top/rich - always. And "same" does not equal "fair".
3
What is it that you think conservatives are trying to conserve? Their good standing in their houses of worship? The adulation of their local civic organizations? Their good-standing in the eyes of their shareholders? No. They want to conserve their ability to have the biggest pile when their time is done. Middle class voters need to figure this out really quickly if we are to make America the economic engine that could.
6
I appreciate the comments from all those person self-identifying as 1%ers who agree the system is broken. Since you all, admittedly, have more resources and more political power than the rest of us, my question and challenge to you is how do you organize yourselves to make the changes you believe are so desperately needed. I assume you all donate to great causes and put your money where your mouths are for the most part. And, certainly grand gestures like Bill Gate's and Warren Buffet's pledges to donate all their wealth are great and very admirable, but the problems we face are systemic and will require concerted effort and very vocal and visible support from those in the upper echelons in society. I'm proposing a "1 percenters for fair and equitable tax policy" organization. Who wants to be the leader? (Sadly I don't qualify for membership)
133
I don't think focusing on the tax rate is correct. If it isn't enough that the government essentially gets half your salary, then there's something wrong. The deregulation started under Reagan was driven to insane levels under Clinton, which was the reason for the crashes in 2000 and 2008. Just taxing the rich and so forth sounds good (because it primarily affects others) but the truth is, if you want to balance the budget, you'll have to raise taxes on everyone, especially the middle class. And if you want general health care for all, like the rest of the world, then you also need to accept a general federal sales tax of 19-21% on everything sold, just as the rest of the world does.
2
Start by raising the rates on the richest people, and see what that does to the economy, deficit and debt. They have clearly benefited the most and are most capable of taking the hit. I agree that 90% is too high, but we can start at half that.
1
"...half of your salary" is incorrect. Top marginal tax rates are just that, top marginal. After a pretty high number you rates go up in increments depending on your wealth. You still pay less for all the money below the top marginal rate.
The global corporations have destroyed the sense of community in America.
After being encouraged and lured into a trap by the big businesses we now have the numerous different cities and states trying to steal the companies from each other with the lavish incentives and tax breaks. That’s the race to the bottom where everybody loses. That’s the reason why the cities, the states and the country are saddled with the enormous debt while the global corporations are extremely profitable.
That is the contemporary implementation of the ancient Roman maxima “Divide and conquer”...
After being encouraged and lured into a trap by the big businesses we now have the numerous different cities and states trying to steal the companies from each other with the lavish incentives and tax breaks. That’s the race to the bottom where everybody loses. That’s the reason why the cities, the states and the country are saddled with the enormous debt while the global corporations are extremely profitable.
That is the contemporary implementation of the ancient Roman maxima “Divide and conquer”...
4
There is another reason the wealthiest Americans from the era 1946-1982 did not feel they should be paid ridiculous amounts of money to do their job, or any job. It was because an entire generation of Americans served together in a world war. The wealthy and the non-wealthy learned, from that experience, that they needed each other, just to survive and defeat their common enemies. That they really were not that different, especially when they stood side by side in a foxhole, or on a B-17 bomber, or a Navy destroyer in the Pacific ocean. They saw themselves, rightly, as Americans first, wealthy or non-wealthy second. They saw themselves as their brothers keeper. They knew there was more to life than simply money. In other words, they had values and a sense of morality and compassion for others. Something that is 100% totally lacking in a modern CEO who makes $30 million a year laying off thousands of workers who are making minimum wage. So the CEO can get a larger end of the fiscal year bonus.
5
Don't know why we don't have wealth caps in this country. Who needs more than a few hundred thousand dollars in wealth? Most Americans have negative wealth or maybe a tiny bit of equity in their homes. Cap wealth at say $250,000 (tax every penny of excess away). Cap income at $50,000/yr and guarantee a minimum income of $35,000 regardless of work or circumstance to everyone. People would make do and all would be reasonably well off. Fair is fair.
1
Cap income at 50k per year? I make 45k and can barely keep up with all the repairs my home needs. And I haven't saved a dime for retirement in 2 years.
I agree 100% with this column, but it ignores one of the primary factors perpetuating the wealth inequality issue. Until Citizens United is reversed, and campaign finance reform comes back to the forefront, income disparity will continue to rise and the stability of the U.S. economy will continue to decline. This, in my opinion, was the biggest threat created by the Republicans' theft of the open seat on the Supreme Court. As long as there is a conservative majority on that court, the CU decision will stand, and the government will remain in the service of the plutocracy.
6
Once someone has more money than any sane person could possibly spend in an entire lifetime on life's necessities, and and even a few garage-fulls of luxuries and gotta-haves, how much more does it take to buy the one thing money --more money-- has so far always failed to provide: true happiness?
People like Martin Shkreli and the current President of the United States wouldn't be satisfied if they owned, free and clear, the planet Earth.
People like Martin Shkreli and the current President of the United States wouldn't be satisfied if they owned, free and clear, the planet Earth.
4
One of the most salient points in the article was on taxation rates: David Lenohardt quotes Gabriel Zucman:
“It’s not worth it to try to earn $50 million in income when 90 cents out of an extra dollar goes to the I.R.S.”
In other words our tax code has the capacity to either encourage or discourage "good behavior" by the wealthy. By increasing the top marginal rate to painful levels, the post-war wealthy were FORCED to invest in PRODUCTION. They had to grow their companies to increase the pie, not just gobble up a bigger share of the same sized pie for themselves. Beyond a certain point, too much of it was taxed for that to be practical.
If you lower tax rates then it becomes all too easy to make tons of money in ways that are not productive to the overall economy. Things like stock buybacks, stock options, hedge fund trading, buying and flipping properties for ridiculous rents and profits. This is far easier than actually building a business from the ground up, employing workers and creating products that ensure profits year after year. Most people will only resort to this sort gut-wrenching hard work and risk, if the easy rent-seeking alternatives are out of reach.
Perhaps that should be the goal of taxation on the wealthy. The size of the tax has to reach a "pain point" where rent-seeking is no longer a viable or practical way to make money. Only then, will they turn their resources into creating jobs which can result in a thriving economy.
“It’s not worth it to try to earn $50 million in income when 90 cents out of an extra dollar goes to the I.R.S.”
In other words our tax code has the capacity to either encourage or discourage "good behavior" by the wealthy. By increasing the top marginal rate to painful levels, the post-war wealthy were FORCED to invest in PRODUCTION. They had to grow their companies to increase the pie, not just gobble up a bigger share of the same sized pie for themselves. Beyond a certain point, too much of it was taxed for that to be practical.
If you lower tax rates then it becomes all too easy to make tons of money in ways that are not productive to the overall economy. Things like stock buybacks, stock options, hedge fund trading, buying and flipping properties for ridiculous rents and profits. This is far easier than actually building a business from the ground up, employing workers and creating products that ensure profits year after year. Most people will only resort to this sort gut-wrenching hard work and risk, if the easy rent-seeking alternatives are out of reach.
Perhaps that should be the goal of taxation on the wealthy. The size of the tax has to reach a "pain point" where rent-seeking is no longer a viable or practical way to make money. Only then, will they turn their resources into creating jobs which can result in a thriving economy.
4
It's a myth to say goodwill and patriotism of the wealthy helped everyone prosper in the past - that this current crop of robber barons is somehow greedier. The modern US experienced a brief window of shared prosperity 1939 to 1980 - yet we all have all hoped for and expected such a virtuous outcome into the foreseeable future. Indeed, many Americans view this current era of disappointment as somehow aberrant. Rather, we have passed the exceptional period of the twentieth century to be undone by negative historical trends, many anticipated, that have led to wealth redistribution to the 1% and destruction of the US middle class: rise of automation; development of third world manufacturing capacity; reduced quality of education and training; decreased population growth; spread of modernization to its limits; redistribution of political power to the wealthiest citizens and corporations; and, most critical, corrupt and ineffective governance. These have all reduced labor demand, reduced the rate of economic growth, weakened or eliminated labor's bargaining leverage, made labor unions impotent, destroyed the wealth of middle class families, and enhanced wealth redistribution ever upwards. Such a vicious cycle will take unparalleled leadership to break. And while our current leadership is unparalleled - it's not in a good way.
4
Norway, Denmark, Germany, etc.-- took the page from our post war economic structure and bettered it. Now their citizens live the good life, and the good life for Americans is in the rear view mirror. It will require bold leadership as you correctly state-- but with the diminished democracy, that is unlikely to occur.
1
Mr. Romney could have taken the bonuses and give the extra to government but he didn't. All these left-leaning CEOs like Tim Cook could also pay extra in taxes but they don't. Maybe Mr. Leonhardt should address that.
The left always whines that wealthy individuals should do with less but never make the same argument about government. If the politicians in Washington would reduce spending and fix the tax code, Mr. Leonhardt wouldn't need to argue for increasing taxes on the wealthy.
The left always whines that wealthy individuals should do with less but never make the same argument about government. If the politicians in Washington would reduce spending and fix the tax code, Mr. Leonhardt wouldn't need to argue for increasing taxes on the wealthy.
4
Bravo, well stated,hm1342!
"All these left-leaning CEOs like Tim Cook could also pay extra in taxes but they don't."
They (and the right-leaning CEOs too) pay what the law requires. Don't like that? Change the law.
They (and the right-leaning CEOs too) pay what the law requires. Don't like that? Change the law.
2
@ Dave: "They (and the right-leaning CEOs too) pay what the law requires. Don't like that? Change the law."
You're missing the point. I'd rather the tax rates overall be reduced. I'd rather eliminate all the exemptions, deductions, subsidies and what-have-you not only for businesses, but for every special interest group and individual. The treasury is not our private piggy bank if only we can curry favor from some member of Congress. If CEOs or other wealthy people want to voluntarily pay the government more, that's their call. But the left can't stop their incessant whining how much more the wealthy should pay in taxes.
You're missing the point. I'd rather the tax rates overall be reduced. I'd rather eliminate all the exemptions, deductions, subsidies and what-have-you not only for businesses, but for every special interest group and individual. The treasury is not our private piggy bank if only we can curry favor from some member of Congress. If CEOs or other wealthy people want to voluntarily pay the government more, that's their call. But the left can't stop their incessant whining how much more the wealthy should pay in taxes.
Every year the national press report that the top 25 hedge fund managers earned, on average, personal compensation of about $1,000,000,000 (one billion U.S. dollars). Other financial managers earning a paltry $100,000,000 (one hundred million dollars) per year seldom are newsworthy, and are generally ignored by the financial press and other media.
But back to the billion-dollar-a-year men. What can you do with a billion dollars, that you can't do with a hundred million? You can only drive one Bentley or Ferrari at a time, sleep in one silk-appointed bed, sail a yacht or fly in a private jet. OK, you might need a few more luxury homes in New York, Southampton, London, and Rio, but who's counting?
And sure, there's a difference between owning a Boeing 737 or a modest Gulfstream G650 - we'll grant you that. And think how embarrassed you would be to have to admit to your friends in the Hamptons or Palm Beach that you could only afford a Beechcraft King Air; you're practically homeless. (Gosh, the Beech even uses propellers!)
But for the most part, your lifestyle wouldn't be appreciably better with a billion than with a hundred million. So why bother?
But back to the billion-dollar-a-year men. What can you do with a billion dollars, that you can't do with a hundred million? You can only drive one Bentley or Ferrari at a time, sleep in one silk-appointed bed, sail a yacht or fly in a private jet. OK, you might need a few more luxury homes in New York, Southampton, London, and Rio, but who's counting?
And sure, there's a difference between owning a Boeing 737 or a modest Gulfstream G650 - we'll grant you that. And think how embarrassed you would be to have to admit to your friends in the Hamptons or Palm Beach that you could only afford a Beechcraft King Air; you're practically homeless. (Gosh, the Beech even uses propellers!)
But for the most part, your lifestyle wouldn't be appreciably better with a billion than with a hundred million. So why bother?
5
"But for the most part, your lifestyle wouldn't be appreciably better with a billion than with a hundred million. So why bother?"
If you earned a billion dollars, would you give $900 million to the government voluntarily?
If you earned a billion dollars, would you give $900 million to the government voluntarily?
3
Trickle-down economics is one of those really bad ideas that just refuses to die. It's never worked for anyone but the rich, yet the mystique lives on.
On a broader level, it's amazing that Republicans are somehow viewed as the responsible stewards of our economy, which has performed far better under Democratic Presidents the past 100+ years. Google it if you don't believe me.
On a broader level, it's amazing that Republicans are somehow viewed as the responsible stewards of our economy, which has performed far better under Democratic Presidents the past 100+ years. Google it if you don't believe me.
9
Any CEO of a public corporations who bases his/her decision as to whether to add employees at the company on his/her personal income tax bracket should be fired immediately. He/she is mixing up personal finances with corporate finances and is basically incompetent.
2
This article skirts the real issue, which is not income but wealth. (Read Piketty and Saez's best-selling book "Capital".) As a liberal, I'm fine with a 39% top tax rate or even lower, as long as wealth is also taxed. Focusing on tax rates diverts attention from the real issues, which are wealth and nontaxable income, much of it from overseas sources. Adding to the problem is the generous tax treatment of the trading of financial assets of all sorts. A tax of, say, 0.5% (a tiny amount) on financial transactions would not affect true investors much, since they don't turn over their investments several times a minute (or a microsecond), but it would spell the end of high-speed trading, which serves no useful economic function. In addition, a 1% net worth tax would hardly harm the rich at all, since even conservative investing provides yields much greater than that.
It used to be that the hugely wealthy were mostly captains of industry. Now they are mostly captains of financial arbitrage such as Steve Cohen (SAC Capital Advisors), Steve Schwartzman (Blackstone) and Robert Mercer (Renaissance Technologies).
It used to be that the hugely wealthy were mostly captains of industry. Now they are mostly captains of financial arbitrage such as Steve Cohen (SAC Capital Advisors), Steve Schwartzman (Blackstone) and Robert Mercer (Renaissance Technologies).
8
" As a liberal, I'm fine with a 39% top tax rate or even lower, as long as wealth is also taxed."
What if it's not enough to fund our already-bloated federal budget? Would you be happy with 50%? How about 85%? Is there any point where you would say "enough!"?
What if it's not enough to fund our already-bloated federal budget? Would you be happy with 50%? How about 85%? Is there any point where you would say "enough!"?
1
Parts of the federal budget are indeed bloated notably the military whose weapons and systems often serve no plausible military purpose. But that's beside the point. If the federal budget turned out to be underfunded even after a financial transfer tax and a net worth tax, I'd increase the tax rate on those things. But I doubt if that would ever come to pass, considering how much untaxed or lightly taxed wealth is out there. Consider the case of Donald Trump, who has boasted of how little he pays in taxes and says that this shows how smart he is.
2
hm1342, you have been quite dominant today! Our federal government is NOT as you insist, "already bloated." Take out our military/defense expenditures as an exercise and suddenly the federal budget is quite small. (and no, you do not get to count SS and medicare since these necessities are largely self-funded) Now take that military budget, reduce it by 2/3 and add it back in and maybe we have a more balanced set of expenditures. Still out of proportion to the civilized world.
1
"... begot Mitt Romney, a highly successful and personally decent..."
How do you judge someone's decency? By their words? By their actions? By their family?
Don't forget the 47%; the "takers". Don't forget his involvement in questionable business deals putting people out of work to line his own pockets (Staples notwithstanding).
Compared to our current POTUS he looks "decent"; but I have my doubts.
How do you judge someone's decency? By their words? By their actions? By their family?
Don't forget the 47%; the "takers". Don't forget his involvement in questionable business deals putting people out of work to line his own pockets (Staples notwithstanding).
Compared to our current POTUS he looks "decent"; but I have my doubts.
2
It's no wonder the nation is $20 trillion in debt. Half of "Americans" (the bottom half) pay a miserly 2.7% of the income taxes paid. When you factor in assistance programs, they likely pay a negative tax rate. They support all Big Government spending, no matter how wasteful. What do they care? They're not paying for anything anyway.
7
Larry: If the other “half of Americans” were paid a fair living wage, they would not need government assistance. And the amount of taxes they paid would also rise substantially.
This isn’t rocket science.
This isn’t rocket science.
5
If they were paid $15/hour, they're income would drop to zero because not all jobs are worth $15/hour. A $15/hour minimum wage would be nothing more than the Robot Full Employment Act of 2017.
The Gop propaganda tries to flatter voters that they're one of the successful ones who don't need govt. This distorts govt in a democracy, which should work for the majority not the few, labeing govt as tyranny that takes away our 'freedoms'. But govt protects the majority from the tyranny of corporations.
The Gop manipulates voters with slogans of 'self reliance' and 'liberty' with the idea that people who need the services that civilization provides with taxation, are inferior. It becomes a status thing to be against taxes. This Gop hoax has created division and competition. Then they take millions of jobs out of the country. Enter Trump.
The Gop and their duptes construct elaborate rationalizations for all this---taxes are theft, taking from the successful and handing out to the inferiors. This superiority complex is at the bottom of all our anti tax, small govt propaganda. So much for the famous American equality.
But even the Dems can't fight back too much to right this imbalance, since adequate, fair taxation is labeled too left wing by our distortions. Dems need billionaire's campaign donations to beat the Gop. To beat Trump Dems have to listen to their megadonors.
A vicious cycle.
The Gop manipulates voters with slogans of 'self reliance' and 'liberty' with the idea that people who need the services that civilization provides with taxation, are inferior. It becomes a status thing to be against taxes. This Gop hoax has created division and competition. Then they take millions of jobs out of the country. Enter Trump.
The Gop and their duptes construct elaborate rationalizations for all this---taxes are theft, taking from the successful and handing out to the inferiors. This superiority complex is at the bottom of all our anti tax, small govt propaganda. So much for the famous American equality.
But even the Dems can't fight back too much to right this imbalance, since adequate, fair taxation is labeled too left wing by our distortions. Dems need billionaire's campaign donations to beat the Gop. To beat Trump Dems have to listen to their megadonors.
A vicious cycle.
2
We already have higher tax rates for the evil hated rich. The top 1% of taxpayers paid a 27.1% individual income tax rate in 2014. The bottom 50% paid an individual rate of 3.5%.
6
Simple solution ... the top 1% should stop earning income once they reach the 50th percentile ... that would reduce how much tax they pay. :-)
The ten-fold increase in the ratio of CEO compensation vs that of typical workers should worry everyone, even the CEOs and others in the 0.1% and above. This statistic, and those demonstrating that essentially all economic gains for several decades have flowed exclusively to the top, represent a threat to all Americans and to our entire system. I believe for the first time in my life that it is not impossible that our society could destabilize.
5
The top income tax rate should be 49.5%. The rate should kick in at 0% up to a basic income level, say $15,000, and run up a smooth slope up to 49.5% for all income over a certain threshold. The top threshold number would be determined by the budget; you move the number to capture the budgeted-for revenue. The ideas are (1) the slope eliminates the inequity of where you stand in a given bracket and recognizes the general principle that the more you make, the less necessary that extra income is to your life. At some point, money that at the lower echelons would be used for food, shelter, and education is allocated towards ice sculptures spewing vodka and next-generational trusts. And (2) the government should never take more from an earned dollar than the person who earned it. Hence the 1% difference at the top end. I call it slope theory taxation and I wish it would catch on.
0% for any average working household up to $30,000. 100% on inheritance - including wealth in stocks, corporations "foundations", "trusts" and other tax evasion methods - over $1 million and 91% on wealth above the poverty line.
A few years of that will put America back on track, create infrastructure jobs and provide healthcare and good education for ALL Americans. Then we can re-look at the formula.
Either that or nationalize every BIG multi-national company and turn them into true employee-owned companies. WE THE PEOPLE must demand a return to social and economic justice for ALL Americans.
A few years of that will put America back on track, create infrastructure jobs and provide healthcare and good education for ALL Americans. Then we can re-look at the formula.
Either that or nationalize every BIG multi-national company and turn them into true employee-owned companies. WE THE PEOPLE must demand a return to social and economic justice for ALL Americans.
2
It will not do a thing as people would just leave. You would end up with a broken country just like Venezuela.
Wow. Well, agree to disagree. To me, this shows a dangerous lack of understanding of how our economy works. And I think your call for "a return to social and economic justice" - while admirable - lacks historical support. When George Romney was eschewing a higher salary, blacks, women, and others faced huge restraints in the workplace. So while the striation of wealth is undeniable, it's also never been better in terms of access.
Those high 90% marginal tax rates also encouraged people to defer income (large pensions starting in their 50's), and to get untaxed perks (starting with company-paid healthcare.) They provided a safety net that no longer exists. They might have been more generous than companies could afford, but the reaction against them might have swung too far.
Yes, all true. Except that modest increases in the marginal tax rate would do little to affect inequality.
And the term "income inequality" is misleading. The goal isn't "income equality", but fairness. No one should work a full-time job and be impoverished. No one should lose their home or go bankrupt because of medical needs. The rest of the developed world sees health care as a human right. This isn't about jealousy: I don't want to be a one-percenter. But a society organized so that a privileged few have more than anyone could spend in a lifetime, while decent, hard-working people struggle is not just or sustainable.
A high marginal tax rate would help, but we would need to first correct the more fundamental problem of our broken electoral system, which has left us with a Congress that is increasingly unrepresentative of voter interests.
And the term "income inequality" is misleading. The goal isn't "income equality", but fairness. No one should work a full-time job and be impoverished. No one should lose their home or go bankrupt because of medical needs. The rest of the developed world sees health care as a human right. This isn't about jealousy: I don't want to be a one-percenter. But a society organized so that a privileged few have more than anyone could spend in a lifetime, while decent, hard-working people struggle is not just or sustainable.
A high marginal tax rate would help, but we would need to first correct the more fundamental problem of our broken electoral system, which has left us with a Congress that is increasingly unrepresentative of voter interests.
8
I frankly question the degree to which money and low tax rates have been responsible for "unleash entrepreneurial energy".
Apple and Steve Jobs provide perhaps the best example that it is not. I don't think money was Jobs's PRIMARY motivation in building Apple. Instead, he was primarily motivated by making "cool" stuff. He was driven more by an obsession with doing computers "right" - his way - and imposing his own views on what the digital world should look like than money. Jobs made all the money he needed for the rest of his life from his first stint at Apple. He didn't come back because he needed more.
The same is likely also true of Zuckerberg. And Musk has said he expected to lose money on Tesla but did it because America (and the world) needed electric cars (to reduce CO2 emissions). On paper at least, he has made a killing. Whatever eventually happens to Tesla he has demonstrated that electric cars can be competitive and that there is a huge demand for them.
No doubt there are exceptions, JPMorganChase, for example (but what do they actually build?). But at least as often as not, entrepreneurial energy seems to arise from a desire to create more than a desire to make money.
Apple and Steve Jobs provide perhaps the best example that it is not. I don't think money was Jobs's PRIMARY motivation in building Apple. Instead, he was primarily motivated by making "cool" stuff. He was driven more by an obsession with doing computers "right" - his way - and imposing his own views on what the digital world should look like than money. Jobs made all the money he needed for the rest of his life from his first stint at Apple. He didn't come back because he needed more.
The same is likely also true of Zuckerberg. And Musk has said he expected to lose money on Tesla but did it because America (and the world) needed electric cars (to reduce CO2 emissions). On paper at least, he has made a killing. Whatever eventually happens to Tesla he has demonstrated that electric cars can be competitive and that there is a huge demand for them.
No doubt there are exceptions, JPMorganChase, for example (but what do they actually build?). But at least as often as not, entrepreneurial energy seems to arise from a desire to create more than a desire to make money.
4
Lowering the tax rate for high earners has been a disaster for Middle America We have no money for infrastructure, healthcare, climate change mediation, the space program or anything else because politicians cater to rich elites.
4
If there's no money, then how do you explain the FACT that Big Government revenues are at record highs???
1
Not when you factor inflation in.
1
You're wrong! Adjusted for 2009 dollars, Big Government revenues are at all-time record highs.
http://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-sum...
http://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-sum...
2
Thanks David,
More discussion is needed on the appropriateness of current and future potential tax rates for our nation, and whether incentives should be included in our tax system to encourage growth in certain sectors of our economy. While it makes sense that tax rates should rise for those earning the most, to help reduce the deficit which has been continuing to grow non-stop since 2000, the tax code can also be structured to support American business. A reduction in rates for the wealthy who invest in industries that we want to encourage may make sense.
More discussion is needed on the appropriateness of current and future potential tax rates for our nation, and whether incentives should be included in our tax system to encourage growth in certain sectors of our economy. While it makes sense that tax rates should rise for those earning the most, to help reduce the deficit which has been continuing to grow non-stop since 2000, the tax code can also be structured to support American business. A reduction in rates for the wealthy who invest in industries that we want to encourage may make sense.
Greed has a small part to play in the human urge to create, innovate, and build. The insatiable desire for ever greater piles of money is not the main driver for artists, scientists, inventors.... It is passion and curiosity. The love of creating for creating's sake. Greed is what motivates the 2nd and 3rd tier inheritors of wealth; second-raters who create little on their own, except for an out-size sense of their own worth.
2
Imagine if the federal court struck down the payments of the alimony because such financial transactions obviously impede the ability of the spouses to create the new families and get the new children.
Why do the state and federal governments let the global corporations off the leash for free in order to create the new jobs in China and India?
What about the American children and the American families?
If the federal government will not protect us, whose job is it?
Does the Washington D.C. believe that the UN or the Chinese government should protect the American citizens?
Why do the state and federal governments let the global corporations off the leash for free in order to create the new jobs in China and India?
What about the American children and the American families?
If the federal government will not protect us, whose job is it?
Does the Washington D.C. believe that the UN or the Chinese government should protect the American citizens?
“In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month.” This single statistic encapsulates what has gone so terribly wrong since Reagan. It symbolizes the direction taken by the Republican Party since that time and what is so deeply askew with their party since Reagan. One of the myths of trickle down is that what the rich will do with all that extra cash is to create jobs and reinvest in their businesses. What we know is that mostly he extra capital gets put into investment accounts not plowed back into the general economy. It is the working and middle classes that spend most of the extra they get immediately putting it back into the economy that promotes more growth. Republicans have been very ingenious in how they get the masses to focus on blaming scapegoats like minorities and immigrants for their lack of economic progress rather than looking at the people at the top of the food chain who pay as little as possible for their labor.
3
Everybody wants more money but the superrich already HAVE more money than everybody else.
5
This problem will only be solved when everyone feels the same "pinch" from their taxes by paying based on their ability to pay.
States like NY are tired of subsidizing mostly southern states who take back more taxes than they pay. If Trump wants to run the country like a business he should cut the losers loose, let Mexico annex their treasury draining inefficiencies. They are sucking the profits out of the states who carry their own weight.
States like NY are tired of subsidizing mostly southern states who take back more taxes than they pay. If Trump wants to run the country like a business he should cut the losers loose, let Mexico annex their treasury draining inefficiencies. They are sucking the profits out of the states who carry their own weight.
7
Poor and working-class people also get back more from the Federal Government than they pay in. Should they too be "cut loose," because they are "sucking the profits" out the gazillionaire class?
The fairest tax would be a flat tax, no loop holes. This includes corporate taxes as well. But no one speaks to fairness when it comes to taxes. At least not economists or politicians. The only loop holes tat congress ever considers eliminating are usually those that affect the Lowe to mid income tax loop holes
What is so difficult in having commen sense tax laws
What is so difficult in having commen sense tax laws
5
An increase in tax rates on those Americans most able to afford them is richly deserved and very much needed.
But the devil is in the details, and what really holds down the effective real-life taxes paid by the wealthy--and will continue to do so until corrected--is the vast array of deductions, depletions, write-offs, givebacks, credits, carried interest, overseas shell companies, and other avoidance schemes (made perfectly legal by supine legislatures) that the rich get to subtract BEFORE computing the income on which tax will actually be required.
But the devil is in the details, and what really holds down the effective real-life taxes paid by the wealthy--and will continue to do so until corrected--is the vast array of deductions, depletions, write-offs, givebacks, credits, carried interest, overseas shell companies, and other avoidance schemes (made perfectly legal by supine legislatures) that the rich get to subtract BEFORE computing the income on which tax will actually be required.
4
Focusing on salary ignores the role of granting equity to top management plays in rising wealth inequality. Furthermore, equity ownership by executives can distort how companies allocate resources. Stock-buy backs do little for 'corporations' but do allow executives to exercise stock options for maximal gain. Furthermore, these capital gains are taxed at much lower rates than the already low marginal tax rate on income.
3
To make matters worse, there are plenty of examples around of where this will end if this keeps up. We know we're on the highway to hell but we're damn sure going to enjoy what's left of the ride. Some of us anyway.
4
By definition the market economy is monopolistic, biased and screwed up.
Who has ever elected any market to have the exclusive rights to determine the social system of values and priorities?
Here are the few critical examples.
A soldier fighting and dying for this country is paid $40k. An actor portraying this soldier in some Hollywood movie is paid for the same efforts and time (but without any risk to his life) $40 million.
Of course the government has the constitutional right to straighten up the inherent injustices in the work compensation systems in order to balance the federal budget.
All the private property is created equal in front of the law. For God’s sake, why should I pay the taxes on buying a loaf of bread if the stockholders paid no sales taxes when buying another corporation? Just because they corrupted the elected officials with the lavish campaign donations?!
It is an act of treason for the federal government not to collect the money from the extremely monopolistic entities abundant with the profits and cash while letting the entire America drown in the enormous national debt...
Who has ever elected any market to have the exclusive rights to determine the social system of values and priorities?
Here are the few critical examples.
A soldier fighting and dying for this country is paid $40k. An actor portraying this soldier in some Hollywood movie is paid for the same efforts and time (but without any risk to his life) $40 million.
Of course the government has the constitutional right to straighten up the inherent injustices in the work compensation systems in order to balance the federal budget.
All the private property is created equal in front of the law. For God’s sake, why should I pay the taxes on buying a loaf of bread if the stockholders paid no sales taxes when buying another corporation? Just because they corrupted the elected officials with the lavish campaign donations?!
It is an act of treason for the federal government not to collect the money from the extremely monopolistic entities abundant with the profits and cash while letting the entire America drown in the enormous national debt...
4
A higher tax rate works only if the people earning millions can't hide their money away. Laws like Dodd-Frank have cracked down on foreign accounts, but in a way those rules only hurt the little people. As Gary Cohn said about the estate tax, only morons pay it. The same can be said of a lot of taxes. Those with the ability to create layers of shell companies shelter their money, legally and sometimes not. Until the government can track those down, you can set the tax rate as high or low as you want but the rich will find ways to evade paying.
4
That means it's time to add real teeth to the laws. If a rich person (or corp) is caught underpaying taxes by so little as a dollar, it should cost them 50% of all assets they own here & abroad. That means if a person is worth a billion, shorts the government $1. They pay 500 million to the government in penalties & owe it even if 100% of their assets are overseas. Pull their passports until they pay up. The whole family's passports. Deny them access to even a checking account, credit card, or cash. So, they can't buy, sell, rent. Until they pay up. If anyone (a friend let's say) loans them $100 for groceries, it is taken & put toward their penalty. For every day they don't pay up there is 95% interest tacked on, compounded daily. It will bankrupt them in under a month. The government every day takes control of more. Companies, housing, even clothing & children's toys. Jewelry of course would be taken first. Including both wedding bands & heirlooms. To be immediately broken up & sold. No chance of getting the items back. If someone less 'well off' catches them, say driving a car, when they call the IRS, they get a payment of say $10,000. As an incentive to turn all the rich bums over. Even their bosses. Make it hurt enough & they will pay up. Make it public. Penalty has to be big for them, for less wouldn't hurt. The rest of us get hit with say a $500 penalty it hurts. Not them. So penalties must be so big, it will keep them so honest they squeak when they walk.
The present-day pay inequality of execs v staff is immoral, period. Since "corporations are (not) people my friend," we should not expect them to behave morally, even if that expectation existed in a better past. The compensation committee cartel cannot be expected to set better, more fair compensation plans in place, even if to do so would be the moral thing to do. thus, the only way for society to catch up, and claim our fair share, is through very aggressive taxation as Mr. Leonard here suggests. The problem is, the very rich want ever more pie; the problem is our congress owes their positions to the rich; the problem is the USA has had a right wing propaganda machine in firm place for 20+ years, whose mission is to spread the lies of low taxation-- to convince those who suffer the most from this theft, that low taxation for the rich will bring the benefits of a modern society to We the People.
1
The state and federal governments should have the right to impose retroactively the exit tax on all the corporations that moved their headquarters, factories and plants to the different states and continents.
In the same way a spouse is obliged to make the alimony payments to the former partner to protect the children and their previous standard of life, the corporations should be forced to pay the alimony payments after leaving some cities and the states behind...
In the same way a spouse is obliged to make the alimony payments to the former partner to protect the children and their previous standard of life, the corporations should be forced to pay the alimony payments after leaving some cities and the states behind...
2
Thank you for admitting the leftist welfare state has failed. You're proposing that failed Big Government states like Illinois hold their citizens hostage until ransom is paid. You're suggesting that failed Big Government states like Illinois build a financial Berlin Wall around their borders to keep the citizenry from fleeing. The fact that you even consider such a draconian, mean, immoral idea proves that liberalism, like Communism, has completely failed.
I think that letting 90% of your bonus go to the government would be truly patriotic. I say that having considered in some depth what it really means to be patriotic. Then again, when I think of the complexities of human nature, I understand that to ask a rich man to let go of his hold on a wad of cash is like expecting a hoarder to clean up his house. The power of rationalization kicks into high gear when it comes to giving up money. In spite of all good intentions and well-considered philosophical positions, the war plan conundrum takes effect: What is the first thing you do when you go to war? You throw away the plan. The unwritten part of this very human situation is that throwing out the plans has some merits. It leaves you to look at your resources without the prior constraint of a plan that has been placed by others before you. It is true that the planners probably had the time to think things through without the pressure of a dire situation; but they did not have to deal with the current problem. This is real! Let us forget that a good planner keeps the reality of the potential problem in sober sights. And is it any different when you put a wad of cash in someone's hand? Do not upbringing, education, and morality leave the room at that point?
If someone would place a briefcase of cash on my desk, I promise you that I will think it through and get back to you with my decision.
If someone would place a briefcase of cash on my desk, I promise you that I will think it through and get back to you with my decision.
1
t rump needs to be invited once again to the Bastille. Only this time the blade of the guillotine needs to shine a little in the sun. He needs to be reminded what happens when the people have finally had enough of the looting of our pocketbooks to line the already bulging pockets of the have it alls.
My father would lambaste anyone who complained of paying too much in taxes. He was proud to pay his 50% back to the country that allowed him to succeed. He plowed the excess profits back into his business, buying new equipment and paying his men more wages. His business is still thriving under the leadership of his grandson.
The real job creator is the entrepreneur who needs to start a business to create a job for himself, for one reason or another. When his business prospers he hires more people to work.
When a t rump gets a tax refund he buys another gold plated toilet from which to exercise his twitter finger. If he hires someone it is only to stiff that person out of the money he is owed.
My father would lambaste anyone who complained of paying too much in taxes. He was proud to pay his 50% back to the country that allowed him to succeed. He plowed the excess profits back into his business, buying new equipment and paying his men more wages. His business is still thriving under the leadership of his grandson.
The real job creator is the entrepreneur who needs to start a business to create a job for himself, for one reason or another. When his business prospers he hires more people to work.
When a t rump gets a tax refund he buys another gold plated toilet from which to exercise his twitter finger. If he hires someone it is only to stiff that person out of the money he is owed.
4
No person is worth hundreds of times what another is worth.
The amount of disparity in earnings we now allow threatens all processes of civilization, including government, business, and law. It's immoral and non-functional in the long run. Beyond parody, we are moving toward socio-political dissolution - as we poison our planet.
The only hope is that so many people are scandalized by this patent idiocy decorated on top with a patent idiot.
The amount of disparity in earnings we now allow threatens all processes of civilization, including government, business, and law. It's immoral and non-functional in the long run. Beyond parody, we are moving toward socio-political dissolution - as we poison our planet.
The only hope is that so many people are scandalized by this patent idiocy decorated on top with a patent idiot.
4
It's really funny to see all the lefties out here promoting higher taxes for the rich while giving freebies to the poor.
Let me ask you one question. How much more taxes does the rich have to pay to compensate the poor?
Here's a fact. A majority of democrats in Congress are fat cats as well. They like to spend other people's money but not their own. Removing all their pay except basic min wage since they are elected to serve the people. Let's see how many are willing to give those up.
One solution is to establish a fixed rate without any deductions. Let's say 20% of their income goes to taxes. However, this will never work since Congress is in bed with so many powerful lobbyists. Hence Ben Carson's 9/9/9 plan got killed by both sides.
One last thought, if I earn my money why would I want to pay for you to get free cell phone? It's like I worked hard to get straight A's to go to a decent college while you didn't and expect to go to the same college as I do. How is that fair?
Only idiots make decisions based on their emotions and not thought through on the solutions.
Let me ask you one question. How much more taxes does the rich have to pay to compensate the poor?
Here's a fact. A majority of democrats in Congress are fat cats as well. They like to spend other people's money but not their own. Removing all their pay except basic min wage since they are elected to serve the people. Let's see how many are willing to give those up.
