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 am a boomer. Due to changes in the estate tax during my lifetime by the Republicans and the step up in cost basis of assets at death, my boomer wealth will transfer to my Gen X? or Gen Z? son tax free at my death. He will not have to pay any estate taxes, and if he decides to sell any of my assets immediately following my death, he will pay no capital gains tax. Many feel this is not right. It tends to create a wealthy upper class. I have mixed feelings, since I want my son to have my money to have a happy and productive life. I hope this answers your question!
I'm going to wait for what Reich suggests about taxing our generation at death before I decide to agree or not. Hopefully there will be something left to help to help my children in their retirements, because it has been harder for my children to save than it was for our generation as a whole.
Are estates under 2 million dollars taxed? Trump and his children inherited all their wealth. Should their estates be taxed at the same rate as those who really earned their wealth, like yours, I presume?
According to Reich's lecture, no estate under $22 million is taxed. I think most people, including Dr. Reich, who advocate having estate taxes, still want to exempt taxation on estates below a certain figure, say, $1 million.
An insightful comment on a current Orwellian issue, which heeding Lawrence O'Donnell's observation I'll call "the Liars' Committee," worth serious attention: https://youtu.be/dJ7fUVnTNMA
Thank you for the laughs and for that important video excerpt from Lawrence O'Donnell's show. It is worth serious attention. I urge everyone to take the time to watch the last link and enjoy the humor in the first three links.
That was a great video by Lawrence O'Donnell. I especially liked Rep. Plaskett's statement at the end of the video.
I will say that Republicans have for a long time been engaged in misnaming things like their legislation, e.g. "Clean Air Act", that conveys a meaning opposite to its true purpose.
You may not personally have participated in boomers' wealth, but that doesn't change the fact that they're the richest generation that has ever existed. It's doubtful that its successors will be able to keep the wealth let alone keep amassing more.
What do you think where the US is heading, what makes you sure the next coup (less than two years from now) will fail again?
Do not kid yourself . Boomer’s wealth was not in dollar signs. It was in programs that supported a work ethic that after a life time of just that , one could count on not being a pauper. It was and is still a government investment in self for having helped make a strong middle class. It was and is the only plan that rewarded investment and in savings of one’s commitment to taking care of not just self but of all Americans! It was and is
called “The New Deal”. It was and is still the most popular program ever devised by an administration by brilliant and caring human beings. It made an entire generation feel important in making our country worthy of Global admiration.
You see, having “gobs” of everything doesn’t make you smart, or kind, or useful. It doesn’t make you happy it just makes one delusional.
When people start thinking they need MORE in order to be right...., they start to believe this. But when people see that sharing in the wealth of caring, when people see that sharing in the joy of balancing a life with more than just consumption, people start to understand that character does not come from having “the most” .
This works in the same way that believing in a religion only if it makes someone else’s religion wrong makes yours right. There is more to life than having more or in being right.
A society that makes an ideal of consumption over all else usually fails. Read our human history.
The median boomer retirement savings is $202,000. That earns about 673 dollars a month witch is subject to tax when added to Social Security. I am guessing that most retired boomers live on less than $30,000. per year and must subtract property taxes for their home from that amount. Retirement savings were taken out of boomer salaries while working and not available to live on. We are currently healthy and may live another 30 years if we can maneuver through the healthcare system and not be stressed to death. I don't know where you get your figures from, but I think my parent's generation was probably wealthier. Why do you think I'm sure the next coup will fail? I hope you're cheering us on to another peaceful transfer of power.
There was never an era when so much wealth was generated than right after WWII especially in western industrialized countries. The US came from the great depression, Europe from the a war. And those boom times have ended in the 1980s at the latest. The number of billionaires is rather evidence of the decline of the US.
No one ever said that the wealth was distributed fairly. Though there has hardly been a time when workers would earn a higher income than the fifties, sixties.
The most prosperous and innovative periods in history have also been very inclusive.
Bob has hinted several times at billionaires/corporations being the source of innovation in modern US, but he never gave it a closer look so far For a good reason of you ask me. I don't think that he buys into this narrative.
