We now turn to policies where widening inequality is directly implicated. The first and most obvious (and most politically contentious) involves taxing higher-income people and redistributing to lower-income people. My goal today is to get students to reexamine their assumptions, both about how the system of taxing and redistributing actually works (or doesn’t) and about the practical consequences.
What boomer wealth are you talking about that is going to disappear and go untaxed? Many of us managed to eventually pay off a 30 year home loan at high interest that we pay increasing amounts of property taxes on every year. My fear is that we will outlive our ability to pay the property taxes and lose our modest home. We boomers are, and always have been, divided into classes as is the total population. Please don't teach young people that we, as a whole, are a wealth source to be cannibalized for the greater good. I don't think that is what you meant, but it could be interpreted that way. Thank you for giving me this opportunity to learn more about how the world works. I'm looking forward to next week's class. I wish I would have had an opportunity to learn from you when I was young. But then you were also still learning.
I'm curious why the structure of the work environment itself isn't discussed more. Why must an autocratic top down arrangement be the standard? The worker co-op system is well illustrated by the Mondragon Corp. of Spain. In existence since the late 50's. If the workplace itself is arranged more democratically. The distribution of wealth derived from it would be more fairly parceled out. But then, it must resemble a socialistic notion, and we can't go that route.
That notion seems to resemble the current geopolitical ramifications of our relationship with China. As the western, particularly US neoliberal free market rhetoric claims there is a democratic vs autocratic war of will with that country. Which is a rather ironic take in that China with its autocratic, (socialistic) structure has made its economy and citizens middle class consumers in record time never before accomplished. Whereas the US has undermined its citizens from that status with its democratic, (oligarchic autocracy) during the same period and longer.
And what if the free marketers and their unearned income were taxed at a rate obliging them to put their money into R&D and manufacturing capabilities in their own countries? Instead of their stocks, and private equity ventures and all the other parasitic practices they employ for easy quick turnaround. Maybe they need to know what the working class knows so well. Making an honest living.
“…taxing higher-income people and redistributing to lower-income people” - there’s something inherently wrong with this model. Considering the fact that people of lower income are the ones whose labor has been stolen to enrich those of higher income, how about avoiding the “redistribution” concept altogether? We need to stop with wording that smacks of the rich having to “sacrifice” something - let’s reframe it as “hard work merits immediate and adequate compensation that guarantees a reasonable standard of living.”
Thank you so much, Dr. Reich, for making these lectures available to the public.
I took Federal Income Tax law in law school about 30 years ago. I left that class at the end of the semester with perhaps one overriding impression: the main reason the Federal Tax Code is so convoluted and recondite is because it was riddled with loop-holes to allow the wealthy -- with the aid of astute tax lawyers -- to get out of paying federal income tax. I recall that at that time there was a considerable large depreciation deduction allowed for airplane ownership.
Much to my negligence I haven't thought much about federal income tax since. Your lecture, seeing the details in the big picture of the overall taxation issue, was a wonderful refresher for me.
Thank you so much for making these lectures available to the public.
Greed seems to be a natural human activity, probably resulting from our survival instincts. As U.S. society is currently structured, greed is maintained primarily by the filibuster. Nothing socially advantageous can happen until it is ended.
Professor Emeritus: This is my second time taking your course on Wealth and Equity. I am gaining valuable information and knowledge to reinforce my liberal formation as a Jesuit Trained Scholar! However, I am struggling with your definition of “Tax Expenditures” as avoidance and/or deductions from possible taxations that may or could be collected. In your example of the two CA Universities, the $350M drawn by Berkeley is clearly paid by CA Taxpayers to the state government and redistributed to the university. The $200M assumed to be deducted by the Alumni of Stanford for donations never sees the inside of the Tax Collectors vault! Please clarify this apparent inconsistency for me. (By the way, I fully appreciate your service over the years and your brilliance in formulating and presenting the truth of our flawed Economic Capitalist System created by another brilliant Founding Father (Hamilton). We need a Constitutional Convention to try to correct the legislation that has rendered our economy a disaster of inequality and unfairness!
I have long been an advocate of two top tiers above our current top tier. For those making $4 million a year or more, they can probably get by with a 42% tax rate.
But for those whom Thom Hartmann calls the morbidly wealthy, I think there should be a tier for those making $40 million or more that is up close to President Johnson’s level of top-tier taxation: 72%.
And here’s another twist. Why not raise the business tax rate back up to what it was before Trump for businesses with a gross annual income of $40 million? However, let’s keep the current rate for all other businesses below that threshold.