One solution is to establish a fixed rate without any deductions. Let's say 20% of their income goes to taxes. However, this will never work since Congress is in bed with so many powerful lobbyists. Hence Ben Carson's 9/9/9 plan got killed by both sides.
One last thought, if I earn my money why would I want to pay for you to get free cell phone? It's like I worked hard to get straight A's to go to a decent college while you didn't and expect to go to the same college as I do. How is that fair?
Only idiots make decisions based on their emotions and not thought through on the solutions.
2
If you feel the poor are getting such great freebies, then jump aboard.
Disparity in wealth actually reduces the ability to generate more wealth that benefits more people. It creates advantages for the upper classes that can't be overcome.
I'm for paying entrepreneurs and CEOs fairly for there energy and effort. But 270-1 is simply grotesque.
Disparity in wealth actually reduces the ability to generate more wealth that benefits more people. It creates advantages for the upper classes that can't be overcome.
I'm for paying entrepreneurs and CEOs fairly for there energy and effort. But 270-1 is simply grotesque.
3
While I agree with what most of Mister Leonhardt says, his response is incomplete.
We have a tax code that places a premium on rent seeking behavior. The 15% carried interest bracket, the failure to tax monies paid by corporations in fines, the failure to tax stock buybacks. The personal income resulting from stock buybacks and other options behavior is treated as capital gains.
Then there are loopholes like an oil exploration credit.
I wonder how much of the 2007/2008 financial catastrophe, which we paid for, was the result of tax advantaged transactions.
We have a tax code that places a premium on rent seeking behavior. The 15% carried interest bracket, the failure to tax monies paid by corporations in fines, the failure to tax stock buybacks. The personal income resulting from stock buybacks and other options behavior is treated as capital gains.
Then there are loopholes like an oil exploration credit.
I wonder how much of the 2007/2008 financial catastrophe, which we paid for, was the result of tax advantaged transactions.
2
David, you may not know what the top marginal tax rate ought to be, but others do: 75-80%*. Such a rate maximizes tax revenue by balancing the urge to earn an extra dollar with the disincentive of higher rates.
*http://www.epi.org/publication/raising-income-taxes/ (see also Paul Krugman's blog post 6/3/13).
*http://www.epi.org/publication/raising-income-taxes/ (see also Paul Krugman's blog post 6/3/13).
2
A key question: How much is enough? You can't spend the kind of money that some of these executives make. Seriously, what do you do when you already have 4 houses, each 8000sq/ft, and a huge yacht in Capri? The money and attitude will flow to the kids and the grandkids who will have no moral claim to their inherited privilege.
2
You set up a charity. Government will squander and waste any addditional revenue.
Interesting. Just saw "Logan Lucky." The rules for robbery (arguably what the rich are doing) include "Don't get greedy." More than once! Perhaps, the wealthy class should see this movie and stop trying to lower their tax rates.
1
In a country where we all pride ourselves on shopping for bargains, it's ironic that Americans get so little in return for what we pay in income taxes, sales taxes, property taxes, various municipal fees and tolls, college tuition, day care and elder care expenses, health insurance premiums and out-of-pocket medical costs, and on and on. If you counted all of these items as taxes against your annual income, the percentage would be quite a bit higher than just your effective tax rate. And yet many of the services we are supposed to receive from what we pay are often substandard and almost always overpriced compared to what socialist governments are able to deliver to their people.
3
Essentially the well-off paying taxes at a higher rate is the fee they need to pay to insure our defense department is fully funded. This is only fair since high income families seldom, if ever, find their offspring joining the military, but someone has to do so, and most come from lower income, lower tax rate families.
2
I believe in a higher tax rate for high earners. They didn't get those salaries without government help in some fashion. And I totally believe that the extreme salaries of CEO's are an affront to common decency. As do most people. Yet, Trump, a man who boasts of his ability to NOT pay tax, got elected president. Americans are nuts.
3
I believe lying is an affront to common decency. The rich already pay a higher tax rate. The top 1% pay a 27.1% income tax rate, 7x higher than taxpayers in the bottom 50 percent (3.5 percent).
2
The government is the largest employer in the world. More precisely, the DoD.
We have the historical record to show us that no entrepreneur would ever stop because of the highest marginal tax rate. That's hilarious. 10% of a $10 million dollar bonus is still an extra million dollars on top of the millions the rich guy gets already!
The real problem is not the tax rate but that we have too few tax brackets. Every smart person knows this so why is this writer going on about the top marginal? He is almost giving credence to the debunked theory of entrepreneurial flight if tax rates went up. In fact, there would be a flurry of entrepreneurial action if reasonable loans were made available to non-millionaires but instead the discount window is only open to the plutocrats. Rich people get their money from the government more than anyone else. Heck just like old times, the queen of England still gets a farming subsidy from the EU! The wealthy are the biggest recipients of tax payer dollars especially when they don't pay their fair share of taxes.
We have the historical record to show us that no entrepreneur would ever stop because of the highest marginal tax rate. That's hilarious. 10% of a $10 million dollar bonus is still an extra million dollars on top of the millions the rich guy gets already!
The real problem is not the tax rate but that we have too few tax brackets. Every smart person knows this so why is this writer going on about the top marginal? He is almost giving credence to the debunked theory of entrepreneurial flight if tax rates went up. In fact, there would be a flurry of entrepreneurial action if reasonable loans were made available to non-millionaires but instead the discount window is only open to the plutocrats. Rich people get their money from the government more than anyone else. Heck just like old times, the queen of England still gets a farming subsidy from the EU! The wealthy are the biggest recipients of tax payer dollars especially when they don't pay their fair share of taxes.
Excellent commentary, bravo, MR. Leonhardt.
2
"Trickle down" economics...or should I say, trickle down "economics" has been great for the very wealthy and for the economists. But then when has it ever been a bad career move to tell the rich and powerful what the want to hear?
David:
Please do a followup on Mitt Romney's $100 m. IRA, widely reported when he released his tax returns in early 2012. https://www.wsj.com/articles/SB10001424052970204468004577168972507188592
See also this GAO report. http://www.gao.gov/assets/670/665806.pdf
[email protected]
Please do a followup on Mitt Romney's $100 m. IRA, widely reported when he released his tax returns in early 2012. https://www.wsj.com/articles/SB10001424052970204468004577168972507188592
See also this GAO report. http://www.gao.gov/assets/670/665806.pdf
[email protected]
2
It's ironic that the lifestyle of the super rich has become part of the lives of the multitude. The poor can sit in front of their huge flat screens and vicariously enjoy the yaghts and mansions as if they were their own. They know the superstars intimately and embrace them as their own. They know they are only a lottery ticket away from joining them and Trump, Oprah, the Royals, and Beyonce are as much a part of their life as their own family. That's why they defend them so vehemently. Reason has nothing to do with it. Trump understands this. If the Democrats would prevail, they must recreate Camelot. (They came close with Obama.) It's all in the ratings.
2
You can sense the widening disparity between the haves, have a littles, and the have nots in this country. The flat wage issue has affected me throughout my career. I can get by, but it becomes increasingly difficult. I am trying to be as frugal as possible, and then I see wealthier friends post their glitzy vacation and new home photos on Facebook and wonder why I have been left behind. I wonder why Trump didn't push for a middle-class tax cut, but then I realize that Trump is either a paper tiger or a shameless liar when it comes to making it a little better for the middle and working classes...or both?
4
That's why there's no money to build modern infrastructure or bullet trains or guarantee clean water. How about free tuition for public colleges. These are good things. But....
3
Democrats need to be aware of the growing frustration of Sub-Urban (Typically comfortable middle class) households. They strongly feel that DC caters to both the poor and the wealthy only, and at their expense. They know the GOP is in the tank for the wealthy, but yet they think the Democrats don't offer much. I have many friends and family in this bloc that know Trump is a clown, yet voted for him/the GOP purely to give the proverbial middle finger to D.C. and to get some tax relief against rising costs, eroding benefits, and stagnant incomes the past twenty yeads.
The Democrats haven't communicated any such alternative tax plan that will benefit them, and they instead look at the Democratic Party as catering exclusively to the poor.
Where is the Democrats alternative tax plan in the wake of the GOP pushing their plan? Democrats are missing a real opportunity here to appeal to a huge voting bloc. Here is all they need to capture a chunk of those voters: 1: Slash taxes on all income bellow 75k for singles, 150k for married. 2: All business income below the first $5mm is untaxed (to help small business), 3: Double the income caps on SS and Medicare to make them solvent for the next 100 years, and 4: Any business that offers all employees at least 4 weeks vacation, 401k at 6% match with 100% vesting, pays daycare costs by at least half, and funds at least 90% of health insurance premiums with gets a tax break.
The Democrats haven't communicated any such alternative tax plan that will benefit them, and they instead look at the Democratic Party as catering exclusively to the poor.
Where is the Democrats alternative tax plan in the wake of the GOP pushing their plan? Democrats are missing a real opportunity here to appeal to a huge voting bloc. Here is all they need to capture a chunk of those voters: 1: Slash taxes on all income bellow 75k for singles, 150k for married. 2: All business income below the first $5mm is untaxed (to help small business), 3: Double the income caps on SS and Medicare to make them solvent for the next 100 years, and 4: Any business that offers all employees at least 4 weeks vacation, 401k at 6% match with 100% vesting, pays daycare costs by at least half, and funds at least 90% of health insurance premiums with gets a tax break.
"A top rate of 90 percent clearly has the potential to drive away entrepreneurs."
Yeah, that would be great. If there is anything we need to get rid of its entrepreneurs. What we need are individuals with imagination and concern for the Common Good to focus on solving our multitudes of entrepreneurial generated diseases and problems, diseases like obesity, tobacco use cancer, damaged brains of children from sugar, and problems like the hundred square mile thrash dump in the Pacific ocean, stupid huge cars that waste tons of materials and generate tons and tons of air and water pollution, the stupid consumption of numerous Jim-cracks and doodads that greed driven entrepreneurs make and sell to consumer mad humans who were generated by the propagandists called advertisers, the unending stream of miracle substances which contain god only knows what and will cure anything you can think of and sell to already drugged into submission humans for tons and tons of money.
Lets go for the 90% tax on anything over $400,000 the amount the President gets paid... What job is conceivably worth more than that one?
Yeah, that would be great. If there is anything we need to get rid of its entrepreneurs. What we need are individuals with imagination and concern for the Common Good to focus on solving our multitudes of entrepreneurial generated diseases and problems, diseases like obesity, tobacco use cancer, damaged brains of children from sugar, and problems like the hundred square mile thrash dump in the Pacific ocean, stupid huge cars that waste tons of materials and generate tons and tons of air and water pollution, the stupid consumption of numerous Jim-cracks and doodads that greed driven entrepreneurs make and sell to consumer mad humans who were generated by the propagandists called advertisers, the unending stream of miracle substances which contain god only knows what and will cure anything you can think of and sell to already drugged into submission humans for tons and tons of money.
Lets go for the 90% tax on anything over $400,000 the amount the President gets paid... What job is conceivably worth more than that one?
1
Growing up in Michigan while George Romney was governor, I can say he received much respect from even his political opponents. He was a man of character.
Contrast that with the money is god crowd today. This nation does not deserve the appellation 'In God we Trust.' It should be 'money is god; we have no other gods before us.'
Contrast that with the money is god crowd today. This nation does not deserve the appellation 'In God we Trust.' It should be 'money is god; we have no other gods before us.'
6
You are correct that George Romney was a "personally decent man." Not so his son. A decent man with wealth exceeding $200 million does not say to a room full of equally well-heeled, greedy, holier than thou jerks that 47% of Americans who will vote for Obama in 2012 are parasites who are dependent on government, believe they are entitled to everything and that government should provide it to them.
The entitled ones were in that room. Despicable, every one.
The entitled ones were in that room. Despicable, every one.
5
Sadly, Mitt did not learn this lesson about financial restraint from his father. Today's GOP would say that George Romney was a traitor to his class and not a real Republican. All this shows the depth to which the character of the GOP has fallen and helps explain the election of Donald Trump.
108
How can you speak for the Republican party? I am not sure, I as a Democrat, can speak for my party. I can say that I am quite disappointed in what seems to be the party's stonewalling of any kind of cross the aisle compromises. It show the depth to which Democrats are willing to go to hang onto power rather than further the best interests of the general population.
Paul Newman's old watch is expected to fetch millions at auction. Do some people have more money than they know what to do with?
4
You who are rich, what are your pressing issues and concerns? How to get richer? How to show others how rich you are? Where to spend next week in one of your dozen homes around the world? Perhaps, you are upset that the peasants who work for you are grumbling about their minimum wage. We who are not of the 1% have no idea how difficult it is being rich.
Unfortunately, when the rich get rich, they also get greedier. More, more and more is their motto. Big businesses are not spreading their profits to employees but only to themselves, on hold for what ever, their CEO's and their investors. The monies do not circulate. We have a stalled economy where the rich are richer, the poor poorer and lower taxes for the rich. Why would they bother to redistribute when they don't pay high taxes!
3
The progressive longing for a return to the days of 90% tax brackets always neglect to mention that the tax code was at that time riddled with deductions and exemptions and that a typical corporate executive of that period was permitted a host of benefits and perks that today would be counted as income. And in bemoaning the alleged unfairness of the American tax system, they neglect to say that the top 10 percent pay 70 percent of federal income taxes, while the bottom 50 percent pay virtually nothing.
I must of missed the meeting when we changed the fundamental principles of our country from a society of individual opportunity and responsibility to a "collective" in which the government is supposed to manipulate the tax system to equalize economic outcomes for the collective good.
Sorry Mr. Leonhardt . . . in America I should not have to convince the government that I will do more socially beneficial things with my money than they would. I should get to keep my money because I earned it!
I must of missed the meeting when we changed the fundamental principles of our country from a society of individual opportunity and responsibility to a "collective" in which the government is supposed to manipulate the tax system to equalize economic outcomes for the collective good.
Sorry Mr. Leonhardt . . . in America I should not have to convince the government that I will do more socially beneficial things with my money than they would. I should get to keep my money because I earned it!
1
"This week, President Trump and Congress will turn their attention to tax policy. After the failure of their health care bill, they are desperate for a legislative win and hope to pass a bill by year’s end. Of course, they are not considering a higher top tax rate."
Of course they're not, because they are social Darwinists at heart. They want to return to the good old days. No, not the 50's when rates were high. They want to return to the 1800's when there was no income tax.
Of course they're not, because they are social Darwinists at heart. They want to return to the good old days. No, not the 50's when rates were high. They want to return to the 1800's when there was no income tax.
3
A lot of good points, well written. However, 2 other things have had a major impact on the accumulation of wealth & compensation - the oligopoly power of the players left after endless consolidation in virtually every industry, and, the globalization that came with that. Once the 2000 or so uber wealthy families that control the US realized what they could do by banding together vs. competing, they executed their plan mostly very well. Buy thinktanks, buy judges, buy legislators - the costs of which are far less than the income and wealth they have accumulated since.
Oh, and don't forget how execs all serve on each other's compensation committee, arguing that they need to keep up with each other on CEO comp - it's not insignificant.
Oh, and don't forget how execs all serve on each other's compensation committee, arguing that they need to keep up with each other on CEO comp - it's not insignificant.
2
Anyone who thinks the wealthiest are paying their equitable share should watch this video - even if you already saw it. 91% tax on the wealthiest and a $1 million dollar limit on inheritances with the rest taxed back into OUR government to support the infrastructure the wealthiest use the most sounds great to me.
https://www.youtube.com/watch?v=QPKKQnijnsM
According to Wikipedia, "in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race". It is incomprehensible to 90% of us.
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
https://www.youtube.com/watch?v=QPKKQnijnsM
According to Wikipedia, "in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race". It is incomprehensible to 90% of us.
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
2
The wealthy pay far in excess of their fair share. This is an undeniable fact. The top 1 percent of taxpayers earned 20.6% of income in 2014 and paid 39.5% of income taxes collected. The bottom 50% earned 11.3% of income and paid a paltry 2.7% of income taxes collected. The top 1% of taxpayers paid a 27.1 percent individual income tax rate, more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).
These are facts!
These are facts!
1
So, Larry, you want me -- a member of the working poor -- to pay 39.5% of my income tax just to be "fair" to rich people. Are you willing to pay for the aid I'd likely need to be able to survive? Or do you feel that if I can't pull my own weight (which I have done for 40 years) I should just go ahead and die?
2
Two laws – ERISA and the Reagan Tax cuts – have changed the way scorporate executives function. Before ERISA was passed, pension funds supported corporate management freeing them from stock market pressure. After ERISA was passed, pension programs became players in hostile takeovers and executive protection was lost. As a result, corporate executives began to focus on quarterly earnings rather than corporate strategy. The Reagan tax cut ended the key roll that high marginal taxes rates played in corporate governance. Executives are agents of the stock holders charged with managing their interests. They are overseen by the Board, which at best has only arms distance knowledge of the business. The executives, know much more about the business than do the owners and thus they are in a position to enrich themselves at the expense of the owners. During America’s Guided Age Robber Barons were constantly bilking stock holders. Beginning in 1913 with the 16th Amendment the 70-90% top marginal tax rate put a cap on how much income a corporate executive could take from the company. Rather than giving 90% of the corporation’s money to the government, the executives had large staffs, and time and resources to focus on the long-term interests of the investors. As a result, executives tended to be fat and comfortable rather than lean and mean. It was in this period of VERY high marginal tax rates from 1913 to the mid 1980 that America became GREAT.
1
David, Thanks for keeping this issue in focus at the NYTimes. The NYTimes has the resources to survey the Nobel Laureates in economics and get their views, but I a confident that a study of the data we need to enact a more progressive income tax rate, NOT cut the tax rate.
The income gap between the upper income earners and the rest of us has been steadily increasing for 40 years and there is no evidence that the economy has improved as a result of the gap. It has not created jobs, or accelerate the growth rate of the economy. In addition, we have seen our publicly owned infrastructure steadily become obsolete and health harming. We have a huge backlog of work to be done but it has been deferred because of the fiscal drag imposed by the spending.
The stock market seems to be doing well but not because of fiscal polices. Most observers will agree that the Federal Reserve's monetary policies have led us out of the Great Repression with very low interest rates. So, my conclusions are the GOP push for cutting taxes on the upper crust is a distortion of the evidence.
I knew George Romney. He spoke to my section at the Harvard Business School and he was inspiring to hear. You had to like him because he was so deadly realistic and earnest about our energy situation. As a result of his visit, I bought shares in American Motors, my first share purchase, and I continued to work in energy, highway safety, transportation, and environmental policy for the rest of my life.
The income gap between the upper income earners and the rest of us has been steadily increasing for 40 years and there is no evidence that the economy has improved as a result of the gap. It has not created jobs, or accelerate the growth rate of the economy. In addition, we have seen our publicly owned infrastructure steadily become obsolete and health harming. We have a huge backlog of work to be done but it has been deferred because of the fiscal drag imposed by the spending.
The stock market seems to be doing well but not because of fiscal polices. Most observers will agree that the Federal Reserve's monetary policies have led us out of the Great Repression with very low interest rates. So, my conclusions are the GOP push for cutting taxes on the upper crust is a distortion of the evidence.
I knew George Romney. He spoke to my section at the Harvard Business School and he was inspiring to hear. You had to like him because he was so deadly realistic and earnest about our energy situation. As a result of his visit, I bought shares in American Motors, my first share purchase, and I continued to work in energy, highway safety, transportation, and environmental policy for the rest of my life.
2
An additional thought -- politicians are loathe to mention where the actual source of additional tax revenue is stored. Sure, headlines about the super-rich squeezing the middle class is appealing but it is, as I mentioned earlier, pure fantasy (Tax the top 500 S&P Corporation CEO's total compensation at 100%, redistribute to the average worker, wages increase $69).
Additional tax revenue would have to come from the middle class. Making that suggestion was part of the reason Mr. Sanders lost his bid. Suggesting to a household earning $60,000-$80,000 that they would also see a tax increase was majorly unpopular. Folks are so quick to change their tune about tax reform when they might have to reach into their own pocket rather than that of their "wealthy" neighbor.
Additional tax revenue would have to come from the middle class. Making that suggestion was part of the reason Mr. Sanders lost his bid. Suggesting to a household earning $60,000-$80,000 that they would also see a tax increase was majorly unpopular. Folks are so quick to change their tune about tax reform when they might have to reach into their own pocket rather than that of their "wealthy" neighbor.
1
Complaining about The Rich, CEO salaries and low taxes is the same as complaining about the weather. Why bother? You can't change the system. So work hard and strive to join the club.
Maybe I'm naive, but I find it hard to believe that Gates, Jobs, Wozniak, and the rest of the early tech entrepreneurs were motivated by low tax rates. They were passionate about what they were doing and knew they would change the world. I imagine that money was secondary to them early on, at least.
3
It's a complete myth that giving the wealthy tax breaks will lead to job creation. Not every millionaire is a job creator. I live in Silicon Valley. Lower taxes line the pockets of folks... who aren't creating a single job.
If we keep going down the path we are, our country will rot. We are already on the path of high income inequality and poor infrastructure. Neither of these are good for the country long term. Just look at developing nations.
If we keep going down the path we are, our country will rot. We are already on the path of high income inequality and poor infrastructure. Neither of these are good for the country long term. Just look at developing nations.
4
When you live in a condo building of say 200 apartments and you own 100 of the apartments, then you have the lion's share of the assessment due for upkeep and emergencies.
Let the corporations and the 1% continue on the slash and burn -everyone- else- path that they've enjoyed for quite awhile and when the expenses come due from disasters and deficits, that they are seemingly always insulated from, send them the bill.
Apple could fund the 180-200 billion Houston disaster -all from their staggering cash on hand - and still have 50-70 billion cash on hand left over.
That left over cash would fund nearly all the 76 billion Trump is proposing to cut from:
-33%
State Department
-31%
Environmental Protection Agency
-21%
Agriculture Department
-21%
Labor Department
-18%
Department of Health and Human Services
-16%
Commerce Department
-14%
Education Department
-13%
Department of Housing and Urban Development
-13%
Transportation Department
-12%
Interior Department
-6%
Energy Department
-5%
Small Business Administration
-4%
Treasury Department
-4%
Justice Department
-1%
And that's the capability of just Apple's cash.
Go ahead- lower their taxes again- why not just make it zero- but time to assess this privileged and protected- at- all -cost - 1 % group a "tax" bill for everything that gets cut to balance the budget, and costs of all the weather disasters,infrastructure failures etc etc that the rest of us suckers struggle to pay our share of all the time.
Let the corporations and the 1% continue on the slash and burn -everyone- else- path that they've enjoyed for quite awhile and when the expenses come due from disasters and deficits, that they are seemingly always insulated from, send them the bill.
Apple could fund the 180-200 billion Houston disaster -all from their staggering cash on hand - and still have 50-70 billion cash on hand left over.
That left over cash would fund nearly all the 76 billion Trump is proposing to cut from:
-33%
State Department
-31%
Environmental Protection Agency
-21%
Agriculture Department
-21%
Labor Department
-18%
Department of Health and Human Services
-16%
Commerce Department
-14%
Education Department
-13%
Department of Housing and Urban Development
-13%
Transportation Department
-12%
Interior Department
-6%
Energy Department
-5%
Small Business Administration
-4%
Treasury Department
-4%
Justice Department
-1%
And that's the capability of just Apple's cash.
Go ahead- lower their taxes again- why not just make it zero- but time to assess this privileged and protected- at- all -cost - 1 % group a "tax" bill for everything that gets cut to balance the budget, and costs of all the weather disasters,infrastructure failures etc etc that the rest of us suckers struggle to pay our share of all the time.
3
Don’t trust blindly the wealthy people. They are not extremely smart but just excessively greedy!
Just examine what they have accomplished over the last quarter of century!
Let’s talk about the truly serious and harmful lies, like the one that we won the Cold War. Do you still believe in that kind of garbage?!
Let’s rerun it. Maybe Mr. Trump should declare from Seoul: “Mr. Kim Yong Un, tear down the nuclear weapons and the ballistic missiles!” If those cries don’t work today, those were equally futile three decades ago!
We weren’t in the conflict with the USSR but with the communism. The Soviet Empire indeed collapsed but the communism has never been stronger. Just look at China - projected to become relatively soon the world largest economy...
What have Clinton, Bush and Obama done? They tried to stop Beijing by subsidizing the export of the US industrial base and technology to the Far East with the lavish tax cuts and colossal national debt.
Clinton, Bush and Obama were the truly delusional leaders, not the latest one. He’s just stayed on the wrong course because we told him that is the great move...
All three of them were handpicked by the rich donors.
The wealthy have failed this nation, not Mr. Trump! By the way, isn’t Mr. Trump extremely wealthy guy?
Just examine what they have accomplished over the last quarter of century!
Let’s talk about the truly serious and harmful lies, like the one that we won the Cold War. Do you still believe in that kind of garbage?!
Let’s rerun it. Maybe Mr. Trump should declare from Seoul: “Mr. Kim Yong Un, tear down the nuclear weapons and the ballistic missiles!” If those cries don’t work today, those were equally futile three decades ago!
We weren’t in the conflict with the USSR but with the communism. The Soviet Empire indeed collapsed but the communism has never been stronger. Just look at China - projected to become relatively soon the world largest economy...
What have Clinton, Bush and Obama done? They tried to stop Beijing by subsidizing the export of the US industrial base and technology to the Far East with the lavish tax cuts and colossal national debt.
Clinton, Bush and Obama were the truly delusional leaders, not the latest one. He’s just stayed on the wrong course because we told him that is the great move...
All three of them were handpicked by the rich donors.
The wealthy have failed this nation, not Mr. Trump! By the way, isn’t Mr. Trump extremely wealthy guy?
1
What exactly IS the fair share - 43.8% Federal, 15% state 5% local.
Back in th days of 90% rates there were lots more deductions
The author is clueless
One thing I LOVE about Trump's proposal is eliminating state income tax deductions. That way the rest of the country doesn't support NY - pay for all your liberal programs yourself
Back in th days of 90% rates there were lots more deductions
The author is clueless
One thing I LOVE about Trump's proposal is eliminating state income tax deductions. That way the rest of the country doesn't support NY - pay for all your liberal programs yourself
1
Warren Buffett made a wise observation about taxes a few years back.
If, he said, he had an opportunity to clear, for example, a million bucks after taxes he would jump at it, regardless of the tax burden. At that stage taxes become irrelevant. A clear million bucks is a clear million bucks.
If, he said, he had an opportunity to clear, for example, a million bucks after taxes he would jump at it, regardless of the tax burden. At that stage taxes become irrelevant. A clear million bucks is a clear million bucks.
1
The republican Cult, yes, Cult of not paying back their fair share to benefit the country that gave them the opportunity to rake in such kingly fortunes has got to end. In the past, this Type of behavior has caused revolutions. The only way to rescue people from a cult is voluntarily coming to your senses or an intervention.
2
We used to cringe when wealthy friends referred to houses on their lake as "tear-downs" but we realized how ridiculous the rich had become when, after tearing down a house in the Hamptons to build a grander one, a friend's brother had the pool ripped out because his wife didn't like the way it was sited. Bring back the 90% upper tax bracket and this money will go into roads, schools, fiber optic connectivity, lead-free water supplies etc. etc. etc.
3
Everyone in this country should be required to have a government job, at least couple hours a week. That way maybe we would all realize that we really are all in this together and that the government is us, not some external enemy.
1
Forget trickle-down economics; we have created a culture of trickle-down greed.
1
It's only greed. A top tax rate of 50 percent wouldn't be unfair nor stifle incentive. Get rid of deductibles as well. A company where top salaries are 20x more than bottom seems to me a lot fairer than 200x
1
When the Republican Party permits the POTUS, an self-proclaimed "billionaire," to hide his tax returns from the public while said billionaire is proposing enormous tax cuts for his own wealth tier, how can we expect anything good for the 99.9% of our citizens? and then to sit quietly by while said billionaire encourages violence against the perpetual and perpetually false scapegoat of "immigrants". How surreal to watch his base cheer while he proposes to use OUR tax dollars to build a wall to keep the supposed job-stealing fruitpickers and janitors out of the country while the true job stealers, the ones who sent all the jobs to be done by Chinese slave labor (yes, Apple, I'm talking about YOU), roam free within the walls of their own armed compounds. What sort nation have we become? By now we increasingly resemble an oligarchy, kind of like, well...Russia. Not quite there yet, but heading that way. Give it a few more mergers.
3
Yes. I really don't understand people that blame immigrants for stealing their job, instead of the person who fired them to give their job to someone else.
They excuse the employer with the canard the market made them do it, but isn't the immigrant also pushed by market forces?
The only solution for illegal immigration is to cut the demand by punishing employees, but neither party ever advanced that solution.
They excuse the employer with the canard the market made them do it, but isn't the immigrant also pushed by market forces?
The only solution for illegal immigration is to cut the demand by punishing employees, but neither party ever advanced that solution.
The core lesson to me is that - admittedly, maybe with some help - the people in power used to have meaningful values, and were willing to act in the name of fairness. Now we have a winner take all Wall St and congress. There is no long-term. It's only about how much can I grab today.
A Harvard study from a couple of years ago, concluded that jerks do come out ahead, and we currently disparage religion - the only part of society that teaches values... So I don't see any fix to this, short of revolution. The dystopian writers are probably right.
A Harvard study from a couple of years ago, concluded that jerks do come out ahead, and we currently disparage religion - the only part of society that teaches values... So I don't see any fix to this, short of revolution. The dystopian writers are probably right.
I am not religious, but I have values. And my values are more about honesty, compassion, community, etc, than many religious people, like Joel Osteen, who was turning flood victims away from his mega church.
A book like the bible can be used to justify almost any behavior if you find the right verse, and very few people actually do what Jesus would do, for example, so the ideas that religion is where people gets their values seems massive and condescending to me.
A book like the bible can be used to justify almost any behavior if you find the right verse, and very few people actually do what Jesus would do, for example, so the ideas that religion is where people gets their values seems massive and condescending to me.
2
When was the last time you heard that old-time, now even quaint expression that "money is the root of all evil"? I think its modern revival is long, long overdue considering the obscene reach of its avaricious, over-sized tentacles into all aspects of our national life. Will the next aspiration of the competing billionaire class be to become trillionaires? (That's not a joke.)
1
Greed never sleeps.
The only emotion stronger than greed is the fear of death.
And so the cycle goes round and round.
Only to end with the species.
The only emotion stronger than greed is the fear of death.
And so the cycle goes round and round.
Only to end with the species.
1
I am not rich and I do not care about income inequality. The comparison to what you are suggesting to George Romney is invalid. He didn't voluntarily give the money to the government, but allowed his employer to keep it. A laudatory personal decision. Others should be free to make a different one. The rich should be allowed to keep the money they have earned or let their employer keep it or give it to charity. Why should it be taken from them and given to politicians who did not earn it? We need to stop the politics of jealousy. How does it hurt me if the top rate is cut to 35% from 39.5%? The only undeserving people I see in all of this are the greedy congresspersons that spend $5-6 billion each per year ($3 trillion fed budget / 535) that they did not earn.
29
You are not acknowledging that our government has provided the vast, and usually reliable structure that enabled and enables wealth to be created. The very rich, as the capital component of the equation, do not themselves create the value they ultimately realize as personal wealth. The people who work to create the products and services create that value, and the point of the article is that they take a lesser share than they should.
In the last analysis, the reliability of our being a nation of laws is what holds our place in the world. That is why our currency is good everywhere, why our contracts are enforceable, why our freedoms are defended in the hair-splitting decisions we see come out of our courts every day. And where does it all come from? From "Government". So many people think that government is something other than themselves. Well, I guess if they sit out the elections like they did in this last one, they are right. But - it's not a perfect system, but our government persists as a world leader in many respects, and continues to evolve. As Pogo might say: we have seen the Government, and it is US.
In the last analysis, the reliability of our being a nation of laws is what holds our place in the world. That is why our currency is good everywhere, why our contracts are enforceable, why our freedoms are defended in the hair-splitting decisions we see come out of our courts every day. And where does it all come from? From "Government". So many people think that government is something other than themselves. Well, I guess if they sit out the elections like they did in this last one, they are right. But - it's not a perfect system, but our government persists as a world leader in many respects, and continues to evolve. As Pogo might say: we have seen the Government, and it is US.
7
What a spurious argument. The legislators don't spend it on themselves. Time to just stop dignifying greed rather than dignifying it by passing it off on someone else. Greed is obnoxious by no matter whom.
5
This is precisely the shallow level of thinking that put us in this place. It demonstrates an inability to apply logic beyond the basic level. Are you unable to see the consequences of this when it plays out, or just too stubborn to begin to think about where this all leads? When you remove checks and balances (and the government is the only one with any teeth in this situation), you tip over the cart. Using shallow logic to decide that government is bad, and the rich should keep all of their money, no matter how much help they got from elsewhere, and how much they earned it off of the backs of others, leads to the spiral into oligarchy that we are currently riding the roller coaster down. In regard to your last question, perhaps you should do a bit of research into how it hurts you in the long run; it may open your eyes up.
7
Recently, it was Thomas Piketty's book "Capital in the Twenty First Century" that made the case for a tax on wealth as an equitable form of taxation. He also noted with, much data, that the middle class flourished when there was the progressive income tax. But how can you have a conversation about a tax reform with politicians who idolize Ayn Rand and her objectivist non-sense or bow to Grover Norquist and his no new tax bullying.
3
The problem isn't so much Republicans, who like the scorpion on the grid back, are going to do what they do, but the wimpy centrist Democrats who let them do it without a fight.
This article one again implicitly creates a false causative narrative. Income for the middle class and poor have not been sluggish because of CEO pay. Period. The headline sounds great, but the conclusion is pure fantasy.
If the US were to:
1. Tax the total compensation package (salary, bonus, stock options, etc.) of all S&P 500 CEOs at 100%;
2. Redistribute those funds to average workers; then
3. The average worker pretax income would increase by $69 -- pretax.
Once again, this is posturing and nothing more than rhetoric.
If the US were to:
1. Tax the total compensation package (salary, bonus, stock options, etc.) of all S&P 500 CEOs at 100%;
2. Redistribute those funds to average workers; then
3. The average worker pretax income would increase by $69 -- pretax.
Once again, this is posturing and nothing more than rhetoric.
1
Yes. The real problem are lie capital gains rates, record corporate profits, and the hiding of vast amounts of wealth by the super rich that doesn't show up in your calculations.
Your response appears to be a handful of buzzwords loosely strung together. I can only address capital gains because your other two points are entirely nebulous.
Capital gains rates, for households that earn more than $400,000 per year are 23.8%. This means that after paying around 50% tax on income (39.6% federal, 7.6% social security and medicare up to $118,000, .9% additional medicare on income over 250,000 and state/local of anywhere between 3-10%) these funds are taxed again to the extent there is any gain. Please explain how these facts are omitted from my analysis.
Capital gains rates, for households that earn more than $400,000 per year are 23.8%. This means that after paying around 50% tax on income (39.6% federal, 7.6% social security and medicare up to $118,000, .9% additional medicare on income over 250,000 and state/local of anywhere between 3-10%) these funds are taxed again to the extent there is any gain. Please explain how these facts are omitted from my analysis.
Lost in this article, and most pro-tax conversations, is the loss of offsetting deductions most Americans enjoyed in those good ole days of higher tax rates. Raise the rates if that plays to your audience...but also bring back those deductions which DID create jobs for products and services those deductions allowed for.
Great article, David, and I wholeheartedly agree on the need to raise tax rates - in some cases all the way back to 90%. Low tax rates, especially on capital gains don't really spur investments, instead they just spur gambling on Wall Street. The lowering of marginal tax rates is one of the key items that has spurned a shift in manufacturing to third world countries - where labor is cheap, and thus profits can be classified as capital gains.
I would however say that there is no one tax rate for all occasions. We need to adjust the rate up and down to both spur economic growth and restrain excessive income inequality. It just depends on where we are economically.
Finally I would add that economic growth is really a product of technological change, and economic theories, whether of the right or left, aren't likely to make substantial changes in growth absent technological changes. The economic growth of the 20th century may be a one of a kind event in history. Thus we need to focus on overall wealth distribution, and ensuring that we all get a piece of the bounty we've managed to create.
I would however say that there is no one tax rate for all occasions. We need to adjust the rate up and down to both spur economic growth and restrain excessive income inequality. It just depends on where we are economically.
Finally I would add that economic growth is really a product of technological change, and economic theories, whether of the right or left, aren't likely to make substantial changes in growth absent technological changes. The economic growth of the 20th century may be a one of a kind event in history. Thus we need to focus on overall wealth distribution, and ensuring that we all get a piece of the bounty we've managed to create.
Technology doesn't have to be electro-mechanical. Management systems are also a form of technology. A Republic is a form of technology.
How governments (theoretically where democracy actuates it's decisions) does things has an effect on productivity.
In general, I would argue that we neglect the most important technology we have, humans.
Saving money on education is bad for productivity. Leaving people without health insurance is bad for productivity. Letting our infrastructure crumble is bad for productivity.
The human body is the most advanced technology we have but we year humans like garbage. We wouldn't let robots go without, power, programming, or maintenance, but we have no problem letting millions of people go without education, food, or healthcare.
Invest in humans to increase productivity.
How governments (theoretically where democracy actuates it's decisions) does things has an effect on productivity.