Do you remember Bob's remark about his new hip (?) which he lauded for its superior quality?
He did say that monopolies/monopsodies increase profits at the cost of innovation which on my eyes is the base of growing wealth.
My thought: they are extinguishing the ability of tens of millions of Americans to be in the middle class. The middle class is rapidly shrinking, as the billionaires continue to rake in their billions at our expense. I consider that to be a decline.
why not blame the government for giving government subsidies to the poor getting them closer to middle incomes ? yeah yeah it's the socialist government (being facetious here with a MAGA hat on)
Combined with the large number of Americans living in poverty, this tremendous disparity between rich & poor in wealth & power, at record levels, is extremely destabilizing for a society & nation.
Per capita "richest" or per collective generationally "richest?" If the latter, that is obviously because it is the largest generation which would ipso facto translate to having the most wealth, only because of the size of that cohort. They also have, to date, the longest WORK histories and the most extended period of time for taking earned Social Security.
I am fascinated by what seems to be a relatively recent attitude expressed in various ways, sarcastically berating "Boomer", mocking, belittling and marginalizing the elderly in ageist ads, comedy bits, etc., relentless "news" about the insufficiencies
and inequities of Social Security and Medicare, constant social media postings blaming "boomers" for every ill and problem, including global warming - while simultaneously promoting notions that the offspring and grand-offspring of "boomers" are entitled, owed, the savings in any/all forms earned and accumulated by "boomer" parents and grandparents. I am unaware of ANYONE in the "boomer" demographic who held similar attitudes about THEIR parents and grandparents!
Social media are also rank with attitudes of anger, hostility, hatred for "seniors" by GEN-youngers.
I heard GEN-youngers once say within earshot of elders, "Why don't they just give it to us NOW?" referring to expected inheritance from "boomer"relatives still working and not poor but not wealthy. Translation: let us find a nice ice floe for you, but leave your wallet with me, geezer/boomer.
There is a generational self-centered, selfish, and rather cruel strain in GEN-youngers that hasn't existed in older generations, e.g. "boomers."
The oft-touted "altruism" of GEN-youngers seems to have very clearly defined limits, largely including their own members and animals.
This sounds much like pitching generations against each other, which is something we definitely need to avoid.
Also I'm not really interested in ranking generations.
Every generation faces its own challenges and it will have its own set of assets to employ.
Generations aren't competing against each other anyway.
Ultimately al generations will need to attribute to the tasks we're facing now, especially coping with climate change (it's a done deal on my eyes, though limiting it is extremely important).
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.
In the 1990s my workplace was into TQ team building, encouraging personnel at all levels to be more engaged in the decision making process. Just as we were getting the hang of it, suddenly the structure was converted to the most hierarchical structure we've had, & consultation of non-managerial/non-administrative personnel who knew best the nuts & bolts of their jobs became practically non-existent.
Thanks Jaime. I too with the rest of our staff was considered to be nothing more than, nut's and bolt's. Of a private equity outfit that bought up our little hospital chain. And the reason why I started investigating non orthodox economists and theory. Insidious what heterodox standard operation procedure is. They must be rendered obsolete.
“…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.”
I see your point. Why should someone work 40 hours a week at Walmart, then have to apply for food stamps and Medicaid, a time consuming and belittling process? The government subsidizes the Walmart corporation through redistribution to their workers because otherwise Walmart would have to pay enough in salaries for people to work for them. Employees are supposed to feel inadequate and grateful. Meanwhile, the SCOTUS has been chipping away at labor laws that protect workers' right to organize, and the NLRB has been underfunded, and in my opinion, corporate friendly. And where are the products that Walmart sells being produced? Not by our workers. Vicious cycle?
In your scenario, Walmart has transferred the responsibility of paying fringe benefits to the government and thus to the tax paying population
The prices we pay at Walmart are discounted by the amount that the taxpayers will have to cover. The general population has to pay income taxes and also contribute to a social insurance fund. In part, we pay fringe benefits for Walmart employees.
That's why I want people like Robert to consider the concept of endowment. IMHO we exonerate "charities" and grant them tax status. I think we could, as a nation do the same for my favorite "charity," the Social Security Administration, which provides the major part of our safety net.
