And would it kill you, on April 15th..

[hippiewannabe]

The rich are getting richer..

This is true. The rest of your rant is Marx inspired claptrap, and does not help address the core issue. The problem of increasing returns to capital and knowledge, and decreasing returns to unskilled labor, is not caused by, nor can it be cured by, tax policy. I focus on that to rebut some of the canards about taxes that are endlessly repeated by the liberal media for purely political reasons.

If you want to simply punish the rich because you resent them, just say so. But if the purpose of taxes is to raise revenue to provide resources to solve problems, punishing the rich through taxes is counterproductive. The facts are the facts. What is an obfuscation is focusing on taxes and accusing the rich of "predation", when bringing people in to the system and raising their skills is the only solution.

We must do better at ensuring meritocracy, and ensuring the safety net is secure. But you cannot have both meritocracy and equality, and every attempt to provide equality has turned in to a nightmare.

[Bleyseng]

Hmmm, now that is some amazing conservative Bullcrap there. How about let's first take the taxable income cap off Social Security so all wages are taxed. Capping the taxable amount at what $115,000 just isn't Fair to everyone as shouldn't all wages be taxed instead of giving the Richer wage earners a break. That's not meritocracy but rather equality of taxation as whether you are a high earner or low earner it the same right?
What's good for the goose is good for the gander but life isn't fair and it's skewed now to be fairer to the Rich. And that's a Fact.

[hippiewannabe]

...How about let's first take the taxable income cap off Social Security so all wages are taxed. Capping the taxable amount at what $115,000 just isn't Fair to everyone as shouldn't all wages be taxed instead of giving the Richer wage earners a break. That's not meritocracy but rather equality of taxation as whether you are a high earner or low earner it the same right?...

Well, this is actually encouraging. For many years, liberals have been promulgating the lie that Social Security is a pension system, savings that you build up and deserve to take out. The fact is, since people are living longer, those receiving benefits now are taking out much more than they paid in, and those that are paying now at the max will never get fair value for their contributions. It's welfare, wealth transfer from working people to retired people, from young to old. If you want the wealthy to pay in even more, despite that fact that benefits are capped, at least it's recognition that SS is not a pension or savings system, it's an income redistribution scheme.

[Lanval]

Lanval, I know what you mean about "strident rhetoric," but I have some thoughts on that.

I was reading Wendell Berry one year--everything I could get my hands on--and I found myself getting very uncomfortable with his fury. I'd been in grad school for a while and had become accustomed to a cleaner, more critical voice. And yet, if you know anything about Berry, he's hard to refute. So I asked my favorite history professor about it. I said, "I've learned that strong, knee-jerk opinions won't get me as far as good critical thinking, but isn't there a place, somewhere, for our truly righteous anger?"

I loved his answer (and it made my crush on him far worse):

"Critical thinking and a 'rational' assessment of a particular issue are important but should be balanced by the passion Wendell Berry brings to his work. Without passion we are neither fully human nor humane."

So I always think of that, no matter the issue I'm debating.

Cindy

That is exactly the sort of elegance and insight I was expecting. Well said.

ML

[Lanval]

As for your reply Hippiewannabe, it's not worth much. You quote a libertarian front for James Dale Davidson who is a private investor and general nutjob, and an editorial (note that it was not an argument made by the WSJ itself, because they would never back such garbage) by Peter Schiff, another private investment libertarian, who was raised and taught by a guy who is now in prison for tax evasion based on his role in the tax protest movement.

Neither source is credible, nor correct. Your numbers are cherry-picked, and your interpretation is blatantly ahistorical, as has been pointed out by others, but I'll add this: If you think that the 80s represented the same kind of rising wealth that the 50s did, you're extraordinarily ignorant. Under the Reagan tax cuts, done under an economic system that even other conservatives called "voodoo economics" the gap between the poor and the wealthy took off, and that gap has been accelerating since then. That's a fact.