In general, I would argue that we neglect the most important technology we have, humans.
Saving money on education is bad for productivity. Leaving people without health insurance is bad for productivity. Letting our infrastructure crumble is bad for productivity.
The human body is the most advanced technology we have but we year humans like garbage. We wouldn't let robots go without, power, programming, or maintenance, but we have no problem letting millions of people go without education, food, or healthcare.
Invest in humans to increase productivity.
The message from the rich and those who control the economy is that they will not allow conditions that permit middle and poor people to have children. Anyone without assure generational wealth who brings more than one child into this economy is taking a huge risk. And be prepared to push that one child as hard as you can, all your life. It will be a life's work to drill the child in math and computers, make them into shining stars in sports, and never allow them a non-monetized hobby. That's the message.
1
My father being the founder of an IT consultancy, it is common for family dinner conversations to turn into ethical and business related lectures. Nonetheless, I enjoy him discussing strategies in how he uses the money he makes to essentially make more, although that may seem selfish at first, I later began to realize he only does so to provide his family with everything and anything they'll need. Perhaps wishing to not have struggled to make a living like he has. After reading this article it phased me that perhaps it's not rational for an 271:1 ratio to exist among the employer and employee. In the end, I think it's best to set a limit to how the ratio works, in the end most of the money business tycoons make end up getting eat up in taxes.
No the rich pay 15% on their capital gains, so most of the money is not eaten by taxes.
I remember being taught (incorrectly) in elementary school in the 1950s that in the U.S. income was concentrated in the middle strata of society, in contrast to much of the rest of the world where it was claimed that income was concentrated in the upper strata. In other words, the "middle class" had most of the money in the U.S. That was never true. But at least it was an ideal that people believed in and fought for, and the poor expected that they had a chance to move up.
Today? Hmmm..... .
Today? Hmmm..... .
4
The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate in 2014, which is more than seven times higher than the pittance paid by the greedy taxpayers in the bottom 50 percent (3.5 percent). When are the bottom 50% going to pay their fair share???
2
The supposed "tax rate" the wealthiesy pay means nothing, Larry. Not sure where you get your information but WE THE PEOPLE - 90% of us - carry the load.
According to Wikipedia, "in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race". If that doesn't boggle your mind try this video:
https://www.youtube.com/watch?v=QPKKQnijnsM
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
According to Wikipedia, "in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race". If that doesn't boggle your mind try this video:
https://www.youtube.com/watch?v=QPKKQnijnsM
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
3
After they've paid for their yachts, jets, and the marble columns at their golf clubs, maybe, Larry?
1
Lol again, you are leaving it capital gains, not to mention the payroll tax, which is regressive, sales taxes, local taxes, etc.
Also the rich get most of the services. The Police are protecting capital which belongs to the few. The military is protecting foreign capital, owned by the few. The infrastructure is used by freight, which is owned by the few.
Also the rich get most of the services. The Police are protecting capital which belongs to the few. The military is protecting foreign capital, owned by the few. The infrastructure is used by freight, which is owned by the few.
If Trump wants to MAGA by returning us to the 50's and 60's, let's not leave this part out. Raise the marginal tax rates!
5
Let’s talk about the extremely wealthy actors and producers.
Hollywood is the newest world religion demanding the followers to obey blindly and pay the extremely expensive movie tickets. Only if you believe unconditionally in the “almighty” market you believe it’s fair that a real soldiers risking his life makes $40k but an actor portraying the events in a movie is entitled to $40 million without accepting any risk...
If the Hollywood movies portrayed exclusively the hardworking class, then the entire social perception would be completely different... It the working class Americans were depicted by the Hollywood movies as the true heroes, nobody would pay the celebrities a thousand times more than the blue color workers and soldiers...
Hollywood is the newest world religion demanding the followers to obey blindly and pay the extremely expensive movie tickets. Only if you believe unconditionally in the “almighty” market you believe it’s fair that a real soldiers risking his life makes $40k but an actor portraying the events in a movie is entitled to $40 million without accepting any risk...
If the Hollywood movies portrayed exclusively the hardworking class, then the entire social perception would be completely different... It the working class Americans were depicted by the Hollywood movies as the true heroes, nobody would pay the celebrities a thousand times more than the blue color workers and soldiers...
75% of the shares in global corporate mass media, including Hollywood is owned by the 1%. They make the decisions not the talent; not the stars, not the "liberal" reporters.
Part of making it acceptable for billionaires to have so much money is to feed people entertainment glorifying wealth. From Disney films about princesses and princes, to Life styles of the Rich and Famous, to May a Millionaire, to celebrity gossip, it is all about the worship of the rich, and having people identify with the rich.
The Hollywood and sports stars are all part of the propaganda machine that ignores the working class heroes while justifying greed.
Many of the rich in entertainment, especially sports end up broke, after the industry robs them blind anyway.
Part of making it acceptable for billionaires to have so much money is to feed people entertainment glorifying wealth. From Disney films about princesses and princes, to Life styles of the Rich and Famous, to May a Millionaire, to celebrity gossip, it is all about the worship of the rich, and having people identify with the rich.
The Hollywood and sports stars are all part of the propaganda machine that ignores the working class heroes while justifying greed.
Many of the rich in entertainment, especially sports end up broke, after the industry robs them blind anyway.
The top executives of big companies are driven people with large egos. Nothing wrong with that. In the era of high marginal tax rates, they found ways to massage those egos that included their status in the community and among their workers. That's not to say they were all generous wonderful people; they sought their rewards and they came in many forms. Since the Reagan era, the one and only way to show how successful you are at that level is by piling up as much money as you can. How big is your paycheck? How much are your stock options worth? If we returned to a very high top tax rate (and remember, it only kicks in on that part of an income above a certain level; the part of your income below that still gets the lower rate), it would not solve all problems, but it would help. Successful entrepreneurs and executives would still make plenty of money, maybe not enough to ensure that their great grandchildren can live as drug addicts, but enough to live a life of luxury. There would still be plenty of incentive for inventiveness and hard work; remember, most of the world's successful companies were American before and after the tax rate was slashed. Income inequality would be lessened while an understanding that we are all in this together would be increased. This would benefit the public spaces -- schools, colleges, universities, roads, rapid transit, police, fire, utilities, levees, etc.
3
Instead of incentives to expand and increase wages, we now have a culture in which corporations exist to maximize profits for their shareholders at the expense of everyone else. Witness Exxon's concealment of climate change information for decades. Instead of incentives to shore up struggling businesses we have incentives for companies like Mitt Romney's to buy up those businesses and loot them for their assets destroying jobs and communities in the process. We definitely need tax reform but not the kind of tax reform Republicans have in mind. Tax cuts will not help anyone but the wealthy creating even more division in society.
3
Yes there was a time when corporations were expected to balance the needs of all stakeholders (shareholders, executives, consumers, employees, the community, the country), Then a legal cultural shift changed it so that corporations are only concerned with shareholder value. Only the stock price matters now. Even a corporation that tries to invest in the future can be attacked by activist investors for not bringing up the quarterly gains.
As an auto executive George Romney also once suggested a more fuel efficient car. The oil industry did not like that. It would be years before his idea became a reality. Romney Sr. also made some pointed remarks regarding the Vietnam War. That did not exactly win him votes when he ran for president.
In both cases George Romney was right. Whatever happened to the days when corporate America actually had a few leaders like him?
In both cases George Romney was right. Whatever happened to the days when corporate America actually had a few leaders like him?
8
This is a great and timely article. The explanation for the failure of lower tax rates on the wealthy to result in greater prosperity for the rest of us is simple. The same greed that allegedly motivates entrepreneurs to create and expand businesses also motivates them to be greedy and hoard as much of the wealth for themselves as they can. However, I have never believed in the first part of the theory -- that lower tax rates on the rich motivate entrepreneurs to create new businesses. Entrepreneurs do what they do because they are entrepreneurial by nature. The prospect of making several million dollars, as opposed to billions, is enough financial motivation for them. Read Malcolm Gladwell's The Outliers and you will understand that the great riches attained by Bill Gates, Steve Jobs, et al. have more to do with timing than anything else.
7
Nothing gets swept under the rug faster and more aggressively than the Founders' understanding of good versus bad leadership.
This is a fundamental principle without which no nation thrives or even survives. Simply put, good leaders care deeply and sincerely about the well-being of all those they lead. Bad leaders may mouth platitudes but care only about themselves and their allies. Bad leaders create rigid authoritarian hierarchies the better to ensure the wealth flows inexorably to the top.
The ancient Greek Anacyclosis - known to Plato and Aristotle - taught that states thrive under good leadership and fail under bad leadership. The Anacyclosis was the basis for the historian Polybius study of the Roman republic which in turn informed Montesquieu, Adam Smith and the Founders, and thus provided the foundation for our modern free and prosperous middle class democracies.
Other Classic sources that taught this theory of leadership and deeply influenced the Founders are Cicero's On Duty and the story Hercules Choice. The latter personifies the two types of leadership in two goddesses - Arete (Excellence) and Kakia (Vice). The seductive Kakia sounds like Ayn Rand.
Selfishness is highly seductive. We should recognize bigotry is a form of selfishness.
The Founders' classic concept of good leadership corresponds to Adler's concept of the mature, mentally healthy adult and, following Adler, Maccoby's work on leadership. For bad leadership, see Hare on corporate psychopaths.
This is a fundamental principle without which no nation thrives or even survives. Simply put, good leaders care deeply and sincerely about the well-being of all those they lead. Bad leaders may mouth platitudes but care only about themselves and their allies. Bad leaders create rigid authoritarian hierarchies the better to ensure the wealth flows inexorably to the top.
The ancient Greek Anacyclosis - known to Plato and Aristotle - taught that states thrive under good leadership and fail under bad leadership. The Anacyclosis was the basis for the historian Polybius study of the Roman republic which in turn informed Montesquieu, Adam Smith and the Founders, and thus provided the foundation for our modern free and prosperous middle class democracies.
Other Classic sources that taught this theory of leadership and deeply influenced the Founders are Cicero's On Duty and the story Hercules Choice. The latter personifies the two types of leadership in two goddesses - Arete (Excellence) and Kakia (Vice). The seductive Kakia sounds like Ayn Rand.
Selfishness is highly seductive. We should recognize bigotry is a form of selfishness.
The Founders' classic concept of good leadership corresponds to Adler's concept of the mature, mentally healthy adult and, following Adler, Maccoby's work on leadership. For bad leadership, see Hare on corporate psychopaths.
2
An amateur economist/business man, Nicholas Johannsen studied recessions around 1910. He opined that too little economic activity or too much economic activity was bad for the economy. One led to recession, the other inflation. It is likely that too little wealth or too much wealth are likewise bad for the economy. Too much wealth in few hands concentrates economic activity, too little wealth across many hands cannot support economic activity. The goal is diversified and moderate economic activity, widespread across households.
3
Yes unfortunately we have concentrated half of the world's wealth (money, real estate, stocks, art, machinery, etc) in the hands of a few thousand people. It is terrible for the economy.
1
Hollywood is the most powerful tool of the super-wealthy Americans.
Only after the Hollywood studios created the endless stream of the superhero movies and the young generations were raised to believe in the supernatural abilities, as the grownup adults they started voting for the people with “supernatural abilities” – the extremely wealthy entrepreneurs.
The only extraordinary ability of those rich people is the extreme greed.
Can you imagine anybody truly sympathetic to their fellow citizens who would chronically cut their wages, make them work harder and longer, saddle them with the colossal amount of stress and push the entire country into the enormous national debt just to become personally extremely rich?
Those people are deprived of any sense of patriotism and personal sacrifice...
The true patriots would not demand the lower tax rates just to lend the money to their country and collect the additional interests. Imagine if our soldiers were willing to betray America just because some other country were willing to pay them more.
That’s what the global corporations have done by exporting the US factories abroad...
Exactly the same principle. They got an offer they could not have refused...
Only after the Hollywood studios created the endless stream of the superhero movies and the young generations were raised to believe in the supernatural abilities, as the grownup adults they started voting for the people with “supernatural abilities” – the extremely wealthy entrepreneurs.
The only extraordinary ability of those rich people is the extreme greed.
Can you imagine anybody truly sympathetic to their fellow citizens who would chronically cut their wages, make them work harder and longer, saddle them with the colossal amount of stress and push the entire country into the enormous national debt just to become personally extremely rich?
Those people are deprived of any sense of patriotism and personal sacrifice...
The true patriots would not demand the lower tax rates just to lend the money to their country and collect the additional interests. Imagine if our soldiers were willing to betray America just because some other country were willing to pay them more.
That’s what the global corporations have done by exporting the US factories abroad...
Exactly the same principle. They got an offer they could not have refused...
3
In 1963 at Northwestern University's business school a classmate asked a professor if he didn't think the tax rates were too high. The professor quickly responded " if someone paid the top rate, he didn't deserve to be in that rate" Loopholes for the wealthy have always been a part of the tax code.
1
I'd rather pay taxes and have a functioning government, safe roads, a good and up to date infrastructure, etc., than deal with the alternative. I say that as a lower middle class single woman who is currently unemployed. However I fail to understand why I and others pay more in income taxes percentage wise than the very rich. Either we are all Americans and care about this country or we're not and those who do not wish to contribute should leave.
9
The global billionaires think that they are above governments and have loyalty to no country. This includes Trump.
3
We are simply living through the painful and confusing time when our citizenry is adjusting to our future life as common citizens of the world. Ordinary Americans will live like ordinary Chinese, and ordinary Guatemalans, and ordinary Russians. Why should our workers' standard of living be higher than the workers in Bangladesh? Those people can do the same work we do. This is globalism, and our leaders don't do anything to help our workers, because THEY AGREE WITH THIS PLAN. After all, when the dust settles, they will be part of the elite.
7
If the unions hadn't sold us out in the 70's they would have organized the workers of the entire world, bringing up everyone's standard of living. Instead they cut a deal. You let us keep our good union jobs in the states, and we will stay out of developing countries.
Eventually that decision killed the unions as union jobs went to those countries. (Now they want us to cut taxes on robots and AI even further so we can be replaced by machinery.
We do not have to create a global race to the bottom, where every government is expected to compete to lower wages, and cut benefits, safety nets, consumer protections, worker protections, and regulations. No law of nature declares this necessary. It is a political decision made by those who make 95% of all donations to politicians.
We could have fair trade to do the opposite, but it will take hard work on the part of all citizens to make it happen.
Do you really think you should have the standard of living of Bangladeshi, so a few thousand people can own half of everything?
Eventually that decision killed the unions as union jobs went to those countries. (Now they want us to cut taxes on robots and AI even further so we can be replaced by machinery.
We do not have to create a global race to the bottom, where every government is expected to compete to lower wages, and cut benefits, safety nets, consumer protections, worker protections, and regulations. No law of nature declares this necessary. It is a political decision made by those who make 95% of all donations to politicians.
We could have fair trade to do the opposite, but it will take hard work on the part of all citizens to make it happen.
Do you really think you should have the standard of living of Bangladeshi, so a few thousand people can own half of everything?
1
The unions died because of relentless strangulation by the rich and powerful, including 24-7 propaganda attacks, and because they (the unions and the entire working class) were sold out by our leaders, including the free press and the Democratic party.
Feel free to organize all the workers of the world as you wish, Mr. McGloin. Meanwhile, I expect the politicians and leaders of the United States of America to support and defend all the citizens of this country, not just the ones who are filthy rich and powerful.
Feel free to organize all the workers of the world as you wish, Mr. McGloin. Meanwhile, I expect the politicians and leaders of the United States of America to support and defend all the citizens of this country, not just the ones who are filthy rich and powerful.
1
I totally agree with George Romney, because i have experienced this, my great uncle is a businessman and at first he didn't have anything at all and his goal became to make a good living and then after he did his goal just became making more and more money and nothing else matters and i think getting too caught up with business for whatever reason is wrong weather it is for making money even though you have money or for just the sake or desire for work,the reason i say this because work can get into your life that really dangerous, for example when i went out with my great uncle we were in the car with his daughter and we were quite because he gets bad tempered really fast because all of the stress work put onto him, and most of the time he is on business calls and i think it is a shame after all what he has done through his business journey to act like, because he doesn't anything he is not missing anything, getting to caught up with work is the worst thing that could ever happen to you, and having limit to your income yearly i think would be the best solution.
Yes tax these poor greedy workaholics enough so that they will take some time to be with their children
Is "greedy" only applicable to the wealthy? There are as many greedy middle- and lower-class people as rich. The progressivism of this paper is mind-numbing. It teaches readers to believe a half-truth: that the economic difficulties of the masses stem entirely from the capture of our political system by corporations -- the ne plus ultra of progressives' enemies -- and the 1%.
Robert Samuelson says that "wages for many middle-class workers may be understated. Government figures indicate that median weekly earnings grew almost 2 percent annually from 2012 to 2016. But these numbers are depressed by the retirement of well-paid baby boomers and their replacement by lower-paid, younger workers. When economists at the [San Fran Fed] eliminated these effects, median wages grew nearly 4 percent annually."
Do progressives wish to kill the dynamism and the innovativeness of America's economy? Do they want the American labor market to look like France's? They dream about Denmark. But what do they know about it? Scandinavia's social democracies depend on homogeneous societies and a culture of trust; America lacks both. The Nordic countries seem to have been superior BEFORE they became high-tax states.
We should learn from Europe, yes, but we shouldn't seek pure emulation. We need experimentalists and pragmatists not wedded to doctrine, leaders who appreciate what's great about America but are ready to right its wrongs. Most progressive ideas seem ... bad, even if noble in intent.
Robert Samuelson says that "wages for many middle-class workers may be understated. Government figures indicate that median weekly earnings grew almost 2 percent annually from 2012 to 2016. But these numbers are depressed by the retirement of well-paid baby boomers and their replacement by lower-paid, younger workers. When economists at the [San Fran Fed] eliminated these effects, median wages grew nearly 4 percent annually."
Do progressives wish to kill the dynamism and the innovativeness of America's economy? Do they want the American labor market to look like France's? They dream about Denmark. But what do they know about it? Scandinavia's social democracies depend on homogeneous societies and a culture of trust; America lacks both. The Nordic countries seem to have been superior BEFORE they became high-tax states.
We should learn from Europe, yes, but we shouldn't seek pure emulation. We need experimentalists and pragmatists not wedded to doctrine, leaders who appreciate what's great about America but are ready to right its wrongs. Most progressive ideas seem ... bad, even if noble in intent.
1
Thank you. Finally.
Yes! There should be tax reform.
Cut corporate taxes down to 5% or 10%.
Raise tax on the highest incomes.
Tax idle wealth. (See Norway.)
And most important of all re-characterize long term capital gains by differentiating between "real" businesses and "financial transactions."
There is a way.
Yes! There should be tax reform.
Cut corporate taxes down to 5% or 10%.
Raise tax on the highest incomes.
Tax idle wealth. (See Norway.)
And most important of all re-characterize long term capital gains by differentiating between "real" businesses and "financial transactions."
There is a way.
4
thank you for this concise and relevant essay. what has happened in our country as a result of the top tax rate cuts has been to expose capitalism at its worst. The result is that the "let them eat cake" attitude has rarely been so evident, at least to an America based on equality. Some year in the future the pendulum will swing back to fairness and cut the greedy excesses of those in the 1% who think living in 1st class means they are better than us. i hope it starts in 2020.
2
How about we tie execs tax rate to the company's median wage?
The closer the two wages, the more they keep.
The closer the two wages, the more they keep.
5
Profits are an outcome measure of business success they are not the cause of that success.
High marginal tax rates encourages reinvestment in business and industry, low marginal tax rates encourages disinvestment. Hence, the the huge flow of money out of American business and industry and into developing countries ever since the huge Reagan tax cuts for the rich in the early 1980's.
High marginal tax rates encourages reinvestment in business and industry, low marginal tax rates encourages disinvestment. Hence, the the huge flow of money out of American business and industry and into developing countries ever since the huge Reagan tax cuts for the rich in the early 1980's.
4
A progressive tax rate with a significantly higher top tier (say 50%) will discourage no one from making more money, and is completely fair. I pay far more in school property taxes because my house is more valuable -- even though I have no children in the schools -- because I derive a greater benefit from a solid school district. The 1% derive more benefits from a stable society and a functional government - why shouldn't they pay more for it?
8
A timely column. We now have 35 years worth of information about the real world effects of large tax cuts on the American economy. Time to integrate that information into our political and policy discussions.
Also, since part of the message of the last election is that it's time to make America great again, it makes sense that we'd look to what Americans actually did back when we think Americans were really great. They had much higher tax rates for the wealthy and more loyalty between employers and employees. They engaged with the world, and used American power to insist on the creation of institutions designed to resolve conflicts under the rule of law rather than by force. They sped up the pace of working to ensure meaningful equality for everyone under the law. They did not make a joke about the federal government being there to help.
Also, since part of the message of the last election is that it's time to make America great again, it makes sense that we'd look to what Americans actually did back when we think Americans were really great. They had much higher tax rates for the wealthy and more loyalty between employers and employees. They engaged with the world, and used American power to insist on the creation of institutions designed to resolve conflicts under the rule of law rather than by force. They sped up the pace of working to ensure meaningful equality for everyone under the law. They did not make a joke about the federal government being there to help.
4
My late father rarely spoke of his philosophy of life. But when he was near 90, he said off-handedly, "I don't understand why some people think money will make them happy. It's doing things for other people that makes us happy." He did volunteer work throughout his retirement years, and it did make him happy.
4
Having a substantial amount of money does free you up psychologically, and instead of worrying about yourself and how you will get by, you can go off and help others.
2
Several studies have found that an annual family income of $70,000 provides sufficient economic security so that more income fails to produce more happiness.
2
George Romney's position was that it would be better for AMC to use his bonus money to benefit his company and its growth rather than transfer 90% of it via income tax to the Federal government for disbursement as government chooses.
Most entrepreneurs would think the same way. If we had a 90% tax rate above the first $2 million earned each year and continue to be able to deduct state and local income taxes, many SJW GenZ, Millennials, and GenX would be satisfied, would be incented to hire more employees, and would reinvest in innovation. It's the materialistic ones who want to out-do the Joneses and who's motto is "he who dies with the most toys wins" that would not want to see this come to fruition.
Most entrepreneurs would think the same way. If we had a 90% tax rate above the first $2 million earned each year and continue to be able to deduct state and local income taxes, many SJW GenZ, Millennials, and GenX would be satisfied, would be incented to hire more employees, and would reinvest in innovation. It's the materialistic ones who want to out-do the Joneses and who's motto is "he who dies with the most toys wins" that would not want to see this come to fruition.
4
Cutting high-income tax rates to stimulate the economy completely ignores the elephant in the room: stagnant middle-class income is holding back economic growth. Mr. Leonhardt's chart from his August 7th post shows the problem most graphically. If CEOs want their businesses to grow, they need their customers to create demand. Customers with stagnant incomes don't create demand. They're begging for relief. If Trump, and the Congress, had any idea of how macroeconomics works -- I'm not betting on it -- they would reform the tax code to enable lower and middle income growth, not cut taxes on wealthy people who won't spend a dime of their savings.
4
There is no evidence that raising tax rates through the roof on wealth will do anything to actually increase the economic welfare of those at the bottom of the bucket. It might make those with wealth envy feel better about sticking it to the glitzy class, but that doesn't translate into a reduction in the poverty rate.
1
"...raising tax rates through the roof on wealth..."? Seriously? Did you actually read this article or is your comment a knee jerk reaction to any suggestion that the uber-wealthy are at a historically low contribution rate to the infrastructure and economic stability of this country?
2
When the senior Romney ran American Motors, the average CEO of American companies were making 20 time the salary of the average worker. Today, the ratio is upwards of 300-to-1. Historically, during the period when the marginal tax rate for corporations and wealthy individuals was at least 70 percent, the whole country prospered. When the marginal tax rate for corporations and wealthiest individuals declined after Reagan, the middle class worker suffered greatly due to income inequality. Unless the wealthy are taxed at a high rate, they will keep the profits to themselves without sharing them with the middle class workers or investing in infrastructure, which benefits all taxpayers.
This is a critical time in American history when half of the wealth in the country is in the hands of the wealthiest and 40 percent of the income goes to the wealthiest corporations and individuals.
If this sounds like an oligarchy, it definitely is.
Unless the oligarchs lose control of government policy regarding taxation, this country is headed in the direction of a banana republic. Bottom line: Republicans can't be trusted because their supporters are the wealthiest corporations and individuals and no changes will be made except to keep lowering their taxes.
This administration must be blocked from lowering the current tax rate until a democratic administration takes over and raises the marginal rate on the wealthy to at least 60% to discourage their greed, which has taken them over.
This is a critical time in American history when half of the wealth in the country is in the hands of the wealthiest and 40 percent of the income goes to the wealthiest corporations and individuals.
If this sounds like an oligarchy, it definitely is.
Unless the oligarchs lose control of government policy regarding taxation, this country is headed in the direction of a banana republic. Bottom line: Republicans can't be trusted because their supporters are the wealthiest corporations and individuals and no changes will be made except to keep lowering their taxes.
This administration must be blocked from lowering the current tax rate until a democratic administration takes over and raises the marginal rate on the wealthy to at least 60% to discourage their greed, which has taken them over.
6
The oligarchs have control of all 3 branches of the government, are spewing misinformation throughout the media, internet and even many of the churches. I frankly don't see any way to turn this tide except by ceasing to buy anything but essentials. A general strike on consumerism.
1
The rich have systematically plundered our country and left the 99% holding the bag. MAGA should mean something very different from what Donald Trump is selling. We were very great even in the face of a 91% top tax rate. That greatness came not from a few hard working and very lucky individuals becoming billionaires but from the contributions of millions of even harder working people from those on the assembly lines right up the ladder who had a decent wage that allowed them to own a home and send their children to college.
The best business leaders recognized this fact and were humbled by it. The worst took all of the credit for themselves and attempted to take all of the money too. Now, they spend a fortune lobbying Congress to allow them to make even larger fortunes. It's time to institute a wealth tax.
The best business leaders recognized this fact and were humbled by it. The worst took all of the credit for themselves and attempted to take all of the money too. Now, they spend a fortune lobbying Congress to allow them to make even larger fortunes. It's time to institute a wealth tax.
10
If you cut the 274 ratio down to the earlier 20 ratio, every company could have 254 more bottom level productive workers all helping make the company more successful and the share price higher and the shareholders value higher.
If you tripled the salaries of the lowest paid workers, you'd still have a 91 ratio, but the 20 ratio would still give the company perhaps 70 more well paid, presumably very skilled, educated and valuable extra workers, who would probably give the company a terrific boost in intellectual property and output.
The maths conclusion seems to be that high exec salaries are bleeding the value out of of most American Companies, with the eventual effect that they will steadily succumb to foreign competition.
If you tripled the salaries of the lowest paid workers, you'd still have a 91 ratio, but the 20 ratio would still give the company perhaps 70 more well paid, presumably very skilled, educated and valuable extra workers, who would probably give the company a terrific boost in intellectual property and output.
The maths conclusion seems to be that high exec salaries are bleeding the value out of of most American Companies, with the eventual effect that they will steadily succumb to foreign competition.
4
While marginal income tax rates in the early 1960s peaked at 91%, the capital gains tax rate was 25%. One thing most folks don't know about the Reagan tax cuts is that the second one, the Tax Reform Act of 1986, eliminated the capital gains tax preference and taxed capital gains the same as all other income. Reagan made his money by working for it. As soon as a man of inherited wealth was again in the White House the capital gains tax preference reappeared.
Another thing most folks don't know about the 1986 Reagan tax cut is that initially it may have only passed the House because the Republican leadership kept the rank and file from getting to the microphones to demand a recorded vote by physically blocking the aisles. There was a great deal of pushing and shoving. While the Speaker had ruled that in the voice vote "the ayes have it", the noes were certainly louder. It is hard to know if the volume of a voice vote is due to numbers or enthusiasm of those voting.
Another thing most folks don't know about the 1986 Reagan tax cut is that initially it may have only passed the House because the Republican leadership kept the rank and file from getting to the microphones to demand a recorded vote by physically blocking the aisles. There was a great deal of pushing and shoving. While the Speaker had ruled that in the voice vote "the ayes have it", the noes were certainly louder. It is hard to know if the volume of a voice vote is due to numbers or enthusiasm of those voting.
1
Reagan made his money working for it when the marginal highest tax rate was 91%. And he made a lot of money, was very wealthy.
Was that when America was Great (again)?
Was that when America was Great (again)?
1
A society that permits individuals and families to accumulate huge amounts of money also contributes to our problems with campaign finance and democracy. Rich people and their corporations effectively have more "free speech" than the rest of us do. I wish we could have a thoughtful policy debate not only about income tax rates but also capital gain tax rates and the estate tax but most thoughtful voices are drowned out by sound bite assertions that lower taxes are good for everybody.
4
The 90% marginal rate was to some degree illusory, since it was accompanied by legislation that permitted extensive tax shelters -- resulting in excess investment flowing into the tax-favored investments (primarily real estate and oil and gas) beyond their economic merits. I know people who were successful professionals in the 1970's and early 1980's who paid little or no income taxes because of the deductions available from real estate investments.
2
That is still true today. I work in banking and set it all the time. Depreciation.
inasmuch as politicians rely on the money they manage to increase for rich people -- either by tax cuts or by privatization -- the first step to restoring the economic balance is to eliminate campaign fundraising.
With public funding, representatives will once again work for the people and not for the money.
With public funding, representatives will once again work for the people and not for the money.
7
Capitalism leads to income inequality naturally over time because of the top heavy corporate wage structure. This cycle will continue ad absurdum if government does not counteract it with higher taxes.
As the wealth concentration continues, it has a detrimental effect on the society values. Being rich replaces being a good person as a worthy goal. This is not new; we were warned about this in the bible with worship of the golden calf.
As the wealth concentration continues, it has a detrimental effect on the society values. Being rich replaces being a good person as a worthy goal. This is not new; we were warned about this in the bible with worship of the golden calf.
4
Around the mid-1970's a new '11th' commandment "Thou shalt make a killing in Real-Estate" filtered into ALL strata of the American body politic. Those new-fangled 'patriots' were very busy over the last decades acquiring bigger and bigger 'pieces of the preverbal pie' but furiously unwilling to pay for the cost of the externalities. The once all-american clarion call to protect and improve the well-being of all Americans pretty much lost all priority. Who amongst us is really surprised that we now find ourselves amongst unplanned unsustainable sprawling metropolises and ever increasingly decaying infrastructures and rampant inequality? (Not to mention environmental degradation on a massive scale). And how many Americans are really up for the radical changes our current predicament requires? We could begin with a Tax Structure akin to the Tax Structure in the good old days of Dwight D. Eisenhower and build an interstate space-age transportation systems befitting of the 21st century. Not gonna hold my breath but one can HOPE and VOTE.
3
Where is the logic in cutting taxes while this country has enormous debt?
If making the rich richer is the solution (and they are), why do we have any problems?
If making the rich richer is the solution (and they are), why do we have any problems?
4
We took away the draft lessening the "skin-in-the-game" of 99% of Americans. Now Americans complain about paying the lowest taxes ever and wanting to reduce them further, lessening Americans skin-in-the-game yet again. As Americans retreat from real responsibility by way of protecting our country or by not wanting to contribute fiscally then so goes the country. People no longer have to pay attention to the wars we fight so they go on for decades and if they don't have to pay taxes then they want to start taking things away like public schools, environmental protections, the arts, healthcare, etc... This trajectory is taking us down not making us great again.
3
Thank you, thank you, thank you! The Presidency of the US, arguably the world's most difficult job, pays $400,000 a year. Let us start on the road to fairness by gradually, 1% a year, raising top rates on those earning more than that. After all, great wealth is accumulated by having the power to amass it, without regard for the actual value of one's work.
5
Why not avoid the whole tax rate issue completely by making non-wage compensation such as deferred compensation, stock options, carried interest, etc. and all wages above a certain level ($1 million, $2 million or so) non-deductible expenses to the business? Corporations would then be incentivized to pay more to lower-level employees and less to the executive suite? This would flatten the salary curve and maybe we'd return to the days of the 20 to 1 ratio or even lower.
2
There's research suggesting 75% is the ideal top marginal tax bracket. I know you're not sure what it should be, but I'd start there.
3
Tax income. Tax stock market "winnings" (short-term investment gains). Tax them heavily.
Slash taxes on research. On re-investment. On employee development and benefits.
When growing one's personal horde loses its appeal, growing one's company through innovation, exploration, and a strong workforce that can buy their own products, gains the appeal it needs.
Scandinavia and Germany figured this out long ago, and it's worked well. They have some of the highest rates of patents and major corporations per capita (ours may often be bigger, but there's a lot more of us). Germany is 1/3 our population, but has a foreign export value on par with China.
Reagan taught a demoralized and morally uncertain populace that greed was good, that greed made us great. Greed did not make us great. It made a few very rich, it made many very poor, and made us all angry, bitter, and disconnected.
Slash taxes on research. On re-investment. On employee development and benefits.
When growing one's personal horde loses its appeal, growing one's company through innovation, exploration, and a strong workforce that can buy their own products, gains the appeal it needs.
Scandinavia and Germany figured this out long ago, and it's worked well. They have some of the highest rates of patents and major corporations per capita (ours may often be bigger, but there's a lot more of us). Germany is 1/3 our population, but has a foreign export value on par with China.
Reagan taught a demoralized and morally uncertain populace that greed was good, that greed made us great. Greed did not make us great. It made a few very rich, it made many very poor, and made us all angry, bitter, and disconnected.
5
It makes no sense to assume that ambition and hard work depend on a tax rate of <40% and history agrees: we've had hard working chief executives forever, but low tax rates only recently.
Further, while Leonhardt doesn't specify a reasonable upper limit on tax rates, there is a good deal of thinking that it hovers around 60%.
That doesn't make the debt disappear, but it does reduce inequality, which is one of the major drivers of political division in the country.
It's something that ought to be done.
Further, while Leonhardt doesn't specify a reasonable upper limit on tax rates, there is a good deal of thinking that it hovers around 60%.
That doesn't make the debt disappear, but it does reduce inequality, which is one of the major drivers of political division in the country.
It's something that ought to be done.
4
Thanks for using the term "personally decent man" in this article. Maybe it will give those readers who participate in the business and political decisions that result in inequality a good question to ask: "Am I a personally decent man or woman?" This is one of my main questions about trends like the one we're seeing now: how and why do personal ethics codes deteriorate as someone gains power and influence? (I suspect it has something to do with what you think you have to do to enable your company to survive, but I'm not sure.)
1
Grace, "those readers who participate in the business and political decisions that result in inequality" don't really care about whether they are "decent." Their measure of self-worth has dollar signs all over it.
1
The very wealthy have been carving a comfortable hammock out of the tax code, piece by piece, for 30 years. The gradual elimination of progressive marginal rates is only one facet of this strategy.
The US now has the 2d most lopsided income distribution in the developed world. And its beneficiaries are solidly entrenched.
Campaign finance reform is needed to right this harmful injustice.
The US now has the 2d most lopsided income distribution in the developed world. And its beneficiaries are solidly entrenched.
Campaign finance reform is needed to right this harmful injustice.
2
We also have the most progressive tax system in the world, where the top 10% in income pay 65% of all Federal tax.
In Europe, the middle class pays a substantial percentage of their income in tax. In the US, the true statistical middle class , i.e. a median income earning $52K in AGI, pay very little in Federal tax.
In Europe, the middle class pays a substantial percentage of their income in tax. In the US, the true statistical middle class , i.e. a median income earning $52K in AGI, pay very little in Federal tax.
I have older copies of shelter magazines from 1962 when George Romney was an auto executive. The striking thing compared to today's magazines are the modest interiors but with little in them. Of course, there is furniture but not tons of knick knacks or expensive artwork. My first comment on seeing one of the homes was, "Where is all of their stuff?" The mid century modern aesthetic of the era was about clean lines and minimalism and bringing the outside in. Now there are large homes that are full of bric a brac and even the Times has run articles on the challenges of downsizing for seniors who are moving into smaller homes. They have too much stuff that their kids don't want. It seems like after Reagan was elected people just felt they needed more material goods to show how well off they were. Maybe a coincidence but I doubt it. Look at older lifestyle magazines to see the difference. In 1962 the average home was under 2000 square feet; anything over that was considered luxurious. People feel wealthy in comparison to others in their peer group so escalating the size of homes, which the tax code has allowed, doesn't really improve ones social standing because it's an arms race. Romney probably figured this out.
3
Reagan is the GOP's hereo not just for cutting taxes but more importantly because he busted up unions. Somehow he convinced union members to not support the air traffic controllers strike and organized labor became disorganized. The public bought into the idea that unions were stealing workers money so now we see the employers stealing it before it gets into workers checks. Track union support and membership and the downward track of both match. Many corporate think tanks will show how those two things do not relate but the way they match is intriguing.
3
The main reason for the high tax rate set and inheritance tax, I was told, was to stop wealth accumulation so we would not become a country ran by the riches among us i.e. kings, monarchs, dictators et al. We fought a war of independence from England so we would not be ruled by a King. Our Founding Fathers and people did not want dynasty families created. We wanted a government of and by the people.
We always had wealthy families but with conscious who wanted America to be the best it could be and they established many institutions to do so. They believed in community and the solid line between capital and labor.
