Capitalism Doesn't Work... So What Would?

"fair share"?

Funny. 47 some odd % of "us" pay no taxes. So not wanting to float that boat of (predominantly) slackers constitutes not paying our "fair share"? Maybe some of us rich taxpayers think a person is actually better off (in his own mind and based on his own self evaluation) if he has to get something accomplished for himself and his family.

 

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That's right. The people who benefit the most from a given social contract, have the most responsibility to ensure that said contract is paid for. Those who are being left behind, have no real responsibility in that sense. That's how social contracts work: every party gets something they want, and gives something in return. The present system only supports the very wealthy - and so nobody else has any moral obligation to pay for it.

And that is also fair - the society produced by our social contract does not benefit them enough to justify asking for anything in return. If you want a vital enough middle class that you can expect to tax the income of the lower half of the country, then you need to be supporting a social contract designed to foster a much more robust middle class (and not the social contract you are advocating, which is simply a give-away to the rich designed to reduce society into a master class and a servant class).

But you're incorrect, of course. That statistic only applies to federal income taxes. These same households pay plenty of payroll, sales, property taxes, etc. - and given that those taxes are structured regressively, this represents a very heavy load on the least well-off in our society.

Meanwhile, your average billionaire pays half the federal income tax rate of your average white-collar professional.

Meanwhile, the richest 1% of the country gets 25% of the income - and so should pay 25% of the taxes (at least). The bottom 80% of the country gets less than 40% of the income. The top 10% owns 80% of the assets. The bottom 80% of the population only has only 7% of the financial wealth. You can't tax people that don't have money - so if your favored social contract concentrates all of the money into the hands of the super-wealthy, then that's who will have to pay all of the taxes.

So, yeah, the people getting filthy rich, are the ones who should be paying for the system. They're the ones who benefit, not the mass of people going nowhere. And note that all of these trends have been on a sharp upward slope lately, as the plutocrats have carved out ever more loopholes and give-aways to themselves, and the services and investments needed to support the other 80% of society have been neglected.

You'd have to be some sort of disgusting fascist to dismiss 50% of the country - hard-working blue-collar types with families to support and limited access to health care or education or jobs - as "slackers." The fact that your favored policies have so emasculated so much of the country that they don't even earn enough that the federal government can justify taxing their income, is an indictment of your favored policies, and not the middle class.

Again, pretty much a disgusting fantasy to imagine that he does anything else, and that you are proposing anything other than holding back hard-working, vulnerable people. This is not the very small percentage of actual layabouts you're talking about here (many of them are actually wealthy, due to inheritance), but fully half of the country. Are you really going to insist, with a straight face, that fully half of all households are slackers who don't even try to accomplish anything?

Moreover, you yourself are almost certainly not in the "rich taxpayers" category. That would be billionaires who spend their time comparing luxury yachts and private jets. Your average upper-middle-class professional family, while better off than most, has likewise been dead in the water for the past generation, while the super-rich have seen explosive growth in their wealth and income (and commiserate reduction of their tax burdens). The canard that such people are in the same boat as the rich is maintained exactly to get you to vote against the interests of yourself and ~90% of the country, and for the interests of a super-rich elite. Rule of thumb: if you had to borrow money to buy a house, you aren't rich.

In all likelyhood, you are very much in the same boat as the bottom 80% of the country, and we could pay for a suitable social contract without raising your taxes at all. The top 10-15% of income earners/wealth holders can more than cover it, while still remaining rich and privileged. So, why are you stumping for the emasculation of our society in order to buy the super-rich a few more toys that they don't need? Rule of thumb: if you cannot afford to live in walled compounds patrolled by armed, private security guards and travel everywhere via helicopter, then you have a bigger stake in propping up the welfare state than you do in seeing your taxes cut.