You can say all you want, but the "meritocracy" you seem to be defending is the rich using the system to increasingly extract wealth from the poor through manipulation of the system itself (Citizens United, Affluenza, etc.). If you can't see that no one here can help you. No one EXCEPT the rich think the system is OK; you can say what you want, but the Occupy Wall Street movement was a few crackpots, but rather the first of what will probably become larger, more violent and ultimately revolutionary reactions to the system we have now. Recent centuries have shown that when the wealthy and elite are reluctant to share their wealth, the people can and will rise up in one way or another. Whether violently, as in France during the revolution, or "peacefully" as in the labor movement in the US in the early part of the century, remains to be seen. But it will happen, unless things change. History is clear on this point.

Here's a nice little write up that points out how you're numbers are a biased look at what's going on. It doesn't make the interpretation wrong per se, but it points out how the information you present deliberately hides the economic reality of the past 30+ years.

http://www.slate.com/blogs/moneybox/201 ... oorer.html

[ruckman101]

If wages went up at the bottom end, tax revenue would go up. As long as Corporations regard labor as another exploitable resource to be driven down, we're in trouble.


neal

[hippiewannabe]

As for your reply Hippiewannabe, it's not worth much. You quote a libertarian front for James Dale Davidson who is a private investor and general nutjob,..

Ha. You indulge in ad hominem attacks and doubt facts based on the source, while quoting Slate, upworthy.com and truthout. Very ironic. As the wonderful Patrick Moynihan said, everyone is entitled to their own opinion, but not their own facts. The numbers don't lie.

Look, I know we have a problem, but you want to slay the goose that lays the golden eggs, and are shooting at the wrong target. Sandra Bullock, Tom Cruise and Lebron James would make it on the list of the 10 highest paid CEOs, yet they don't generate the same kind of resentment as people who actually do productive work. As far as I'm concerned, actors and sports stars add negative value to society, yet nobody seems to care. Raising taxes on working schmucks who make 1% of what Lebron James makes is what you are demanding, and it won’t solve the problem. Whenever the Democrats have aimed to soak the rich, they hit the middle class. The truly rich can hide their money, but the merely successful who make wages can’t hide and get screwed. The Alternative Minimum Tax was supposed to ensure the richest of the rich paid their fair share, but what it means now is millions of upper middle class wage earners can’t deduct their kid’s college tuition or property taxes.

Facebook just paid $19 Billion for Whatsapp. They had 50 employees. Cummins engine, with a similar market value, has 46,000 employees. That’s indicative of something quite unheard of happening in the economy, and is certainly a huge concentration of wealth. But it’s not the fault of the tax code, and is not result of predatory behavior by an engineer or manager working 80 hours a week.

[hippiewannabe]

If wages went up at the bottom end, tax revenue would go up.

State, local, and SSI taxes, yes. But the bottom pays no net federal income taxes.

..as long as Corporations regard labor as another exploitable resource to be driven down, we're in trouble.

Exploitable resource is inflammatory rhetoric. But yes, labor is a cost that goes in to the calculation of profit and loss.

Coincidentally, I was talking today with a friend who runs a small steel processing company. Up till now, he paid a guy $12 an hour to weigh parts that came off a saw. In-spec goes in one bin, under-spec goes in another bin, and over-spec goes in a third. He just ordered a machine from Germany that sorts them automatically, and cost $40,000. $12 an hour, 8 hours per shift, 15 shifts per week, the machine pays for itself in 28 weeks, and the guy is laid off. He is not a bad man, but those are just the numbers. Raising the wage would just make the payback happen sooner, or push the whole sawing operation to China, forcing his company in to bankruptcy and putting all the employees out of work.

The guy weighing the parts put in an honest day's work, and deserves an honorable living. We need to find a way to ease the transition to whatever new jobs are available, and keep jobs from flowing to German labor-saving machine makers and Chinese sweat shops. But raising the taxes on and excoriating people like my friend will definitely not help.