They invested in workers, new product development/research and in community. Now they want that return quarterly each and every time.
Now they will invest but they want control and they want a 30% return.
We always had wealthy families but with conscious who wanted America to be the best it could be and they established many institutions to do so. They believed in community and the solid line between capital and labor.
They invested in workers, new product development/research and in community. Now they want that return quarterly each and every time.
Now they will invest but they want control and they want a 30% return.
3
I shudder at the thought of this Congress or any other one controlled by Republicans will venture into tax "reform". It will end up as nothing more than a huge give away for the super rich that will mean we won't have funds for needed services.
6
Perhaps Corporations will start really paying taxes if we tie their ability to do business in the States to their willingness to pay any and all taxes promptly, without asking for handouts, tax breaks or deferments.
Businesses need to have their businss licenes in order to do business legally. If their license was only granted every year upon receipt of their taxes (or quarterly etc.) and there were no problems with the last year's taxes, then business could continue. However, as soon as any failure to pay taxes or repatriate taxable income or any of the other shell games used to hide income, then their business license and ability to do ANY sales is IMMEDIATELY curtailed. No more of this duing business as always on the way to trial, which never really happens because either the prosecuting party dies, is discouraged into retracting suit or gets paid off just prior to the case going to court.
But for real tax overhaul, first get rid of any and all tax deductions for corporations of any type. The exceptions that have been carved out of what was once a mountain of taxable money has become a deep, deep pit for the poor and middle class, surrounded by the 'untouchable' mountain ranges of Millionaires and Billionaires protected by their individual carveouts.
No More, Not One Cent More for the 1% !
Businesses need to have their businss licenes in order to do business legally. If their license was only granted every year upon receipt of their taxes (or quarterly etc.) and there were no problems with the last year's taxes, then business could continue. However, as soon as any failure to pay taxes or repatriate taxable income or any of the other shell games used to hide income, then their business license and ability to do ANY sales is IMMEDIATELY curtailed. No more of this duing business as always on the way to trial, which never really happens because either the prosecuting party dies, is discouraged into retracting suit or gets paid off just prior to the case going to court.
But for real tax overhaul, first get rid of any and all tax deductions for corporations of any type. The exceptions that have been carved out of what was once a mountain of taxable money has become a deep, deep pit for the poor and middle class, surrounded by the 'untouchable' mountain ranges of Millionaires and Billionaires protected by their individual carveouts.
No More, Not One Cent More for the 1% !
4
Financial restraint, Mr Leonhardt!?! What a quaint notion that has become in America as we near the end of the 2nd decade of the century. Not just in corporate boardrooms. Wherever you look, the reigning ethos is to grab as much as you can while you can get it.
Colleges charging exorbitant tuitions; hospitals, drug makers and insurance companies fleecing patients; landlords raising rents by 10 or 15 percent a year without batting an eyelid; restaurants suggesting 20 or 25% tips; TV and internet providers charging 3 or 4 times what people pay in other developed countries; and I could go on and on.
Financial restraint from a CEO has to be a reflection of a broader attitude prevalent in society. In today's 'winner take all' America, any kind of restraint is in short supply.
Colleges charging exorbitant tuitions; hospitals, drug makers and insurance companies fleecing patients; landlords raising rents by 10 or 15 percent a year without batting an eyelid; restaurants suggesting 20 or 25% tips; TV and internet providers charging 3 or 4 times what people pay in other developed countries; and I could go on and on.
Financial restraint from a CEO has to be a reflection of a broader attitude prevalent in society. In today's 'winner take all' America, any kind of restraint is in short supply.
6
The biggest tax cut President Trump needs to get rid of is the deduction for state income taxes. States with astronomical state income taxes like New York and California are unfairly pushing their burden onto other states and citizens. New Yorkers and Californians need to pay their fair share!!
1
True entrepreneurs make money through the appreciation of their ventures. Marginal income tax rates should have no bearing on this. The SEC, if not the IRS, should be regulating the ridiculous salaries drawn by CEOs.
2
It's not only tax RATES.
We have different tax SYSTEMS for (a) income earned by working and (b) amounts received from inheritance and returns on investment while idling on yachts.
Amounts earned by working, by us, are taxed far more onerously than the same amounts received in other ways by the feelthy rich.
We need a new tax rule: Any amount actually earned by working shall not be taxed more onerously than the same amount received in other ways.
We have different tax SYSTEMS for (a) income earned by working and (b) amounts received from inheritance and returns on investment while idling on yachts.
Amounts earned by working, by us, are taxed far more onerously than the same amounts received in other ways by the feelthy rich.
We need a new tax rule: Any amount actually earned by working shall not be taxed more onerously than the same amount received in other ways.
5
Money itself has no value. It doesn't taste good and has no nutritional value.
It has been used as wall paper, and some use it to light cigars.
The "Unsinkable Molly Brown" discovered it has value keeping a cabin warm, but as the movie showed, she wasn't aware of it then.
Money is symbolic and has value only when it motivates someone to do something useful. East Indians have a saying "Giver's gift, getter's gift" to describe transactions -- spiritual and financial. Whether the gift is a smile or a job, both sides benefit and value is created.
Taxes spent on improved roadways, intersections, sound abatement, and rainwater retention pools make communities safer and more pleasant.
Goethe's Faust describes the immense pleasure that grows from knowing we've used our life to contribute something to the quality of all life.
The Englischer Garten in Munich is such a legacy. It is the world's first public garden and was built to successfully avoid revolution 200 years ago.
Twin statues in Munich and Woburn, MA pay tribute to the man who created that garden. He also introduced soup kitchens and social involvement by the wealthy -- more progressive alternatives to monthly executions.
Like Mitt's father, we need to ask ourselves whether we have more money than we know what to do with. Multiple homes and alimony payments contribute nothing. Greed isn't good; it's stupid and destructive.
George Romney knew that.
Can Donald Trump learn?
The US economy is not a Casino.
It has been used as wall paper, and some use it to light cigars.
The "Unsinkable Molly Brown" discovered it has value keeping a cabin warm, but as the movie showed, she wasn't aware of it then.
Money is symbolic and has value only when it motivates someone to do something useful. East Indians have a saying "Giver's gift, getter's gift" to describe transactions -- spiritual and financial. Whether the gift is a smile or a job, both sides benefit and value is created.
Taxes spent on improved roadways, intersections, sound abatement, and rainwater retention pools make communities safer and more pleasant.
Goethe's Faust describes the immense pleasure that grows from knowing we've used our life to contribute something to the quality of all life.
The Englischer Garten in Munich is such a legacy. It is the world's first public garden and was built to successfully avoid revolution 200 years ago.
Twin statues in Munich and Woburn, MA pay tribute to the man who created that garden. He also introduced soup kitchens and social involvement by the wealthy -- more progressive alternatives to monthly executions.
Like Mitt's father, we need to ask ourselves whether we have more money than we know what to do with. Multiple homes and alimony payments contribute nothing. Greed isn't good; it's stupid and destructive.
George Romney knew that.
Can Donald Trump learn?
The US economy is not a Casino.
1
One can't help but notice that American Motors did not survive -- despite a line-up of small cars that should have been especially appealing in an era of high gasoline prices. Maybe Mr. Romney wasn't a very good CEO. More seriously, David Leonhardt is missing the real inequality driver and thus the relevant tax rate. The "hockey stick" chart of .01% incomes reflects income derived from pass-through vehicles, meaning the income of hedgies and PE guys, taxed at the favorable taxable gain rate rather than ordinary income. It's the recharacterization of such income as "income" that ought to be Leonhardt's target.
2
At a certain point, people just get addicted to money the same way they get addicted to drugs. Letting the wealthy have undue influence over our tax code is akin to giving heroin addicts a huge stash of heroin and telling them to distribute it equally among the whole population. It will never happen. The uber wealthy are quite simply hoarding money like narcotics, and only a rigorously enforced higher tax rate will pry it from their greedy claws.
2
Too much wealth is like too much sugar. Too much sugar causes diabetes in the body. Too much wealth causes diabetes in the brain; i.e., it is just people patting their egos and saying how great they are. You can't eat it all and you can't wear it all. All you end up doing is wasting it (the wealth) so that you can say that you can because you are wealthy.
1
Work harder?!!! Indeed, tax cut rewards the rich for doing nothing - nothing to merit or earn the tax breaks.
In addition to more tax cuts to the wealthy in exchange for doing nothing, Republicans want to reduce taxes on corporations in exchange for doing nothing. CEOs and executives will claim higher earnings adding tax cuts to the bottom line for doing nothing. Insulting those working harder for less, CEOs and execs will get more stock options and bonuses from the tax cut profit windfall for doing nothing, while their added unearned personal income is taxed even less. Money for nothing and chicks for free. Only in America! Great!?
If only the wealthy and corporations could be held accountable for some responsibility to the society they reap their profits from and get undeserved and unearned tax cuts.
Besides, why are shareholders paying CEOs so much money for making simple infantile decisions? Like, if I cut everyone's else's pay, or ship jobs overseas to the cheapest most desperate labor markets, I can increase my own pay. Smarter?
George Romney was highly successful and decently well paid man, taxed at a 91% rate thinks earning even more unseemly. Mitt Romney is a highly successful and indecently over-compensated (several orders of magnitude more than his dad) taxed at an effective rate of 13.9% (https://nyti.ms/2xMxqse), thinks he is oppressed by high taxes. Go figure.
Unearned tax cuts simply go to the bottom line and inflates stocks, CEO bonuses - not jobs or R&D.
In addition to more tax cuts to the wealthy in exchange for doing nothing, Republicans want to reduce taxes on corporations in exchange for doing nothing. CEOs and executives will claim higher earnings adding tax cuts to the bottom line for doing nothing. Insulting those working harder for less, CEOs and execs will get more stock options and bonuses from the tax cut profit windfall for doing nothing, while their added unearned personal income is taxed even less. Money for nothing and chicks for free. Only in America! Great!?
If only the wealthy and corporations could be held accountable for some responsibility to the society they reap their profits from and get undeserved and unearned tax cuts.
Besides, why are shareholders paying CEOs so much money for making simple infantile decisions? Like, if I cut everyone's else's pay, or ship jobs overseas to the cheapest most desperate labor markets, I can increase my own pay. Smarter?
George Romney was highly successful and decently well paid man, taxed at a 91% rate thinks earning even more unseemly. Mitt Romney is a highly successful and indecently over-compensated (several orders of magnitude more than his dad) taxed at an effective rate of 13.9% (https://nyti.ms/2xMxqse), thinks he is oppressed by high taxes. Go figure.
Unearned tax cuts simply go to the bottom line and inflates stocks, CEO bonuses - not jobs or R&D.
2
Raising taxes on the evil rich has always been one of the Big Lies of the left. The top1% pay far in excess of their fair share. The share of income earned by the top 1 percent of taxpayers was 20.6 percent in 2014; they paid 39.5 percent of income taxes collected. The bottom 90 percent paid 29.1% of income taxes collected. Anyone who claims the top 1% aren't paying their fair share is denying reality.
Second, the Left loves to lie about how we could have everything for free if only we took just a little more from a couple hundred hedge fund managers in Manhattan. That's a lie. We could confiscate 100% of income over $1 million, and this immoral act would get just $616 billion. A drop in the bucket in the bloated wasteful inefficient $4 trillion federal budget
Second, the Left loves to lie about how we could have everything for free if only we took just a little more from a couple hundred hedge fund managers in Manhattan. That's a lie. We could confiscate 100% of income over $1 million, and this immoral act would get just $616 billion. A drop in the bucket in the bloated wasteful inefficient $4 trillion federal budget
3
You are a brave man for wading into this very lopsided conversation - kudos to you! On the substance, we need more jobs and opportunities for people to work and earn a living. Focusing on what 1% of the population is earning is examining and solving the wrong "problem' it it is really a problem. That focus just feeds envy and distracts people from what they can do to improve their lot in life and what they can encourage the government to do. In my view the government often creates more problems than they solve and is wasteful to the extreme. Government is needed for a limited number of things - much less than they do now, and mostly needs to get out of the way, stop creating rule up on rule upon rule, and allow people to flourish on their own. To help that government needs to provide strong education in the basics - math, reading, writing, history, speaking. Things they are not doing well now. Empower people and they will make good decisions for themselves. And stop focusing on blaming some rich hedge fund manager for the reason you are feeling poor. Its not his or her fault. And I agree we could take every dollar of income above $1M from the entire top 1% - and we could take all of their assets and indeed all of their income, and it would be chewed up by our wasteful, bloated government in short order. Bottom line to me - stop looking to the government to solve the problems of individuals, what the government can do is limited.
But then the economy tanked. When New York wanted to declare bankruptcy and get bailed out by the federal government. Ford to New York. Drop Dead. So capitalist need compensation.
We need to revive the union movement.
We need to revive the union movement.
In a country where top 20% pay 87% of federal taxes, and top 1% pays 40% of all taxes, liberals want them to pay even more. As well recite the famous verse - From each according to his ability, to each according to his need, kill a few million and then wait for the united states to break up.
1
such a bogus statistic -- let's follow the money -- the top 1% make about 40% of the money, so they should pay 40% of the taxes
@P - They make 20% of the money, not 40%.
It would be interesting to see a survey of the wealthiest among us to ask what they are planning to do with their wealth. They have so much more than they can ever spend. Leaving it to children is very rarely a good idea. Doing "good" with it is best done while you are still alive and probably most satisfying if you have improved the lives of your employees and community. Do they even realize they can't take it with them?
1
This wealth is basically stock holdings. These stockholdings represent companies with buildings, factories, vehicles, employees, etc. These companies are active economic entities producing useful goods and services with the capital goods they own.
So you can't really 'do' anything with wealth. These companies will go on doing what they are doing, and somebody will continue to own their stock through the magic of the stock market. The existing owners can sell their stock to someone else, and spend the money, but this will not impact the underlying companies.
So you can't really 'do' anything with wealth. These companies will go on doing what they are doing, and somebody will continue to own their stock through the magic of the stock market. The existing owners can sell their stock to someone else, and spend the money, but this will not impact the underlying companies.
Post your will online so we can read it and decide if your plans for your property are acceptable to The State
The top marginal tax rate is less imprortant than the effective tax rate. This is only rarely discussed becasue it requires a minute dissection of the deductions permitted by the tax code. There are so many, the persons or entities who are affected or benefited are so numerous; it is a task that only the government or the largest corporations or wealthiest indiviuals can perform. In the absence of such an analysis, moving the marginal tax rate around may have little or no impact on the amount of taxes corporations and indviduals actually pay. Indeed, the IRS can change its own regulations with no input from Congress.
Remember Trump's billion dollar tax loss in the middle 1990s. Do you think he has paid taxes at a marginal rate of between 30-40% since then. I doubt it. If he had, he would have released his tax returns.
Remember Trump's billion dollar tax loss in the middle 1990s. Do you think he has paid taxes at a marginal rate of between 30-40% since then. I doubt it. If he had, he would have released his tax returns.
We need about three more tax rates-50%, 60% and 70%.
1
"A house divided against itself cannot stand." I believe that our government will not endure permanently half poor and half rich.
All of history, from the Ancient Greeks onward, demonstrates that democratic republics fall when the middle classes are decimated. The US is not immune. I believe that the very existence of our form of government is imperiled by the radical inequality America now experiences.
When I grew up in the 50's, my teachers contrasted the happy state of the American Republic, with its strong middle class, with the unstable, despotic governments of Latin America, condemned to unending strife by the contest of the poor against the rich. Today, closer to the Latin American model than ever, the edifice of US government strains against what are merely the outer bands of the coming hurricane.
Over one hundred years ago, the Progressive Movement instituted the income tax. The principal aim, besides raising money, was to curb the threat to good government posed by the selfish, greedy influence of the rich. Today, we likewise need to use the tax system to restore the basis of good government. Not only do we need to tax top income at 90% but also, like the Netherlands, tax wealth - until the distribution of income is returned to what it was before Reagan. (https://fred.stlouisfed.org/series/PRS85006173)
All of history, from the Ancient Greeks onward, demonstrates that democratic republics fall when the middle classes are decimated. The US is not immune. I believe that the very existence of our form of government is imperiled by the radical inequality America now experiences.
When I grew up in the 50's, my teachers contrasted the happy state of the American Republic, with its strong middle class, with the unstable, despotic governments of Latin America, condemned to unending strife by the contest of the poor against the rich. Today, closer to the Latin American model than ever, the edifice of US government strains against what are merely the outer bands of the coming hurricane.
Over one hundred years ago, the Progressive Movement instituted the income tax. The principal aim, besides raising money, was to curb the threat to good government posed by the selfish, greedy influence of the rich. Today, we likewise need to use the tax system to restore the basis of good government. Not only do we need to tax top income at 90% but also, like the Netherlands, tax wealth - until the distribution of income is returned to what it was before Reagan. (https://fred.stlouisfed.org/series/PRS85006173)
2
But not country has ever had mass affluence. In the US, there are more than 10 million households with assets of $1 million. These people are the ones who are running the country, the top 10%, about 30 million people with incomes in the $150-500K range. Can you see them voluntarily giving up their wealth and power?
This is a very different kind of country than a South American dictatorship with a few thousand wealthy oligarchs and millions of impoverish peasants.
This is a very different kind of country than a South American dictatorship with a few thousand wealthy oligarchs and millions of impoverish peasants.
Yes, for the time being. . . . but has Republican Party, aka the Party of the Rich, demonstrated the SLIGHTEST interest in reversing - or even halting - the slide toward Richistan? Judging by its tax proposals, refusal to countenance limitations on campaign contributions, shredding the safety net, hatred of unions, chicanery in packing the Supreme Court, etc., etc., I suggest any reasonably honest person would have to respond in the negative.
1
The wealthy American job creators have in fact been creating jobs, just not in the US. We do not invest in our own people. We do not view them as assets but as moochers and consumers.
1
Many economists who prefer low marginal tax rates speak of unleashing our "animal spirits." But even animals know when to stop, know that to continue to gorge will only lead to bloat and, thus, ultimately to their destruction.
Maybe those economists should take a closer look at their favored analogy. But, unfortunately, I don't think it will make much of a difference as we humans (at least many humans with power) seem constitutionally incapable of saying, "enough, I've had enough."
Destruction here we come.
Maybe those economists should take a closer look at their favored analogy. But, unfortunately, I don't think it will make much of a difference as we humans (at least many humans with power) seem constitutionally incapable of saying, "enough, I've had enough."
Destruction here we come.
3
“The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” --J.K. Galbraith
Ironically, Galbraith offered this quote long before "modern conservatives" came up with the idea trickle-down economics or Art Laffer came up with his Laffer Curve.
Ironically, Galbraith offered this quote long before "modern conservatives" came up with the idea trickle-down economics or Art Laffer came up with his Laffer Curve.
2
I have no doubt that the top companies would have continued to be American companies, even if income continued to be taxed at 1960s rates. Many of the companies you list were great companies already by the 60s. And while I agree that the top income tax rate should be higher, you neglect to mention that it should apply to the real culprit of income inequality -- unearned income, especially capital gains. The wealthiest among us pay roughly half the top rate on almost all of their income because the lion's share of the income of the top 1%, and especially the top .1%, consists of capital gains. Only when ALL income is subject to fair and progressive taxation will we return to a distribution of wealth that will support a more consistently productive economy.
1
This commentary by David Leonhardt reminds me of a time when many people, including many of the wealthy, had a philosophy echoed by the Oliver Wendell Holmes Jr. quotation engraved across the front of the IRS building in Washington DC: “Taxes are what we pay for a civilized society.” Today, the prevailing philosophy is anti-taxation, tax evasion and greed of the rich. I think a good argument can be made that in addition to creating the ever widening gulf of income inequality, the super rich (and the would be super rich) are a significant factor in the ever increasing rise of an uncivilized society.
5
Actually, this is not that complicated. Over the last 40 years, the .01 percent were able to corrupt and control the political process with money and the Fox hustlers. They duped the poorly educated lower classes, and aspiring middle classes into electing politicians who really only made economic policy that represented the .01 percent. At the same time they placated the lower classes by promoting conservative social issues. Foreign oil wars and terrorism were the perfect distractions so the American public did not concentrate on the slow and steady shift of wealth to the .01 percent. At this point the top 0.1% of americans have as much wealth as the bottom 90%.
The present question is, will the american electorate wake up and demand a more equitable distribution of wealth and will the smarter part of the .01 percent look at the dysfunctional violent societies around the world and see that if this wealth shift continues they are going to create a dystopian society here.
The present question is, will the american electorate wake up and demand a more equitable distribution of wealth and will the smarter part of the .01 percent look at the dysfunctional violent societies around the world and see that if this wealth shift continues they are going to create a dystopian society here.
7
As epitomized by Donald Trump and many of his cabinet members, we have become a society in which possession of great wealth is valued above all else. The wealthiest are assumed to have worked harder, have higher moral character, be more deserving of good fortune, are considered to contribute to society merely by existing, and are assigned less personal responsibility for their deleterious actions, because great wealth equals great godliness. We have CEOs who rail to corporate boards that they are so valuable that they deserve tens of millions in compensation, but when a major corporate scandal like Enron or Wells Fargo emerges, they whine, "I'm only the CEO. How could I possibly know what's going on in my own company?" and then launch mass firings of low-paid employees.
Raising the highest marginal tax rates would be a start toward fixing this. However, those in the adored wealthy class are the ones with the greatest influence on Congress, so it seems that yet another tax cut for the wealthiest is the most likely scenario. Maybe we ordinary citizens need to mobilize like we did to oppose repeal of the ACA.
Raising the highest marginal tax rates would be a start toward fixing this. However, those in the adored wealthy class are the ones with the greatest influence on Congress, so it seems that yet another tax cut for the wealthiest is the most likely scenario. Maybe we ordinary citizens need to mobilize like we did to oppose repeal of the ACA.
4
"Maybe we ordinary citizens need to mobilize like we did to oppose repeal of the ACA."
No "maybe" about it!
No "maybe" about it!
1
The federal income tax code is a legal license to steal for those with lobbyists to buy legislative, executive and judicial deductions, subsidies, credits and lower tax rates for particular industries, transactions, sources of income, business entity structures, contracts and securities. The nominal income tax rate is not the effective tax rate for those with clever lawyers and accountants.
The real question is what is the purpose of an income tax beyond raising revenue for public governmental functions. Answering that question leads to the second question which is how much money is needed. Which leads to determining how to raise that amount and from whom.
America is a divided limited power republic nation state. America is not a business. The ethical obligation of a business is to it's shareholders or partners or owners personal private profit. The rich are not driven by what is best for America nor the American people. The income tax must serve the beneficial interests of the American government and all of the American people.
The real question is what is the purpose of an income tax beyond raising revenue for public governmental functions. Answering that question leads to the second question which is how much money is needed. Which leads to determining how to raise that amount and from whom.
America is a divided limited power republic nation state. America is not a business. The ethical obligation of a business is to it's shareholders or partners or owners personal private profit. The rich are not driven by what is best for America nor the American people. The income tax must serve the beneficial interests of the American government and all of the American people.
3
This essay would have been read by a George Romney and praised. Men like George Romney are in short supply. Unfortunately for America (and the world) we now have petty tyrants running major corporations. These tyrants see nothing wrong with wanting to make millions upon millions of dollars while paying their employees next to nothing. In their eyes they did it all by themselves. In other words their version of America and our version of America diverge to the point of living in two different countries.
Then there are the statements made by Mitt Romney about many of us being moochers. Other Republicans said that unemployment benefits weren't good, that being unemployed and receiving payments was like being on vacation. They then proceeded to vote against extending benefits again to the long term unemployed despite the fact that everything in our economy depends upon money.
America has become two separate and unequal countries. There are the very rich which include CEOs of major corporations, people like the Koch Brothers who take but give back next to nothing and are manipulating the system to keep 100% of what they "earn" and there are the rest of us who have to fight for the droppings. It's pathetic to realize that the rich, who earned their money from the rest of us refuse to pay into a system that would help all of us, prefer to let America fail rather than realize that their success depends upon our success.
Then there are the statements made by Mitt Romney about many of us being moochers. Other Republicans said that unemployment benefits weren't good, that being unemployed and receiving payments was like being on vacation. They then proceeded to vote against extending benefits again to the long term unemployed despite the fact that everything in our economy depends upon money.
America has become two separate and unequal countries. There are the very rich which include CEOs of major corporations, people like the Koch Brothers who take but give back next to nothing and are manipulating the system to keep 100% of what they "earn" and there are the rest of us who have to fight for the droppings. It's pathetic to realize that the rich, who earned their money from the rest of us refuse to pay into a system that would help all of us, prefer to let America fail rather than realize that their success depends upon our success.
6
"If so, the tax bill will deserve the same fate as the health care plan: energetic and organized opposition, followed by defeat."
I hope you are right!
We are in critical need of leaders with integrity, humility and a government that's for all not a few!
I hope you are right!
We are in critical need of leaders with integrity, humility and a government that's for all not a few!
5
It is all about values
How quaint: limits, restraint, decency, character, be concerned about society, think of your obligations as a leader, remember your civic duties, show your moral character, help others in need. And, don't be greedy, don't be selfish, don't be mean, don't lie, don't take advantage of other people's weaknesses. I am old enough to remember when Americans--rich and poor--largely agreed to these values. Now look at us!
We went through a near economic collapse in 2008, and now we are going through the collapse of civic society and widespread moral collapse throughout country. No better illustrated by our new President, his cabinet, the entire GOP, the DNC, Fox and right-wing media, and raging violence, intolerance, and addiction throughout the populace,
Both the economic and moral collapse were a long time coming, but one could argue that as the rich got richer (as seen in Leonhardt's link to the charts), the citizenry and the society became worse off. Follow the money.
The secret is to find a balance among the market sector, the government, and civil society. But we put all our eggs in the market basket and are way out of whack. It was a zero-sum game: the market sector can only win if it can dominate government and ignore civil society. It was either-or, and by the business sector's definition, we could not have both a well functioning private sector and a viable and vibrant public sector.
Restore the balance: Stop the tax cuts & the bleeding!
How quaint: limits, restraint, decency, character, be concerned about society, think of your obligations as a leader, remember your civic duties, show your moral character, help others in need. And, don't be greedy, don't be selfish, don't be mean, don't lie, don't take advantage of other people's weaknesses. I am old enough to remember when Americans--rich and poor--largely agreed to these values. Now look at us!
We went through a near economic collapse in 2008, and now we are going through the collapse of civic society and widespread moral collapse throughout country. No better illustrated by our new President, his cabinet, the entire GOP, the DNC, Fox and right-wing media, and raging violence, intolerance, and addiction throughout the populace,
Both the economic and moral collapse were a long time coming, but one could argue that as the rich got richer (as seen in Leonhardt's link to the charts), the citizenry and the society became worse off. Follow the money.
The secret is to find a balance among the market sector, the government, and civil society. But we put all our eggs in the market basket and are way out of whack. It was a zero-sum game: the market sector can only win if it can dominate government and ignore civil society. It was either-or, and by the business sector's definition, we could not have both a well functioning private sector and a viable and vibrant public sector.
Restore the balance: Stop the tax cuts & the bleeding!
9
The managers discovered they could make even more outsourcing and subcontracting the maker and maintainer jobs overseas or to independent contractors. Hey they even realized that taking salary as stock options they could lower the taxes even more to 15% well below that of their remaining workers.
The great lie of Ronald Reagan, George Bush's and now Donald Trump's trickle down economics.
The great lie of Ronald Reagan, George Bush's and now Donald Trump's trickle down economics.
4
Let's face it: the Robber Barons are back. The difference is, the American people this time have greater access to information (well, yes, AND disinformation by the corporatists). We have greater mass movement potential. The wealthiest (and, apparently, greediest) need our slavish consumerism. I suggest we use that addiction of theirs to give them a little reminder who really is turning the gears of our economy. Let's call a strike week or month. Except for groceries and medical supplies, let's stop buying ANYTHING for an extended period of time.
6
Just look at Bank Fraud Bernie and his 3 mansions!! Obama already owns 3 mansions, and now he's looking to buy another mansion!! How many mansions does these greedy bloodsucker robber barons need?
A strike strategically applied seems timely!! With voting diluted by republican shenanigans perhaps the strike is a last resort!
Great article.
Lost in nearly all of the current discussion about tax policy is the fact that taxes are also a mechanism for steering investment in the national interest.
When you take revenue our of a company and convert it to exorbitant salaries, all you get are exorbitant personal spending patterns. (Gold commodes come to mind for some reason.)
On the other hand, if the tax policy penalizes taking money out of play and instead incentivizes reinvestment, you then get R&D, innovation, and job growth. (Like the greatest period of US economic expansion in history.)
Over the long term national income and expenditures need to be of equal magnitude, but it is this "steering" ability of taxes that must be corrected if we want US business leaders to once again invest in jobs and growth.
Every second or third private jet, $50,000 handbag, or other insane expenditure someone makes because they have more money than they can ever spend is evidence of how dysfunctional the system has become. Imagine the US economy if even a portion of that earned profit was retained and reinvested instead of squandered on juvenile displays of power.
Right now it is simply easier to lobby for rule changes and grab the cash, the proposed reductions in rate will simply increase the rate of social and economic decay. Why put a million dollars at risk hiring people and building products when a donation to the right sleazeball politician(s) can put billions in our pocket?
Lost in nearly all of the current discussion about tax policy is the fact that taxes are also a mechanism for steering investment in the national interest.
When you take revenue our of a company and convert it to exorbitant salaries, all you get are exorbitant personal spending patterns. (Gold commodes come to mind for some reason.)
On the other hand, if the tax policy penalizes taking money out of play and instead incentivizes reinvestment, you then get R&D, innovation, and job growth. (Like the greatest period of US economic expansion in history.)
Over the long term national income and expenditures need to be of equal magnitude, but it is this "steering" ability of taxes that must be corrected if we want US business leaders to once again invest in jobs and growth.
Every second or third private jet, $50,000 handbag, or other insane expenditure someone makes because they have more money than they can ever spend is evidence of how dysfunctional the system has become. Imagine the US economy if even a portion of that earned profit was retained and reinvested instead of squandered on juvenile displays of power.
Right now it is simply easier to lobby for rule changes and grab the cash, the proposed reductions in rate will simply increase the rate of social and economic decay. Why put a million dollars at risk hiring people and building products when a donation to the right sleazeball politician(s) can put billions in our pocket?
6
I agree about tax rates, but there were some other factors that led people like George Romney to view extremely high income as, well, embarrassing.
The depression and FDR's programs to deal with it spread an attitude that we can all work together to solve this problem. It didn't completely sink in with the depression, but was an undercurrent. Then with WWII we really had to solve a big problem together, plus folks of all walks of life and different classes were put together in high stakes situations. This creates empathy. Unfortunately troops were still race segregated in WWII, but that's another story. After the war rebuilding together was part of the national psyche.
Contrast this with the message from Ronald Reagan and Gordon Gecko. "The government can't do anything right", and "Greed is good". These messages still resonate today, even with folks who are struggling to get by.
Tax rates for high earners will not go up until the public realizes the fallacy of the messages of the Reagan years.
The depression and FDR's programs to deal with it spread an attitude that we can all work together to solve this problem. It didn't completely sink in with the depression, but was an undercurrent. Then with WWII we really had to solve a big problem together, plus folks of all walks of life and different classes were put together in high stakes situations. This creates empathy. Unfortunately troops were still race segregated in WWII, but that's another story. After the war rebuilding together was part of the national psyche.
Contrast this with the message from Ronald Reagan and Gordon Gecko. "The government can't do anything right", and "Greed is good". These messages still resonate today, even with folks who are struggling to get by.
Tax rates for high earners will not go up until the public realizes the fallacy of the messages of the Reagan years.
4
When Dave and the rest of the various pundits actually define what a "fair share" is and/or settle on what the top bracket should be, their calls to raise taxes on the rich ring hollow. It is nothing more than a rallying cry to increase government overreach and to stir up resentment.
If there is a "fair share", you people should able able to define it.
If there is a "fair share", you people should able able to define it.
The moment BOTH political parties outsourced policy to special interest lobby groups, however well meaning, was the moment we lost control of government. In the 60s and 70s laws were changed because average Americans marched and campaigned for better rights, today it is easier to write a check and get the same result. At least with Civil Rights or the Equal Rights Movement we knew there was genuine grassroots support. Today, I doubt even a majority of the 1% support the tax structure they benefit from.
It's not just the rates that matter, it's the incentives. A top rate of 90% is probably appropriate for a caretaker type person who's non entrepreneurial, and doesn't create new jobs. But the tax code should also allow for deductions for every employee that reports directly to the individual. That provides an incentive for creating jobs, all the way down the management chain. This used to be thought of as wasteful bloat, but in today's environment in which we have more workers than positions, it is necessary for the economy.
1
Agreed. There were many deductions to encourage behavior such as job creation back when rates were higher.
It made sense when people justified fewer deductions and lower rates using the language of freedom. Supposedly we would achieve even more job creation as a result. But in practice, after all these years, it does seem to have created presumably unintended incentives, as outlined in the article.
It made sense when people justified fewer deductions and lower rates using the language of freedom. Supposedly we would achieve even more job creation as a result. But in practice, after all these years, it does seem to have created presumably unintended incentives, as outlined in the article.
I have thought since 2009 and the Great Recession that the corporate tax rate should be lowered dramatically and the top personal income tax rate should be raised. Zero percent for five years and then gradually raise the corporate rate to 20 percent; top earners should have been taxed at 75 percent and gradually brought down to 50 percent. The rates and their adjustments should have been laid out at the start so that all could adjust accordingly.
During the era of high marginal tax rates companies supplied company cars, paid country club dues, and covered the legendary 3 martini lunches. A lot of an executives "pay" in those days was provided in a way to avoid the tax bite (a la the expense accounts in "Mad Men"), making comparisons across eras somewhat misleading.
What is markedly different is the emphasis on the price of the company's stock and rewarding executives based on its performance. That was rare in the 1960s and 1970s, and became fashionable in the 1980s, partly because companies like American Motors, run by George Romney, performed miserably for their stockholders and became take-over targets.
Stock-based pay is now the norm, and has magnified the wealth of top executives, who now focus laser-like on the stock price. One sure-fire way to increase the stock price is by controlling costs, which can be done by cutting jobs and compensation for the rank-and-file employees.
While this is unattractive, returning to the "Mad Men" era of boozy lunches is not the solution.
What is markedly different is the emphasis on the price of the company's stock and rewarding executives based on its performance. That was rare in the 1960s and 1970s, and became fashionable in the 1980s, partly because companies like American Motors, run by George Romney, performed miserably for their stockholders and became take-over targets.
Stock-based pay is now the norm, and has magnified the wealth of top executives, who now focus laser-like on the stock price. One sure-fire way to increase the stock price is by controlling costs, which can be done by cutting jobs and compensation for the rank-and-file employees.
While this is unattractive, returning to the "Mad Men" era of boozy lunches is not the solution.
1
Another way of increasing the stock price is the company buy back. That's where any extra money goes.
And, BTW, there aren't enough 3-martini lunch-times in a lifetime to add up to to add up to the bizarre money the execs are now making annually. Let them indulge - it might take away from the time they spending to do their employees out of jobs, hours or benefits.
And, BTW, there aren't enough 3-martini lunch-times in a lifetime to add up to to add up to the bizarre money the execs are now making annually. Let them indulge - it might take away from the time they spending to do their employees out of jobs, hours or benefits.
2
Thanks for providing the historical basis for today's trickle down nonsense. It shows that most billionaires have lost all interest in humanity and only care about their taxes.
Another problem worth discussing is the highly complex and increasingly incomprehensible tax code, which is written and is constantly revised by Certified Public Accountants, enabling them to become the fastest-growing professional group in U.S. history.
Another problem worth discussing is the highly complex and increasingly incomprehensible tax code, which is written and is constantly revised by Certified Public Accountants, enabling them to become the fastest-growing professional group in U.S. history.
3
There really is no life cycle planning and thinking of any kind going into how to transition to a leisure economy with advanced automation.
2
rasing tax rates always soudns good - but it never really gets oyu anywhere. The rich will always find another way around.
That said, one of the other things the rich, corporate owners did, back in the days of 90% rates, was they moved what would have been profits to them, into increased ownership in their companies, through increased expaniosn and cap ex, which allowed them to grow the business, and thus they owned more of a bigger pie.
This is how the great wealth was accumulated - slowly, deliberately, and not at the expense of the worker. Everyone benefited from expansion.
Now unfortunately, the tax code has created a situation where it behooves the people that own and run companies to maximize their profits.
Additionally, most big, public companies are almost required to do this. Even if the CEO decided to raise salaries, at the expense of margins, the board would veto it, and replace him/her.
That said, one of the other things the rich, corporate owners did, back in the days of 90% rates, was they moved what would have been profits to them, into increased ownership in their companies, through increased expaniosn and cap ex, which allowed them to grow the business, and thus they owned more of a bigger pie.
This is how the great wealth was accumulated - slowly, deliberately, and not at the expense of the worker. Everyone benefited from expansion.
Now unfortunately, the tax code has created a situation where it behooves the people that own and run companies to maximize their profits.
Additionally, most big, public companies are almost required to do this. Even if the CEO decided to raise salaries, at the expense of margins, the board would veto it, and replace him/her.