 

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T0 quadraphonics:

I agree with your post 241 about the current broken social contract, or perhaps "revised" in stead of broken to give the rich and powerful few ever greater wealth and power, while shoving ever more of the middle class down to the lower class, dependent on the few crumbs that fall from the tables of wealthy (job as maid or yardman etc. for low pay, as many with no job would accept even lower pay)

But there are a couple of aspects you omitted:

(1) Poor schools for the masses and sophisticated propaganda via TV have divided those being given ever smaller pieces of the pie. (Divide and Control)* Many who have no real hope to be moving up, instead of down as they currently are, have been lead to believe they could move up, if only the right wing polices were put into place. (Brain washing is easy if the subject is ill educated and can not think for him/her self.)

Thus you have growing mass movements like the tea/party with most of their members unhappy with their drift towards lower economic levels actually supporting the structure that is shoving them down - concentrating their lost wealth into the hands of the already wealthy the revised social contract benefits most. Goebbels would be impressed by their success.

(2) Especially after the tax relief GWB gave to the already rich who were already paying smaller fraction of their wealth (tax loopholes, good tax lawyers, long term capital gain rates low, etc.) have closed US factories they owned and/or controlled while building new, more modern ones in Asia, especially China, with their tax money savings they did not pay so US debts have climbed and jobs were lost, reducing salary tax collections even more.

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When GWB still had two years more as POTUS, I realized where this was inevitably leading (run on the dollar and then depression). "Inevitable" as US can not compete against more modern factories with cheaper labor AND education is a slow process, so given the wealth and power the ultra rich have and better than Goebbels propaganda, their revised social contract can not be changed - restored to one for benefit of the majority.

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* you didn't think "DC" stood for District of Colombia, did you? They will DC DC.

 

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Can any of you wealth haters point me to a reliable resource on who has what? Seriously. My instinct is that you, like so many, assume there is a lot more money and rich people out there than there really are. I'd like to find out who's right.

 

How do you know people here hate wealth? That is just another in a long series of canned responses used by Tea Partiers/Republicans to detract from the serious issues at hand. Can't respond to an arguement with facts or reason, accuse someone of being a wealth hater or any number of other canned accusations - anything to keep the conversation away from an honest discussion of evidence and reason.

And I think you are probably not as wealthy as you think you are, especially when compared to those you accuse of being "wealth haters". Warren Buffet, one of the richest men in the world, has similar opinions as those you are accusing of being "wealth haters". Are you accusing one of the most successful businessmen in our time of being a "wealth hater"?

 

Forbes has been tracking the wealthy individuals of the world for 25 years.

http://www.walletpop.com/2011/03/09/forbes-the-richest-people-in-the-world-2011/

 

Gotcha, I now know where you stand.

 

"The 2011 Billionaires List breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion)."

And from Wikipedia just now: "President Barack Obama proposed his 2011 budget during February 2010. He has indicated that jobs, health care, clean energy, education, and infrastructure will be priorities. Total requested spending is $3.83 trillion and the federal deficit is forecast to be $1.56 trillion in 2010 and $1.27 trillion in 2011. Total debt is budgeted to increase from $11.9 trillion in FY2009, to $13.8 trillion in FY2010, and $15.1 trillion in FY2011.[3][4]"

So just ballparking it, if we stole every billionaire's total wealth and left them living under a bridge, we could pay one year of our budget plus pay off 700 billion of a 15.1 trillion dollar debt leaving us, again, with no money and still owing 14.4 trillion.

I don't think hacking rich people up is really going to work. I'm just say'n.

Edit: WHOA is THAT wrong! Those are the total Billionaires in the WORLD. This is where the US is: "The United States had 413 billionaires with a total net worth of $1.5 trillion" http://en.wikipedia.org/wiki/Billionaires

So I don't think we can hack every Billionaire in the entire world, so we will have to be satisfied with just our own. So. 3.83 trillion dollar budget, 1.5 trillion gets us where? To May of the first year? And we can't even say the Billionaire money windfall is over and above the tax base, because that would be double dipping.

OK, what's the next plan?