[Lanval]

Dig this quote from the new star of economics, Thomas Piketty:

"According to Piketty, whose data on income and wealth span three centuries and 20 countries, the forces of convergence (the spread of knowledge and skills, for example) are considerable, but those of divergence have typically had the upper hand. The crux of his argument is a deceptively simple formula: r > g, where r stands for the average annual rate of return on capital (i.e. profits, dividends, interest, and rents) and g stands for the rate of economic growth. For much of modern history, he contends, the rate of return on capital has hovered between 4 and 5 percent, while the growth rate has been decisively lower, between 1 and 2 percent. (Piketty makes a compelling case that economic growth, which depends in good part on population growth, is unlikely to accelerate dramatically anywhere but in Africa, given current demographic trends.) Thus he adduces capitalism’s "principal destabilizing force": Whenever r > g, "capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based."

In other words, in a slow-growing economy, accumulated wealth grows faster than income from labor. So the rich, who already hold most of the wealth, will get richer, while everyone else, who depend mostly on income from their jobs, will be lucky to keep up with inflation" (emphasis mine)

Here's the whole article on the Chronicle of Higher Education website.
http://chronicle.com/article/Capital-Man/146059/

[Amskeptic]

Exploitable resource is inflammatory rhetoric. But yes, labor is a cost that goes in to the calculation of profit and loss.

Coincidentally, I was talking today with a friend who runs a small steel processing company. Up till now, he paid a guy $12 an hour to weigh parts that came off a saw. In-spec goes in one bin, under-spec goes in another bin, and over-spec goes in a third. He just ordered a machine from Germany that sorts them automatically, and cost $40,000. $12 an hour, 8 hours per shift, 15 shifts per week, the machine pays for itself in 28 weeks, and the guy is laid off. He is not a bad man, but those are just the numbers. Raising the wage would just make the payback happen sooner, or push the whole sawing operation to China, forcing his company in to bankruptcy and putting all the employees out of work.

The guy weighing the parts put in an honest day's work, and deserves an honorable living. We need to find a way to ease the transition to whatever new jobs are available, and keep jobs from flowing to German labor-saving machine makers and Chinese sweat shops. But raising the taxes on and excoriating people like my friend will definitely not help.

Now, you see here . . . .
You can't tell Lanval on the one hand "Ha. You indulge in ad hominem attacks", and tell me on the other, that I am a Marxist, and INTERPRET the phrase Exploitable Resource as "inflammatory rhetoric", then pick a perjorative like "'excoriating' your friend" is twisting this conversation.

I see the current system as definitely defining the worker as an exploitable resource. The current capitalist system does not even think about human beings as people with dignity. Your story about the guy who was pushed aside for a machine shows no regard for the full context surrounding the company that bought the machine. "Sorry, had to save money". That explanation DOES NOT WORK. Nobody has to close and declare bankruptcy and put all the employees out of work just because the minimum wage needs to go up. It is not true. It is a scare tactic. Nor can we soothingly say "ease the transition to whatever new jobs are available". We need to have a discussion about work, efficiency and mechanization. And again, we need to discuss this perverse tendency for the elite to declare that the only way you get paid a dignified wage is if you are "worth" it as far as skills. An unskilled human being deserves a living wage. We CAN afford it. It IS a moral issue as well.
Kolinmarx

[Lanval]

The numbers don't lie.

First, equating "Slate" with a crackpot who writes books about how the economy is going to implode (written more than 20 years ago... I'm sure he's right if we're willing to wait a few million years. I wouldn't call that meaningful) is absurd. There are basic rules to arguing, and one of them is the idea that some sources are more reliable than others. You quote a guy who's dad is in prison for tax evasion. Hmmm... ethics an issue there? That's ridiculous, and if you can't tell the difference between a mainstream journalism source and a crazy person, then you've got issues not I. As for numbers not lying, that statement in and of itself is stupid. Numbers do lie, because all use of them is interpretive and the interpretation itself is fundamentally a lie, unless you have access to the mind of God. Otherwise, you're just guessing; a more or less likely guess is correct, but Occam's Razor is only a guide, not a statement of indisputable fundamental fact.

Look, I know we have a problem, but you want to slay the goose that lays the golden eggs, and are shooting at the wrong target. Sandra Bullock, Tom Cruise and Lebron James would make it on the list of the 10 highest paid CEOs, yet they don't generate the same kind of resentment as people who actually do productive work.