Call it the “monopoly mitigation rate.” Imagine how many dyed in the wool Republican restaurant-chain owners who’d jump at the chance to have a tax advantage over their larger rivals.
Please tell me what you think of these ideas and how they could be improved. How would you change the numbers, either in percentages or thresholds?
Dr. Reich, I am aware of an effort to shake up the “Caregivers” market. Today the Employment Agencies exploit the Aides/ CNAs and set unrealistically low salaries while dictating where and when they should provide Quality Care. The leader of this effort doesn’t know how to proceed effectively. She is a trained Nurse from Brazil and is married and living in the USA and is happy about that. Help!
The way to ‘make America fairer’ is to start by practicing equal representation as the Constitution dictates. This can only be done by publicly financed campaigns. The Zero Contributions Campaign Finance Amendment (campaignfinanceamendment.org) is designed to do this.
The system is clearly rigged to make the rich richer. We went to a 1031 exchange sales pitch just yesterday. If you are an old foggie, who happened to buy real estate in your youth, you gained from the Prop 13 rule of 1% max property tax increase per year. That destroyed California schools, and makes housing prices go up, helping those who managed to buy a house, and hurting those young people trying to buy a house. 1031 applies to rental property with lots of special case rules, that allow business and landlords to eventually pass sales tax on their property to their heirs, and even then with deffered taxes into the future. This is only one set of tax benefits for those with wealth. So the rich get richer, the poor get poorer, and eventually there may be a violent revolution. I'm in favor of equal benefits for all. Justice is the basis for sustainable freedom and peace.
If the poor and middle class aren't up in arms because "they are being taxed unfairly," who will lead the charge to change the system? America doesn't seem to acknowledge "classism" as the rest of the world does. We would rather bet on the billion to one shot of become part of the upper 1% by luck and/or hard work.
Another fantastic class. You did talk about tax expenditures, thank you, but I wish you'd talk about Gross taxable incomes more. The older the worker gets, the fewer the deductions allowed, and the higher the net tax paid (especially State tax) Now, retired at age 90 on a fixed income under $50,000, one would expect to pay fewer taxes, and yes my total tax is less than when I made $200,000 a year, but it still hurts. Now , I have no deductions [I sold my home, so no property tax, I gave my car to my granddaughter, so no registration fees. No more children to deduct (they don't allow deductions for my cats) I still have a few charitable donations, but anything approaching political, including Substack in non-deductible] The wealthy have it made until their dying day, they still manage to stick it to the middle
This is an excellent introductory course. We must also keep in mind that America has a curse. It's the curse of racism and colonialism. Consider this: If African Americans and Native Americans were not marginalized they would be better educated,, healthier,, happier, more productive,, would enjoy higher incomes, would pay more in taxes, and we all would be wealthier and less cantankerous. We are paying for the sins of past generations, and we are scapegoating each other. This Karma can be broken, and Professor Reich shows the way. Bravo!
The first needs are a healthy respect for our environment, including all the worlds creatures and upmost, recognizing the humaneness of all peoples. As climate disaster is teaching us, we are all in this battle of survival together. The next need is to stop the overpopulation of the planet by humans. Then there is the need to provide for the basic needs of all peoples, such as adequate food, shelter, healthcare and so forth. Of course it would help to end wars and stop the arms race, with the understanding that the worlds’ raw resources are not endless. And that means stop the waste and control the expectation of more is better. Does that mean a world government entity with the power of enforcement? Many would question these concepts as unnatural, destructive of individualism, socialistic, autocratic and whatever other name conjured up. But apart from changing the genetic structure of humans that has us competing and killing each other and destroying our Earth, what other choices are really viable.
Looking at the USA, what are the root causes of the problems alluded to in paragraphs above...racism, social injustices, and so forth. Is the distress and mental illnesses of so many inherent to our species or a consequence of something more or less obvious. In our struggles to survive we are taught to attack and hate the others among us, through desperation, spurred on by manipulation and propaganda by the very rich and greedy powerful. The anxieties and depression brought on by the daily endless struggles to keep one’s head and family above water are preventable. Yes, wealth inequality must be addressed head on. The workers are the backbone of our economy, and need to be treated with dignity and thanked with livable wages, adequate healthcare, adequate shelter, adequate transportation. If that means major taxing of the ultra rich and redistribution of monies through livable wages and social programs, and forgiveness of debt, let’s get to it. Stop the bribery of our leaders, stop the the wars, stop the religious fanaticism and instead focus on a healthy Earth, not some imaginary pie in the sky. Hell will be real enough if we don’t get our act together.