Can also do the same for Medicare.
I have also brought a second issue up previously. We are not collecting any taxes on a segment of our economy. You buy a widget made in a foreign country -- say a country we don't have diplomatic or a a tax treaty with -- but that widget is sold by a reseller in the US. The manufacturer is foreign, and the manufacturer is not registered to do business in the US. The profits go to that company/ and or that country. They pay no US taxes.
In essence, we, whether an employer or an employee, are in essence subsidizing that company and or country.
Yes, Judy you are correct in my understanding . We aren’t planning to tax “the rich” to give to “ the poor”. We are taxing everyone in order that our government can do the good of the people , for the people, of the people. Somewhere along the slow decline into Reaganomics some felt they aren’t needing to “put back” into the economy others make possible with hard work.
We are simply asking to Give back to the country so many of you think is yours and no one else’s. Middle Class..... long known to make a stable culture of working people who then can buy into neighborhoods, send children to college, depend on a government that is built for the good of all.... ALL.... not for a few greedy “so called Elites”, . Remember the Revolutionary War.... the one we eradicated ourselves from Monarchs?
Let’s get back to the Strength of making a Middle class worthy again. All of us gain.
I ask Dr. Reich's indulgence to use this his thread to promote a very good documentary on our society's intentional, controlled implosion. (See above.)
I may have my tin-foil hat on again, but 9/11 wasn't the only "inside job" directed against the American people.
Obviously having companies & institutions paying their employees more equitably, such as a maximimum of 20:1 between highest & lowest paid workers (instead of around 400:1 as it is now), would help reduce wealth disparity. So would a much more progressive tax system, which in turn would encourage a less lopsided method of paying employees.
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?
They pay much less on the first $40 million in EARNINGS.
People with great wealth can borrow from themselves without ANY tax liability. On paper NO earnings.
The wealthiest people I know are not in "business." They are at best "investors." Usually invest in themselves before any public investments.
I'm primarily concerned by foreign countries not paying their fair taxes on their US earnings and investments. IMHO we have been undermined by our "allies" who control many of our industries and make not just economics but are making national security risky. Think OPEC, Saudi, China, etc.
Here’s a crazy idea off the top of my head: the federal minimum wage must be a living wage, as determined by local cost of living, excluding rent (explain in a moment). At the same time, to be fair there should be a federal maximum wage (meaning all forms of compensation, including stock options), let’s say 100x the minimum wage. No one allowed to take home and spend on themselves more than the maximum. Any profit in excess of that has to be spent on running the company (including labor) or on public welfare, or sent directly to the government (taxes). Want a private jet? It has to be company property with justifiable company purpose. Then you’re a passenger, not the owner.
About rents: now it is “what the market will bear,” so if your landlord knows your wage will bear it, he is free to jack up the rent accordingly. “Oh, you got a raise? I’ll take that, it’s mine.” So, make rent set at 30% (or whatever) of your wage, regardless of what it is. You make minimum wage (set by other cost of living locally), then 30% of it goes to your landlord. You make 1 million a year and rent? Your landlord gets $300,000 a year out of you. (Remember if that, after actual costs, exceeds the maximum wage (see above) he has to spend the excess according to the law, and can’t keep it personally.)
Yeah, I know, it’ll never happen. A much more fundamental reset needs to happen, but that will be forced on us, we won’t do it by voting.
There seems to be a lot to like in your idea about rents. One question I have though is will landlords/ property owners be disinclined to rent to low income people scraping by on the minimum wage? What landlord would settle for $300/ month rent out of aprox. a $1,000 a month income of a minimum wage worker?
Would people be driven away from becoming landlords if low income tenants payed so little?
Perhaps there could be some sort of a tax incentive to keep landlords in the private housing/rental market under such a scenario?
For whatever it is worth, for the preceding 20 or so years I was living in California and paying about 70% of my very small income to rent. I finally got driven out of that market by rent increases in the "free market."
There's got to be a better way for the poor. With wages driven down (against inflation) and rents free to rise the poor are caught in a life killing vice in this country.
