OPP Newsletter

memBrain Loc: North Carolina (No longer in hiding.)

I suspect that this video was designed to force viewers coming to a specific conclusion. Without disputing facts as presented in the video, we have to ask, is it wrong for the top 1% to earn more than 40% of the wealth?
If so, then why is it wrong? Should we impose a wage ceiling for earners? Given that most of the wealth generated by these top wealthy is largely from investment assets, and not directly related to any work done by them, should limits be imposed on how much one can invest? Given the political capital such wealth affords such individuals, should there be a cap on how much wealth an individual may have before their wealth becomes deemed a disruptive force in the economy? How can we create such a system that preserves the best ideals of capitalism while preserving the social integrity of the country...or the world?

remaerD

Perhaps the issue is far simpler the the richest Americans pay our media to tell us to think it is. Most income of the top 1% comes from capital gains. That income is taxed at 15%. People who actually work for their money, instead of being paid because they have in enough money to buy shares of the profit corporations make (I believe that it is a real stretch to call this investment because the purchase of existing stock generates not revenue directly for the corporation unless the corporation is selling it), have paid, in recent years, 36%. If we just asked people who did not have to work for their money to pay as much as we ask the upper middle class to pay for money they had to work for, we could go along way to evening out this distribution.

We might also asked is the earned income ratio of CEO's to his average workers pay become extreme enough to become a rights issue democracy. How, in a nation that claims to stand for "liberty and justice for all" can we justify so few to gain so much from the labor of so many?

Voice of Reason Loc: Earth

Let's look at some real numbers, shall we?

This is a list of the IRS income tax rates for 2012 for a married couple filing jointly:

10% on taxable income from $0 to $17,400, plus
15% on taxable income over $17,400 to $70,700, plus
25% on taxable income over $70,700 to $142,700, plus
28% on taxable income over $142,700 to $217,450, plus
33% on taxable income over $217,450 to $388,350, plus
35% on taxable income over $388,350.

Additionally, the personal exemption for 2012 is $3800, so for a married couple filing jointly it is $7600.

That means the first $7600 earned by a married couple filing jointly is not taxed.

So, for a married couple filing jointly these are the actual tax rates they pay with no exemptions, other than the personal exemption, ie, they use the 1040EZ form (which is unrealistic for higher incomes and worst-case).

Income Tax rate
7600 0
25000 7%
78300 12.5%
150300 18.5%
225050 21.6%
395950 26.5%

For a married couple filing jointly without exemptions all income under $99,000 is taxed at or below the capital gains rate of 15%.

fjthomeczek

In a a more perfect world, I would suggest that there should be a world wide rule that no one has a right to be worth more than a billion dollars. I know it will never pass, but if the world had such a rule, imagine what that would do not only for wealth ine******y, but poverty. IMO, anyone who is not content to have a net worth 1,000 Million dollars needs to get new priorities.

Voice of Reason Loc: Earth

I assume under your plan all individual net worth over 1B would be confiscated and given to the poor? If so, I would guess the net effect would be to increase the poverty rate. Paying people to be poor is not the solution to poverty. The only solution to poverty is jobs.

Voice of Reason Loc: Earth

I just love this liberal progressive bs about income ine******y. It is designed solely to promote envy and hatred. There always have been and always will be those who have more than you and those who have less. That's life, get over it.

Can anybody explain how the fact that Bill Gates has more money than you or I is harming you or I? Personally it doesn't bother me one whit.

fjthomeczek

The problem is not wealth per say, it is that more and more people are realizing that the system is r****d towards a very small minority of out population. World wide, ine******y is much worst than here in the United States, but we are trying to catch up. My understanding is that world wide, the top one percent control 70 percent of the wealth.
At any rate, I did expect criticism of that idea, but I honestly think that it has merit. Again, I fully realize that such will never happen.

Voice of Reason Loc: Earth

I disagree with your claim that the system is r****d. Personally, I think more and more people are being deceived into thinking that the system is r****d and therefore there's no point in trying to get ahead, which is a good way to ensure the continued need for the welfare state.

If the system truly were r****d, wouldn't it be impossible for anybody to become a self-made millionaire? I already mentioned Bill Gates, he didn't start out rich, he became rich because he had a good idea and worked hard to develop it. Same for his partners. Same for Richard Branson. Same for the founders of FedEx, Amazon and a host of other successful businesses.

Not counting self-made millionaires, in the US the goal of most people has been to have their children better off financially then they were. Until Obama became president, this has been the norm. Under Obama's expanded welfare state, most people are now worse off financially than at any time since 1959.

The difference being that under capitalism wealth is not a zero-sum game. Instead wealth is constantly being created and there is constantly more to go around. Under wealth resdistribution it is a zero-sum game. What is given to one must be taken from another. Wealth is not created and so there is less for everybody as the population increases.

memBrain Loc: North Carolina (No longer in hiding.)