What boomer wealth are you talking about that is going to disappear and go untaxed? Many of us managed to eventually pay off a 30 year home loan at high interest that we pay increasing amounts of property taxes on every year. My fear is that we will outlive our ability to pay the property taxes and lose our modest home. We boomers are, and always have been, divided into classes as is the total population. Please don't teach young people that we, as a whole, are a wealth source to be cannibalized for the greater good. I don't think that is what you meant, but it could be interpreted that way. Thank you for giving me this opportunity to learn more about how the world works. I'm looking forward to next week's class. I wish I would have had an opportunity to learn from you when I was young. But then you were also still learning.
I'm curious why the structure of the work environment itself isn't discussed more. Why must an autocratic top down arrangement be the standard? The worker co-op system is well illustrated by the Mondragon Corp. of Spain. In existence since the late 50's. If the workplace itself is arranged more democratically. The distribution of wealth derived from it would be more fairly parceled out. But then, it must resemble a socialistic notion, and we can't go that route.
That notion seems to resemble the current geopolitical ramifications of our relationship with China. As the western, particularly US neoliberal free market rhetoric claims there is a democratic vs autocratic war of will with that country. Which is a rather ironic take in that China with its autocratic, (socialistic) structure has made its economy and citizens middle class consumers in record time never before accomplished. Whereas the US has undermined its citizens from that status with its democratic, (oligarchic autocracy) during the same period and longer.
And what if the free marketers and their unearned income were taxed at a rate obliging them to put their money into R&D and manufacturing capabilities in their own countries? Instead of their stocks, and private equity ventures and all the other parasitic practices they employ for easy quick turnaround. Maybe they need to know what the working class knows so well. Making an honest living.
“…taxing higher-income people and redistributing to lower-income people” - there’s something inherently wrong with this model. Considering the fact that people of lower income are the ones whose labor has been stolen to enrich those of higher income, how about avoiding the “redistribution” concept altogether? We need to stop with wording that smacks of the rich having to “sacrifice” something - let’s reframe it as “hard work merits immediate and adequate compensation that guarantees a reasonable standard of living.”
Thank you so much, Dr. Reich, for making these lectures available to the public.
I took Federal Income Tax law in law school about 30 years ago. I left that class at the end of the semester with perhaps one overriding impression: the main reason the Federal Tax Code is so convoluted and recondite is because it was riddled with loop-holes to allow the wealthy -- with the aid of astute tax lawyers -- to get out of paying federal income tax. I recall that at that time there was a considerable large depreciation deduction allowed for airplane ownership.
Much to my negligence I haven't thought much about federal income tax since. Your lecture, seeing the details in the big picture of the overall taxation issue, was a wonderful refresher for me.
Thank you so much for making these lectures available to the public.
Greed seems to be a natural human activity, probably resulting from our survival instincts. As U.S. society is currently structured, greed is maintained primarily by the filibuster. Nothing socially advantageous can happen until it is ended.
Professor Emeritus: This is my second time taking your course on Wealth and Equity. I am gaining valuable information and knowledge to reinforce my liberal formation as a Jesuit Trained Scholar! However, I am struggling with your definition of “Tax Expenditures” as avoidance and/or deductions from possible taxations that may or could be collected. In your example of the two CA Universities, the $350M drawn by Berkeley is clearly paid by CA Taxpayers to the state government and redistributed to the university. The $200M assumed to be deducted by the Alumni of Stanford for donations never sees the inside of the Tax Collectors vault! Please clarify this apparent inconsistency for me. (By the way, I fully appreciate your service over the years and your brilliance in formulating and presenting the truth of our flawed Economic Capitalist System created by another brilliant Founding Father (Hamilton). We need a Constitutional Convention to try to correct the legislation that has rendered our economy a disaster of inequality and unfairness!
I have long been an advocate of two top tiers above our current top tier. For those making $4 million a year or more, they can probably get by with a 42% tax rate.
But for those whom Thom Hartmann calls the morbidly wealthy, I think there should be a tier for those making $40 million or more that is up close to President Johnson’s level of top-tier taxation: 72%.
And here’s another twist. Why not raise the business tax rate back up to what it was before Trump for businesses with a gross annual income of $40 million? However, let’s keep the current rate for all other businesses below that threshold.
Call it the “monopoly mitigation rate.” Imagine how many dyed in the wool Republican restaurant-chain owners who’d jump at the chance to have a tax advantage over their larger rivals.