Bear in mind that the minimum wage would be set at a “living” rate (but not inflated by sky high rents, which would be excluded in setting the rate) so no one working a full week (40 hr) would bring home only $1000/mo; depending on the area, more like 2500-3500/mo. So 30% would be about $750-1000. And the 30% would be based on full time employment, not part-time. Of course landlords would court high income tenants, but there are only so many of those. I’m not familiar with the profit margin on modest rentals, but cracking down on slum lords is a whole nuther subject. No one should be allowed to rent out an apartment in neglected unsafe condition. Try that, lose the property.
I wasn’t intending to get into the weeds on this, I’m sure any idea has knots to untangle.
From my personal experience as a low-income renter, getting rid of all the slum lords would get rid of 20 or 30% of the property renters and rents would go up 20 or 30% above already too high levels.
There's got to be a better way. I know HUD was supposed to be doing something regarding providing low income housing but they don't do much.
In America housing is seen as an opportunity for speculators to make a killing off of the most vulnerable poor. In more enlightened countries housing is seen as a human right like food and clothing.
America is not a democracy. It is an oligarchy for the rich. Fuck it.
Here are my ideas on taxation. Exempt from taxation the first $50K in annual income. Tax the next $50K (up to $100K) in income at 20%, the next $100K (to $200K) at 40%, $200-500K at 60%, $500K - $1M at 80%, & any further income above $1M/yr at 90%. It's simple to calculate your taxes, it reduces taxes on the majority of taxpayers while bringing in considerable more revenue to the federal government, to be used for taking care of our greatest problems like climate chaos/environmental destruction/ecosystem collapse/mass extinction, paying for universal healthcare like every other advanced nation in the world has had since last century, providing a nationwide mass/rapid transit system like Europe, Japan & China all have, eliminating poverty, distributing a universal basic income, etc. It would also leave more money in more people's pockets which could be used for boosting the local community & supporting small businesses. I would also consider raising the gasoline tax by about $1 per gallon (to help with transportation infrastructure & rapid transit), institution of a fee or tax on greenhouse gases, a special tax on meat & on plastic, a wealth tax, transaction fee on large sums of money, closing tax loopholes, eliminating tax havens, revoking tax exemptions for religious organizations (at least those involved in politics), & eliminating the income cap for paying Social Security taxes.
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.
The high prices of houses has made me delay buying a house, & then once I buy a house, having committed a huge proportion of my limited wealth to the purchase, I wonder if high property taxes, like Gloria Maloney mentioned above, would take too much of what I have left to be able to afford to keep that house. That is the conundrum so many of us face who neither like paying such a large portion of our income on high & rapidly rising rent.
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!
Top rate was 91% during the Eisenhower administration. We were gaining in prosperity, well-being & standard of living at all economic levels during the era of FDR-LBJ, when our tax system was at its most progressive. The richest are not harmed by a progressive tax system because more money is in the hands of more people who can use it to spend, which helps businesses. But the middle & lower/working classes are harmed when the tax system is not progressive.
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 am a boomer. Due to changes in the estate tax during my lifetime by the Republicans and the step up in cost basis of assets at death, my boomer wealth will transfer to my Gen X? or Gen Z? son tax free at my death. He will not have to pay any estate taxes, and if he decides to sell any of my assets immediately following my death, he will pay no capital gains tax. Many feel this is not right. It tends to create a wealthy upper class. I have mixed feelings, since I want my son to have my money to have a happy and productive life. I hope this answers your question!
I'm going to wait for what Reich suggests about taxing our generation at death before I decide to agree or not. Hopefully there will be something left to help to help my children in their retirements, because it has been harder for my children to save than it was for our generation as a whole.
Are estates under 2 million dollars taxed? Trump and his children inherited all their wealth. Should their estates be taxed at the same rate as those who really earned their wealth, like yours, I presume?
According to Reich's lecture, no estate under $22 million is taxed. I think most people, including Dr. Reich, who advocate having estate taxes, still want to exempt taxation on estates below a certain figure, say, $1 million.
I don't think so.
Still have state tax liability depending where you live.
When I lived in Pennsylvania, the most important public official was the inheritance tax appraiser.