I like how you get to pick and choose what constitutes "productive" and what doesn't. You think Hollywood isn't productive? You think it doesn't produce revenue? Listen, if you want to join Aristotle in his age-old argument that poets ought to be kicked out of the ideal city since they lie, and that isn't valuable, be my guest. But that argument has, like your own argument about economics/taxes, long since had it's bubble burst. And that isn't even considering the relative paucity of revenue they represent; why are you crying about Tom Cruise or Kobe Bryant? 20 Million? Are you serious? Those guys are a blip on the screen of people like Larry Ellison. Dude is worth 41 BILLION dollars.

I got a serious wake up call for you. Larry Ellison and his whole shitty wanna-be Microsoft company has less social value than a single pediatric nurse. If you can't understand that, then you're the problem. Until you get to the point where you realize that just because the economy works a certain way, according to certain values, AND that those values are arbitrary (not completely ~ they're chosen by the wealthy to promote their own power/wealth) there's not hope for you. NOT blaming the tax code IS the problem ~ who do you think wrote it? The wealthy, that's who. You're going to have to deal with the reality of a corrupt system, because only through doing so will meaningful, long-term change occur. Otherwise, you're just arranging the deck chairs on the Titanic, and truth be told, that metaphor is so particularly apt to your thinking ~ because there's no doubt that from an economic point of view, you are perfectly comfortable with the wealthy locking up the lower classes to make sure there's plenty of lifeboats for them. Change the gates to tax laws, and third class to the working class and you have an exact model of what's occurring economically in the US, and you're totally OK with it.

~ Fin.

[hippiewannabe]

Raising the volume of your anger doesn't change the facts. The simple fact is Madonna earned more than Larry Ellison did in 2013. And Madonna has become a billionaire.

I'm not a fan of Ellison, but his billions come from being a founder and major shareholder of the company on whose database software most corporations have chosen to run their business. I'd like to get more of his wealth for the treasury, but he can move it faster than we can grab it. History has proven that if you try to take too much, you end up getting less.

And yes, I was working in the '80s. I came of age in the Carter inflation and malaise days, and in my first full year of working as an entry level engineer, faced a marginal tax rate of over 50%. Reagan fixed that. And then the economy grew 36% between 1983 and 1990. There has been an increasingly desperate attempt to rewrite that history. But while many naive people have bought in to it because it fits the narrative they want to believe, the facts will win out in the end.

[hippiewannabe]

Now, you see here . . . .
You can't tell Lanval on the one hand "Ha. You indulge in ad hominem attacks", and tell me on the other, that I am a Marxist, and INTERPRET the phrase Exploitable Resource as "inflammatory rhetoric", then pick a perjorative like "'excoriating' your friend" is twisting this conversation.

I see the current system as definitely defining the worker as an exploitable resource. The current capitalist system does not even think about human beings as people with dignity. Your story about the guy who was pushed aside for a machine shows no regard for the full context surrounding the company that bought the machine. "Sorry, had to save money". That explanation DOES NOT WORK. Nobody has to close and declare bankruptcy and put all the employees out of work just because the minimum wage needs to go up. It is not true. It is a scare tactic. Nor can we soothingly say "ease the transition to whatever new jobs are available". We need to have a discussion about work, efficiency and mechanization. And again, we need to discuss this perverse tendency for the elite to declare that the only way you get paid a dignified wage is if you are "worth" it as far as skills. An unskilled human being deserves a living wage. We CAN afford it. It IS a moral issue as well.
Kolinmarx

Hey, I never called you a Marxist, I simply said your rant was full of Marx-inspired claptrap. Big difference. Umm, I think.

Whatever you think the problems are, raising taxes on guys who are just trying to put their kids through college and save so they can retire some day won't fix it. Neither will arbitrarily raising the pay of people beyond what the market says it can pay.

[asiab3]

Whatever you think the problems are, raising taxes on guys who are just trying to put their kids through college and save so they can retire some day won't fix it.

This isn't just limited to high-earning individuals.