Please tell me what you think of these ideas and how they could be improved. How would you change the numbers, either in percentages or thresholds?
Dr. Reich, I am aware of an effort to shake up the “Caregivers” market. Today the Employment Agencies exploit the Aides/ CNAs and set unrealistically low salaries while dictating where and when they should provide Quality Care. The leader of this effort doesn’t know how to proceed effectively. She is a trained Nurse from Brazil and is married and living in the USA and is happy about that. Help!
The way to ‘make America fairer’ is to start by practicing equal representation as the Constitution dictates. This can only be done by publicly financed campaigns. The Zero Contributions Campaign Finance Amendment (campaignfinanceamendment.org) is designed to do this.
The system is clearly rigged to make the rich richer. We went to a 1031 exchange sales pitch just yesterday. If you are an old foggie, who happened to buy real estate in your youth, you gained from the Prop 13 rule of 1% max property tax increase per year. That destroyed California schools, and makes housing prices go up, helping those who managed to buy a house, and hurting those young people trying to buy a house. 1031 applies to rental property with lots of special case rules, that allow business and landlords to eventually pass sales tax on their property to their heirs, and even then with deffered taxes into the future. This is only one set of tax benefits for those with wealth. So the rich get richer, the poor get poorer, and eventually there may be a violent revolution. I'm in favor of equal benefits for all. Justice is the basis for sustainable freedom and peace.
If the poor and middle class aren't up in arms because "they are being taxed unfairly," who will lead the charge to change the system? America doesn't seem to acknowledge "classism" as the rest of the world does. We would rather bet on the billion to one shot of become part of the upper 1% by luck and/or hard work.
Another fantastic class. You did talk about tax expenditures, thank you, but I wish you'd talk about Gross taxable incomes more. The older the worker gets, the fewer the deductions allowed, and the higher the net tax paid (especially State tax) Now, retired at age 90 on a fixed income under $50,000, one would expect to pay fewer taxes, and yes my total tax is less than when I made $200,000 a year, but it still hurts. Now , I have no deductions [I sold my home, so no property tax, I gave my car to my granddaughter, so no registration fees. No more children to deduct (they don't allow deductions for my cats) I still have a few charitable donations, but anything approaching political, including Substack in non-deductible] The wealthy have it made until their dying day, they still manage to stick it to the middle
This is an excellent introductory course. We must also keep in mind that America has a curse. It's the curse of racism and colonialism. Consider this: If African Americans and Native Americans were not marginalized they would be better educated,, healthier,, happier, more productive,, would enjoy higher incomes, would pay more in taxes, and we all would be wealthier and less cantankerous. We are paying for the sins of past generations, and we are scapegoating each other. This Karma can be broken, and Professor Reich shows the way. Bravo!
Yes, the richest need to pay more. In the 1950's their share was about 70% and they still had plenty of money.
The first needs are a healthy respect for our environment, including all the worlds creatures and upmost, recognizing the humaneness of all peoples. As climate disaster is teaching us, we are all in this battle of survival together. The next need is to stop the overpopulation of the planet by humans. Then there is the need to provide for the basic needs of all peoples, such as adequate food, shelter, healthcare and so forth. Of course it would help to end wars and stop the arms race, with the understanding that the worlds’ raw resources are not endless. And that means stop the waste and control the expectation of more is better. Does that mean a world government entity with the power of enforcement? Many would question these concepts as unnatural, destructive of individualism, socialistic, autocratic and whatever other name conjured up. But apart from changing the genetic structure of humans that has us competing and killing each other and destroying our Earth, what other choices are really viable.
Looking at the USA, what are the root causes of the problems alluded to in paragraphs above...racism, social injustices, and so forth. Is the distress and mental illnesses of so many inherent to our species or a consequence of something more or less obvious. In our struggles to survive we are taught to attack and hate the others among us, through desperation, spurred on by manipulation and propaganda by the very rich and greedy powerful. The anxieties and depression brought on by the daily endless struggles to keep one’s head and family above water are preventable. Yes, wealth inequality must be addressed head on. The workers are the backbone of our economy, and need to be treated with dignity and thanked with livable wages, adequate healthcare, adequate shelter, adequate transportation. If that means major taxing of the ultra rich and redistribution of monies through livable wages and social programs, and forgiveness of debt, let’s get to it. Stop the bribery of our leaders, stop the the wars, stop the religious fanaticism and instead focus on a healthy Earth, not some imaginary pie in the sky. Hell will be real enough if we don’t get our act together.
Thanks for yet another informative session.