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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (555027)	3/14/2010 10:34:42 PM
From: tejek	Read Replies (1) \| Respond to of 1572288

So why are we so fearful of taxing the super-rich? Here are the arguments I've heard. This is the million dollar question. I just don't get it. 1. They've earned it. Really? The concept of "earning" is murky when you consider the array of corporate welfare programs we provide. Oil companies have their depletion allowances. Big sugar farmers have their sweet subsidies. The health insurance industry is exempt from anti-trust laws. One way corporations spend their welfare checks is by providing top management with mind-boggling compensation packages. For instance, in 2009, our financial wizards netted about $150 billion in bonuses - as if in reward for crashing the economy. Were it not for our $10 trillion (not billion) in bailout funds, they would have earned nothing at all. In fact, the financial sector's reckless gambling has lost us over $6 trillion in wealth. But the execs did quite well, thanks to taxpayer largesse. You'd think we'd be crying out for a windfall profits tax to reclaim our money. But no. And yet, the biggest defenders of these corps. are people who don't stand to gain from corp. largesse at all. People like Tim Fowler. Like I said earlier, I just don't get it. 2. Redistribution of Income is Un-American. During the 2008 campaign, Joe the Plumber got his 15 minutes of fame when he slammed Obama for daring to utter the phrase "redistribution of income." Of course, we redistribute income primarily through progressive taxation - having the rich pay a higher rate. Joe didn't mention that we already live in a world of massive redistribution. Only it's from the bottom to the top. We still hear about how poor folks game the system and mooch off our hard earned tax dollars. They go to emergency rooms and don't pay. They get Medicaid for free. And many don't pay any taxes at all (mostly because their incomes are so impossibly low). But all of that is chump change compared to the gaming going on at the other end of the economic scale. Just think of all the scams corporations and the rich are running: ever-rising credit card fees, predatory mortgages, usurious interest rates, check cashing ripoffs, monopoly pricing. They turn income into lower taxed capital gains, find offshore tax shelters, collect subsidies for their runaway shops. And then they netted the big one: Wall Street bailouts. Post-baillout, these too-big-to fail companies are getting even bigger. It all adds up to a major redistribution plan -- from the many to the few. During the post-WWII boom we had one of the fairest income distributions in the world. Not anymore. Today the gap between rich and poor is wider than at any time in U.S. history. Here's a telling statistic: In 1970 the compensation ratio of the top 100 CEOs compared to the average worker was 45 to one. By 2008 it was 1,071 to one. You think they got that much smarter? Here we go......Joe the Plumber.....barely working.....doesn't have a pot to piss in..attacking Obama over the redistribution of income. Its like a cult and these people have been brainwashed. Meanwhile, the rich find one loophole after another to shelter their money. They pay their acctants more in a year than Joe the plumber earns in that same year. 3. If we tax the wealthy, we'll hinder investment and kill jobs. This was the justification politicians and pundits used when they started cutting taxes and eliminating regulations in the late 1970s. Tax cuts were supposed to create a robust investment class whose dollars would fuel the new service economy. Since only the wealthy can make such investments, the argument went, we have to make sure they have the money they need to invest. Otherwise, where will all the new jobs come from? In theory this sounds good. But we tried this experiment, and it didn't work. When we cut taxes on the super-rich, we got a different kind of investment boom than the politicians and economists had promised. The wealthy literally ran out of investments in factories, equipment and even services. So they flocked to financial investments -- which were supposedly safer and more profitable anyway. The super-rich laid their money down in the Wall Street casino, and helped puff up bubble after bubble. Profits in the financial sector soared. In 1960, the sector accounted for about 15 per cent of all corporate profits. By 2008 (before the crash, that is), it was almost 40 percent. The financial sector crased as the direct result of tax cuts for the super-rich and Wall Street deregulation. Exactly. Tax cuts became a scam for the rich. 4. Government's too big already. We should be cutting the public sector, not raising taxes to expand it. Many people (like those in and around the Tea Party) dislike tax scams by the wealthy, but dislike government even more. They're outraged that public sector workers often have better wages and pensions than people in the private sector. They've made attacking public employees the new national blood sport. With unemployment so high, public sector workers are an easy target. Why should taxpayers, many of whom have no pensions, finance the pensions of public sector workers? Why should we protect public sector jobs when we ourselves are unemployed? Here's one reason: Because cutting state and local payrolls would actually add to our economic woes. If we fire public sector workers, they'll stop paying taxes -- which will only add to the tax burden on those people who still have jobs. If teabaggers had a brain, they might be dangerous. Besides, this is a country of over 300 million people and growing with a number of complex problems confronting it. Why do they believe gov't should be getting smaller? It makes absolutely no sense. Good article. The author makes perfect sense to me.