 

Hey, I'm loving this wiki thing: http://en.wikipedia.org/wiki/Millionaire

Here's how the rich are getting richer: INFLATION

Historical worth

Depending on how it is calculated, a million US dollars in 1900 is equivalent to 2006 US dollars of [9]
$24,766,584.77 using the Consumer price index,
$21,224,697.05 using the GDP deflator,
$114,128,571.43 using the unskilled wage,
$162,813,054.25 using the nominal GDP per capita,
$641,531,874.47 using the relative share of GDP,
Thus one would need to have a little over twenty million dollars today to have the purchasing power of a US millionaire in 1900, or more than a hundred million dollars to have the same impact on the US economy.

 

Who can do the math on this:

The number of U.S. households with a net worth of $1 million or more, not including first homes, fell by 2.5 million to 6.7 million in 2008, according to the Spectrum Group report, as reported by Reuters. After the 27 percent drop, the number of millionaires is at the lowest level since 2003, when the millionaire population stood at 6.2 million.

I come up with $6,700,000,000,000 so that's 6.7 trillion right? So if we stole all THAT money too, we could pay off about 38% of the total remaining budget deficit plus the national debt.

Of course there wouldn't be one person left to finance a business enterprise. So how do we pay for next year? I guess it's mud huts for everyone.

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But just as a matter of scale, given that the total wealth of all billionaires in the WORLD is only $4.5 trillion (I say "only," HA!) that still means we have borrowed (and apparently can't repay) more than three times the total wealth of all the richest people in the world combined. We are FUCKED.

 

No - we are talking about a million or more, not a million exact.

So the way to work it would be to take 2/3 of their income and an ordinary property tax rate on their wealth, and pay off the debt over a couple of decades like normal.

Since they got the wealth and money in the first place as a result of the tax breaks given earlier, the net would be that they have had several years use of the money we should have used to pay off deficits,

and we dont' begrudge them the fun they had with it. But crunch time has come.

 

Well how about starting with correct numbers? The 14 trillion dollar number included "interagency debt". That is debt owed to the government by the government.

So when you take out that debt (the debt owed by government to itself) you get a number more like 7 trillion dollars. Additionally, there is no need to pay off the entire debt. The objective/need is to get debt in line with income...not to eliminate debt from the nations books altogether.

There is no need to do that in one year, two years or even three years. But it does need to be done over the course of the next 10-20 years. An finally there are two sides to this equation. There is the debt and spending side and then there is the income side.

In order to solve the nations debt problem you need to work both side of the equation. Debt levels need to be managed and you need to grow income. If you ignore growth, you make the problem worse because it exacerbates the debt problem - increases government spending (increased costs of security, social safety nets, less revenues, etc.). And growing income makes debt levels smaller as a percentage of income, which is the goal.

 

I am not exactly poor, my net assets are now at least two million dollars, all self made by investments as only had a salary from Applied Physics Lab of Johns Hopkins Un. for 30 years as income. I started very poor. I had full needs scholarship at Cornell, but had to wash dishes for my dinners (skipped lunch and ate two dinners in kitchen with coffee in room for breakfast, most days).

One Thanksgiving I could not even scrape up bus fare home so to be truly thankful (and not be embarrassed by eating alone in cheap place) I ate nothing that day. (Fraternity house where I washed dishes was closed.) Thus, I am not a “wealth hater," but do have a deep understanding of the disadvantages of being poor and strong sense of the need for more social justice. One summer, I lead at the operational level the restaurant desegregation efforts in Baltimore to success after two summers of failed efforts prior to me taking over. (We gave the restaurant association so much economic pain, that they turned 180 degrees and joined us asking the legislature to make that illegal.) I was also the "token white" the more adult all-black policy leadership group sometimes took to meetings with the restaurant association. Later, one member of that group is (or was?) in the US Congress and another was the Mayor of Baltimore.

GINI, I think, stands for something like Genereral INequality Index. (0 = complete equality & 1 = all wealth owned by one person or something like that.)
Gini index of Brazil: 60.7 (1998) & 56.7 (2005) for significant rate of equality improvement
Gini index of USA: 40.8 (1997) & 45.0 (2007) for significant rate of wealth concentration.
Data from: https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html BTW, the CIA is not a liberal biased organization to say the least.