Problem is, so many humans are stuck trying to stay alive, working until they die, that they can't expend the effort to fight for the chance to pay for their kid's college. Now which one is unfair?

[Lanval]

And yes, I was working in the '80s. I came of age in the Carter inflation and malaise days, and in my first full year of working as an entry level engineer, faced a marginal tax rate of over 50%. Reagan fixed that. And then the economy grew 36% between 1983 and 1990. There has been an increasingly desperate attempt to rewrite that history.

Desperate on your part. Try this out:

http://www.cbpp.org/cms/?fa=view&id=3220


edit: I'm adding a brief explanation, so it's clear what I'm pointing at. A quick image search of google using the keywords "growing gap between the rich and poor in the us" will return a dozen variants of this chart. One version is the chart named figure 1 in the link. No one, on either side of the debate is arguing:

1. The fact of the change
2. Its origins in Reagan's tax cuts

The only discussion is whether it's OK or not. A very small group of highly conservative economists, who represent a tiny fraction of professional economists worldwide, think this graph is acceptable, and believe it doesn't signify a long term destructive development which has its origins in the "tax reform" that Reagan implemented and which Hippie seems to be championing in his comment.

Everyone else ~ Hippie would be wise to consider that the vast majority of economists, all of whom are substantially better educated on the economics of the tax system than he is, and most of whom don't live in America, so don't subscribe to his blind jingoism ~ pretty much agrees that what is shown in the graph is a bad sign, and that Reagan's tax cuts accelerated the growth in income difference, a growth which continues to this day.

Hippie, I don't care what you believe. Your inability to recognize that only a tiny fraction of the economic professionals on this planet would even bother to defend your point, and that those few are, like the examples you offer, crackpots who live outside of the mainstream, publishing books to great acclaim among the group you represent ~ myopic white people who believe that the government is evil, taxes are evil, the wealthy are deserving, etc., is a problem for you, not for me. I'm not wrong. Many much smarter people than I have made this argument ad infinitum but struggle to achieve the necessary changes because people like you support the wealthy, who are in NO WAY helping you. Yeah, you made a few more bucks. 15% more of whatever you were making? That's nothing. 15% when your gross income is 8+ figures? That's something. You look at the baker and thank him for throwing you a few crusts of bread while he uses your hard work to make the bread itself.

Take a look at the people on the board of directors for the group I linked to ~ they have their beliefs to be sure, but a simple fact: There's more credibility and expertise on that list than you'd be able to summon had you the infinite powers of a wizard. Even Buffet thinks your argument is wrong.

Board of Directors
David de Ferranti, Board Chair
President, Results for Development Institute
Henry J. Aaron, Senior Fellow, Brookings Institution
Kenneth Apfel, Professor of the Practice, School of Public Policy, University of Maryland
Jano Cabrera, Managing Director, Burson-Marsteller
Henry A. Coleman, Rutgers University, Edward J. Bloustein School of Planning and Public Policy
James O. Gibson, Senior Fellow, Center for the Study of Social Policy
Antonia Hernández, President, California Community Foundation
Wayne Jordan, CEO, Jordan Real Estate Investments, LLC
Frank Mankiewicz, Vice Chairman, Hill and Knowlton
Lynn McNair, Senior Director of Business Development and Resource Mobilization, Internet Society
Marion Pines, Senior Fellow, Johns Hopkins University Institute for Policy Studies
Robert D. Reischauer, President Emeritus, Urban Institute
Paul Rudd, Adaptive Analytics, LLC
Susan Sechler, Managing Director, TransFarm Africa
Melanne Verveer, Executive Director of the Georgetown Institute for Women, Peace and Security
Kim Wallace, Managing Director, Head of Washington Policy, Renaissance Macro Research
William Julius Wilson, Lewis P. and Linda L. Geyser University Professor and Director of the Joblessness and Urban Poverty Research Program, Harvard University

Emeritus Board Members
Beatrix Hamburg, Visiting Scholar, Cornell Medical College, Department of Psychiatry
Marian Wright Edelman, President, Children's Defense Fund