2
Am I to presume you've never found ways to reduce your taxes? You've never taken a charitable deduction, nor deducted your mortgage interest, nor college savings, nor IRA/401k contributions, nor deferred sales of an asset to push taxes into next year??
1
Roughly speaking, there are three models of society: Texas, Bicoastal, European. The European model assumes that government's role is to plan, maintain and foster the several values of a desirable society. The Texas model assumes that the fundamental goal of society is total wealth, that this is best achieved through completely free enterprise, even if the cost is a few thousand lives a year and severe social inequality, and that government's proper role is inverse to the size of the community it serves. The Bicoastal model oscillates between the two above. At a time when the Texas model is ascendant, you have proposed a European model tax approach. I think our society will first have to fully taste the consequences of the Texas approach, and see if we like it. The Dreamers are the unfortunate canaries in our current mine.
3
How long do American workers have to eat this humble pie? It's been 40 years and America has evolved into a feudal society. Income and wealth inequality is at record levels. As we can see, the response is a turn to fascism. When would be a better time to start turning this around?
1
Given how little taxes he paid on enormous income by the time he ran for President, I wonder what changed his mind?
Great! We need to provide the wealthy with more opportunities they can't refuse for getting into the middle class. It's amazing how their politics would change if they had more chances to do that than even the poor do!
1
The idea that tax cuts would inspire the already rich was always an odd theory. The bigger and more damaging shift since George Romney ran AMC was to make only shareholders matter to corporate leaders.
6
Another whole issue--but yes. Corporations are seen as having little or no social responsibility, but only the responsibility to make money. Not to make money by creating value, and certainly not to contribute to the common good while making money, but just to make money however they can.
I will admit to not being a tax or tax reform expert. But I have enough common sense to know what does or doesn't work. And lowering taxes on the wealthy doesn't (and hasn't) done anything for anyone except them. I am not interested in working myself to death to support the 1 percent (and near 1 percenters) while the majority of my fellow citizens struggle to put food on the table and keep a roof over their head. The ethics of the senior Mr. Romney are so far in the past, they barely register in today's times. As an American, the only real entitlement the wealthy have is to assure that their wealth is used to help those who have less and the best way to do that is to make sure they pay their fair share via a higher tax rate. I don't know how many more decades of obvious proof are required to clearly illustrate that tax advantages to the wealthy are a direct path to our country's destruction. Our government's job is to provide protections for all our citizens and that includes a fair and equatable tax code, not just protections and loopholes for a select group. If the 1 percenters don't like this core American value, luckily they have enough money to provide padding on their backsides when the door hits them on their way out of the USA. We don't want them and we sure as hell don't need them or their ridiculous and undeserved tasteless displays of wealth.
3
It is funny though how NYT can publish an article without looking at the relevant data. In 1959 25% of the population was below poverty line. In 2015 it is 13.5%. And this is when poverty line has been moving up gradually.
Rich are getting richer, but the increase in productivity by their actions is resulting in poor being able to afford things that were considered luxuries a few decades ago.
Rich are getting richer, but the increase in productivity by their actions is resulting in poor being able to afford things that were considered luxuries a few decades ago.
1
Let me know how that works out for you.
I think there is a way conservatives and liberals could agree on tax reform that would be a start to better income distribution. Let everyone keep the first $100,000 dollars he earns in income and pay no taxes until he exceeds that level. Conservatives would surely appreciate keeping the government completely out of one's business and financial life as it would for most Americans, and liberals would appreciate how dramatically it would increase the well being of the poor ad middle class.
3
Assuming that those with adjusted gross incomes above $100,000 would continued to pay tax on their income below that amount, in 2014 this proposal would have reduced federal revenue by $278 billion. How would that revenue be replaced? By increasing the income taxes on those with AIG above $100,000 by 26%? (These numbers are based on tax units not individuals. If the proposal would exempt the first $100,000 of each individuals income the cost would be considerably higher.)
The fact that the tax cuts of the last 40 years have been accepted is symptomatic of a broken capitalist democracy. How else can you account for a system that continues down a path that serves only a very small percentage of citizens who happen to have the wherewithal to influence the rules? The fact that the ability to do that exists indicates to me that the system is broken, and our elected officials are complicit. Perhaps this is a gap our forefathers could not have anticipated, and thus didn't build any constitutional protections against it?
5
Well done Mr. Leonhardt. The rich screwing the poor. You are right, there is less money left over for everyone else. Unregulated greed has put our country at great risk. Inequality has driven our politics for way too long. When labor is only a cost but executive pay stimulates entrepreneurial spirits, you know you have been played. Fixing this will lead to increased growth across the board for everyone.
5
I'm not sure a tax bill is the equivalent of Trumpcare. The difference is too many Democrats are eager to break ranks and Joe the Plumber will say yes to an extra $60 a month even if the tax bill pillages the nation in favor of the wealthy. The average American has enough foresight to fill a thimble.
I really hope an organized opposition forms. I really do. Somehow though, I don't think we'll find the same united opposition we did for saving health care. We can probably only hope to minimize the size of the deficit and distribute the handout a little more equitably. We live in a world of low expectations now. The entrepreneurs can dream. Everyone else is left with the scraps from the table.
I really hope an organized opposition forms. I really do. Somehow though, I don't think we'll find the same united opposition we did for saving health care. We can probably only hope to minimize the size of the deficit and distribute the handout a little more equitably. We live in a world of low expectations now. The entrepreneurs can dream. Everyone else is left with the scraps from the table.
3
Please be wrong! Oh, please! I'm scared that you're right.
Most entreprenuers are drinking Kool Aid too.
My family is in the lower end of the "1%" or"5%", depending on how you count it. My husband and I both work very hard but we consider ourselves extremely fortunate. There are plenty of folks who working just as hard that can't make ends meet. We live in an extremely expensive part of the state, but would happily pay more taxes to ensure that the government is adequately funded, including schools, mental health care, housing for the homeless, public transportation, infrastructure, environmental protection, etc.
7
"Corporate executives and others now have much more reason to fight for every last dollar..."
Seems like backward reasoning. If so much of their income was taken by taxes 50 years ago, it seems like CEOs would have bigger incentive then to "fight for every dollar." With a tax code that allows today's Titans to be Croesus reborn every year, less incentive for such tight-fisted stinginess would be expected. ...Unless greed were just an indelible part of their character - and I think that's the nature of today's CEOs. Sober restraint - so much a part of American Protestant culture, was one of those ugly evils that had to be destroyed a half-century ago. We're enduring the wonders of that brilliant revolt today.
Seems like backward reasoning. If so much of their income was taken by taxes 50 years ago, it seems like CEOs would have bigger incentive then to "fight for every dollar." With a tax code that allows today's Titans to be Croesus reborn every year, less incentive for such tight-fisted stinginess would be expected. ...Unless greed were just an indelible part of their character - and I think that's the nature of today's CEOs. Sober restraint - so much a part of American Protestant culture, was one of those ugly evils that had to be destroyed a half-century ago. We're enduring the wonders of that brilliant revolt today.
3
How do you ask those at the top to forego the second homes, the private jets, the selective schools, the luxury items, the expensive vacations, the exclusive clubs, the specialized health treatments, the personalized shoppers, the one-of-a-kind gadgets, the fancy resorts, the privilege, the access...? That stuff costs $$$$$$$$!
3
Back to reality. How will Trump pay for tax cuts for the 1%?
They’re going to try to eliminate the home mortgage interest deduction. And do away with the state and local tax deductions. And tax 401Ks up front. Right now, people contribute to their 401Ks with pre-tax dollars, and you pay the tax later in life, when you start cashing it in.
In other words, they’re going raise taxes (in effect; doing away with a deduction is raising a tax) on middle-class homeowners and pension-payers to pay for tax cuts for corporations and the 1 percent, whose top rate would be cut by 4.6 percent, which would save someone making $2 million a year around $75,000.
They’re going to try to eliminate the home mortgage interest deduction. And do away with the state and local tax deductions. And tax 401Ks up front. Right now, people contribute to their 401Ks with pre-tax dollars, and you pay the tax later in life, when you start cashing it in.
In other words, they’re going raise taxes (in effect; doing away with a deduction is raising a tax) on middle-class homeowners and pension-payers to pay for tax cuts for corporations and the 1 percent, whose top rate would be cut by 4.6 percent, which would save someone making $2 million a year around $75,000.
4
I'm sorry that Mr. Leonhardt once found the doctrine of tax cuts for the wealthy to be "persuasive," but glad that he, and many others, are now in recovery.
The hypocrisy and "class warfare" aspect of the argument should always have been apparent.
Tax cuts which allow the rich to "keep more dollars" are claimed to be motivating for economic activity--but somehow wage increases for less fortunate workers are not. (Doubling up on the hypocrisy, this argument is usually made by politicians and economists who themselves would never voluntarily work for minimum wage, but simultaneously blame the underclass for a lack of gumption.)
Wages are taxed as ordinary income, but dividends and capital gains from speculation in paper instruments are taxed at preferential lower rates, another direct benefit to the rich who, after all, own most of the paper, and the politicians who write tax law. (This tax situation is viewed as just fine, by persons who claim to venerate the glory of "work" and who blame the underclass for buying lottery tickets, which, of course, have about a snowball's chance in hell of paying off, compared to the upper classes' guarantee of preferential treatment at tax time.)
We're always told how economically important it is for the business "community" to experience feelings of "confidence." But the ability of working people to have "confidence" in their incomes, their job security, the fairness of their employers and elected "representatives"? Not so much.
The hypocrisy and "class warfare" aspect of the argument should always have been apparent.
Tax cuts which allow the rich to "keep more dollars" are claimed to be motivating for economic activity--but somehow wage increases for less fortunate workers are not. (Doubling up on the hypocrisy, this argument is usually made by politicians and economists who themselves would never voluntarily work for minimum wage, but simultaneously blame the underclass for a lack of gumption.)
Wages are taxed as ordinary income, but dividends and capital gains from speculation in paper instruments are taxed at preferential lower rates, another direct benefit to the rich who, after all, own most of the paper, and the politicians who write tax law. (This tax situation is viewed as just fine, by persons who claim to venerate the glory of "work" and who blame the underclass for buying lottery tickets, which, of course, have about a snowball's chance in hell of paying off, compared to the upper classes' guarantee of preferential treatment at tax time.)
We're always told how economically important it is for the business "community" to experience feelings of "confidence." But the ability of working people to have "confidence" in their incomes, their job security, the fairness of their employers and elected "representatives"? Not so much.
2
The income tax is a terrible tax. You can't end inequality by taxing work, and this article is from my understanding woefully incomplete. Money was moved from personal income to corporate income because of the punitive taxes. After tax reform pass-through entities increased and the incomes shot up. I agree corporate executives are overpaid, but many high earning people are not getting paid to manage, but are working professionals. If you had a surgeon who was taxed after a certain point at 91% would they continue to operate? What about a salesman? Increasing income taxes will just make it so it is harder to, or near impossible to become wealthy. The government's programs to reduce inequality have largely zero effect on long term incomes.
1
But would it not be a good thing for the surgeon to stop operating? Would that not make room for younger surgeons? Growth isn't forever sustainable, and we need more and more jobs.
The GOP thinks that the poor get too much in benefits and that the rich don't get enough. This has been going on since Reagan. Unless the poor fight back with their votes, the situation will never be reversed where everyone pays their fair share. Don't see that happening after the last election cycle, where the middle class and poor voted another billionaire into the WH.
3
Do the executive salary numbers mentioned here include bonuses and stock options?
Often, the stock options at least double the fixed salary and often times is much higher than the base salary.
This is a link to a Bloomberg article for IBM:
https://www.bloomberg.com/news/ar
ticles/2017-04-24/ibm-says-ceo-pay-is-33-million-others-say-it-is-far-higher
Often, the stock options at least double the fixed salary and often times is much higher than the base salary.
This is a link to a Bloomberg article for IBM:
https://www.bloomberg.com/news/ar
ticles/2017-04-24/ibm-says-ceo-pay-is-33-million-others-say-it-is-far-higher
1
An interesting side note, George Romney was born in Mexico.
His Mormon grandparents left Nevada when Nevada had to give up polygamy to join the union.
George Romney returned to the US as a child during the violence of the Mexican Revolution.
https://en.wikipedia.org/wiki/George_W._Romney#Early_life_and_background
His Mormon grandparents left Nevada when Nevada had to give up polygamy to join the union.
George Romney returned to the US as a child during the violence of the Mexican Revolution.
https://en.wikipedia.org/wiki/George_W._Romney#Early_life_and_background
We really need to eatablish a high capital gains tax worldwide along with taking money out of politics and that would cure many ills, but of course that sounds like a tall order. That EU for starters has tried many times to establish a capital gains tax only to be blocked by the bankers of the UK and i'm about Brexit as will at least get the British saboteurs away from having veto power on this issue.
3
I am amazed that it has taken so long for the NYTimes to feature an editorial making the point that has been so obvious: It is not a coincidence that the changes in income distribution were happening at the same time as the changes in our tax code. Even after 10 years of handwringing about income inequality and stagnant middle class incomes, the New York Times editorial staff couldn't seem to put their finger on the root of the problem.
When you start looking for the root causes of Trump voters, look no further than the fact that the liberal establishment has turned a blind eye to the death of the American Dream, while tacitly accepting that immense fortunes for very, very few would "unleash creative forces." An entire generation of elite liberals, having accepted the pay off, was simply unwilling to address the problem, because the "problem" was making them extremely wealthy.
So, better late than never, but it may just be too late.
When you start looking for the root causes of Trump voters, look no further than the fact that the liberal establishment has turned a blind eye to the death of the American Dream, while tacitly accepting that immense fortunes for very, very few would "unleash creative forces." An entire generation of elite liberals, having accepted the pay off, was simply unwilling to address the problem, because the "problem" was making them extremely wealthy.
So, better late than never, but it may just be too late.
2
While it’s certainly true that the decline in high-end tax rates has helped change the culture of money, it’s also true that the “inside” game CEOs now play with their tightly controlled boards ensures a highly lucrative and symbiotic approach to increases in executive pay. Meanwhile, their inside game is further enabled by the dilution of shareholder control due to increases in indirect ownership in common stocks (i.e. mutual funds).
In this space, the deck is stacked.
In this space, the deck is stacked.
3
What comes to mind? That some things never change.
“A rich man is nothing but a poor man with money.” -- W.C. Fields
“The price of anything is the amount of life you exchange for it.” -- Henry David Thoreau
“A rich man is nothing but a poor man with money.” -- W.C. Fields
“The price of anything is the amount of life you exchange for it.” -- Henry David Thoreau
2
Most wealthy people do not have Trump-like aspirations (take over the world, etc) and most would follow the laws of the land (high tax rates for the wealthy) if required. They are very happy with their status in life.
1
The ultra-rich will only "get it" when their heads hit the bottom of the "national razor's " basket.... like Louis the XVI and Marie Antoinnett's did...
1
The problem is that a number of the extremely affluent in this society (and probably other societies) have become hoarders of wealth. They can never ever be rich enough. They use their money to influence law (citizen's united for example) and subsequently, politicians (since it is now legal to bribe). In terms of "free speech" they have super megaphones while the average citizen can speak only in a whisper. They are bringing back feudal society -- the average person gets to work for next to nothing, barely subsisting, while the lucky few scoop up the lion's share of everything else. I won't be surprised when we see the resumption of the "company store".
What is particularly galling to me is that so many of the affluent who are participating in the rape of our society are those who inherited their wealth. Born on third base, they believe themselves to have hit a triple. We see the rise of eugenics again. Donald Trump thinks he has especially good genes and therefore everything he does turns to gold. I believe him to be a shameless, immoral huckster who cheated everyone in his way and could get away with it because of daddy's money.
What is particularly galling to me is that so many of the affluent who are participating in the rape of our society are those who inherited their wealth. Born on third base, they believe themselves to have hit a triple. We see the rise of eugenics again. Donald Trump thinks he has especially good genes and therefore everything he does turns to gold. I believe him to be a shameless, immoral huckster who cheated everyone in his way and could get away with it because of daddy's money.
2
Unfortunately for this theory, the percentage of people in the Fortune 500 who inherited their money has been dropping steadily over the past 50 years.
1
Perhaps, but they seem to be doing a disproportionately large share of the damage. The Mercers, the Kochs, Trump -- all inheritance babies. It is not that all the super wealthy are "evil", it is that those whose motivations are not in the best interests of society are able to inflict so much damage.
1
I always felt that people who ran businesses in the 60s charged what people could afford not what people could endure.
As many of the people who make the most money now are hedge fund managers who don't actually create any businesses that can employ people we shouldn't be too surprised that people lower down on the economic ladder haven't benefited from the unheard of wealth those hedge funders have accumulated.
3
Greed took over!
2
More envy, division, and hatred from the reality-denying left!
1
About the most ironic comment I've ever seen. That, from the "We create reality now", "Alternative facts", "Donald Trump cares about the very people he didn't pay for work done", "Let them die if they don't have health insurance", "We hate gays, the poor, immigrants (with brown skin), black people, all liberals, both coasts, education, intellect, Democrats, atheists, non-Christians...well, anyone not white, male, American...and Putin", the free press,", "Donald Trump is not a fraud or mentally whacko", right wing.
And btw, envy of the obscenely wealthy belongs to those who defend it and the damage it's done to our economy, same people who voted for Trump supposedly because they had no jobs and the economy had left them out and blah, blah, blah. You don't get it. You project.
But do tell how your comment is NOT divisive.
So, like I said: Ironic.
And btw, envy of the obscenely wealthy belongs to those who defend it and the damage it's done to our economy, same people who voted for Trump supposedly because they had no jobs and the economy had left them out and blah, blah, blah. You don't get it. You project.
But do tell how your comment is NOT divisive.
So, like I said: Ironic.
How is Trump allowed to talk about tax "reform" when he still refuses to show us his own tax returns? No one should listen to a single word until he does....if he ever does.
2
This tax cut fever must be yet another Russian ploy to weaken our system to the point of collapse.
We ourselves couldnt be this stupid. Or...
We ourselves couldnt be this stupid. Or...
2
During that time period my father decided to use tax shelters to lower his effective tax rate. Unlike most, his investments were successful and ultimately were worth more than the corporate income he was sheltering. Interesting twist.
George Romney (taxes) and his son (healthcare) demonstrated a remarkable public morality and dedication to spreading capitalism's benefits. Today greed and neglect of the poor and vulnerable prevail. Congress and the presidency has been entrusted to the rich--the only ones who can afford them. Vested interests have taken over the Republican Party. Discredited fringe ideas -like trickle down and job creators--are now wholesaled.
What has changed Mr. Leonhardt and how much worse will it get for everyone but the wealthy?
Economics has changed and so we have changed. With the skewing of the income distribution and concomitant loss of better paying middle class jobs and benefits America has looked for scapegoats to explain their frustrated efforts at self betterment. Deep pockets with vested interests take over media and provide platforms for Ideologues, con men, preachers of the once disreputable fringe ideas. Ironically they espouse policies designed to feed the dreams, punish the Dreamers and engorge the wealthy.
This will go on until the populace wakes up to its loss of innocence and challenges the greed, the greedy and sets aside the false morality that being better off than 'those people' should be enough. The question is how much longer will Americans be in thrall to $$ and those who have and use it to exclude others.
What has changed Mr. Leonhardt and how much worse will it get for everyone but the wealthy?
Economics has changed and so we have changed. With the skewing of the income distribution and concomitant loss of better paying middle class jobs and benefits America has looked for scapegoats to explain their frustrated efforts at self betterment. Deep pockets with vested interests take over media and provide platforms for Ideologues, con men, preachers of the once disreputable fringe ideas. Ironically they espouse policies designed to feed the dreams, punish the Dreamers and engorge the wealthy.
This will go on until the populace wakes up to its loss of innocence and challenges the greed, the greedy and sets aside the false morality that being better off than 'those people' should be enough. The question is how much longer will Americans be in thrall to $$ and those who have and use it to exclude others.
1
And still, these CEO making 271 times that of their workers, who are taking home hundreds of millions in compensation, living very, very large, insist that things are dire and regulations and taxes are making it just impossible to succeed!
Get them a fainting couch and some smelling salts.
Get them a fainting couch and some smelling salts.
2
The CEO average for all publicly traded companies is only $167,000. Only a tiny number of CEOs at very large companies make millions.
3
1) Who said anything about 'publicly traded' companies?;
2) Take it up with the author. I am obviously referring to the statistic Mr. Leonhardt cites in the article;
3) read the link he provides to see the damage those "few" CEO salaries have on the rest of the economy and other people's incomes;
4) Read. I said, "These CEOS making 271 times..." K? I didn't say all CEOS make 271 times. I am clearly addressing the ones that do. Not all physicians are obstetricians either. What does that have to do with the fact that some are, and those are the ones being discussed???
Read the article. And those CEOs of those huge companies ARE the ones insisting that the business conditions in America are impossible, because of regulations and taxes, so they MUST move their workforce off shore, i.e.: Apple, TrumpCo, etc.
K?
2) Take it up with the author. I am obviously referring to the statistic Mr. Leonhardt cites in the article;
3) read the link he provides to see the damage those "few" CEO salaries have on the rest of the economy and other people's incomes;
4) Read. I said, "These CEOS making 271 times..." K? I didn't say all CEOS make 271 times. I am clearly addressing the ones that do. Not all physicians are obstetricians either. What does that have to do with the fact that some are, and those are the ones being discussed???
Read the article. And those CEOs of those huge companies ARE the ones insisting that the business conditions in America are impossible, because of regulations and taxes, so they MUST move their workforce off shore, i.e.: Apple, TrumpCo, etc.
K?
1
I'm conflicted on how to tax the top% of people. Clearly they don't pay their fair share, but what would taxing them more accomplish in terms of the wealth gap?
This problem clearly can't be solved by just taxing some folks.
This problem clearly can't be solved by just taxing some folks.
1
Wealthy people should pay FAIR tax rates -- not punitive ones.
Everyone should pay some taxes -- even a token $1 from the poor -- because that's what makes for societal cohesion. The sense that "we are all in it together" and "everyone has some skin in the game".
Everyone should pay some taxes -- even a token $1 from the poor -- because that's what makes for societal cohesion. The sense that "we are all in it together" and "everyone has some skin in the game".
Like everything in our society, it's become a competition to have the most, the biggest, the fastest, the most beautiful, etc. Until our priorities shift, just a bit mind you, to caring about each other and less about ourselves and our 'tribes' we won't make progress as a broader society. The lowering tax rate change over the decades has fed this greed.
2
Anybody who truly believes that any person can be a thousand times more productive than an average human being obviously is polytheistic in essence or thinks that the superheroes are real and not just a product of Hollywood film studios...
1
What part of "trickle down" don't liberals understand?
It goes like this:
When you water the biggest trees, they grow huge, so they can grow giant crowns & take all the sun so they can grow even huger, and then their root systems grow vast so they can suck up all the nutrients, and then those vast roots sprout shoots that are really just part of the same original giant tree, & further expand the dominance of the main tree by helping it shade out any seedlings of other trees that might grow to threaten the big tree.
And then any little tiny sprouts that try to grow under the giant tree are... skinny & spindly & die young for lack of water, sun & nutrients, & eventually die off, leaving only the Big Tree & its progeny to take over everything, while the bones of the dead little trees that tried to grow, eventually rot & provide compost for the Big Tree, who now owns the entire forest...
See? It all works out, just like nature intended, no liberal, redistributionist class-warfare required. Just artificially favor the Big Trees vastly more, & everything works out just fine for the little guy.
Trickle, trickle...
It goes like this:
When you water the biggest trees, they grow huge, so they can grow giant crowns & take all the sun so they can grow even huger, and then their root systems grow vast so they can suck up all the nutrients, and then those vast roots sprout shoots that are really just part of the same original giant tree, & further expand the dominance of the main tree by helping it shade out any seedlings of other trees that might grow to threaten the big tree.
And then any little tiny sprouts that try to grow under the giant tree are... skinny & spindly & die young for lack of water, sun & nutrients, & eventually die off, leaving only the Big Tree & its progeny to take over everything, while the bones of the dead little trees that tried to grow, eventually rot & provide compost for the Big Tree, who now owns the entire forest...
See? It all works out, just like nature intended, no liberal, redistributionist class-warfare required. Just artificially favor the Big Trees vastly more, & everything works out just fine for the little guy.
Trickle, trickle...
4
The following would be worth reading:
From Politico Magazine, June, 2014 "The Pitchforks are coming....For us
Plutocrats" and
July 18, 2017 "To My Fellow Plutocrats: You Can Cure Trumpism"
Both written by Nick Hanauer.....
From Politico Magazine, June, 2014 "The Pitchforks are coming....For us
Plutocrats" and
July 18, 2017 "To My Fellow Plutocrats: You Can Cure Trumpism"
Both written by Nick Hanauer.....
1
More of the same. Steal from the poor and give to the rich. The GOP mantra. Oh, wait...I get that confused with the racist mantra.
The poor pay NO taxes, but get benefits like Medicaid and the EITC and food stamps.
The folks that are stolen from (to give to the rich) are not the poor. They are the middle and working classes.
The folks that are stolen from (to give to the rich) are not the poor. They are the middle and working classes.
"I have everything I need. That's the definition of affluence." Jack Reacher
2
It took the CEOs a little while for their tax lawyers to figure out how to call income something other than income. In addition to lower rates, we have more deferred compensation, stock options, carried interest, and such that do not show up on a W-2. We need to go after the dodges. My guess is that raising the top marginal rate is the worst possible way to extract more tax revenue from high end earners. Part of the problem is that if you do, low information voters think their taxes have been raised--seriously, listen to what people say about taxes. Republicans run with that, and it works.
183
But my taxes HAVE been raised -- and a LOT.
Just not my Federal taxes. Those have been relatively the same for years.
But I also pay property taxes, and local county taxes, and LOCAL and state income taxes on that same income. Those have gone up astronomically. My local income tax was raised by almost 30% last year.
Most people just know "what do I have left" and how much they have to write checks for -- they don't suss out what entity is taxing them. As Federal rates have gone down or stayed the same.....LOCAL AND STATE rates have skyrocketed.
Just not my Federal taxes. Those have been relatively the same for years.
But I also pay property taxes, and local county taxes, and LOCAL and state income taxes on that same income. Those have gone up astronomically. My local income tax was raised by almost 30% last year.
Most people just know "what do I have left" and how much they have to write checks for -- they don't suss out what entity is taxing them. As Federal rates have gone down or stayed the same.....LOCAL AND STATE rates have skyrocketed.
Very good point. Here's an option that would increase revenue, redistribute wealth and increase long-term economic security:
Raise the Cap, Lower the Rate, Boost the Benefit.
Meaning apply the (currently ~15%) payroll tax for Social Security and Medicare to ALL income, earned and unearned, instead of only taxing the first ~$120k of salary. Then lower the rate to 10% or so, giving 90% of workers a small raise. Then boost retirement benefits, allowing millions of older workers to retire, freeing up jobs for the young.
Raise the Cap, Lower the Rate, Boost the Benefit.
Meaning apply the (currently ~15%) payroll tax for Social Security and Medicare to ALL income, earned and unearned, instead of only taxing the first ~$120k of salary. Then lower the rate to 10% or so, giving 90% of workers a small raise. Then boost retirement benefits, allowing millions of older workers to retire, freeing up jobs for the young.
Yes, I remember hearing, during the run up to the 2008 election, a comment from a person making minimum wage: Obama will raise my taxes. We have a financially illiterate country.
Funny how when the tax rates were higher our infrastructure was in better shape and education was better funded. Now our roads and bridges are crumbling, the quality of our K-12 education is crumbling, and a state school college education isn't even affordable any longer. Cutting taxes comes with an enormous price tag to the nation. The wealthy get to keep most of their money (especially with all the additional loopholes) and they are the ones most able to pay for what they need. The rest get what little is left over and have little to show for a lifetime of hard work
2
Rounded off the higher taxed areas of the country where the wealthiest live: Federal tax = 40 %
State Tax = 8 %
City Tax = 4 %
Sales Tax = 9 %
Real Estate Tax for average home = $30,000/year
So genuine tax rate is about 60%
State Tax = 8 %
City Tax = 4 %
Sales Tax = 9 %
Real Estate Tax for average home = $30,000/year
So genuine tax rate is about 60%
1
Uh, I'd recheck your numbers. Sales tax is only on items you purchase. It is not 9% of your total income, but 9% of what you buy -- and depending on where you live, some things like food or clothing are exempt from taxation.
The top average tax rate (incl. local taxes) is more like 32%.
Personally, I'd like to see a tax system that stayed just as it is, except that it adds one more tax bracket. Any income of any kind over $10,000,000 is taxed at 95%. Can anyone argue that 10 million is really more than anyone "needs?" Can anyone argue that anyone could even COUNT more than that? If you made 10 million a year, you would have to spend over $27 thousand dollars every day to use it all up. That would be hard work in itself! But what a boon to the treasury; or, more likely, to all the rest of the people who work where ever Mr. Ten Million hangs out. Spread the wealth. Save the planet.
3
My late father-in-law held a top job with the Ford Motor Company in Britain and was taxed at a pre-decimal rate of nineteen shillings in the pound. He never complained about this. On the contrary, he regarded it as fair given that his income far exceeded that of most Britons at the time. A similar rate could easily be absorbed in the United States without causing any discomfort for those receiving large pay packets plus obscene bonuses. But will it ever happen? Of course not. It's the USA--greed will out.
3
It's amazing to me that so-called "deficit hawks" in the Congress are eager to cut taxes on the wealthy based on the pipe dream of "trickle down" but sharpen their pencils when it comes to paying for health care, roads, scientific research, and, until last month, disaster relief. Any time somebody tells you cutting taxes on the rich grows the economy, or raising wages kills jobs, ask them to show you the data.
2
The answer to the wealth equality riddle lies in your first paragraph: inflation that has made $2 million today have the same value and purchasing power of only $225,000 in George Romney's day.
Inflation occurs when the Federal Reserve "injects" more dollars into our monetary system than there is matching economic growth. And those injections - in the tens and hundreds of billions of dollars - occur at the very top of the economy's food chain: banks, corporations, and government. Thus these institutions conduct financial transactions at a de facto discount: by the time it reaches the working class, the purchasing power of this new money has evaporated due to inflation.
Inflation occurs when the Federal Reserve "injects" more dollars into our monetary system than there is matching economic growth. And those injections - in the tens and hundreds of billions of dollars - occur at the very top of the economy's food chain: banks, corporations, and government. Thus these institutions conduct financial transactions at a de facto discount: by the time it reaches the working class, the purchasing power of this new money has evaporated due to inflation.
1
Sadly, most people today have forgotten the horrifying inflation of the late 70s to mid 80s -- and how that utterly changed our notions of prices, housing, income, taxes.
I was in my 20s and I remember it VERY well -- prices went up weekly or more often. You'd go to the supermarket and see 10 price stickers on a can of peas -- each one up 10-20 cents until the price had doubled or tripled.
People screamed and got wage increases with COLAs....but you can't outpace that kind of inflationary spiral, so people would fall further and further behind. And of course, high oil prices were a principle driving factor.
That's why George Romney could be "rich on $225,000 a year -- an amount that would be only a comfortable middle class income today in 2017, for a couple living in NYC or LA or San Francisco.
When costs escalate by 1000%....we are all losers, even if we "make more money on paper".
I was in my 20s and I remember it VERY well -- prices went up weekly or more often. You'd go to the supermarket and see 10 price stickers on a can of peas -- each one up 10-20 cents until the price had doubled or tripled.
People screamed and got wage increases with COLAs....but you can't outpace that kind of inflationary spiral, so people would fall further and further behind. And of course, high oil prices were a principle driving factor.
That's why George Romney could be "rich on $225,000 a year -- an amount that would be only a comfortable middle class income today in 2017, for a couple living in NYC or LA or San Francisco.
When costs escalate by 1000%....we are all losers, even if we "make more money on paper".
1
Hey, I remember that! You'd be making your shopping list and wonder if you could afford applesauce, or if the price had gone up too much again.
The reduction in taxes from the highs of post WW2 through the Reagan years did indeed increase MEASURED inequality. The emphasis on measured is because capital gains, expense accounts, benefits in kind, pensions, income from tax free municipal bonds, and a host of other benefits are not considered income from whence the data on income inequality are generated. (The data typically are derived from the IRS which it is uninterested in non-taxable resources.) So much of the growth of inequality is an artifact of the data as people shifted from non-taxable benefits to taxable income as tax rates fell. But as you can see from the article and comments, neither the NYT nor the bulk of its readers are interested in a dispassionate analysis.
1
How, then, do you account for the immense growth in *wealth* inequalities?
1
Let's go back to those tax rates, when our economy was booming and the rich were still rich. I'll hold my breath. If you failed to vote the last time, or you voted against the Democrats, you might want to step up to the plate, this time. On the other hand, a casual survey was recently taken on a busy street in NYC, and almost nobody could identify a picture of Robert Mueller. These are people who have the privilege of voting, IF they want to. Are they well enough informed?
1
Good grief, I saw a video a couple years ago, where interviewers went to COLLEGE CAMPUSES to interview students -- smart young people -- and one after another, they could not identify "when was the Civil War?" or "who won the Civil War?". Most could not name the Vice President of the United States (Joe Biden at that time).
But every single kid knew who Angelina Jolie was, and the status of her relationship with Brad Pitt.
Truthfully....I am pretty well read and informed, and I know who Mueller IS, but I doubt I could identify his PHOTOGRAPH. He's not famous in that sense, and not on TV the way celebrities or politicians are.
But every single kid knew who Angelina Jolie was, and the status of her relationship with Brad Pitt.
Truthfully....I am pretty well read and informed, and I know who Mueller IS, but I doubt I could identify his PHOTOGRAPH. He's not famous in that sense, and not on TV the way celebrities or politicians are.
1
"Incomes for the middle class and poor have grown sluggishly since 1980, while the upper middle class has done modestly better."
That is not just coincidence, that is cause and effect.
The top end has taken it all, so there has been none for anyone else. They took it all.
Why? Because they can.
We can change that. If we don't, then it seems of course they will.
That is not just coincidence, that is cause and effect.
The top end has taken it all, so there has been none for anyone else. They took it all.
Why? Because they can.
We can change that. If we don't, then it seems of course they will.
5
I'm all for raising David Lenohardt's taxes. Say, one year at Danish levels to give him some...perspective.
1
I make a six figure income. I know people who work full time at minimum wage with no health insurance. They sell blood when they need extra cash.
I would gladly pay a little more taxes to give them health care.
And when you are comparing Danish tax rates, remember that includes health care and university.
I am an independent software developer and pay $11,000 for Blue Cross.
Figure university costs about $20,000 for four years or $80,000. Divide that over a 40 year career and it is another $2,000 per year.
And Denmark usually ranks in the top five on the Forbes list of best countries for business while the US ranks below 20.
They get universal health care and the US has parts of the country with infant mortality rates the same as Botswana.
We have the highest incarceration rate in the world.
They are the top of the happiness index.
I would gladly pay a little more taxes to give them health care.
And when you are comparing Danish tax rates, remember that includes health care and university.
I am an independent software developer and pay $11,000 for Blue Cross.
Figure university costs about $20,000 for four years or $80,000. Divide that over a 40 year career and it is another $2,000 per year.
And Denmark usually ranks in the top five on the Forbes list of best countries for business while the US ranks below 20.
They get universal health care and the US has parts of the country with infant mortality rates the same as Botswana.
We have the highest incarceration rate in the world.
They are the top of the happiness index.
4
Denmark has almost no defense outlay. They farm it out to us.
George Romney was also a leader on civil rights and correctly said he was ''brainwashed'' by American officials on a tour of war-torn Vietnam, a comment that effectlvely ended his political career.
The tax cuts that made Mitt Romney's success possible were based on a theory scribbled on the back of a napkin, the Laffer Curve, which asserted, without evidence, that tax rates had reached levels that suppressed growth.
The resulting deficits in the Reagan era, which ballooned the deficit and tripled the national debt, also made people like Mitt Romney very rich.
But facts don't matter when the control of policy rests in the hands of those whose belief in top tier tax cuts aligns wth the desires of the wealthy donors who fund most campaigns. The wealthy can effectively pay Senators and Members of Congress to keep top rates low and have little compassion for workers and those who need the support of government programs or interest in crucial investments in the future like education and infrastructure.
Like so many things these days, a low top marginal rate is a matter of self-reinforcing belief, in this instance supported by a massive shift of wealth and power to a tiny minority. Facts and analysis are no longer relevant.
The tax cuts that made Mitt Romney's success possible were based on a theory scribbled on the back of a napkin, the Laffer Curve, which asserted, without evidence, that tax rates had reached levels that suppressed growth.
The resulting deficits in the Reagan era, which ballooned the deficit and tripled the national debt, also made people like Mitt Romney very rich.
But facts don't matter when the control of policy rests in the hands of those whose belief in top tier tax cuts aligns wth the desires of the wealthy donors who fund most campaigns. The wealthy can effectively pay Senators and Members of Congress to keep top rates low and have little compassion for workers and those who need the support of government programs or interest in crucial investments in the future like education and infrastructure.
Like so many things these days, a low top marginal rate is a matter of self-reinforcing belief, in this instance supported by a massive shift of wealth and power to a tiny minority. Facts and analysis are no longer relevant.