True enough:
https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1boTGr.img?w=800&h=415&q=60&m=2&f=jpg
https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1boJFc.img?w=800&h=415&q=60&m=2&f=jpg
https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1boWfJ.img?w=800&h=415&q=60&m=2&f=jpg
An insightful comment on a current Orwellian issue, which heeding Lawrence O'Donnell's observation I'll call "the Liars' Committee," worth serious attention: https://youtu.be/dJ7fUVnTNMA
Thank you for the laughs and for that important video excerpt from Lawrence O'Donnell's show. It is worth serious attention. I urge everyone to take the time to watch the last link and enjoy the humor in the first three links.
That was a great video by Lawrence O'Donnell. I especially liked Rep. Plaskett's statement at the end of the video.
I will say that Republicans have for a long time been engaged in misnaming things like their legislation, e.g. "Clean Air Act", that conveys a meaning opposite to its true purpose.
You may not personally have participated in boomers' wealth, but that doesn't change the fact that they're the richest generation that has ever existed. It's doubtful that its successors will be able to keep the wealth let alone keep amassing more.
What do you think where the US is heading, what makes you sure the next coup (less than two years from now) will fail again?
Do not kid yourself . Boomer’s wealth was not in dollar signs. It was in programs that supported a work ethic that after a life time of just that , one could count on not being a pauper. It was and is still a government investment in self for having helped make a strong middle class. It was and is the only plan that rewarded investment and in savings of one’s commitment to taking care of not just self but of all Americans! It was and is
called “The New Deal”. It was and is still the most popular program ever devised by an administration by brilliant and caring human beings. It made an entire generation feel important in making our country worthy of Global admiration.
You see, having “gobs” of everything doesn’t make you smart, or kind, or useful. It doesn’t make you happy it just makes one delusional.
When people start thinking they need MORE in order to be right...., they start to believe this. But when people see that sharing in the wealth of caring, when people see that sharing in the joy of balancing a life with more than just consumption, people start to understand that character does not come from having “the most” .
This works in the same way that believing in a religion only if it makes someone else’s religion wrong makes yours right. There is more to life than having more or in being right.
A society that makes an ideal of consumption over all else usually fails. Read our human history.
Thank you for listening.🤪🎶👏🏻🤗
The median boomer retirement savings is $202,000. That earns about 673 dollars a month witch is subject to tax when added to Social Security. I am guessing that most retired boomers live on less than $30,000. per year and must subtract property taxes for their home from that amount. Retirement savings were taken out of boomer salaries while working and not available to live on. We are currently healthy and may live another 30 years if we can maneuver through the healthcare system and not be stressed to death. I don't know where you get your figures from, but I think my parent's generation was probably wealthier. Why do you think I'm sure the next coup will fail? I hope you're cheering us on to another peaceful transfer of power.
There was never an era when so much wealth was generated than right after WWII especially in western industrialized countries. The US came from the great depression, Europe from the a war. And those boom times have ended in the 1980s at the latest. The number of billionaires is rather evidence of the decline of the US.
No one ever said that the wealth was distributed fairly. Though there has hardly been a time when workers would earn a higher income than the fifties, sixties.
The most prosperous and innovative periods in history have also been very inclusive.
Bob has hinted several times at billionaires/corporations being the source of innovation in modern US, but he never gave it a closer look so far For a good reason of you ask me. I don't think that he buys into this narrative.
Do you remember Bob's remark about his new hip (?) which he lauded for its superior quality?
He did say that monopolies/monopsodies increase profits at the cost of innovation which on my eyes is the base of growing wealth.
Why is the number of billionaires evidence of the decline of the US?
My thought: they are extinguishing the ability of tens of millions of Americans to be in the middle class. The middle class is rapidly shrinking, as the billionaires continue to rake in their billions at our expense. I consider that to be a decline.
Probably true.
why not blame the government for giving government subsidies to the poor getting them closer to middle incomes ? yeah yeah it's the socialist government (being facetious here with a MAGA hat on)
Combined with the large number of Americans living in poverty, this tremendous disparity between rich & poor in wealth & power, at record levels, is extremely destabilizing for a society & nation.