To: RetiredNow who wrote (555027)	3/16/2010 9:16:41 AM
From: TimF	Respond to of 1572288

Why Are We Afraid to Tax the Super-Rich? We aren't. We do it. They pay more than the normal percentage of their income in taxes (although less than the very rich who have less income than they do) Forget the solar panels, the smaller classes and the new jobs -- we've got to cut back on government programs at all levels. That would be good, but we never cut back on government at all levels. It keeps getting bigger. That would be a good subject for an article "Why are we afraid to cut government?" In the 1950s the marginal tax rate on those earning more than $3 million a year (in today's dollars) was 91 percent. Which was utter foolishness, but which didn't affect many people because of bot the high level where the tax kicked in, and the loopholes to avoid the rate, and the huge incentive 91% tax rates create to legally or illegally avoid taxation. The IRS says that the top 400 richest tax filers actually paid a rate of just 16 percent in 2007 (the latest numbers we have). Yep, the richest earners -- people who took in an average of $343 million each -- probably paid a lower rate than you did. Only if you have a solidly above average income. The bottom 60% pay less in total federal taxes than the wealthiest pay in just income taxes. Lowest quintile: 4.3 percent Second quintile: 9.9 percent Middle quintile: 14.2 percent Fourth quintile: 17.4 percent Percentiles 81-90: 20.3 percent Percentiles 91-95: 22.4 percent Percentiles 96-99: 25.7 percent Percentiles 99.0-99.5: 29.7 percent Percentiles 99.5-99.9: 31.2 percent Percentiles 99.9-99.99: 32.1 percent Top 0.01 Percentile: 31.5 percent gregmankiw.blogspot.com And that's before considering the super wealthy individuals' share of the corporate taxes paid by the companies they own in whole or in part, and before considering the lost income in lieu of taxes for their tax free bond holdings, and other similar issues. 1. They've earned it. Really? Yes really. Or ancestors earned it and passed it on to them, but then their ancestors earned it and should be able to decide what to do with at least the bulk of their wealth. The concept of "earning" is murky when you consider the array of corporate welfare programs we provide. Than stop providing corporate welfare. Don't give with one hand and take with another. Esp. since the set your giving and taking from aren't identical, and since both the giving and the taking distort economic incentives in negative ways. providing top management with mind-boggling compensation packages. Than the corporations believe the employees earned it, and whether or not they did, the corporations earned it, and its their money to decide what to do with not yours, not yours or Leopold's. If we tax the wealthy, we'll hinder investment and kill jobs. This was the justification politicians and pundits used when they started cutting taxes and eliminating regulations in the late 1970s. And it was a good and accurate one. Not just that they hinder investment, but that they distort it, making it chase low tax incidence rather than the most efficient investment opportunities. But we tried this experiment, and it didn't work. No we tried it and it worked very well. When we cut taxes on the super-rich, we got a different kind of investment boom than the politicians and economists had promised. The wealthy literally ran out of investments in factories, equipment and even services. So they flocked to financial investments A very large portion of the financial investments are in stocks and bonds. The investment in them either help fund other types of investments, or lowers the interest rate that the big government that Leopold seems to like, has to pay. and helped puff up bubble after bubble Bubble's have existed with all sorts of tax rates. The connection between generally lower marginal tax rates and bubbles is weak. (Not so much with specifically low tax rates in one area for investment, with high or at least moderate tax rates elsewhere, because then you create an incentive for over-investment in one area. The tax breaks on real-estate probably helped drive the bubble. Government's too big already. We should be cutting the public sector, not raising taxes to expand it. Correct. Because cutting state and local payrolls would actually add to our economic woes. Arguably in the short term (although even in the short term your taking from others to give to them, its not like their salaries are new wealth that does no harm to the rest of the economy), not in the medium or long term.