2
So the argument here is that we should raise taxes on the rich so they won't want to make money? And that will help the economy how exactly? The reason we have the greatest economy in the world is because rich people were free to make money, so they innovated and created new products which made people's lives better. We have iPhones today because Steve Jobs wanted to make money. What is the obsession with rich people for Democrats? Democrats say they want to hurt rich people, then create special breaks for THEIR rich people (see Warren Buffett and his $10 billion of unpaid taxes). No, we should lower everyone's taxes, and take away the special loopholes created for certain rich people.
2
Yes, "desperate for a legislative win." Desperate for a win will likely trump considerations of what is best for the people of our country. Focus can make you stupid. Too much legislation seems to take social values out of the picture. Do away with mortgage interest deduction? Oops, home ownership is in trouble and neighborhoods become renterhoods, right? Idea! Put money in the hands of the working class and they will spend it and business will prosper!!!
In any society at any one point in time, there is a finite amount of wealth.
As the 1% or less acquire more, that means there is less to be shared by the rest of us. Simple.
I don't hate rich people, I just think it is obscenely immoral to amass obscene amounts of personal wealth when there is insufficient wealth in the society at large for everyone to have the basic needs met of shelter, food, clothing, education and health care.
I read the other day that if all the water that fell on Houston was spread across the country, there would be three inches of water covering every square inch of desert and forest and roads and homes.
Just think if the vast amount of the wealth of the top 5% were spread around, leaving them still with huge amounts of money, just spreading the money they aren't using, how the lives of every American would be improved and those of the poorest improved the most.
Money doesn't bring happiness but there are fewer things to worry about as you face the things life throws at us all.
Being able to fly away to a beautiful island to be pampered and massaged does not take away the pain of a failed relationship, but sitting alone in a ramshackle apartment with an eviction notice on the door and a toothache you can't afford to have fixed makes the hurting worse.
So, why is 271-1 enough? Why shouldn't it be 275 or 300? I can distribute more of the profits to me, or not give my employees a raise again this year. Either way works for me. Why not both?
As the 1% or less acquire more, that means there is less to be shared by the rest of us. Simple.
I don't hate rich people, I just think it is obscenely immoral to amass obscene amounts of personal wealth when there is insufficient wealth in the society at large for everyone to have the basic needs met of shelter, food, clothing, education and health care.
I read the other day that if all the water that fell on Houston was spread across the country, there would be three inches of water covering every square inch of desert and forest and roads and homes.
Just think if the vast amount of the wealth of the top 5% were spread around, leaving them still with huge amounts of money, just spreading the money they aren't using, how the lives of every American would be improved and those of the poorest improved the most.
Money doesn't bring happiness but there are fewer things to worry about as you face the things life throws at us all.
Being able to fly away to a beautiful island to be pampered and massaged does not take away the pain of a failed relationship, but sitting alone in a ramshackle apartment with an eviction notice on the door and a toothache you can't afford to have fixed makes the hurting worse.
So, why is 271-1 enough? Why shouldn't it be 275 or 300? I can distribute more of the profits to me, or not give my employees a raise again this year. Either way works for me. Why not both?
1
But this wealth isn't money - it's the ownership of capital goods. Through their stock portfolios, the wealth own lots of buildings, factories, vehicles, etc.
So if wealth were more widely distributed, the middle class would own more stock, and the rich less. Instead of one guy with a $10 billion portfolio, there'd be a million investors with a $10,000 portfolio. And while the rich guy got $300 million a year in income, each middle-class investor would get $300.
How would this affect the stock market? Would share prices be lower or higher? How would companies react to having large numbers of small investors holding the bulk of their stock?
So if wealth were more widely distributed, the middle class would own more stock, and the rich less. Instead of one guy with a $10 billion portfolio, there'd be a million investors with a $10,000 portfolio. And while the rich guy got $300 million a year in income, each middle-class investor would get $300.
How would this affect the stock market? Would share prices be lower or higher? How would companies react to having large numbers of small investors holding the bulk of their stock?
1
I can't say what it would do to the stock market, but I can tell you that the consumer housing market would benefit immensely from having, say, 3000 individual people/families owning 3000 different apartment buildings in New York, rather than 5 incestuous companies owning 3000 buildings as part of their corporate holdings.
1
The most equitable distribution of wealth in America occurred during the 90% tax rate era. There was no damper placed upon our economy nor business creativity and advancement in that era rather quite the opposite. Our economy lead the world! Reagan ushered in the new gilded age and that has undermined the country more than any other existential threat.
2
Fair enough! But let's simultaneously decrease the corporate tax rates, especially on overseas income. Let's get investment up and create more productive employment.
The rich, the top 1% (those with AGI of ~$500k per year) already pay 40% of federal income taxes. Everyone's rate should be 10%. That is fair everyone paying the same. And if 10% is good enough for god (tithing) than uncle Sam can make do on it. BUT those like David Leohardt was more than welcome to contribute more. And people like Warren Buffett and the Clintons who complain taxes are not high enough can put their money where their mouths are.
Show me a working class and middle class man/woman who votes Republican and I'll show you a man/woman who is gullible, naïve, uninformed, or to put it more plainly, a sucker. In an enlightened country Republicans would receive 0.1% of the vote, the same amount of the people they represent.
5
Gays, guns and God. Works for the Repubs every time.
1
It took Europe a few centuries to develop despotic monarchies. It has taken our country a matter of a few decades to develop a despotic oligarchy. The adventurism of kings has been matched by corporate adventurism where wars are fought in every region of the globe to protect "our" financial interests. Kings realized that their bread and circus displays of wealth kept the subjects distracted. Our oligarchs invented reality TV as America's opiate of the masses. Lobbyists for the rich and their companies are today's dispensers of courtly favors. The people have become increasingly complacent and see the world around them as the norm, just as had our European ancestors. All this has occurred as you point out in a single generation! Unfortunately, we can't pack up and leave for that "shining city on a hill" over the pond.
2
We have a president who ascends the bully pulpit . . . to hawk his hotels, wines and steak. The man donates one ten-thousandth of his fortune to help the victims of a once-in-500 year storm. Listening to him one has to wonder whether he ever -- even by accident -- utters a truthful word. He abhors socialists and admires national socialists.
Ask for social justice and Mr. Trump will sell you the Brookjlyn Bridge and deliver a $2 replica, branded TRUMP and all.
Ask for social justice and Mr. Trump will sell you the Brookjlyn Bridge and deliver a $2 replica, branded TRUMP and all.
2
This is a useful analysis. Thank you.
But we know that Republicans are determined to reduce the size of the federal government, and their plans would cut taxes, again, for the very rich. How does this keep happening if the folk who most often benefit from GOP policies constitute just 1 percent of the electorate? Why would conservative Christians support lecherous, greedy, gilded Donald Trump? Why would anybody vote for Paul Ryan, who wants to slash Medicare and once warned that free school lunches for hungry kids would damage the souls of the children who ate them? Who would ever vote for Mitch McConnell? The libertarian Tea Partiers? Don't these voters have relatives who need health insurance and an education and ... Why don't they resent being "trickled-down" upon (a phrase that, for me, always evokes incontinence)?
Many answers to these questions have been proposed. Christians resist Roe v Wade and gay marriage. NRA members have been instructed to buy more and bigger guns to resist federal government aggressions. Lots of people resent immigrants. And lots of others don't want to pay taxes to help support those black "welfare queens" and "bucks" the GOP has warned against for decades.
And, apparently, they don't want to become more like Europeans or Scandinavians. They respect and value American independence, hardihood, physical liberty, history of resistance, manliness, competition, and the American military.
So here we are.
In a strange land.
But we know that Republicans are determined to reduce the size of the federal government, and their plans would cut taxes, again, for the very rich. How does this keep happening if the folk who most often benefit from GOP policies constitute just 1 percent of the electorate? Why would conservative Christians support lecherous, greedy, gilded Donald Trump? Why would anybody vote for Paul Ryan, who wants to slash Medicare and once warned that free school lunches for hungry kids would damage the souls of the children who ate them? Who would ever vote for Mitch McConnell? The libertarian Tea Partiers? Don't these voters have relatives who need health insurance and an education and ... Why don't they resent being "trickled-down" upon (a phrase that, for me, always evokes incontinence)?
Many answers to these questions have been proposed. Christians resist Roe v Wade and gay marriage. NRA members have been instructed to buy more and bigger guns to resist federal government aggressions. Lots of people resent immigrants. And lots of others don't want to pay taxes to help support those black "welfare queens" and "bucks" the GOP has warned against for decades.
And, apparently, they don't want to become more like Europeans or Scandinavians. They respect and value American independence, hardihood, physical liberty, history of resistance, manliness, competition, and the American military.
So here we are.
In a strange land.
2
Mitt Romney's Bain Capital was a master at engineering leveraged buyouts of profitable companies whose assets were stripped, spun off and sold while the responsibility for funding legacy costs like pensions were offloaded to taxpayers after the raided company went bankrupt.
By any sensible definition, this alien spawn of the Harvard Business school would be labeled pure evil. Instead, it somehow qualified a devout fantasist and intellectually challenged ken-doll to become a no-show governor of a decidedly liberal state and a legitimate candidate for the presidency of the US.
To compound the tragedy, Mitt - the self appointed moral paragon of a party that's devolved into a legally sanctioned crime syndicate, condemned a candidate who had the temerity to enunciate out loud what Mitt and his cohort carefully hid behind clever euphemisms and inveigling rhetoric unless exposed by a live mike.
Cloaked evil condemning naked evil.
By any sensible definition, this alien spawn of the Harvard Business school would be labeled pure evil. Instead, it somehow qualified a devout fantasist and intellectually challenged ken-doll to become a no-show governor of a decidedly liberal state and a legitimate candidate for the presidency of the US.
To compound the tragedy, Mitt - the self appointed moral paragon of a party that's devolved into a legally sanctioned crime syndicate, condemned a candidate who had the temerity to enunciate out loud what Mitt and his cohort carefully hid behind clever euphemisms and inveigling rhetoric unless exposed by a live mike.
Cloaked evil condemning naked evil.
1
The US voters have chosen to be punished by being trickled upon. The typical GOP were not quite insane enough so the desperate masochists of the US went out and elected Trump.
The wealthy are disconnected from reality. They have lived so sheltered from the real world that they can only be delusional.
The media is corporate and incapable of truth that may be perceived to affect consumption.
The politicians are also incapable of truth since the silly voters need to have their egos stroked.
The wealthy are disconnected from reality. They have lived so sheltered from the real world that they can only be delusional.
The media is corporate and incapable of truth that may be perceived to affect consumption.
The politicians are also incapable of truth since the silly voters need to have their egos stroked.
Mitt would have been a reasonable choice if he had followed his father's lead. Six car elvators and a dancing horse later, he's lost his way.
1
Remember noblesse oblige? God, those were the days, weren't they?
"The tax rates helped create a culture in which Americans found gargantuan incomes to be bizarre."
Really. In the land where the streets are paved with gold?
Hyperbole, Mr. Leonhardt. Since Jamestown.
Really. In the land where the streets are paved with gold?
Hyperbole, Mr. Leonhardt. Since Jamestown.
1
Comment quoting Professor David F. Ruccio (Notre Dame). ECONOMICS IN WONDERLAND". The usual meaning of reform is that it involves changes for the better. Most of the so-called reforms that are being proposed by the Trump administration—including the vague speech by Donald Trump yesterday—are just cuts in the tax rates that will directly benefit wealthy individuals and large corporations. " Article and graphs at
https://anticap.wordpress.com/2017/08/31/economics-in-wonderland/
https://anticap.wordpress.com/2017/08/31/economics-in-wonderland/
Since higher taxes are so great, why not raise tax rates to 100%-of net worth- and have a booming economy?!?! Right?! Right???
1
oh sure, I'm an inflationary billionaire; i'll check my pockets right now. Oh yeah I've got a few million in change for you. Here you go! Oh make sure this makes the headlines. Oh Mother, can you pull a few million out of the safe for me, I'm out of change at the moment and planning on saying hello to all my economic slaves today.
The "wealthy" in this article, are really "the upper Middle class". And if you had to break it down between just Upper Class and Lower Class, then Trump, Romney (etc.) are definitely in the Lower Class. Education levels are really important when discussing the Upper Class. It is the well-educated who have Post Doctorate Degrees and have finished all 52 Grades of School that are "the real wealthy" people. And, those with Brilliant IQ Scores are even higher than that, and they are "the extremely wealthy". Leonhardt should have conversations with the Top Level of the BusinessWorld.... (easily accessible in Europe). ---- Then maybe write another article with a different perspective on "Tax Cuts".
An 80 yr old aquaintance said it best, "The rich get richer and the poor get children". The Better Deal of the Democrats must robustly advocate for 1. the progressive tax system with a higher top tax rate 2. phasing out tax deductions for high income taxpayers on mortgage interest, retirement savings and tuition savings 3. more infrastructure spending and 4. less military spending. Tom Perez, are you istening??
1
Tax reform = Trump's taxes revealed
1
The Republicans will certainly try to cut taxes for the wealthy similar to the W. Bush tax cuts.
And with two "tax cuts for the job creators" we got 3 million jobs.
Under Obama, we got 10 million jobs. 16 million really but 6 million were jobs lost due to the Great Recession that came back. And that was with the "jobs killing" Obama-care.
MOST IMPORTANTLY - Clinton gave W. Bush a balanced budget, zero deficit. W. Bush gave Obama a whopping $1.1 Trillion deficit and that was before the sub-prime meltdown. The final number was $1.4 Trillion. Think of what that does for our debt every year.
And Republicans sold their voters at the time saying the American people knew how to spend their money better than the government. Except we weren't spending our money, we were spending our children's and grandchildren's money.
And it is about to happen again.
Another note, I remember getting a onetime $600 tax refund from W. Bush. But there was a deficit. So it really means he gave me a check for $600 and charged it to my credit card.
And with two "tax cuts for the job creators" we got 3 million jobs.
Under Obama, we got 10 million jobs. 16 million really but 6 million were jobs lost due to the Great Recession that came back. And that was with the "jobs killing" Obama-care.
MOST IMPORTANTLY - Clinton gave W. Bush a balanced budget, zero deficit. W. Bush gave Obama a whopping $1.1 Trillion deficit and that was before the sub-prime meltdown. The final number was $1.4 Trillion. Think of what that does for our debt every year.
And Republicans sold their voters at the time saying the American people knew how to spend their money better than the government. Except we weren't spending our money, we were spending our children's and grandchildren's money.
And it is about to happen again.
Another note, I remember getting a onetime $600 tax refund from W. Bush. But there was a deficit. So it really means he gave me a check for $600 and charged it to my credit card.
"A different mind set", that is what seems to lie behind the differences between the approaches I mention in my main comment on my morning walk and what I saw during similar walks in my USA - New England and New York last summer. I see that phrase turning up all the more often in comments filed by people like me, Americans living in Europe. So for us the question that bears on Leonhardt's column is, how do you change a mind set?
I would like Vermonters to think some more about Bernie Sanders and then consider if they can engage in mind-set changing. First up, kicking the Vermont propane and natural-gas habit.
Tak a look at Diane Cardwell's report "Utility Helps Wean Vermonters From the Electric Grid" @ https://nyti.ms/2hbwGs9 The utility is fossil fuel company Green Mountain Power that is changing its mind set by showing that combining solar, wind, and heat pump technologies can free you, even an individual home owner, from the fossil-fuel habit. Get enough to do that and ever fewer NG pipelines, reduced home hazards, silent reliability, and less CO2. Add electricity generation from solid waste and vehicle fuel from biogas and you can catch up with Europe, little pain and major gain.
Try it, become just a bit more European.
Only-NeverInSweden.blogspot.com
Dual citizen US SE
My comment at about reader rec no. 6 just under Hamid Varzi's, he from Tehran. Good company to keep!
I would like Vermonters to think some more about Bernie Sanders and then consider if they can engage in mind-set changing. First up, kicking the Vermont propane and natural-gas habit.
Tak a look at Diane Cardwell's report "Utility Helps Wean Vermonters From the Electric Grid" @ https://nyti.ms/2hbwGs9 The utility is fossil fuel company Green Mountain Power that is changing its mind set by showing that combining solar, wind, and heat pump technologies can free you, even an individual home owner, from the fossil-fuel habit. Get enough to do that and ever fewer NG pipelines, reduced home hazards, silent reliability, and less CO2. Add electricity generation from solid waste and vehicle fuel from biogas and you can catch up with Europe, little pain and major gain.
Try it, become just a bit more European.
Only-NeverInSweden.blogspot.com
Dual citizen US SE
My comment at about reader rec no. 6 just under Hamid Varzi's, he from Tehran. Good company to keep!
@ myself - I actually knew better than to file a second comment since my first is doing fine. But I keep trying to elicit a reply from one Vermonter who presently heats his or her home with oil, natural gas, or propane but is a dedicated opponent of Donald Trump's goal of making the US 100% fossil again.
Welcome Vermonter, my Gmail is at my blog.
Welcome Vermonter, my Gmail is at my blog.
If our government were controlled by the people and not by lobbyists for the wealthy, then we might not have a country about to explode. The death of Unions, gerrymandering and the corporate takeover of the government have blocked real democracy. What we need is serous campaign finance reform. There are very few of our elected people who would dare vote for that - and we need to vote for THOSE people...and NOT for the politicians who have been bought. Check out who gives money to your candidates.
1
The top 500 CEO's average 10 million dollars in pay. That puts them on a par with actors, athletes, popular writers, some inventors, tech start ups, and Joel Osteen, among others. The money made by these people has little effect on me. The pundits try to get me worked up about it. J.K. Rowling, LeBron, Jamie Dimon, and Sylvester Stalone are filthy rich. What is that to me?
So Romney declined bonuses because he would have only personally received 10% with the government taking the remaining 90% and the author concludes that higher tax rates are good? Did it occur to the author that the revenue generated by 90% of zero is zero? Mathematically challenged.
I pretty much can guarantee that Romney received the bonuses in other kinds of compensation - Mormons have no issue with folk making money..
I pretty much can guarantee that Romney received the bonuses in other kinds of compensation - Mormons have no issue with folk making money..
Of course taxes have to be increased on the rich. Big time. It's as obvious as the sun that comes up in the morning. The idea that the rich are already paying too much is idiotic. Those who think otherwise are either motivated by (duh) self-interest/greed or sadly misinformed
Is there no limit to greed? How much money one needs to be happy? Accumulation of more and more, and never having enough is a disease.
Giving more tax break for the wealthy has never improved the lot of the rest of the population, it is a well orchestrated lie.
Giving more tax break for the wealthy has never improved the lot of the rest of the population, it is a well orchestrated lie.
2
As far as the Romney's are concerned:
I guess the apple can fall light years away from the tree
I guess the apple can fall light years away from the tree
2
Great minds think alike.
1
Dear President Trump- the nation pays more in taxes than it does on food and clothing combined. Greedy Big Government is raking in record tax revenues, and yet the fanatical ideologues on the left demand more, more, more-from everyone except themselves, of course. We The People support you in your plan to cut the bone-crushing burden of high taxes and the The People keep their money!
Listen up peasants. If you want help, then give more of your community's wealth to the richest folk. Then they will help you. Capiche? They don't have enough yet to undertake the task. The two trillion that just half of the Fortune 500 are sitting on isn't enough to get to work and get you jobs. They need more. Lots more.
1
The Mitt apple must have rolled a long way downhill from the George tree. Mitt disgusts me. Like Trump, Mitt has manipulated the American financial system (how the heck can his I.R.A. be worth millions?) to nobody's benefit except his own. It's all about him.
2
There can be no rational discussion of taxes in America as long as the fascist left bitterly clings to lies. It is a fact that the rich already pay far in excess of their fair share. The fact is that the bottom 50% pay nowhere near their fair share. The fact is that greedy Big Government is collecting record tax revenues. The fact is that record Big Government tax revenues is dangerous to the economy because Big Government is the most inefficient segment of the economy. Pouring more and more money into the most inefficient segment of the economy is not a recipe for growth
1
Nothing will change if Republican voters don't wake up. Their lethargy is killing our nation and our future.
Interestingly enough, the concept of supply side economics had no theoretical nor quantitative basis in fact. People invent and innovate for reasons beyond just pure greed. This "theory" that was proposed by Art Laffer and pimped by King Ronald Raygun was simple boiling peoples motives down to its most base level. Leave it to a hack professor with a graph on a napkin and a former B actor to sell that one. Makes sense, it's the GOP.
2
The Republicans are attacking on all fronts, regardless of the expressed eswires of the majority (often vast majority) of citizens. They seek to enact their radical agenda as quickly as they can while they have the power given them by gerrymandering, vote suppression and the electoral college.
They must be resisted for as long as it takes for the system to become responsive to the actual will of the people and a concern for the Common Good.
IOW, they must be resisted and opposed until they are voted out of office and otherwise prevented from damaging the country further.
They must be resisted for as long as it takes for the system to become responsive to the actual will of the people and a concern for the Common Good.
IOW, they must be resisted and opposed until they are voted out of office and otherwise prevented from damaging the country further.
3
Please -- since you sound like a decent person -- PLEASE don't hold your breath.
We live in a wealthy neighborhood and the other day I saw a posting in a local (not fancy!) hair salon for $175 children's haircuts, which did not include blow the dry ($50 additional). We, the rich, need to be taxed. I grew up really poor and always heard that rich people were just like us but now that I'm rich I realize this is nonsense propaganda pumped out by the greedy to keep their fortunes safe. Now that I'm in the top 1% it's laughable to imagine that my former poor self wouldn't vote to tax the wealthy because I saw them as suffering financial stresses similar to my own, just with larger numbers. I used to take extra mayo packets from fast food restaurants so I wouldn't "waste" money buying my own mayo. Now I have a housekeeper who buys organic mayo for me and I have no idea what it costs. I'm here today promising that my life in the 1% is not the same as my former life - and that high taxes would absolutely be the right thing to do.
739
It sounds like you live in a neighborhood where people spend all their income. This usually leads to bankruptcy, not wealth.
I trust that, in the meantime, while waiting (probably futilely) for such a tax increase, Smithy is generous with his/her disposable income and using it to benefit non-profit groups that support the needy (e.g., food banks, housing projects) and the middle classes and above (e.g., education, the arts). Great good fortune should impose great obligations.
Start soon nd don't wait for those nasty republicans to do the right thing. Commit 90%of your income to charity today.
I was born in the 50's and have been watching since the 1960's as the disparities between the wealthiest and poorest in our country have kept growing, and the middle class has shrunk. Very simply, a fair tax code would put more of a tax burden on the wealthy and less on those making less than 200,000 dollars. Though I'm not an economist, I can perceive like many others in this nation that it's high time for our government to stop messing around with everyone's pet agendas and start putting the American people first again.
5
Broader distribution of ownership of the means of production is the only economic policy that will sustain demand in an increasingly automated economy.
1
This article hits what ails the US on the head.
It should be required reading for everyone. The discussion not only about tax reform but real change in the US is all about begins with this piece.
Making the message simple can help get us out of the otherwise wasteful rut of contemporary political culture.
It should be required reading for everyone. The discussion not only about tax reform but real change in the US is all about begins with this piece.
Making the message simple can help get us out of the otherwise wasteful rut of contemporary political culture.
1
It seems to me America had more competent and innovative executive level management back in the 50s and 60s. Even gov't and military procurement succeeded on projects like the Apollo moon landing and aircraft like the SR-71.
Perhaps the people most motivated by massive incomes aren't able to dream and do truly great things.
Perhaps the people most motivated by massive incomes aren't able to dream and do truly great things.
3
Let's be clear. In the1950's a very wealthy family friend reportedly paid an income tax of 90%. We, of more modest means, were all agog at that. Such generousity on behalf of us lesser mortals. ! But on closer inspection it turned out that the 90%rate was only on income OVER a certain amount, say $300,000, which, at that time, was a hefty amount. So even a high tax rate may not be all that it seems.
2
That's why income taxes need to be combined with new wealth taxes.
I look at the tax bite like this:
The average person's income is an apple. The government comes along and bites off one third or so of this apple, leaving barely enough for the person to support his or her family. The person struggles to make ends meet. This tax bite hurts!
The rich person's income is like a watermelon. The government comes along and bites off one third or so of this watermelon, leaving more than enough for the person to support his or her family. The person can still live like a king. This tax bite doesn't hurt a bit, although this doesn't stop the rich person from crying and carrying on like a toddler with a boo-boo.
No one should pay taxes until it hurts unless everyone pays taxes until it hurts -- at least just a little.
The average person's income is an apple. The government comes along and bites off one third or so of this apple, leaving barely enough for the person to support his or her family. The person struggles to make ends meet. This tax bite hurts!
The rich person's income is like a watermelon. The government comes along and bites off one third or so of this watermelon, leaving more than enough for the person to support his or her family. The person can still live like a king. This tax bite doesn't hurt a bit, although this doesn't stop the rich person from crying and carrying on like a toddler with a boo-boo.
No one should pay taxes until it hurts unless everyone pays taxes until it hurts -- at least just a little.
298
It is unconscionable that people in the US who make a taxable income from $0 to 9,325 have to pay 10% in federal income tax while people who make almost half a million dollars are supposed to pay almost 40% but they can use many loopholes to pay much less.
There should be more tax brackets while the loop holes should be closed and or made more progressive.
There should be more tax brackets while the loop holes should be closed and or made more progressive.
For the rich scenario, it is more like a giant pumpkin.
I like your images.
What if the watermelon is just a baby water melon instead of those large oval ones?
What if the apple is a large grade A shiny one? Just musing with the idea. My apples are the 2 1/2 inch diameter lunch box sized apples.
What if the watermelon is just a baby water melon instead of those large oval ones?
What if the apple is a large grade A shiny one? Just musing with the idea. My apples are the 2 1/2 inch diameter lunch box sized apples.
YES ! Finally someone has got it! And not just marginal income tax rates, Dividends taxed as income, capital gains taxed at marginal rates as well.
12
IF you are rich enough to INVEST in a scheme that PAYS DIVIDENDS then you are rich enough to pay taxes for roads, military and the common good.
At the time George Romney was CEO of American Motors there was a delicate balance between labor and management due in large part to the power of the unions.
How did CEO salaries soar to the current levels? The decline of the unions and lessening of tax rates played a role as did theories emanating from the top business schools in the early 1980's about aligning pay and performance. Yet the passivity of institutional investors has allowed this trend to continue to the point of absurdity.
Why do investment managers such as the large mutual fund and ETF companies continue to vote for these pay increases? Because they have a vested interest in staying on the good side of management in order to maintain their fees from managing retirement assets.
Why do directors support these pay increases? Because they are all in the same boat and, of course, no compensation consultant will advise paying the CEO just the average annual increase.
In many ways there is significant collusion in setting and maintaining these salary levels. I think that a marginal tax rate above the current 40% is warranted in order to manage the unchecked earnings power of these people-especially if the boards and institutional investors refuse to play a role. It will also affect the legions of highly-paid lawyers and consultants who write the employment contracts to ensure this salary under all circumstances including destruction of the company.
How did CEO salaries soar to the current levels? The decline of the unions and lessening of tax rates played a role as did theories emanating from the top business schools in the early 1980's about aligning pay and performance. Yet the passivity of institutional investors has allowed this trend to continue to the point of absurdity.
Why do investment managers such as the large mutual fund and ETF companies continue to vote for these pay increases? Because they have a vested interest in staying on the good side of management in order to maintain their fees from managing retirement assets.
Why do directors support these pay increases? Because they are all in the same boat and, of course, no compensation consultant will advise paying the CEO just the average annual increase.
In many ways there is significant collusion in setting and maintaining these salary levels. I think that a marginal tax rate above the current 40% is warranted in order to manage the unchecked earnings power of these people-especially if the boards and institutional investors refuse to play a role. It will also affect the legions of highly-paid lawyers and consultants who write the employment contracts to ensure this salary under all circumstances including destruction of the company.
14
Fred--I want to go back to the days of strong unions, WITHOUT the Jimmy Hoffas of the world. Union backer fought and died for worker rights like the 40 hour work week. Well, what about it? From what I know about the first 50 years of the 20th century, history seems to be repeating itself, in more ways than one. Pretty horrifying, when people don't learn from the past.
1
The income gap that is really harmful is the gap between the top 10% and everyone else. These are the people who are really out to make as much money as they can. The professional classes, those making between $150K and $500K, have a household income between three and ten times the average.
This kind of gap did not exist in the 50s. Doctors and lawyers may have been well-off, but they did not tower over everyone else, and there were not as many of them. More importantly, they did not rig the system to maximize their income by using their monopoly position. Now litigation and high health care costs are pulling the money out of the economy, money that used to go to the middle class.
This kind of gap did not exist in the 50s. Doctors and lawyers may have been well-off, but they did not tower over everyone else, and there were not as many of them. More importantly, they did not rig the system to maximize their income by using their monopoly position. Now litigation and high health care costs are pulling the money out of the economy, money that used to go to the middle class.
5
Do you know what it costs a person to become a doctor or a lawyer? The price of entry is exceedingly high -- $200k-$400k, and a hell of a lot of work. Salary rates for doctors and lawyer are not arbitrarily set -- their rates are set by the market, and for those whose talents are great and in high demand, the salaries are accordingly high. That's how markets work. You need to remember that, at bottom, doctors and lawyers are not so very different from plumbers and electricians -- the vast majority of them are wage slaves like the rest of us. You need to move the needle up to the .01% -- THAT is where the real income inequality lives.
Wow. A Romney I can respect.
Not that Mitt Romney isn’t a “decent” man. He’s at least as honorable as ‘no drama as Obama’ as far as being a good family man. But I still fight, every day, to get people to understand that his “47% who pay no income taxes” are not a population of “people expecting a handout.” That number is derived from income tax returns, from working people who pay payroll taxes (SS and Medicare) but don’t earn enough money to pay additional federal income tax. These people are our working poor, elderly, and students. That’s the population he dissed, and I still see people, every day, use that 47% like a slur.
Mitt may be “personally decent” but in my mind, he created this intense hatred of our poor, this American mindset that “those people better start paying their fair share!” With what, exactly? Their twenty thousand dollar a year salaries?
I’m sure everyone remembers the photo of Mitt Romney with wads of cash stuffed in his jacket lapels, gleefully passing cash to his Bain buddies. Mitt may be decent in that he can keep his pants zipped. Otherwise, his behavior is obscene. And that sums up the Republican party today.
Mitt, I don't think your dad would be proud.
Not that Mitt Romney isn’t a “decent” man. He’s at least as honorable as ‘no drama as Obama’ as far as being a good family man. But I still fight, every day, to get people to understand that his “47% who pay no income taxes” are not a population of “people expecting a handout.” That number is derived from income tax returns, from working people who pay payroll taxes (SS and Medicare) but don’t earn enough money to pay additional federal income tax. These people are our working poor, elderly, and students. That’s the population he dissed, and I still see people, every day, use that 47% like a slur.
Mitt may be “personally decent” but in my mind, he created this intense hatred of our poor, this American mindset that “those people better start paying their fair share!” With what, exactly? Their twenty thousand dollar a year salaries?
I’m sure everyone remembers the photo of Mitt Romney with wads of cash stuffed in his jacket lapels, gleefully passing cash to his Bain buddies. Mitt may be decent in that he can keep his pants zipped. Otherwise, his behavior is obscene. And that sums up the Republican party today.
Mitt, I don't think your dad would be proud.
476
Don't forget former darling of the right Michelle Bachmann. who during the 2012 primaries famously declared, paraphrasing, that it's not fair for 47% of taxpayers to be "paying nothing" and "everyone should be paying something."
Interestingly, the current Trump/GOP tax plan which doubles the standard deduction will continue those types of %'s of people not paying federal income taxes, while doing nothing or raising taxes on as many as 25-33% of middle class households.
Interestingly, the current Trump/GOP tax plan which doubles the standard deduction will continue those types of %'s of people not paying federal income taxes, while doing nothing or raising taxes on as many as 25-33% of middle class households.
1
Dear CF-- You're from Massachusetts. Did you think his behavior obscene when he was your governor? Or do you suppose he had to reconstruct himself, to run nationally as a Republican?
Briefly, I thought this was the case with Trump. A New Yorker, I thought he was a blowhard and not as rich as he claimed. I suspected he padded the books on the Central Park skating rink, surreptitiously spending way over budget to so he could falsely promote himself as a can-do builder. I didn't think of him as racist or mean-spirited, but I feel the campaign showed us what he really is.
Mitt is a vastly superior person to The Donald, of, course, but not so much he was immune to be abased by his ambitions within the GOP.
Briefly, I thought this was the case with Trump. A New Yorker, I thought he was a blowhard and not as rich as he claimed. I suspected he padded the books on the Central Park skating rink, surreptitiously spending way over budget to so he could falsely promote himself as a can-do builder. I didn't think of him as racist or mean-spirited, but I feel the campaign showed us what he really is.
Mitt is a vastly superior person to The Donald, of, course, but not so much he was immune to be abased by his ambitions within the GOP.
Even more than that, leading a group of boys in holding down a classmate who looked "different", cutting his hair, and then professing to "not recalling doing it" takes you out of the decent column.
1
We could enact an income tax curve that would be modestly progressive up until, say, the $5 or $10 million level, and then increase the marginal rate more steeply, perhaps hitting a rate of 90% after $50 million.
There is no way this tax would deter the entrepreneurial spirit that drives today's startups.
And it might have a very beneficial effect on the other side. Do we really need to encourage today's CEOs to continue growing their already huge corporate giants? Jeff Bezos may not be satisfied until Amazon controls 90% of all retail sales; should we reward him with lower tax rates for hollowing out the economy?
There is no way this tax would deter the entrepreneurial spirit that drives today's startups.
And it might have a very beneficial effect on the other side. Do we really need to encourage today's CEOs to continue growing their already huge corporate giants? Jeff Bezos may not be satisfied until Amazon controls 90% of all retail sales; should we reward him with lower tax rates for hollowing out the economy?
10
Someone to say no to more payments? This must have been long, long ago. American mores to make MORE money have infested the whole business world and have brought an inequality in payments that is hardly surpass.
Even here in Germany, normally considered a equilibrated country, the payments of CEOs have reached records. Just tink of the former CEO of Volkswagen, yes the one who said he knew nothing about the Diesel car scandal, was awarded with a pension plan scraping a heavenly ceiling. It's almost unbelievable.
Even here in Germany, normally considered a equilibrated country, the payments of CEOs have reached records. Just tink of the former CEO of Volkswagen, yes the one who said he knew nothing about the Diesel car scandal, was awarded with a pension plan scraping a heavenly ceiling. It's almost unbelievable.
5
I wish I had the skills to develop an algorithm that would develop proper tax scales on all Americans & businesses, not to mention an inheritance tax. Perhaps then, we could return to the model of the 20th Century, with an economy that actually benefitted our Nation.
Perhaps someone could dig up copies of the Statistical Abstract from, say, 1950-1965, before LBJ tried to have both guns & butter without raising revenues to pay for them. Bush 43 suffered the same fate when he charged 2 wars & an unfunded Medicare Part D on our National Credit Card almost 40 years later.
LBJ (& the Democrat majorities of the 60's) enacted spending policies & legislation that led to the stagflation of the 70's until Volcker (not Reagan) began to limit the amount of money in the economy & tamed inflation.
The current situation of stagnant wages coupled with rising prices for housing, drugs, food, education, health insurance, infrastructure building, etc., has yielded a new Gilded Age. The middle & lower economic classes are running on a treadmill just to stay in place, while the wealthy and the super rich, as well as multinational corporations sheltering wealth overseas, wail that they don't have "enough" & need "more".
Unbridled greed & the sense of privilege that comes with it, may take us to places we don't really want to go. Anyone up for a trip to elysium?
Perhaps someone could dig up copies of the Statistical Abstract from, say, 1950-1965, before LBJ tried to have both guns & butter without raising revenues to pay for them. Bush 43 suffered the same fate when he charged 2 wars & an unfunded Medicare Part D on our National Credit Card almost 40 years later.
LBJ (& the Democrat majorities of the 60's) enacted spending policies & legislation that led to the stagflation of the 70's until Volcker (not Reagan) began to limit the amount of money in the economy & tamed inflation.
The current situation of stagnant wages coupled with rising prices for housing, drugs, food, education, health insurance, infrastructure building, etc., has yielded a new Gilded Age. The middle & lower economic classes are running on a treadmill just to stay in place, while the wealthy and the super rich, as well as multinational corporations sheltering wealth overseas, wail that they don't have "enough" & need "more".
Unbridled greed & the sense of privilege that comes with it, may take us to places we don't really want to go. Anyone up for a trip to elysium?
7
Gonzo--The first thing they have to do is define income levels, and realize that nobody, in their country, can live on $25,000 a year. At least, eliminate any tax on the first $25,000. I am no longer a member of the "middle class," along with those who make 10 times, or more, that I do. That is ridiculous! I pay a higher percentage than Warren Buffet, and so does his secretary. 35% is not unfair for billionaires and multi-nationals, since they never pay those rates, anyway. They only whine about it.
The mistake we keep making in this country is focusing on income rather than capital---that is where the real money is at.