In general I agree with you on this. After the initial purchase of a stock, subsequent purchases become speculation, not investment. The company sees no net difference except a different name on the ledger of whom to pay dividends. I don't think it's unreasonable to tax this income at a higher rate. However, our current tax code is a quagmire of jumbled rules and regulations that is not easy to navigate. We need to overhaul the existing tax code before we start changing what people are being taxed. Additionally, we need to assure that any adjustments, such as exemptions, reflect real world conditions for the individual being assessed. A flat rate exemption doesn't give a person living in New York City as much of a buffer as a person living in Podunk Idaho. There's a significant difference in cost of living. Everyone's tax rate should be cost of living adjusted. Also, I have never been a fan of graduated tax schedules. How is it fair to charge people of a higher income higher taxes when they do not receive any additional benefit from those taxes? To pay for the poor? Hogwash. That is income redistribution, and income redistribution is just a fancy word for government sponsored theft. Everyone should be charged the same tax rate adjusted for cost of living.

Kentoidi8 Loc: Ellenton, FL

World rule! Do you think the world (UN) will treat us like nice guys? I have seen a lot of the world and I like the way we were. I don't like what we are becoming. A nation losing a majority who want to create to achieve a life they can be proud of vs. the other guys who are happy to exist on handouts. I have always thought CEOs were generally far over paid but that should be market related. It is not the governments right to rob them.

fjthomeczek

Mr. Voice of Reason. We can disagree whether the system is r****d, but if "perception is reality", a growing number of American's want something done about wealth ine******y, which is a product of income ine******y. When a growing number of people feel the system is r****d, that leads to political instability, and I would submit is the common denominator of a country suffering an internal failure, a revolution. I could list statistics about the concentration of wealth over the last 32 years, and the shrinking middle class, but more and more people are becoming aware of such. Ine******y actually affects all of us negatively in ways that are hard to appreciate, and a middle class child today in the middle class has twice the probability of ending up in the lower class than the upper class. Bill Gates, IMO, was very clever in getting his start, although I do not recall all the details, but many question how honest he was initially. He must recognize something wrong with his wealth, instead of handing it down to his children, he is giving most of it to what I consider worthy charities. When the rules are r****d, capitalism becomes a "winner take all" type of philosophy, and IMO, it needs to change. BTW, if you are a Republican, when is the last time a Republican President balanced the budget?

fjthomeczek

Mr. Mem Brain: Interesting that I just saw a blurb about in Switzerland, they are considering some sort of law measuring the ratio of executive pay to worker pay. The United States ranks high on that, not good for the country. I personally think that there is something morally wrong with taxing labor at a higher rate than capital gains or carried interest. We were told that these policies would cause more job growth, so to mimic Boehner, "Where are the jobs." jr. bush pushed through a lot of tax cuts, in a time of war, the first President to do so in history, and put the wars "off budget." 53 percent of bush's tax spending went to the upper one percent, and the conservative WSJ in January of 2009 billed him the "Worst job creator ever." He did hide some of it by increased government employment.
A short 12 years ago, we were told that we had to be careful not to pay down the debt too fast,and I give jr. credit. He sure took care of that problem of paying down the debt too fast.

Voice of Reason Loc: Earth

Mr fjthomeczek,

Perception is reality if, and only if, a complicit and dishonest media perpetrate the lie. Unfortunately the MSM at this point in time is complicit and dishonest.

I'm sure you could list statistics, but you know what they say, there are lies, damn lies, and statistics. They, like the bible, can be used to prove/disprove any argument.

I am intrigued by your statement, "[income] Ine******y actually affects all of us negatively in ways that are hard to appreciate". If they are hard to appreciate does that mean their hard to notice? If so, how important are they?

I agree that if the system is r****d capitalism can become a "winner take all" exercise, but like you said we'll have to disagree on the r****d part. I notice you mentioned Bill Gates and implied he became rich by being dishonest. You may be correct, I don't know. However, if the system were r****d wouldn't that have prevented him from succeeding despite his dishonesty? You also didn't answer the greater questions about the other self-made millionaires or the general fiscal improvement for the majority of the middle class up until the start of the recession.

The beauty of capitalism, when it works correctly, is that there are no losers. Everybody wins. No other economic system can do that.

No, I'm not a Republican, in fact I dislike Republican politicians only slightly less than I dislike Democratic politicians. I am a libertarian, but not a Ron Paul libertarian.

Lastly, I do think there is some merit in looking at CEO salaries, but I don't think that is the purview of government. I don't know if this practice still exists, but in the '80's in Japan CEO salaries were limited to 40x the lowest-paid worker's salary. This wasn't a law, it was just a societal norm. I do agree that many American CEO salaries are outrageous and that money could be put to better use either in reinvestment in the company, higher pay for workers, bonuses for exemplary workers, increased benefits or some combination of those.

memBrain Loc: North Carolina (No longer in hiding.)

Personally, I think it is morally wrong to tax ANYONE more than another. Income, if it is taxed at all, should be taxed the same across the board regardless of how it is made. It will assure that the wealthy pay their fair share. Also, If the tax is adjusted for cost of living, then it wouldn't be punitive for anyone. It would help the poor person, and have little effect on the rich.

Another thing with respect to taxes, necessities should not be taxed. So, for example, food purchased by the end consumer should not be taxed. For that matter, nor should other products that are consumed taking care of life's daily functions (IE toiletries). Beyond that, there should be a consumption tax for all other goods and services. Here's where I believe a graduated tax system would be preferable. Luxury items should be taxed at a higher rate than standard commodities. That way everyone is taxed at the rate at which they consume.