Per capita "richest" or per collective generationally "richest?" If the latter, that is obviously because it is the largest generation which would ipso facto translate to having the most wealth, only because of the size of that cohort. They also have, to date, the longest WORK histories and the most extended period of time for taking earned Social Security.
I am fascinated by what seems to be a relatively recent attitude expressed in various ways, sarcastically berating "Boomer", mocking, belittling and marginalizing the elderly in ageist ads, comedy bits, etc., relentless "news" about the insufficiencies
and inequities of Social Security and Medicare, constant social media postings blaming "boomers" for every ill and problem, including global warming - while simultaneously promoting notions that the offspring and grand-offspring of "boomers" are entitled, owed, the savings in any/all forms earned and accumulated by "boomer" parents and grandparents. I am unaware of ANYONE in the "boomer" demographic who held similar attitudes about THEIR parents and grandparents!
Social media are also rank with attitudes of anger, hostility, hatred for "seniors" by GEN-youngers.
I heard GEN-youngers once say within earshot of elders, "Why don't they just give it to us NOW?" referring to expected inheritance from "boomer"relatives still working and not poor but not wealthy. Translation: let us find a nice ice floe for you, but leave your wallet with me, geezer/boomer.
There is a generational self-centered, selfish, and rather cruel strain in GEN-youngers that hasn't existed in older generations, e.g. "boomers."
The oft-touted "altruism" of GEN-youngers seems to have very clearly defined limits, largely including their own members and animals.
This sounds much like pitching generations against each other, which is something we definitely need to avoid.
Also I'm not really interested in ranking generations.
Every generation faces its own challenges and it will have its own set of assets to employ.
Generations aren't competing against each other anyway.
Ultimately al generations will need to attribute to the tasks we're facing now, especially coping with climate change (it's a done deal on my eyes, though limiting it is extremely important).
And don't forget Keynes. I've done that. I hope you are enjoying the class as much as I am.
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.
In the 1990s my workplace was into TQ team building, encouraging personnel at all levels to be more engaged in the decision making process. Just as we were getting the hang of it, suddenly the structure was converted to the most hierarchical structure we've had, & consultation of non-managerial/non-administrative personnel who knew best the nuts & bolts of their jobs became practically non-existent.
Thanks Jaime. I too with the rest of our staff was considered to be nothing more than, nut's and bolt's. Of a private equity outfit that bought up our little hospital chain. And the reason why I started investigating non orthodox economists and theory. Insidious what heterodox standard operation procedure is. They must be rendered obsolete.
“…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.”
I see your point. Why should someone work 40 hours a week at Walmart, then have to apply for food stamps and Medicaid, a time consuming and belittling process? The government subsidizes the Walmart corporation through redistribution to their workers because otherwise Walmart would have to pay enough in salaries for people to work for them. Employees are supposed to feel inadequate and grateful. Meanwhile, the SCOTUS has been chipping away at labor laws that protect workers' right to organize, and the NLRB has been underfunded, and in my opinion, corporate friendly. And where are the products that Walmart sells being produced? Not by our workers. Vicious cycle?
In your scenario, Walmart has transferred the responsibility of paying fringe benefits to the government and thus to the tax paying population
The prices we pay at Walmart are discounted by the amount that the taxpayers will have to cover. The general population has to pay income taxes and also contribute to a social insurance fund. In part, we pay fringe benefits for Walmart employees.
That's why I want people like Robert to consider the concept of endowment. IMHO we exonerate "charities" and grant them tax status. I think we could, as a nation do the same for my favorite "charity," the Social Security Administration, which provides the major part of our safety net.
Can also do the same for Medicare.
I have also brought a second issue up previously. We are not collecting any taxes on a segment of our economy. You buy a widget made in a foreign country -- say a country we don't have diplomatic or a a tax treaty with -- but that widget is sold by a reseller in the US. The manufacturer is foreign, and the manufacturer is not registered to do business in the US. The profits go to that company/ and or that country. They pay no US taxes.
In essence, we, whether an employer or an employee, are in essence subsidizing that company and or country.
I am not following. I will continue to take the classes so I will understand more.