3
You have left off an important contributing factor to the lowering of the tax rate, racism. With the Civil Rights movement came the reality, that systemic and institutional racism had created a black economic underclass. African Americans had not only been aggressively discriminated against, socially, economically, but generally not given any relief. With civil rights that changed. This move towards fairness created a white backlash, which Ronald Reagan adroitly exploited: "welfare queens, driving in Cadillacs" etc...This false imagery, which racist whites absorbed, made it quite easy to sell the trickle down witchcraft. Nearly fifty years later, what we have is severe inequality And economic brutality being the standard.
10
Marc--Reagan was such a lovely man. A real American hero. :-/
How, in a democratic republic, the majority continues to vote for a party that has as a mantra "reduce taxes for the one percent"—is beyond me.
15
Amen.
Don't forget the US estate tax debacle. Same story; the people who suffer the mental illness that keeps them from understanding the concept "enough" get to perpetuate their dynasties...
8
Yes, 18th century Europe............here we come!
Ever hear of The French Revolution? The Russian Revolution? When the masses feel that those in power, mostly defined by wealth have dramatically more than they should and the separation between the classes is too great history has shown you will have a revolution. Money has corrupted our government too much. Example: we just elected a liar and hypocrite as president. He is still supported because he delivered the message that he was above the corruption and despite the facts his supporters blindly still believe it despite his being the perfect antithesis of that.
Reforming taxes seems impossible in this divisive partisan climate though the good news is the president will sign anything partially because he has had nothing significant to sign so far and because he really just doesn't care. If he looks good it works for him.
Revolutions require extremes and we are not there but we are on the cusp. I hope the voters realize how demoralizing and awful it is to be lied to and cheated, like the republicans did with healthcare. I hope Trump's supporters wake up and vote in people committed to changing the landscape so that there is a better more prosperous balance for us all.
Reforming taxes seems impossible in this divisive partisan climate though the good news is the president will sign anything partially because he has had nothing significant to sign so far and because he really just doesn't care. If he looks good it works for him.
Revolutions require extremes and we are not there but we are on the cusp. I hope the voters realize how demoralizing and awful it is to be lied to and cheated, like the republicans did with healthcare. I hope Trump's supporters wake up and vote in people committed to changing the landscape so that there is a better more prosperous balance for us all.
7
Mitt hasn't got a clue of what his father's socially responsible and socially sensitive philosophy was.Making money is NOT a problem. In fact any fool or criminal or decoit can do it.Its how you make it and how you use it that counts.
If money legitimately made is plowed back to creating jobs in the USA itself its good.To ensure that, the Government will have to put american markets literally restricted for importers by quota system.Or by staggering taxes by introducing a slab system of import taxation policy at least for the next twenty years after which if economy is stabilized in america it can be reviewed. Those who remained loyal to america will be given favorable treatment at the time of review.
As for taxing the rich and the wealthy Kennedy days taxation policies or even a bit stringent to that need be adopted pronto.Beyond a certain slab 99 % need to the rate of taxation without compunction.Those real business persons would still make a huge enough killing which they can splurge with a crystal clear conscience adding to their feeling of self-esteem and self-worth and gain respect and adulation from society at large and even been looked up as social models worthy of emulation by the world.
The government on their part is duty bound to set apart the tax money they gather in excess of the 30 % self -imposed limit to welfare activities and on building infra structure for public health,public education and care for the elderly and the disabled and for infant care .
If money legitimately made is plowed back to creating jobs in the USA itself its good.To ensure that, the Government will have to put american markets literally restricted for importers by quota system.Or by staggering taxes by introducing a slab system of import taxation policy at least for the next twenty years after which if economy is stabilized in america it can be reviewed. Those who remained loyal to america will be given favorable treatment at the time of review.
As for taxing the rich and the wealthy Kennedy days taxation policies or even a bit stringent to that need be adopted pronto.Beyond a certain slab 99 % need to the rate of taxation without compunction.Those real business persons would still make a huge enough killing which they can splurge with a crystal clear conscience adding to their feeling of self-esteem and self-worth and gain respect and adulation from society at large and even been looked up as social models worthy of emulation by the world.
The government on their part is duty bound to set apart the tax money they gather in excess of the 30 % self -imposed limit to welfare activities and on building infra structure for public health,public education and care for the elderly and the disabled and for infant care .
2
At a certain point, what is the need for all that excess wealth? Our top salaries and incentives have been absurd for decades.
We are cannibalizing much of our own society with these vast income disparities.
We are cannibalizing much of our own society with these vast income disparities.
3
Maybe if the president had said no to getting richer before he campaigned for the White House he wouldn't have to hide his tax returns.
5
Wow, quite the mea culpa concerning your belief in high-end tax cuts. But while you openly acknowledge that the second half concerning trickle down economics did not come true, there is no reason to conclude the first half was right, either.
What evidence do you have that tax cuts inspired business leaders to work smarter and harder?
Unless you mean by working harder figuring out how rig the system, with pump and dump schemes among others, based upon the wider cultural forces of 'greed is good' unleashed by the triumph of voodoo economics.
Also, let's not discount that the anti-governmental rhetoric of Reagan has a flipside of social Darwinism. That is to say, Reagan insitutionalized a form of cruel negligence. HIs pro-capital, anti-labor, anti poor agenda, and the increased police powers provided by the Berger/Rehnquist court are the roots of the fascist movement in America today. Just look at the republican party base. AT public meetings when the question comes up regarding what the state should do with respect to an injured person who has no insurance, the answer is inevitably shouted 'let 'em die'.
The great story of the oughts and this decade is the failure of elites to rein in their appetities for the good of the public in democracies. Their greed has pushed society past it's breaking point.
I don't see the nouveaux riche embracing your plea to moderate their appetites any time soon...
What evidence do you have that tax cuts inspired business leaders to work smarter and harder?
Unless you mean by working harder figuring out how rig the system, with pump and dump schemes among others, based upon the wider cultural forces of 'greed is good' unleashed by the triumph of voodoo economics.
Also, let's not discount that the anti-governmental rhetoric of Reagan has a flipside of social Darwinism. That is to say, Reagan insitutionalized a form of cruel negligence. HIs pro-capital, anti-labor, anti poor agenda, and the increased police powers provided by the Berger/Rehnquist court are the roots of the fascist movement in America today. Just look at the republican party base. AT public meetings when the question comes up regarding what the state should do with respect to an injured person who has no insurance, the answer is inevitably shouted 'let 'em die'.
The great story of the oughts and this decade is the failure of elites to rein in their appetities for the good of the public in democracies. Their greed has pushed society past it's breaking point.
I don't see the nouveaux riche embracing your plea to moderate their appetites any time soon...
7
Another impact of the highest tax rates was keeping women at home. Atleast women married to highly paid men. No thanks.
2
All the fanatics who are demanding massive tax increases on everyone but themselves are free to forego their tax cuts, which all of you will do, right? Right?!
Well, our income is in the top 25% and, yes, please raise our taxes. Please raise the taxes on higher incomes more. Please use the money to lower inequality through education, higher wages for working people, etc. As far as Mr. Leonhardt is concerned, I have no more idea about his income than you do, other than the common knowledge that journalists are way overpaid and raking it in hand over fist (as you implied in another comment).
1
Time to read or re-read economist E. F. Schumacher's book, "Small Is Beautiful." And for Mitt Romney to heed his father's example. For starters.
I sure wish the author would have detailed the raises and other increases in income and in the value of investments that he's turned down. I'll bet the answer is zero
It's the loss of the very idea of "The Common Good", which reflects the extension of Myself to include All. America, in it's great success after WWII (all competitors were destroyed and it took decades for them to regain the capacity to compete), allowed, and then celebrated, the rise of Myself over The Common Good to such an extreme extent that the very concept is now quaint in a society dedicated to personal greed and dominance, practically reviled in a culture of Myself AGAINST All.
I guess this is how America falls--suicide by cash.
I guess this is how America falls--suicide by cash.
2
Taxes are the lubricant that allows society to fonction. The amount of taxes that are needed depends on what services, including infrastructure and the military, the citizenry wants.
The tax rates must be progressive in order to allow the port afford the basic needs of food, shelter, clothing. It also needs to be progressive in order to allow the middle class some disposable income after the basic needs are met in order to buy things and thus create a demand for goods and services that will create jobs and grow the economy.
Tax cuts for the wealthy only increases their disposable income which will not be spent but saved, because they already buy everything they need and want. They might invest that surplus money, but only in a way that provides revenu like dividends and interest. And the entrepreneur amongst them will invest that disposable income to start or grow a business only if they know there is a demand out there for the product or services they offer.
Basic, but that's how the economy works, always has. It is demand that drives growth, not tax cuts for the opulent. But then when Congress and all their friends are opulent, they want you to believe in trickle down nonsense. It's a fraud.
The tax rates must be progressive in order to allow the port afford the basic needs of food, shelter, clothing. It also needs to be progressive in order to allow the middle class some disposable income after the basic needs are met in order to buy things and thus create a demand for goods and services that will create jobs and grow the economy.
Tax cuts for the wealthy only increases their disposable income which will not be spent but saved, because they already buy everything they need and want. They might invest that surplus money, but only in a way that provides revenu like dividends and interest. And the entrepreneur amongst them will invest that disposable income to start or grow a business only if they know there is a demand out there for the product or services they offer.
Basic, but that's how the economy works, always has. It is demand that drives growth, not tax cuts for the opulent. But then when Congress and all their friends are opulent, they want you to believe in trickle down nonsense. It's a fraud.
6
Let's not forget for a moment that we have a president that had his casino/companies go bankrupt while at the same time reaping millions (and 100% tax write offs) for himself personally. To think that he or his hedge fund cabinet members aren't willing to do the same to the rest of the nation is to blind oneself to reality.
4
I'd really like some help in understanding on how most CEO's justify the exorbitant salaries they command when childcare workers, police, teachers, nurses and other hard working, frustrated workers try to raise families afford houses, make ends meet and put away something for a rainy day. I hate to be partisan but this for the most part can be traced to the demise of unions, the Voodoo economics of Bush, Bush and Regan. And by the way, if Congress really wants to infuse some juice into the economy give the youth of this country a CEO type bonus - forgive their ridiculous and all consuming student loans, certainly the banks and money lenders can more than absorb the losses. Tax increases on the wealthy, I sooner put my money on winning the lottery.
3
No, the tax cuts on the rich did not unleash entrepreneurial energy. What it unleashed was Trump and friends. I think it is called the "trickle-up effect."
4
Is is it immoral just to have too much money? My answer is yes, when there are people who are homeless, people who need medicine they cannot pay for, and the like. What gives these people the right to take the money society needs and spend it on nonsense or stash it away? Nothing gives them this right and they should be ashamed.
2
Reagan and Bush's tax rate cuts amounted to permission to be selfish and fueled the Republican ideology that says it's good to get rich, starve the government, and deregulate everything in sight. You only need to pay attention and have a good memory to know that this is what Republicans do, so I expect nothing less this time. Americans need to get it through their heads that Republicans will ALWAYS reduce taxes for themselves, increase military spending, decrease benefits to the poor and middle class, deregulate business, and start a war. It happens every time and it is happening again. Then, eventually, the stock market will crash and we will have a recession as we did in '87, '91, 2002 and 2008-all during Republican administrations, and we might then get a Democratic Congress and White House like we do every time Republicans ruin the economy.
3
To some people you can give the endless number of second chances but they will never learn... Never blame the other people for your own shortcomings! Don’t blame the others for your own sins, incompetence and stupidity! Don’t blame the wealthy people for your own greed!
If the voters chose smartly, they would have elected the honest people. The honest leaders would have balanced the federal budgets for decades and there would be no colossal national debt.
Without our greed, there would have been no excessive debt spending, so the world economy would have been more tamed and subdued, thus far less pollution. There would be no bubbles because there would be no easy money.
However, all of us prefer to blame Donald Trump for the global warming instead of ourselves.
We are still intellectually at the level of the cavemen.
When we have a chronic problem we don’t want solved, we sacrifice a single individual to please the Gods to make the world better place.
If it does not happen, then we are at peace because everything is obviously God’s will...
Thus we casually blame just the politicians, from Clinton and Bush to Obama and Trump. However, the only rational way to improve this world is to improve ourselves first.
But, we are still just the little children inside our big bodies. If we don’t do our homework, we still blame a dog that chewed up our school notebooks and the presidents that failed to protect us.
No single man can protect this world. Our destiny is in our hands...
If the voters chose smartly, they would have elected the honest people. The honest leaders would have balanced the federal budgets for decades and there would be no colossal national debt.
Without our greed, there would have been no excessive debt spending, so the world economy would have been more tamed and subdued, thus far less pollution. There would be no bubbles because there would be no easy money.
However, all of us prefer to blame Donald Trump for the global warming instead of ourselves.
We are still intellectually at the level of the cavemen.
When we have a chronic problem we don’t want solved, we sacrifice a single individual to please the Gods to make the world better place.
If it does not happen, then we are at peace because everything is obviously God’s will...
Thus we casually blame just the politicians, from Clinton and Bush to Obama and Trump. However, the only rational way to improve this world is to improve ourselves first.
But, we are still just the little children inside our big bodies. If we don’t do our homework, we still blame a dog that chewed up our school notebooks and the presidents that failed to protect us.
No single man can protect this world. Our destiny is in our hands...
1
Cured cancer? Invented the perfect no-loss battery? No. They put an alarm clock in a phone and figured out a way to harvest personal data from a chat room. They crammed more seats into a flying tube designed in the 60s. They extracted sugar from a highly subsidized crop and injected it into everything. They used the surpluses of the agricultural revolution, the medicines of the antibiotic age, and the pristine forests of the planet to fatten cows. They mass produced small school busses for personal transportation and did everything they could to defeat efficiency. They destabilized countries and made loans to despots who absconded with the money, leaving the people to pay. They also made loans to people who couldn't pay and sold them to suckers and then convinced the government to bail them out when the whole racket went south. They also sold financial services to people without their knowledge. They polluted the seas, the air, and the land, and then want drilling rights on public land so that they can sell American resources without giving America a cut in the profits. They buy investment properties for millions, causing real estate booms that price inhabitants and small businesses out of their own neighborhoods.
Many of us know some super-rich people. We say, "They are nice people, it's just that the system is messed up." At some point we'll quit making that distinction.
Tax the rich like Ike.
...or eat them when we get hungry enough.
Many of us know some super-rich people. We say, "They are nice people, it's just that the system is messed up." At some point we'll quit making that distinction.
Tax the rich like Ike.
...or eat them when we get hungry enough.
1
Great post! (and they're too fatty to eat.)
1
Where in this hideous diatribe is morality? That in a free society, it is highly suspect for the government to confiscate even half of someone's earnings? That's right - their earnings, not yours. I honestly couldn't care less about inequality or the culture of money. What I know to be true, is that people deserve to keep what they earn, less a modest slice to pay for basics such as roads, defense, police, fire. Redistribution for the sake of social engineering is immoral and unAmerican. If certain people feel that they don't deserve it, let them decline or donate to charity. That's their business and a voluntary act.
And yet the economy boomed in that post war period like nothing the world had ever, or has ever since, seen.
There is only one problem with taxes: by collecting almost 4 trillion in taxes, the government feeds a bloated, incompetent, stupid, inefficient Federal bureaucracy that feels entitled to waste about 50% of the taxes it consumes.
No GS-15 manager or Senior Executive in the Federal government gives a second thought to the wasted spending. Why should they? It's not their money.
As a Fed for over 25 years, including a long stint on Al Gore's team to reinvent the government, I can vouch for the fact that about 50% of the employees at BLS, where I worked, spent much of their days surfing the web, reading magazines, snoozing in their cubicles, selling real estate, socializing, taking liquid lunches or having affairs.
At the US Department of Labor, dozens of African-American ladies, bless their capitalist hearts, busy themselves at least one day a week by selling cosmetics or various trinkets to other African-American ladies. Business is always good at DOL.
Federal salaries in DC now average 100K for a low-level GS-12.
Solution: arbitrarily cut 50% of the budget of every Federal agency (except the Park Service, Smithsonian, NIH and a handful of other science-related agencies) and you can cut taxes by 50% for everyone.
The Defense Department, in particular, is colossal waste of money. It could easily be cut by 50%, as could half of the 200 or so military bases the US maintains around the world for no reason, saving about 400 billion dollars a year.
No GS-15 manager or Senior Executive in the Federal government gives a second thought to the wasted spending. Why should they? It's not their money.
As a Fed for over 25 years, including a long stint on Al Gore's team to reinvent the government, I can vouch for the fact that about 50% of the employees at BLS, where I worked, spent much of their days surfing the web, reading magazines, snoozing in their cubicles, selling real estate, socializing, taking liquid lunches or having affairs.
At the US Department of Labor, dozens of African-American ladies, bless their capitalist hearts, busy themselves at least one day a week by selling cosmetics or various trinkets to other African-American ladies. Business is always good at DOL.
Federal salaries in DC now average 100K for a low-level GS-12.
Solution: arbitrarily cut 50% of the budget of every Federal agency (except the Park Service, Smithsonian, NIH and a handful of other science-related agencies) and you can cut taxes by 50% for everyone.
The Defense Department, in particular, is colossal waste of money. It could easily be cut by 50%, as could half of the 200 or so military bases the US maintains around the world for no reason, saving about 400 billion dollars a year.
2
Leonhardt is trying on Piketty's latest fad - that high tax rates deter high compensation by persuading the affluent to forego more money. For reference, Piketty is from France which likewise tried a millionaire's tax - but had to abandon it when the rich threatened to simply leave the country. It's easy to knock the rich and to send them the bill for society's ills. "The theory behind all those high-end tax cuts ... was that it would unleash entrepreneurial energy."
Wrong. The idea behind tax cuts is that we live in a free society. If the person got rich by scamming others, then fine, throw the book at them. But most people earn their money by providing a service that others willingly purchase. Bill Gates was born to a middle class family. He got rich because he developed an operating system that over 400 million people willingly purchased.
Let's stop this crucifixion. I remember the day I became a conservative. I was a kid in my father's room while he was doing his taxes. He wasn't a rich man - but he had a high income that year because he exercised a lot of stock options that he had worked for at his company over the years. This was the 1970's and the government would take 70% of this. It didn't make him work harder. He couldn't if he wanted to. I asked him what the government did for this money. He couldn't really answer and said I was too young to understand. I'm now 48 years old and I still don't understand.
Wrong. The idea behind tax cuts is that we live in a free society. If the person got rich by scamming others, then fine, throw the book at them. But most people earn their money by providing a service that others willingly purchase. Bill Gates was born to a middle class family. He got rich because he developed an operating system that over 400 million people willingly purchased.
Let's stop this crucifixion. I remember the day I became a conservative. I was a kid in my father's room while he was doing his taxes. He wasn't a rich man - but he had a high income that year because he exercised a lot of stock options that he had worked for at his company over the years. This was the 1970's and the government would take 70% of this. It didn't make him work harder. He couldn't if he wanted to. I asked him what the government did for this money. He couldn't really answer and said I was too young to understand. I'm now 48 years old and I still don't understand.
1
Check out this group: https://patrioticmillionaires.org/ Like Warren Buffett, they are not looking for lower taxes. They would like to live in a society where their fellow citizens can access economic opportunity just like they did. As Michelle Obama said, when you get to the top, you shouldn't be pulling the ladder up behind you. These folks are fighting for a $15 minimum wage and other policies to be sure that ladder will be strong enough for the next hard-working person to climb.
1
How about we just treat all income the same.
The "culture of restraint"...how quaint..and puritanical that sounds today!
What is missing here is a broader perspective. The 60s saw a massive cultural devaluation of the old notions of morality as based on restraint of one's "lower" impulses. That was now seen as based on a Puritan morality, and was washed away in wave of hedonism: "do your own thing, do what you want to do, go where you want to go, don't worry about such things as restraint and responsibility, they're such a drag".
While the hippies were at least into simple living, that quickly morphed into a more general cultural ethos of "pushing the envelope" to see just how many "barriers to self-expression" someone could break down.
The cult of simplicity quickly morphed into the cult of bling-bling and "the gangsta", glamour, rock stars trashing hotel rooms and waving champagne bottles around, sports stars making millions as well...
From The Carpenters, Joan Baez and Bob Dylan, to Beyoncé and rap stars...
The race to show off one's wretched excesses was on. American culture became all about the race for status as demonstrated by how much money one could throw around...
What is missing here is a broader perspective. The 60s saw a massive cultural devaluation of the old notions of morality as based on restraint of one's "lower" impulses. That was now seen as based on a Puritan morality, and was washed away in wave of hedonism: "do your own thing, do what you want to do, go where you want to go, don't worry about such things as restraint and responsibility, they're such a drag".
While the hippies were at least into simple living, that quickly morphed into a more general cultural ethos of "pushing the envelope" to see just how many "barriers to self-expression" someone could break down.
The cult of simplicity quickly morphed into the cult of bling-bling and "the gangsta", glamour, rock stars trashing hotel rooms and waving champagne bottles around, sports stars making millions as well...
From The Carpenters, Joan Baez and Bob Dylan, to Beyoncé and rap stars...
The race to show off one's wretched excesses was on. American culture became all about the race for status as demonstrated by how much money one could throw around...
1
The argument is persuasive, but also quaint. The country just elected a president who plainly said during the campaign that taxes are for chumps and the smart guys don't pay them. His version of tax "reform" lowers the marginal rates further, lowers the corporate tax rate and, related, removes restrictions on the financialization of the economy that is the main engine of income inequality.
The astonishing part is the number of middle class working voters who bought into this scam. If the government has any role in closing the gap--and I don't know if it does or doesn't--these voters will have to learn to vote in their own self interest. I'm not hopeful. Anyone naive enough to buy the Trump line in the first place is not likely to be swayed.
The astonishing part is the number of middle class working voters who bought into this scam. If the government has any role in closing the gap--and I don't know if it does or doesn't--these voters will have to learn to vote in their own self interest. I'm not hopeful. Anyone naive enough to buy the Trump line in the first place is not likely to be swayed.
361
Unfortunately, a lot of what you say is true.
Smart guys may not pay taxes but good guys do.
It should be a point of pride that we pay our taxes.
A person used to say, "I am a tax-paying citizen" which meant he/she was a real American with rights.
Smart guys may not pay taxes but good guys do.
It should be a point of pride that we pay our taxes.
A person used to say, "I am a tax-paying citizen" which meant he/she was a real American with rights.
We DID vote in our own self-interest. Lower taxes lets ME keep more of MY money
Trump is famous for his projections. He projects on to others his own characteristics & actions! Therefore, Trump is the chump!
These low tax rates are immoral. We should all benefit from being a part of the same economy, not just the wealthy. The rich simply could not have attained wealth without the middle class. As they rip off their fellow Americans by not paying their fair share, they strip their fellow Americans the dignity of being American. Education and healthcare should not be on the chopping block. They should be seen as means to remedy capitalism's failures. But there is a powerful voting bloc in America which sees greed and selfishness as the meaning of being American. This has to change. We Americans, but most especially the Republicans, must change how we value and see our fellow Americans. He or she is not just a consumer whose only duty is to grow corporate America's bottom line.
This failure of vision strikes at the very diginity of being human. Inevitably and perversely, this constant refrain of tax cuts will strike at the health of the American economy as the middle class loses its ability to compete globally due to lack of affordable education and healthcare.
This failure of vision strikes at the very diginity of being human. Inevitably and perversely, this constant refrain of tax cuts will strike at the health of the American economy as the middle class loses its ability to compete globally due to lack of affordable education and healthcare.
331
"The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on the big fortune and in another tax which is far more effective-a graduated inheritance tax on big fortunes, properly safeguarded agains evasion, and increasing rapidly in amount with the size of the estate."
"Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism."
"And I have equally small use for the man, be he a judge on the bench or editor of a great paper, or wealthy and influential private citizen, who can see clearly enough and denounce the lawlessness of mob-violence, but whose eyes are closed so that he is blind when the question is one of corruption of business on a gigantic scale." Teddy Roosevelt
"Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism."
"And I have equally small use for the man, be he a judge on the bench or editor of a great paper, or wealthy and influential private citizen, who can see clearly enough and denounce the lawlessness of mob-violence, but whose eyes are closed so that he is blind when the question is one of corruption of business on a gigantic scale." Teddy Roosevelt
1
You are correct that the lack of affordable education and healthcare is a major issue, but the media never asks the right question......why has College administrators increased the cost of college at an exponential rate of increase, much high than CPI inflation. Why has Medical care costs gone up, this is not insurance...this is doctors & hospitals.
50% of health care costs are spent on 5% of individuals....what do we do about this.
50% of health care costs are spent on 5% of individuals....what do we do about this.
I'll stipulate that the highest incomes in this country are unnecessary and unseemly.
What, though, gives you or me or anyone else the right to take from those people what others have willingly given to them?
What, though, gives you or me or anyone else the right to take from those people what others have willingly given to them?
Of course, they will attempt to cut taxes for the highest earners. That's the only reason this Congress has to even address tax rates. In the meanwhile, although the taxes on lower income persons may not be affected much, the economics of all this mean that - overall - lower income persons will have even less in buying power, as prices on all commodities will increase. And this is the main reason that wealthy persons feel they need tax relief in the first place -- in order to keep their buying ability at least where it is now.
The economy, as a whole, will still suffer. All this is a direct consequence of inflation, which has never stopped growing since WWII. No matter what the Congress does, the situation will remain the same. Wealthy people will remain wealthy(er), and the lower income classes will, as usual, still suffer.
The economy, as a whole, will still suffer. All this is a direct consequence of inflation, which has never stopped growing since WWII. No matter what the Congress does, the situation will remain the same. Wealthy people will remain wealthy(er), and the lower income classes will, as usual, still suffer.
Inequality, greed and national debt were promoted by Ronald Reagan. While his Food and Nutrition Service classified ketchup as a vegetable for poor kids, the Reagans spent $200,000 to dine on new china and his tax cuts gave the wealthy another helping of caviar on their new yacht, all the while doing it on a national credit card piling up debt.
Instead of being a conservative, Reagan promoted conspicuous consumption. He removed solar panels from the roof of the White House and turned up the thermostat; instead of the humble sweater Jimmy Carter donned, the Reagans were always pompously dressed to the hilt, Hollywood-star style, with Nancy opulently adorned in fashion, furs and jewels.
The trajectory of inequality, greed and national debt has been upward ever since. Our American culture has been changed forever. The greedy can never have enough. Trump is the result of Reagan's ideology of trickle down economics which has turned our country into a land of wealthy overlords and poor peasants.
Since the government has reached the end of squeezing money out of we peasants to give to the wealthy, Trump and his Republican vassals now want to end Obamacare and take our very blood.
The Trumpican tax plan cannot get more money out of the 99%; we are barely surviving. Their plan will simply give piles of money to the wealthy by adding it to the national debt; one day to be to be paid by our children's children's children, the peasants of the future.
Instead of being a conservative, Reagan promoted conspicuous consumption. He removed solar panels from the roof of the White House and turned up the thermostat; instead of the humble sweater Jimmy Carter donned, the Reagans were always pompously dressed to the hilt, Hollywood-star style, with Nancy opulently adorned in fashion, furs and jewels.
The trajectory of inequality, greed and national debt has been upward ever since. Our American culture has been changed forever. The greedy can never have enough. Trump is the result of Reagan's ideology of trickle down economics which has turned our country into a land of wealthy overlords and poor peasants.
Since the government has reached the end of squeezing money out of we peasants to give to the wealthy, Trump and his Republican vassals now want to end Obamacare and take our very blood.
The Trumpican tax plan cannot get more money out of the 99%; we are barely surviving. Their plan will simply give piles of money to the wealthy by adding it to the national debt; one day to be to be paid by our children's children's children, the peasants of the future.
616
I never like Ronnie, not even when people loved him in the WH. I thought he was a big phony. Over the years as I see what his polices did to America, I liked him less and less. Now I'm beginning to hate him.
1
Thank you, jabarry, for interrupting the "Reagan is beloved" narrative to remind us how this all started. I will also add that homelessness was called an "emergency" when Reagan first came into office, and there was no such thing as "homeless families" before I started working in the first family shelter in Boston in 1981. That's because, as a country, we had a public policy commitment to providing decent housing. Now no one calls homeless families living in cars or hotels or shelters an "emergency." There is a catalogue of social horrors that we have come to accept as "just the way things are in America." But they haven't always been. We haven't always had a sleepy neurosurgeon in charge of HUD whose only qualification for that job seems to be that our literally-minded president can't think past his own most obvious free associations. Trump is the symptom of a long, Republican-led sickness that has made America's decline a chronic illness. Can we be well again? Do we want to be?
3
When I first went to work out of colle6ge in the 60's the gap between my salary and the CEO was reasonable compared to today but when I asked why the CEO was making $400,000 a year was told that because of the graduated tax rates it had to be that high to reflect what you "took home". When LBJ cut the top rate, I naively believed the company (DuPont by the way) would adjust their salary to insure their take home pay stayed the same. I was laughed at and once that gap grew the upper management never looked back and as the salaries were constantly escalated we were told it was needed to keep our talented leadership. Well today DuPont is a shell of it's what it was in the sixties due to this "great leadership". I had a great career but The last company I worked for the CEO arranged to sell the company six months before retirement, He walked away with $25M and in the ensuing merger many long time loyal employees lost their jobs. Although I loved my job, I decided to retire tired of seeing upper management getting wealthy at the because of the employee not because of their brilliance. I believe if we don't bring this gap between workers and management income back to a reasonable level we will see an ever greater revolt then that which resulted in the election of Trump. We can see the consequences if we look at what happened time and again in history
10
A high income tax rate would drive away entrepreneurs? Funny how that never bothered the founders of Apple, Walmart, Target, McDonald's, Cargill, Archer Daniels Midland, Microsoft, Starbucks,... or the great film and recording stars of yesteryear.
I also do not remember reading stories in history classes about the rich people of America going on strike or deporting en masse because income taxes were "too high".
Americans (Republican voters) have been brainwashed. One wonders what it will take to discredit "supply-side economics" as the cruel joke it is.
I also do not remember reading stories in history classes about the rich people of America going on strike or deporting en masse because income taxes were "too high".
Americans (Republican voters) have been brainwashed. One wonders what it will take to discredit "supply-side economics" as the cruel joke it is.
748
The is because many of these people took their compensation in company stock in ways that make it tax exempt until it is sold, generations later in many cases (such as the Walmart heirs).
You forget about the fact that rich people park their money overseas because of the high tax rates. You also forgot about all the loopholes Democrats threw into the tax code to benefit their favorite rich people. Supply side economics is the best solution to revitalizing the economy. Plase learn about it from reliable sources.
Reliable sources such as, umm, the NYT? As the GOP has implemented it, supply-side is corrupt. Through numerous Republican Presidents, it has failed to do what it was sold to do. Thirty-plus years of failure. When does it start working for 98% of us?
2
The good old days! Wealth should not be filthy, affluent should not become effluent, and there is no reason for Amazon or Google to become this big and powerful. While they think "they got it made" the society and the social fabric is being destroyed.
The solution is simple: Make money, pay progressive taxes, get incentives for investments and higher wages. This will stabilize the society, and with great hope will prove wrong the saying "Greed is good!" It is not!
The solution is simple: Make money, pay progressive taxes, get incentives for investments and higher wages. This will stabilize the society, and with great hope will prove wrong the saying "Greed is good!" It is not!
395
People need to remember that just because a "saying" seems to have currency, that it may be as phony as a three dollar bill.
The so expression"Greed is Good" is a line from the mouth of the Wall St. criminal and millionaire, Gordon Gecko,(a gecko is a kind of lizard, common in many hot and wet climates that eats bugs. It is often seen on walls and ceilings where it's prey can be easily caught) Gordon gecko was a character in the movie "Wall Street" who was meant to represent all that was wrong with the American system of wealth making through the destruction of the economy.
So when people claim that the saying is false, they are right. It was an invention by Hollywood writers.
The so expression"Greed is Good" is a line from the mouth of the Wall St. criminal and millionaire, Gordon Gecko,(a gecko is a kind of lizard, common in many hot and wet climates that eats bugs. It is often seen on walls and ceilings where it's prey can be easily caught) Gordon gecko was a character in the movie "Wall Street" who was meant to represent all that was wrong with the American system of wealth making through the destruction of the economy.
So when people claim that the saying is false, they are right. It was an invention by Hollywood writers.
Greed is infantile. Every kid knows that . . .
1
The U.S. should bring back 90% top income tax rates and institute a true wealth tax as described by Thomas Picketty. The lowering of tax rates on the wealthy has not only vastly increased inequality, it has given rise to a class of super-wealthy individuals who cannot perceive and hence do not care about their fellow citizens. Their primary goal is maintaining and increasing their own obscene wealth.
5
The focus should be on accumulated income and not annual income. A modest tax on accumulated income would lessen entrenched generational wealth that preserves the benefits of the economy to a small elite group. Instead of doing away with the estate tax apply it each year instead of only at death.
4
So you feel that people's money is never theirs, that it all belongs to the government, and the government can decide how much money someone can have? This has been tried many times before, with disastrous results. Go to Venezuela so you can see how this is working right now. But be sure and take you own toilet paper.
Sir, It is no different than the present system other than what is taxed. Why should labor (income) be taxed but not capital? Abolishing the death tax is a laudable goal is it not? Why should society be deprived of income while it waits for some uncertain date of death. Tax estates over 11 million (joint) each year at some acceptable rate.
A timely article when the Republican Party has permeated the myth since the Reagan era that paying taxes is unAmerican and that government is out to get you! They all can get a lesson from Mitt Romney's father!
438
Republicans sowed the "govt. bad" myth for decades because they wanted to take over from the Democrats.
You mean "perpetrated the myth", and indeed they have, with all the power of American advertising skill.
"A rising tide lifts all boats"
Brought to you by YOUR John F Kennedy.
Brought to you by YOUR John F Kennedy.
It matters little what the top rate is when nobody ever pays it. With the current tax code allowing exemptions for almost anything one can think of, what we really would like to know, is what the real rate of taxation on the wealthy is.
5
The author neglects to include the non-salary benefits that the 90% tax rate on high earners produced. These were only touched on in the 'Mad Man' TV show. Instead of cash, companies offered executives massive expenses accounts, paid for their cars and county club dues, etc.
10
Follow the money:
The added (or preserved) income resulting from lower taxes on the rich are most commonly invested in financial instruments. Moreover, these are financial instruments purchased in the secondary market. Not only is the money not used for job creation, corporate or government treasuries do not measurably benefit, so these bodies can not increase jobs, investment in production, etc. The "virtuous cycle" is short-circuited.
This affect extends far down the income ladder. As a retiree, any "windfall" from tax savings (e.g. the "making work pay" credit) goes first into savings. I suppose my bank reinvested the deposit in my CD in some economically useful fashion, but this is a slow and inefficient mechanism at best.
The added (or preserved) income resulting from lower taxes on the rich are most commonly invested in financial instruments. Moreover, these are financial instruments purchased in the secondary market. Not only is the money not used for job creation, corporate or government treasuries do not measurably benefit, so these bodies can not increase jobs, investment in production, etc. The "virtuous cycle" is short-circuited.
This affect extends far down the income ladder. As a retiree, any "windfall" from tax savings (e.g. the "making work pay" credit) goes first into savings. I suppose my bank reinvested the deposit in my CD in some economically useful fashion, but this is a slow and inefficient mechanism at best.
6
Mr. Leonhardt's economic analysis is quite true but limited. Don't forget the incredible pressure that communism across the ocean put on the U.S. elite. During the Cold War, Americans were as a nation trying to prove that capitalism could lead to better lives and a better country for the common worker. At the same time McCarthyism tried to root out the Communist threat in the U.S. Once Communism stopped being a serious threat to the American capitalist system, wealthy Americans felt no fear about increasing their personal wealth at the expense of average American families.
7
Two words explain a lot: Grover Norquist.
9
It seems there was a time when the wealthy recognized other goals and satisfactions in life than personal wealth. They wished to accomplish things and to help their society accomplish things and they sought recognition for their vision rather than for their net worth. What ever happened to "noblesse oblige"?
10
The myopia with people who clamor for higher tax rates is that they quote the super rich, like those who are in charge of or who founded Apple, Amazon, Google, Exxon Mobil, Walmart, Johnson & Johnson and JPMorgan Chase.
They ignore that they will also tax the merely successful, the professional class, and small business owners.
As a small business owner, my income varies wildly. During the worst days of Obama's economy, I made $13,000 for the year, but that doesn't count the enormous loss my company had that wiped me out. Under the growing economy of Trump, I will make well over a million this year. But it is a one-time event, a shot I have been working on for 25 years.
Why should I be taxed at the same rate as the super rich during a good year when I might make $400k or my once in a lifetime year where I make closer to $10M? I am the job creator, an entrepreneur, the kind of person every state economic development department wants.
Because of our high tax rate this year, my wife is demanding to quit working because "It isn't worth it!" Her marginal tax rate is just over 50%. Any tax rate that discourages people from working is too high.
When AMT was introduced, it was meant for about 150 households. Now it traps the professional and business classes. Let's re-write AMT for maybe the top 400 taxpayers, maybe top 1,000. Let the IRS send each one an AMT bill if they are in the top and leave the rest of us alone.
They ignore that they will also tax the merely successful, the professional class, and small business owners.