I also have some English data for answering you from page A2 of13/6/11 Folio de Sao Paulo:

In1979 the 0.1% most wealthy got 1.3% of all salaries paid.
Currently 0.1% most wealthy get 5% of all salaries paid.
Projected to 2030 that 0.1% will get 14% if trends continue as they are.
Thus the social contract is tilting to aid the already wealthy in many so-called "advanced" countries.
Newspaper editorial notes that 14% would imply social conditions worse than those Charles Dickens described!

Page A2 is the editorial page and this is sort of self congratulation as Brazil has very significantly decreased the wealth gap, which was extreme, between it rich and poor, mainly via the Bolsa Familia program. Read about it here: http://www.sciforums.com/showpost.php?p=2478404&postcount=4 , part quoted below and read my general discussion of the wealth gap problem there too.
{Bolsa Familia now gives monthly up to ~$100/ kid with ~$300 max to poor IF they keep kids in school until age 18 and kids get their free vaccinations.}

That is why all my above data showing the rapid rate of wealth concentration (instead of the lessening wealth gap US enjoyed pre-Reagan, post 1900) in US and England is of a form that is not influenced by inflation.

 

So the millionaire number includes the billionaire number, so that's ALL the rich folks. So that 6.7 trillion number includes the 1.5 trillion of the billionaires? Wow. so that's even worse. But isn't that total amount of wealth a relatively static number. Isn't that accumulated wealth? So it only replenishes at the rate of their actual earnings and gets eaten by inflation. True?

How can draining off their static wealth slowly work any better than taking it all at once? Don't we have interest on the debt so it would have a tendency to keep growing if we slow pay it? Considering inflation, wouldn't that possibly totally offset the "growth" of that wealth?

 

You can't mean that literally? Don't you figure their wealth was actually "created" by the company they ran or the investments in other companies they made? Sure, if you are taxed a little less, then you get to keep and reinvest more, but the means of creating the wealth in the first place has got to be the income producing machine.

You know what they say: A fine is a tax for doing wrong. A tax is a fine for doing well.

 

LOL, no a tax is something needed to keep government services coming...you know things like roads, security, commerce, etc..

 

A great number of the super-wealthy these days are heirs, who don't do anything identifiably productive, or that could even be called "work." To the extent that they are making money on investments, this is handled by professional investment managers. This is what happens when you gut the estate tax and then wait for a decade or two. We do not inhabit some Ayn Rand fantasy world wherein wealth is directly proportional to individual merit, especially at the upper end.

 

I wonder if that is really true. How can we find out? I don't know anybody who just clips coupons. They all work.

 

You can look through the Forbes Top 400 list of the wealthiest Americans, and see which ones got their wealth through inheritance. I haven't gone through the whole thing, but roughly half of the top 20 got rich via inheritance.

It's very likely that you don't know any super-rich people at all. Why would you? In all likelihood, you are falling into the trap of confusing the upper-middle-class with the rich. If I had to guess, I'd speculate that you are yourself upper-middle-class, and live in a place where this puts you near the top of the local wealth hierarchy (i.e., not in NYC or Silicon Valley or Malibu or wherever). So when you hear people talking about the rich, you assume that they mean you and your neighbors. They don't. They mean people who could buy and sell you without thinking twice about it. You are probably part of the "middle class" that we need to be taxing the rich to maintain. I've read that the recent explosion in wealth inequality is concentrated into NYC and Silicon Valley - that if you exclude those two areas, there is no statistically-significant trend towards wealth inequality in the USA. So if you don't live in those areas, you should not expect to be seeing such directly, nor subject to any increased taxes. We're talking about taxing banking moguls and billionaire CEOs here, not upper-middle-class professionals.

Another good rule of thumb: if you have to work for a living, you aren't rich. We're talking about people who could never do another day's work for the rest of their lives and not only would they live in total luxury until they died, but so would multiple generations of their offspring.