Walmart is not a manufacturer. It is a seller or reseller. Most profits actually go to the manufacturer.
The manufacturer may be in Bangladesh, but the shareholder may be in your hometown.
More likely the manufacturer is the government and it's not a publicly traded company. Most Chinese "companies" are owned lock stock and barrel by the government. https://www.wsj.com/articles/china-trumps-u-s-in-key-technology-research-report-says-adbb56bc
Even the Japanese and South Korean companies doing business here are highly subsidized by their governments. I am a witness to their roles in the demise of our seamless pipe industry. https://billmoyers.com/story/black-monday-77-mill-shutdown-youngstown-gave-birth-rust-belt/
China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture.
Yes, Judy you are correct in my understanding . We aren’t planning to tax “the rich” to give to “ the poor”. We are taxing everyone in order that our government can do the good of the people , for the people, of the people. Somewhere along the slow decline into Reaganomics some felt they aren’t needing to “put back” into the economy others make possible with hard work.
We are simply asking to Give back to the country so many of you think is yours and no one else’s. Middle Class..... long known to make a stable culture of working people who then can buy into neighborhoods, send children to college, depend on a government that is built for the good of all.... ALL.... not for a few greedy “so called Elites”, . Remember the Revolutionary War.... the one we eradicated ourselves from Monarchs?
Let’s get back to the Strength of making a Middle class worthy again. All of us gain.
https://www.google.com/search?q=Requim+for+the+American+Dream%3B+Noam+Chomsky&oq=Requim+for+the+American+Dream%3B+Noam+Chomsky&aqs=chrome..69i57.11022j0j1&sourceid=chrome&ie=UTF-8#fpstate=ive&vld=cid:278e4698,vid:WEnv5I8Aq4I
I ask Dr. Reich's indulgence to use this his thread to promote a very good documentary on our society's intentional, controlled implosion. (See above.)
I may have my tin-foil hat on again, but 9/11 wasn't the only "inside job" directed against the American people.
Obviously having companies & institutions paying their employees more equitably, such as a maximimum of 20:1 between highest & lowest paid workers (instead of around 400:1 as it is now), would help reduce wealth disparity. So would a much more progressive tax system, which in turn would encourage a less lopsided method of paying employees.
I agree about workplace structure.
But why would a neoliberal US go to war with am even more neoliberal China?
If there's something worth fighting for, it's democracy that isn't lost yet.
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?
They pay much less on the first $40 million in EARNINGS.
People with great wealth can borrow from themselves without ANY tax liability. On paper NO earnings.
The wealthiest people I know are not in "business." They are at best "investors." Usually invest in themselves before any public investments.
I'm primarily concerned by foreign countries not paying their fair taxes on their US earnings and investments. IMHO we have been undermined by our "allies" who control many of our industries and make not just economics but are making national security risky. Think OPEC, Saudi, China, etc.
Here’s a crazy idea off the top of my head: the federal minimum wage must be a living wage, as determined by local cost of living, excluding rent (explain in a moment). At the same time, to be fair there should be a federal maximum wage (meaning all forms of compensation, including stock options), let’s say 100x the minimum wage. No one allowed to take home and spend on themselves more than the maximum. Any profit in excess of that has to be spent on running the company (including labor) or on public welfare, or sent directly to the government (taxes). Want a private jet? It has to be company property with justifiable company purpose. Then you’re a passenger, not the owner.
About rents: now it is “what the market will bear,” so if your landlord knows your wage will bear it, he is free to jack up the rent accordingly. “Oh, you got a raise? I’ll take that, it’s mine.” So, make rent set at 30% (or whatever) of your wage, regardless of what it is. You make minimum wage (set by other cost of living locally), then 30% of it goes to your landlord. You make 1 million a year and rent? Your landlord gets $300,000 a year out of you. (Remember if that, after actual costs, exceeds the maximum wage (see above) he has to spend the excess according to the law, and can’t keep it personally.)
Yeah, I know, it’ll never happen. A much more fundamental reset needs to happen, but that will be forced on us, we won’t do it by voting.