As a small business owner, my income varies wildly. During the worst days of Obama's economy, I made $13,000 for the year, but that doesn't count the enormous loss my company had that wiped me out. Under the growing economy of Trump, I will make well over a million this year. But it is a one-time event, a shot I have been working on for 25 years.
Why should I be taxed at the same rate as the super rich during a good year when I might make $400k or my once in a lifetime year where I make closer to $10M? I am the job creator, an entrepreneur, the kind of person every state economic development department wants.
Because of our high tax rate this year, my wife is demanding to quit working because "It isn't worth it!" Her marginal tax rate is just over 50%. Any tax rate that discourages people from working is too high.
When AMT was introduced, it was meant for about 150 households. Now it traps the professional and business classes. Let's re-write AMT for maybe the top 400 taxpayers, maybe top 1,000. Let the IRS send each one an AMT bill if they are in the top and leave the rest of us alone.
5
Who caused the economy that Obama had to deal with? Ppl like Trump. Be prepared to be broke again when trump get done
Many of those who are taxed as "small business owners" myself included, do not employ anyone except themselves. My income is not "trickling down" to anyone. In good years, I pay more, and in lean years, I pay less. In good years, I put more money into my retirement. What is the problem with that? If I am doing well, I am willing to pay more taxes to support schools, infrastructure, health care, scientific research, and cleaning up the environment. I'm pleased that you're having a "good year." I'm having a fair year. I don't think either has anything to do with Trump.
Sorry, sir but it wasn't Obama's economy ... it was W's.
The tax code really needs top tax brackets that kick in a levels much higher than the present $400K range. There is a big difference between the circumstances of two married doctors or a successful car dealer, and those of a corporate CEO or investment banker. A much higher rate starting at several million dollars, along with income averaging to protect the one time winner, is very much in order.
14
Who besides me remembers when our government could afford schools and roads and even polio inoculation for the public good? Our government ought not be struggling for money to do what the public needs. Create tax brackets for gazillionaires and capture some of that windfall that only they have been experiencing.
17
Our government is not struggling for money. We bring in ever increasing amounts of money every year. The problem is that government used to be somewhat efficient, but now it wastes so much money on ever increasing government programs that have no incentive to spend wisely. We need to eliminate corruption, not feed it.
I think that George was of the opinion that the company served multiple stakeholders, ie employees as well, and not just stockholders.
High tax rates served as a competitive incentive as well. You had to innovate to be competitive to increase profits. Planned obsolescence and marketing were not enough to insure a flow of customers, you had to constantly improve. Now we're tied to algorithms responding to quarterly reports that improve upon record high performance shifting capital to better performers, and purely short-term profit-based performance rewards.
High tax rates served as a competitive incentive as well. You had to innovate to be competitive to increase profits. Planned obsolescence and marketing were not enough to insure a flow of customers, you had to constantly improve. Now we're tied to algorithms responding to quarterly reports that improve upon record high performance shifting capital to better performers, and purely short-term profit-based performance rewards.
8
Thank you David - you are the first main stream columnist I've seen that explicitly argued the case for high marginal taxes and the history that bears it out.
To go even further, the money that the execs didn't take went into investing in plant and labor, and if they still demanded higher pay the treasury, it benefited the treasury as well as their egos. Execs and companies are flush with money now and I don't see it trickling down, so how will them even more make any difference? It will just go into financial instruments that will make them even more money with money, beyond the dreams of Midas.
To go even further, the money that the execs didn't take went into investing in plant and labor, and if they still demanded higher pay the treasury, it benefited the treasury as well as their egos. Execs and companies are flush with money now and I don't see it trickling down, so how will them even more make any difference? It will just go into financial instruments that will make them even more money with money, beyond the dreams of Midas.
13
Money begets power and power begets money in a loop that runs to whatever level of wealth concentration allowed by the lack of negative feedback imposed by progressive taxation of income and wealth.
8
Tying this article to Mr. Krugman's article,WHAT'S WRONG WITH OUR CITIES?;
were there some George Romneys' in developer world perhaps we'd have the right balance in housing for all economic stratas as well as cities with character and scale to enhance the quality of life of residents.
Instead, they say Manhatten looks like a pin cushion from the air, with little sun and sea breeze. Many are coming to LA for sun and breeze- at least until it too becomes another inhumane pin cushion.
were there some George Romneys' in developer world perhaps we'd have the right balance in housing for all economic stratas as well as cities with character and scale to enhance the quality of life of residents.
Instead, they say Manhatten looks like a pin cushion from the air, with little sun and sea breeze. Many are coming to LA for sun and breeze- at least until it too becomes another inhumane pin cushion.
A disaster is in the making in Manhattan, where the recent wave of residential construction along the Hudson River was built without any planning of street level and underground movement of people whatsoever. It is as clueless in its own way as the development of Houston.
1
I agree that raising the tax rates might help. However there are other steps that should be taken.
As the article says, "American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month."
I would make it a requirement that the CEOs cannot more than 20 times the average worker. If a CEO makes more than the corporation and the CEOs personal rate should be at 90 percent.
The other step would be to require that a all workers get at least the same proportional benefits as the CEO, and that the CEOs annual increase must less than or not more than the average salaries worker. This would mean if a CEO gets a bonus 3 times his salary, so do all the other workers. It would also mean that is CEO got a 20 percent increase is salary, so would all the workers.
These steps would not solve the problem immediately, but they would be a good start.
As the article says, "American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month."
I would make it a requirement that the CEOs cannot more than 20 times the average worker. If a CEO makes more than the corporation and the CEOs personal rate should be at 90 percent.
The other step would be to require that a all workers get at least the same proportional benefits as the CEO, and that the CEOs annual increase must less than or not more than the average salaries worker. This would mean if a CEO gets a bonus 3 times his salary, so do all the other workers. It would also mean that is CEO got a 20 percent increase is salary, so would all the workers.
These steps would not solve the problem immediately, but they would be a good start.
11
I agree. And --this is not mine; I got it from my husband-- is it reasonable that an executive should be paid in ONE year, enough to make his or her family rich down through the generations? One year--and you can know that your great-great grandchildren will never have to work. Is this America?
David, you are missing some pieces of the bigger picture. The rates you cited were for earned income. Capital gains and related income like "carried interest" are taxed at significantly lower rates. The economy, i.e., the majority of the population, hasn't seen the benefits of the growing concentration of wealth because that wealth is largely derived from financial activities, making money from money or simulated money in the form of derivatives and other "financial instruments" which are given favorable tax status.
George Romney got his income by running a company that built things which required employing people. His son acquired his wealth by manipulating the finances of companies, gaining wealth (taxed at much lower rates) while often causing unemployment. Two allegedly decent people; very different attitudes about how to make money.
Until we start dealing with the imbalances caused by a rampant, unbridled financial sector and how we define and classify what is taxable, the nominal rates have little significance
George Romney got his income by running a company that built things which required employing people. His son acquired his wealth by manipulating the finances of companies, gaining wealth (taxed at much lower rates) while often causing unemployment. Two allegedly decent people; very different attitudes about how to make money.
Until we start dealing with the imbalances caused by a rampant, unbridled financial sector and how we define and classify what is taxable, the nominal rates have little significance
40
Napoleon Hill - The Master Key to Riches, 1975.
If overpaid corporate executives assimilated and practiced what Hill proposes, we'd be a much improved society. MBA programs apparently also do not incorporate his philosophy. It's neither a difficult, nor a long, read. It's not a quick fix, it's not a one stop fix all, but man, much of what he says would work today.
If overpaid corporate executives assimilated and practiced what Hill proposes, we'd be a much improved society. MBA programs apparently also do not incorporate his philosophy. It's neither a difficult, nor a long, read. It's not a quick fix, it's not a one stop fix all, but man, much of what he says would work today.
2
If you believed that a person's worth could be measured by their pocketbook, naturally you would favor letting these most worthy people get even more wealthy. And that is the essence of the Trump brand: Advertise your worth by wearing expensive clothing, belonging to expensive clubs, live in expensive condos. This ruling family believes in the inherent value of wealth and the wealthy. We can never expect any policies from this administration that are not in line with this empty world view.
14
And think who has made the most impact on your life? Picture a strike by CEO's--and then a strike by trash collectors, health aides, or mail carriers.
1
Trump's wealth is as superficial as he is. He is really in hock to his gills.
It's not just how much money (=power) people make or have, but what they do with it should be considered. If spent on extra mansions or yachts that sit empty it probably does not help the country as much as if invested in new enterprises that benefit more people (and probably yield more profits ... and tax payments.)
2
For the top 1%, about 53% of its income is investment income and business income (which is also from a type of investment). That's a strong indication that most of their wealth is investment capital - not tied up in luxury assets. (This should surprise no one.)
It's difficult to find specific stats (even after a lot of googling), but if they get over 50% of their income from investment, it's highly likely that a significant portion of their income goes to increase their investments.
It's difficult to find specific stats (even after a lot of googling), but if they get over 50% of their income from investment, it's highly likely that a significant portion of their income goes to increase their investments.
The other half of the question is the fact that the federal government has borrowed trillions of dollars to offset the revenue shortfall over the last 35 years. Jimmy Carter's federal debt was 900 billion. Now it's 20 trillion. In short, tax cuts were subsidized with borrowed money, compounding the problem. They are rich people's free lunch. The top bracket taxpayers owe the rest of us trillions of dollars, and in a particularly ugly twist during Reagan's regime surplus social security funds were also borrowed to offset the shortfall--at least 2.7 trillion of the debt is owed to SS. It's time for the plutocracy to repay their windfall.
20
After the Great Depression, the big guys realized they needed to exponentially give back.
In the '70s, efficiency experts on behalf of shareholders pushed companies to begin firing to bring up share value.
Not only did Reagan embrace the go-go bubble blowing, any attempts at conservation and environmental protection Nixon instated were deemed non-productive. George Bush Sr. saw through these vapid concepts and deemed them voo-doo until he was tapped as V.P. benefiting the Carlyle Group among many of his private business interests.
Today we suffer from The Great Recession where mortgage voo-doo in bundling nearly brought us to the brink of collapse (paraphrasing George Bush Jr. and Paulson in December 2008).
We will continue to suffer if democracy and human rights are considered a commodity to be controlled in the name of capitalistic gain through mass consumerism.
The solution lies somewhere in Paul Mason's studies.
In the '70s, efficiency experts on behalf of shareholders pushed companies to begin firing to bring up share value.
Not only did Reagan embrace the go-go bubble blowing, any attempts at conservation and environmental protection Nixon instated were deemed non-productive. George Bush Sr. saw through these vapid concepts and deemed them voo-doo until he was tapped as V.P. benefiting the Carlyle Group among many of his private business interests.
Today we suffer from The Great Recession where mortgage voo-doo in bundling nearly brought us to the brink of collapse (paraphrasing George Bush Jr. and Paulson in December 2008).
We will continue to suffer if democracy and human rights are considered a commodity to be controlled in the name of capitalistic gain through mass consumerism.
The solution lies somewhere in Paul Mason's studies.
5
This article addresses the reality of economic growth and wealth distribution in the US. Trump and Republicans prefer to continue to live in la-la land where debunked ideas like trickle-down economics work--Oh yeah----and we would have plenty of work for all "Americans" if we just get rid of the dreamers and all other immigrants.
11
It looks as though we humans, when given a chance to become rich, will take it...without a consideration to it's potential, or real, social impact. The problem is avarice, the worst 'sin' we seem to court day in and day out, all to satisfy a jealous god: Greed. That is why we need to regulate ourselves via a trusted instrument, government, it's function being that of serving its community, and guaranteeing societal peace via politics, the art of the possible. Trouble is, we are used to seeing so much 'politicking' that we lost sight of the wonderful potential to redeem ourselves, to lose being owned by 'things', and to free our spirit and feelings from vulgar enrichment. Real wealth, once our basic needs are met, does require we avoid being enslaved by our possessions. Life is too short to go on counting money; we can't take it beyond our grave anyway. Especially if we made it on the backs of others (and capitalism, where capital always trumps labor, is suspect).
5
"A trusted instrument, government..."? That's why the framers of our Constitution gave the federal government limited powers. Our current situation is the result of the fact that the federal government has gone way beyond those limited powers. We need to deal with that first by getting the government back under control of the Constitution. We also need to disabuse politicians of the notion that every time they overspend, they can simply raid the pockets of Americans by raising taxes (legitimized theft).
The question isn't whether there's any justification for people being allowed to keep the wealth they've earned, it's whether there's any moral, philosophical, or economic justification for governments to seize anyone's wealth. There's also the question as to whether there's any moral or philosophical justification for governments to try to mould the shape of society, to, for example, try to impose "a culture of financial restraint" on society.
The answer to both questions is self-evidently "no," mostly because no government, at least in modern times, has exhibited the wisdom necessary to wield that kind of power.
Taxation is a pragmatic necessity, but that's no excuse for deluding ourselves--or allowing governments to delude us--that there's the slightest bit of moral or philosophical justification for it. For people forced to pay taxes, especially to governments the actions of which they do not approve and which they do not respect, is basically theft, even though it may be necessary theft. This is compounded by the injustice of "taxation inequality," of forcing some to pay more than others for the exact same government they have in common, and further egregiously compounded by allowing some to pay nothing at all and still receive the benefits for which others are forced to pay. (And don't even try to justify taxation as something "we" through our "representatives" have agreed to pay. Is anyone naive enough to still believe that Congress represents our interests?)
The answer to both questions is self-evidently "no," mostly because no government, at least in modern times, has exhibited the wisdom necessary to wield that kind of power.
Taxation is a pragmatic necessity, but that's no excuse for deluding ourselves--or allowing governments to delude us--that there's the slightest bit of moral or philosophical justification for it. For people forced to pay taxes, especially to governments the actions of which they do not approve and which they do not respect, is basically theft, even though it may be necessary theft. This is compounded by the injustice of "taxation inequality," of forcing some to pay more than others for the exact same government they have in common, and further egregiously compounded by allowing some to pay nothing at all and still receive the benefits for which others are forced to pay. (And don't even try to justify taxation as something "we" through our "representatives" have agreed to pay. Is anyone naive enough to still believe that Congress represents our interests?)
2
Government is just of the people, by the people. So if you don't believe government has the wisdom to use the money properly, you shouldn't believe an individual would possess the wisdom to do better.
17
You admit that some sort of taxation is "necessary theft." Why is it theft to ask people to pay for the services that they receive... an educated workforce paid for with public schools, plenty of aid to private schools, federal grants and loans for colleges, roads and rail and air transport (controllers) publically funded. Government funded research that has seeded or laid the foundation for so called entrepreneurial activity. They benefit from the labor of the people they employ. The list goes on and on. To pretend that these million and billionaires earned their money on their own is nonsense. A society builds wealth somehow a few people benefit by acquiring way more of that wealth than their contribution warrants. Just because they get away with it doesn;;t mean that it is "theirs." They are stealing from the public coffers and their employees bank accounts. That is the real theft.
563
The problem with your statement is that the money belongs to the individual, not the government. The individual is going to use money for his benefit. We cannot say that the government will use the money for our benefit.
The phenomenon is real, but the implications are broader than income inequality. Combined with incentive stock options, drastically reduced marginal rates have created an incentive for both excessive risk-taking and short-term business planning by corporate managers. This is one of the most important factors in reduced productivity.
6
The author and the the commenters fail to mention that there is also empirical research that strongly suggests the rise in income inequality is, at least in part, the result of changes in the tax code that strongly favor very high earners.
It is certainly true that when top marginal rates were higher, there was much more (legal) tax avoidance by high earners. It is also true that a higher proportion of income tax revenue was paid by very high earners.
The author mentions -- and provides a link -- to the fact that "there is no evidence that a modestly higher tax rate would hurt the economy." In particular, a higher marginal tax rate would certainly not have deterred Sergey Brin and Larry Page from founding Google while they were undergraduates at Stanford ... and a lower marginal tax rate would not encourage their counterparts to found the successor to Google.
It is certainly true that when top marginal rates were higher, there was much more (legal) tax avoidance by high earners. It is also true that a higher proportion of income tax revenue was paid by very high earners.
The author mentions -- and provides a link -- to the fact that "there is no evidence that a modestly higher tax rate would hurt the economy." In particular, a higher marginal tax rate would certainly not have deterred Sergey Brin and Larry Page from founding Google while they were undergraduates at Stanford ... and a lower marginal tax rate would not encourage their counterparts to found the successor to Google.
4
Perhaps infrastructure is the key here... surely if all the additional taxes collected from the wealthy were earmarked for repair of our infrastructure, then the idea would be more palatable and all of us would benefit.
Pie in the sky I know.....
Pie in the sky I know.....
8
It's not exactly a Christian (i.e., Bible-based) principle, but I was always taught to "take no more than you need." It has always been my belief, a personal economic theory from a non-economist I've dubbed the 5M theory of economic growth - "money that moves makes more money." It doesn't seem that that could be literally, fiscally true...there are only so many dollars to go around. But I believe that the more money changes hands - from the owner to the manager to the worker to the neighborhood store owner to the wholesaler to the ... the more money everyone has to spend to buy to stimulate others with good reasons to spend to buy to invest etc.
When the mega-rich just get richer, it means the money that should be "moving around" with shared impact on more people, just sits collecting dust. At best it gets invested in stocks which may help companies grow and hire and make more stuff, but if the end result is simply extraordinary growth in the value of stocks the already-wealthy stockholders grow into the mega-mega-wealthy with no corresponding "sharing" of the profits with workers, who stagnate and pay the price over an entire lifetime of labor.
Then to compound matters, to get and hold even more wealth, the mega-mega-wealthy seek to cut Medicare, Social Security, and any other program that serves to give the working class any comfort in their retirement years.
Unbridled greed is destroying this country! And, perversely, some claim their greed is "righteous"!
When the mega-rich just get richer, it means the money that should be "moving around" with shared impact on more people, just sits collecting dust. At best it gets invested in stocks which may help companies grow and hire and make more stuff, but if the end result is simply extraordinary growth in the value of stocks the already-wealthy stockholders grow into the mega-mega-wealthy with no corresponding "sharing" of the profits with workers, who stagnate and pay the price over an entire lifetime of labor.
Then to compound matters, to get and hold even more wealth, the mega-mega-wealthy seek to cut Medicare, Social Security, and any other program that serves to give the working class any comfort in their retirement years.
Unbridled greed is destroying this country! And, perversely, some claim their greed is "righteous"!
18
"Unleashing entrepeneurial energy" is not sufficient to boost the overall economy. We have plenty of energy in Silicon Valley but it's more of a free-for-all with white male VCs in an insular boys' club, grabbing at the next shiny object.
I would like to see more solid businesses that have a long-term growth strategy, which is the opposite of the get-rich-quick mentality that prevails today.
I would like to see more solid businesses that have a long-term growth strategy, which is the opposite of the get-rich-quick mentality that prevails today.
13
Unfortunately, I don't remember the source of this story: A parent is explaining trickle down economics to his child. "First, we give all the money to the rich." The child then asks, "And then what?" The parent replies, "That's it."
To think there is any rationale for 'tax reform' other than simple pillaging by the rich is folly. I remember reading in the '70s that it was dawning on business community that the investment that offered the best ROI was to buy a legislator. All we have to do is look at the net worth of current Administration members and the Congress to see the wisdom of that idea.
To think there is any rationale for 'tax reform' other than simple pillaging by the rich is folly. I remember reading in the '70s that it was dawning on business community that the investment that offered the best ROI was to buy a legislator. All we have to do is look at the net worth of current Administration members and the Congress to see the wisdom of that idea.
34
VooDoo economics failed dramatically nearly tipping the nation into a second great depression. What literally happened was that tax cuts made it worthwhile to pillage workers' productivity gains and to allow the nation's social and physical infrastructure to crumble. As the American Indians might say, we ate our seed corn.
46
The NY Times this weekend has had some great pieces on income inequality, the structural forces behind it and how we should try to craft policy as a response. (Neil Irwin's and Sendhil Mullainathan most recent pieces come to mind.) Also, Ross Douthat's latest column about the Jeff Flake's and the rest of small government Republican's wildly irrelevant policy prescriptions. Now we have the tax component which reflects a sea change in our country's values over the last 70 years. (Taxes are after all a statement of values as well as a way to fund the government.) I just hope these conversations can work there way up to congress having a debate about them. We can always hope!
15
What we're missing is the credible fear of a Russian-style Communist Revolution in the U.S. The wealthy were actively afraid of too much inequality, lest it spark something similar in the U.S. I'm not a fan of Communism or revolutions, but losing the threat of them has led inevitably to this century's Gilded Age excess.
When did the tycoons of the 1800's stop building their over-the-top summer palaces in Newport, Rhode Island and start thinking like George Romney? 1917, with the murder of the Romanovs, the rise of Communism, and the advent of the income tax. When the USSR fell in the 1980's, it removed the last credible threat of actual revolution. And here we are...
When did the tycoons of the 1800's stop building their over-the-top summer palaces in Newport, Rhode Island and start thinking like George Romney? 1917, with the murder of the Romanovs, the rise of Communism, and the advent of the income tax. When the USSR fell in the 1980's, it removed the last credible threat of actual revolution. And here we are...
29
The Republican Parry has long been, and continues to be, the party of selfishness and greed. Take away health care, destroy the unions, hire lots of part-timers, object to overtime, weaken medicare, medicaid, and eliminate regulations. Some policy, some party!
29
But that was George Romney's choice. He could just have taken that bonus money and donate it to any charity he wanted to.
And of course higher taxes hurt the economy, Obama even admitted it when he pushed for higher capital gains taxes. We also see the very slow economic growth after Obama and the Democrats raised taxes on the rich.
And bush had one of the weakest economic records because of the attack on 9/11. Or do you deny that the attack caused any economic damage?
And of course higher taxes hurt the economy, Obama even admitted it when he pushed for higher capital gains taxes. We also see the very slow economic growth after Obama and the Democrats raised taxes on the rich.
And bush had one of the weakest economic records because of the attack on 9/11. Or do you deny that the attack caused any economic damage?
Your explanations are facile and not particularly relevant or proof that lower top tax rates are better for all of America than higher top rates are. It's not just about what is good for 1 or 2% of the entire population. There is no evidence rich people drive the economy for all.
14
Obama tax hikes on the rich didn't hurt either the economy or the rich.
http://www.chicagotribune.com/business/ct-obama-tax-hikes-study-20161104...
You can put "of course" in front of statements, but doing that doesn't make it true.
http://www.chicagotribune.com/business/ct-obama-tax-hikes-study-20161104...
You can put "of course" in front of statements, but doing that doesn't make it true.
Obama and the democrats raised taxes? Thats a good one. No they were restoring taxes that were supposed to be reset automatically, in fact they did not let them reset back to where they were. Remember that war in Iraq we paid for with the credit card? Go take a look at the amount of the military budget which is being used to pay off the war debt. So, yeah they did not raise taxes, they let the tax cuts expire.
2
Way to go David! Keep catapulting stones with your slingshot. However I fear Goliath has you vastly outgunned and no miracle for the benefit of the common man is forthcoming.
Right wing plutocrats in this country are already too strong from years of wealth acquisition to be held back from manipulating our political system to assure the government won't interfere with their plunder.
Our current president was elected while mouthing a populist message, but now is pushing an agenda that could have been (maybe was) written by the brothers Koch.
Right wing plutocrats in this country are already too strong from years of wealth acquisition to be held back from manipulating our political system to assure the government won't interfere with their plunder.
Our current president was elected while mouthing a populist message, but now is pushing an agenda that could have been (maybe was) written by the brothers Koch.
15
You bet Trump's agenda was written by the Kochs and their allies (one hesitates to call them "friends", men like them have only transactional relationships). Trump never had an agenda of his own and will do whatever it takes to stay in power and get funding for his next election and his "brand", which is flowering under the patronage system in place.
2
David is absolutely spot on. What he fails to mention is that persistent and rising inequality threatens the very foundation of our democracy. Does anybody seriously believe that there is no connection between the rising riches of the 1% and voter suppression, the opioids epidemic, and the financial collapse of 2008? We need higher taxes on the rich, but more than that we must have inheritance taxes in the 90% range for all inheritances over $1Million in order to break up these wealthy dynasties that currently control our government. Anarchy is really ugly, so let's head it off now.
25
"The lure of great wealth would inspire business leaders to work harder and smarter, and the economy would flourish...
..The first half of that theory may well have come true... Amazon, Apple, Facebook and Google are examples.."
I worked through the 60's, 70's, and 80's. There were great companies back then too. AT&T(Ma Bell) with Bell Labs and technological innovation, IBM (Big Blue), GE, Kodak, Xerox, etc. All doing well and treating their employees like partners in their emterprise. Decent wages, and excellent benefits.
As I look back it seems to me that the rationale for lowering the top tax rates was nothing more than a "ruse" to increase the wealth of the top tier.
And it was successful. And the Republican Congress has got their eyes set on doing it again.
..The first half of that theory may well have come true... Amazon, Apple, Facebook and Google are examples.."
I worked through the 60's, 70's, and 80's. There were great companies back then too. AT&T(Ma Bell) with Bell Labs and technological innovation, IBM (Big Blue), GE, Kodak, Xerox, etc. All doing well and treating their employees like partners in their emterprise. Decent wages, and excellent benefits.
As I look back it seems to me that the rationale for lowering the top tax rates was nothing more than a "ruse" to increase the wealth of the top tier.
And it was successful. And the Republican Congress has got their eyes set on doing it again.
16
The richest of ironies here is that many of those struggling financially and professionally voted for a man who has shown just how little he understands or cares about their plight. The sound bite "...bring back coal..." displays a crass, simplistic, willfully insensitive ignorance of where the problem lies. Job skill creation, not unlike education and the arts, is not self supporting. Money should be directed to re-equipping those disenfranchised from the work force with skills needed in today's marketplace. And, to be fair, as unpleasant as the idea may be, those without work need to look hard at geographic considerations. Where in the U.S., with these newly acquired skills, is one more likely to get a job? A move might indeed be required. People should be paying attention to Mike Rowe who has a fine grasp of the nuances of the unemployment problem. And, no, another tax cut for the top 5% does not have a trickle down effect. It only exacerbates the glaring divisions in this country.
10
This country was founded on entrepreneurship and capitalism; let it continue. Socialism and excessive taxation stunts growth and creativity besides creating negativity and depression for some. Let the freeloaders earn their keep in this country; one half is continually upholding the second half who do not contribute. If people would become more ambitious, curious, educated and work harder, they may reap the benefits they complain about by the wealthy. It is America; you can become what you want and earn much as you want; and that is why I will never vote for a socialistic democrat.
This is such a canard, that 50% are freeloaders. Surely you are aware that includes retired folks, college students, caregivers, disabled, working poor etc? The percent that are "freeloading"- by which I assume you mean able bodied sitting around collecting a check for nothing- is actually vanishingly small. And since Clintons days collecting straight welfare checks is time limited.
The idea that the very rich are victimized by assuming the majority of the financial burdens and that someone caring for an elderly relative with dementia or working 40 hours as a janitor or temporarily using the social safety net due to major medical issues, divorce or other life upheavals working class folks can't easily weather is repellant. And the point of this article is that there have been times where the rich recognized that, as well as the advantages many of them started from giving them several rungs up the ladder. From whom much is given, much is required.......
The idea that the very rich are victimized by assuming the majority of the financial burdens and that someone caring for an elderly relative with dementia or working 40 hours as a janitor or temporarily using the social safety net due to major medical issues, divorce or other life upheavals working class folks can't easily weather is repellant. And the point of this article is that there have been times where the rich recognized that, as well as the advantages many of them started from giving them several rungs up the ladder. From whom much is given, much is required.......
Stop drinking the kool aid! But, in your case, that advice is probably way too late. Capitalism is not God; it needs to be tempered by a strong, effective government that works for the welfare of the every citizen, including the half that you malign as not contributing. They are contributing; they're the ones who juggle 2 or 3 jobs paying minimum wage (or slightly higher), raise their kids, pay their bills and try to keep their heads above water. Helping them to a decent shot at a middle class life is not a threat to "entrepreneurship and capitalism."
In a word, balderdash! Go live on the streets for a month and get back to us about the ease with which you pull yourself up by the bootstraps.
Cutthroat capitalism, income inequality and low taxes go together like Trump and Russian oligarchs.
Export jobs to countries without unions, and import products to those who still have money to spend, and your investors chortle with glee.
So what if Nike destroys the American shoe market? They have billionaires, and the poor have...?
The change in America has turned this 70 year old into a Bernie socialist. No sense trying to reform the tax code, the rich and greedy own too much and too many politicians, and are more and more resembling the Russian oligarchs. A national disaster, like a decade long recession, might change the thinking of the populace, but I am resigned to knowing I will live the rest of my life in a falling empire, as the greedy rich destroy the American spirit.
Hugh Massengill, Eugene Oregon
Export jobs to countries without unions, and import products to those who still have money to spend, and your investors chortle with glee.
So what if Nike destroys the American shoe market? They have billionaires, and the poor have...?
The change in America has turned this 70 year old into a Bernie socialist. No sense trying to reform the tax code, the rich and greedy own too much and too many politicians, and are more and more resembling the Russian oligarchs. A national disaster, like a decade long recession, might change the thinking of the populace, but I am resigned to knowing I will live the rest of my life in a falling empire, as the greedy rich destroy the American spirit.
Hugh Massengill, Eugene Oregon
15
That was when America was great. Say, shouldn't it make America great again to repeat this tax code? Or was it when Americans walked or rode horses back when there was no income tax at all? What makes this or any country great (again)? Low taxes? Effective government with taxes as necessary? Social Security or Medicare? Or neither?
In ancient Rome, Senator Cicero's brother advised him to promise all the people want to hear, but not so much that they might think it is really not achievable. We heard every promise to every special interest group, and enough heard what they wanted we wound up with what few want to hear or see. Where is Cicero's brother when we need him? Sigh... when Rome was great.
In ancient Rome, Senator Cicero's brother advised him to promise all the people want to hear, but not so much that they might think it is really not achievable. We heard every promise to every special interest group, and enough heard what they wanted we wound up with what few want to hear or see. Where is Cicero's brother when we need him? Sigh... when Rome was great.
2
Right wing talk has the average Trump voter convinced that democrats want to raise their taxes and that this is about makers and takers.
They have no idea they support elected officials and policies that are against their own self interests.
I expect no self realization from these folks, only more anger.
They have no idea they support elected officials and policies that are against their own self interests.
I expect no self realization from these folks, only more anger.
11
onerous top rates have been tried here, and in britain, to no good effect. the idea that burdens on creators can be ratcheted up endlessly without impact is as silly as it is false. in all likelihood, the revenue maximization point for tax revenue involves lower overall rates. and if writers like this could stop worrying about the wealthy, who are going to be wealthy whether he likes it or not, and start worrying about an actual productive result, we might get somewhere. vilifying the wealthy is as silly and false as a narrative could be. it achieves nothing for the working class.
Where, oh where, do you get the idea that the rich are "creators"? Really, letting your money work for you is not "creative". They are a bunch of rentiers who flatter themselves that they are better than that.
What all of these discussions about "income" taxes leave out is that the rich make their money from capital gains.
$2 million per year takes 500 years to make $1 billion. But we have a bunch of people that have tens of billions of dollars. The biggest cause of wealth inequality is capital gains.
Most capital gains are taxed at 15%. This is why Warren Buffett pays a lower rate than his secretary. This is the real scandal in tax rates.
We say we value work in this country, but we tax work at more than double the rate we tax owning the machinery that replaces workers.
75% of all stock is owned by the global 1%. They already have half of all wealth.
The tax "reform" that Republicans and centrist Democrats want to pass, would not fix this problem, but make it worse. Many want zero taxes on capital gains. This would cut many billionaire taxes to zero.
This is all based on Supply Side Economics, which is a giant hoax. Investment decisions are not made based on tax cuts. They are made based on demand for a product, and the ability to meet that demand. There is a nearly infinite supply of excrement, but there is no market for it, because there is no demand. If you could create demand for excrement investment money would be found.
Demand is a desire and ability to buy something. By shifting wealth from workers/consumers we are crushing demand. That is why the economy doesn't grow.
Tax capital to invest in humans.
$2 million per year takes 500 years to make $1 billion. But we have a bunch of people that have tens of billions of dollars. The biggest cause of wealth inequality is capital gains.
Most capital gains are taxed at 15%. This is why Warren Buffett pays a lower rate than his secretary. This is the real scandal in tax rates.
We say we value work in this country, but we tax work at more than double the rate we tax owning the machinery that replaces workers.
75% of all stock is owned by the global 1%. They already have half of all wealth.
The tax "reform" that Republicans and centrist Democrats want to pass, would not fix this problem, but make it worse. Many want zero taxes on capital gains. This would cut many billionaire taxes to zero.
This is all based on Supply Side Economics, which is a giant hoax. Investment decisions are not made based on tax cuts. They are made based on demand for a product, and the ability to meet that demand. There is a nearly infinite supply of excrement, but there is no market for it, because there is no demand. If you could create demand for excrement investment money would be found.
Demand is a desire and ability to buy something. By shifting wealth from workers/consumers we are crushing demand. That is why the economy doesn't grow.
Tax capital to invest in humans.
6
It is all so self-defeating. The rich hoarding their money, when Jimmy down the road has an idea for a doohickey that would make him a million and a backer 10.
The divisiveness that has marked our era, the paid-media outlets that stoke it, and the culture that rewards it, are a fatal hole in our society.
If we're not in it together, then we're not a 'we' at all.
The divisiveness that has marked our era, the paid-media outlets that stoke it, and the culture that rewards it, are a fatal hole in our society.
If we're not in it together, then we're not a 'we' at all.
3
It's no use longing for the good old days when rationality sometimes triumphed.
It's been all downhill since Reagan sold the snake oil.
Greed is good, and you better not get on my way. A knife in the back with a smile.
It's been all downhill since Reagan sold the snake oil.
Greed is good, and you better not get on my way. A knife in the back with a smile.
5
It's as simple as this: Not paying taxes makes me smart!
it has been proven (most recently and explicilty) by the tax cuts enacted by W (7 - 10 years' worth of data on it's efficacy) to be a bust for broad economic stimulation (it did stimulate the economic benefits to those at the top).
we need to significantly raise the marginal rate. 90 "may" be too high (but why? it seems to have worked well before), so lets start with 65/75 pct. absolutely no reason a CEO (glorified mgr who did not found the company in most cases) to earn 200/500 times the lowest paid in the company. you will ALWAYS be able to find a bright talented CEO at a lower salary point.... as long as insanely high incone is taxed aggessively.
for those of you who may "lament" paying more taxes, i have a suggestion for you: earn less. the less you earn, the less you pay...viola! problem solved!
we need to significantly raise the marginal rate. 90 "may" be too high (but why? it seems to have worked well before), so lets start with 65/75 pct. absolutely no reason a CEO (glorified mgr who did not found the company in most cases) to earn 200/500 times the lowest paid in the company. you will ALWAYS be able to find a bright talented CEO at a lower salary point.... as long as insanely high incone is taxed aggessively.
for those of you who may "lament" paying more taxes, i have a suggestion for you: earn less. the less you earn, the less you pay...viola! problem solved!
3
I would add "when you earn less, put that money towards raises for your employees. More loyal and productive employees who can afford your stuff, economy reaping benefits.
Part of the problem I've discovered is that all too many people are uneducated about how taxes work. I was recently on a comment thread where half the people didn't realize the top marginal rate applied to only that amount ABOVE the last rate. They seriously thought you would earn less and less. .....and were lecturing those of us trying to clue them in.
Part of the problem I've discovered is that all too many people are uneducated about how taxes work. I was recently on a comment thread where half the people didn't realize the top marginal rate applied to only that amount ABOVE the last rate. They seriously thought you would earn less and less. .....and were lecturing those of us trying to clue them in.
Let's see if we can understand why income & wealth inequality, is bad for the economy. Economists have a concept called the velocity of money. It is the frequency, how often, that money changes hands in domestic commerce. I think of it as how useful the money is, how it facilitates commerce.
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also, if Scrooge loses a financial bet to Daddy Warbucks, & the Billion moves from Scrooge's basement to Daddy's, that is a change, but the velocity does not change because it is not a useful change. It doesn't affect commerce.
Money going to the Rich has a lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What's a guy or gal who already has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going to use it to speculate.There is a correlation between inequality & financial speculation. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746 Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't a good thing.
Since 2007, the velocity of money has plunged. https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-dec...
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also, if Scrooge loses a financial bet to Daddy Warbucks, & the Billion moves from Scrooge's basement to Daddy's, that is a change, but the velocity does not change because it is not a useful change. It doesn't affect commerce.
Money going to the Rich has a lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What's a guy or gal who already has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going to use it to speculate.There is a correlation between inequality & financial speculation. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746 Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't a good thing.
Since 2007, the velocity of money has plunged. https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-dec...
10
Nobody gives up power; money is power. (G. Romney aside). Our ruling class will do everything is can to keep what it has and to get more. Do we let them?
3
Also, it sounds like Romney believed in moderating his executive income as a matter of ethics. It's disingenuous of the author to highlight Romney and then argue the tax code should discourage high executive pay by making it not worth their while. (If the author thinks Romney was not honest about his motivation, the author should say so openly.)
Do we really want to socially engineer executive to take less pay, by making sure they have no motivation to seek more? Furthermore, in the days of 90% rates, executives found ways to get more compensation - in ways that were sheltered from the high rates on salaries.