There seems to be a lot to like in your idea about rents. One question I have though is will landlords/ property owners be disinclined to rent to low income people scraping by on the minimum wage? What landlord would settle for $300/ month rent out of aprox. a $1,000 a month income of a minimum wage worker?
Would people be driven away from becoming landlords if low income tenants payed so little?
Perhaps there could be some sort of a tax incentive to keep landlords in the private housing/rental market under such a scenario?
For whatever it is worth, for the preceding 20 or so years I was living in California and paying about 70% of my very small income to rent. I finally got driven out of that market by rent increases in the "free market."
There's got to be a better way for the poor. With wages driven down (against inflation) and rents free to rise the poor are caught in a life killing vice in this country.
Bear in mind that the minimum wage would be set at a “living” rate (but not inflated by sky high rents, which would be excluded in setting the rate) so no one working a full week (40 hr) would bring home only $1000/mo; depending on the area, more like 2500-3500/mo. So 30% would be about $750-1000. And the 30% would be based on full time employment, not part-time. Of course landlords would court high income tenants, but there are only so many of those. I’m not familiar with the profit margin on modest rentals, but cracking down on slum lords is a whole nuther subject. No one should be allowed to rent out an apartment in neglected unsafe condition. Try that, lose the property.
I wasn’t intending to get into the weeds on this, I’m sure any idea has knots to untangle.
From my personal experience as a low-income renter, getting rid of all the slum lords would get rid of 20 or 30% of the property renters and rents would go up 20 or 30% above already too high levels.
There's got to be a better way. I know HUD was supposed to be doing something regarding providing low income housing but they don't do much.
In America housing is seen as an opportunity for speculators to make a killing off of the most vulnerable poor. In more enlightened countries housing is seen as a human right like food and clothing.
America is not a democracy. It is an oligarchy for the rich. Fuck it.
In my reply I concentrated on individual taxes & neglected to mention corporate & capital gains taxes, which I would raise significantly.
Here are my ideas on taxation. Exempt from taxation the first $50K in annual income. Tax the next $50K (up to $100K) in income at 20%, the next $100K (to $200K) at 40%, $200-500K at 60%, $500K - $1M at 80%, & any further income above $1M/yr at 90%. It's simple to calculate your taxes, it reduces taxes on the majority of taxpayers while bringing in considerable more revenue to the federal government, to be used for taking care of our greatest problems like climate chaos/environmental destruction/ecosystem collapse/mass extinction, paying for universal healthcare like every other advanced nation in the world has had since last century, providing a nationwide mass/rapid transit system like Europe, Japan & China all have, eliminating poverty, distributing a universal basic income, etc. It would also leave more money in more people's pockets which could be used for boosting the local community & supporting small businesses. I would also consider raising the gasoline tax by about $1 per gallon (to help with transportation infrastructure & rapid transit), institution of a fee or tax on greenhouse gases, a special tax on meat & on plastic, a wealth tax, transaction fee on large sums of money, closing tax loopholes, eliminating tax havens, revoking tax exemptions for religious organizations (at least those involved in politics), & eliminating the income cap for paying Social Security taxes.
In what way?
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.
Your last name sounds so cool!
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.
The high prices of houses has made me delay buying a house, & then once I buy a house, having committed a huge proportion of my limited wealth to the purchase, I wonder if high property taxes, like Gloria Maloney mentioned above, would take too much of what I have left to be able to afford to keep that house. That is the conundrum so many of us face who neither like paying such a large portion of our income on high & rapidly rising rent.
Long Long ago, my wife and bought the cheapest fixer-uper in town, and worked on it every weekend for 7 years to acquire some equity.
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
I face the same kind of future. It feels precarious & insecure.
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.
Top rate was 91% during the Eisenhower administration. We were gaining in prosperity, well-being & standard of living at all economic levels during the era of FDR-LBJ, when our tax system was at its most progressive. The richest are not harmed by a progressive tax system because more money is in the hands of more people who can use it to spend, which helps businesses. But the middle & lower/working classes are harmed when the tax system is not progressive.
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.
This is an excellent post! Can't believe I'm the first in the >42 hours it's been up to give it a "heart".
Thanks for yet another informative session.