Jan 31, 2023·edited Jan 31, 2023Liked by Robert Reich
This is very depressing. Robert since you're an expert, what CAN be done? Lay out a plan and we will all back you up. Give it to your congressional friends... I mean it! You know how it all works, right? If not, when will it ever stop? Something needs to be done!!!! Have at it, please!
Jan 31, 2023·edited Jan 31, 2023Liked by Robert Reich
Exactly!
Thank you!
Capitalism is defined as:
An economic and political system in which a country's trade and industry are controlled by private owners for profit.
What professor Reich has explained is what I call “Runaway Capitalism “.
The problem in the US is our Capitalism has been leveraged by industry and private owners, not for the benefit of the country, but rather for their personal benefit in many ways, such as: Reduction of taxes on the wealthy, offshoring manufacturing and parking profits in safe haven country bank accounts, spending astronomical amounts of money to “buy” politicians, monopolizing industries, owning controlling share of the media, leveraging inflation to their benefit, hampering the IRS from conducting audits on the wealthy…
In short, we are falling into an abyss.
The previous Gilded Age came to an end after the stock market crash and WWI. Later FDR enacted programs that were beneficial for the country as a whole, which led to the prosperous 1950’s and 1960’s. And, even though they were still very solvent, the wealthy hated it. Which in turn has led us to this current Gilded Age.
What will it take to end this current Gilded Age?
It won’t be easy and it won’t occur immediately/overnight.
Well said. I think you meant WW1 not 2, The Gilded age died at the hands of President Theodore Roosevelt and others. The current Gilded age was conceived in the 1970's and came to full fruition under the trumpster.
Uncontrolled imperialism and corruption - which have brought down every empire in history and are rampant in our own. Given the rapid acceleration of both in the past 40 years, it probably won't be much longer.
Yes, and the ones to feel the effects first will be 1) the environment and the natural world, as we continue to extract more and more to sell more and more to try vainly to keep up with the insatiable debt; 2) the middle class, or what's left of it, because the loss of many conveniences will impact them than the poor, who've learned to deal without them; and 3) the bottom of the income heap. The crowds in the amphitheater gathered to watch the bottom heap slug it out to the death are already thinning. How long will it be before #1 and #2 will see through the delusion of corporate-induced sports and entertainment and start rebelling against the multi-million dollar contracts?
Words are powerful. I didn’t look for a definition of capitalism, but I would recommend most highly the Professor’s book, ‘Saving Capitalism’ That was an eye opener for me.
Professor Reich outlines 5 building blocks of capitalism, then writes that if we want a ‘free market’ we have to build those blocks: ( verbatim )
• PROPERTY: what can be owned
• MONOPOLY: what degree of market power is permissible
• CONTRACT: what can be bought and sold, and on what terms
• BANKRUPTCY: what happens when purchasers can’t pay up
• ENFORCEMENT: how to make sure no one cheats on any of these rules
This is way more enlightening than ‘he who has the gold makes the rules,’ a summary of the usual use of the word, in my experience.
In other words, there is no ‘free market’ without laws and a society to regulate and enforce those laws. That’s the opposite of the usual use of the term.
The professor does not go to a dictionary or elsewhere to define capitalism if I did not miss it — maybe there is something in the documentary based on the book — he illuminates the myths of the ‘free market’ and details problems and opportunities to make a vision of capitalism work.
As above, the most profound realization for me from that book, first pages worth the price of the whole thing, was that the definition of capitalism is not set in stone at all, but that real life beneficial capitalism has structure and rules, essentially a working definition, that we don’t often talk about. Instead we get wrong, wild claims that should not be accepted, but are not even questioned in my experience. Like ‘socialism,’ the term is skewed and twisted to suit the aims of many different actors, for worse and better.
‘Saving Capitalism,’ very highly recommended — b.rad
#5 probably isn't going to happen, but should for cerian strategic items like steel, electronics, and chips if possible. But rates of exchange and worker exploitation makes foreign sites for factories very attractive.
Greene is upset that President Biden lowered gas prices prior to the mid-term elections, in essence, to swing public opinion over to the Democratic way of thinking. Well maybe the rest of us should be upset with the huge oil concerns, that exist only to mingle with the Republican way of not thinking, artificially raising gas prices to make the Biden administration look bad during the same mid-terms election cycle. Ms. Greene, it's all in how you look at it. The end result was the lowering of the gas prices at the pump. What's your problem, besides a missing mass of fatty material lodged loosely between your ears? The stupidity this woman exhibits every time she opens her mouth is only surpassed by the emptiness of the thought she is trying to convey. Georgia must be suffering from "Peach Pit Poisoning" (I think that qualifies as being alteration) and this fool must have swallowed a belly full. The House has a quantity of honest elected officials that are being forced to listen to Greene's ridiculous rantings centered around her flagrant inability to act in a responsible manner. Her female bulldog mentality, that we all know by another name, stands as a testament to her lack of understanding of why she is and where she shouldn't be. If her state reelects this woman in the next election cycle maybe 49 is a more significant number than 50. She ain't no Georgia Peach and that's a pity.
I would eliminate cash and income tax completely. I would put a “ use tax “ on all transactions. Apple builds a factory use tax … Mrs gotrocs buys a bond or whatever use tax . That eliminates subsidies to get factory’s to build wage slave farms and factories. It also solves border problem’s as no one undocumented can work here with no cash to pay them .. everyone rows the natonsl boat and if corporations ate people too they grab an oar …
Not to disagree with you but has there been any studies done in an effort to project the amount of revenue the government would receive under your idea as compared to the old way of funding the activities necessary for the operation of the country..
I agree... I would like to see some research on this "USE TAX". Again, not to disagree, only that i have never heard of it and I am pretty well read on tax policy...
On it's face it sounds like a Value Added Tax, which as been researched and is extremely regressive (IE the poor pay higher rates than the rich).
Whole money system as tilted money is supposed to represent a token for like effort. It took hours to make wampum .. banks are creating money out of air and demanding unreal “ interest “ in those funds and have created laws and paperwork and confusing language your deposit in the bank is called a debit because the bank owes it to you . They take 10x your money and loan it out at interest that makes you pay. 5x before you own it … they make money and you pay back with earned money . The 29.99 % offers I get from credit karma are criminal. We need the value of loaned money to be capped ( usury) and banks need to loan money they have earned not created from air . The tax system creates wage slaves feeding elites
The simple story is that We have $135 Trillion in net household wealth — net! — and $31 Trillion in federal debt. Every citizen should know both numbers, cold. But all we hear about is the debt. This is not an accident.
A more complex story points out that the United States of America, the federal enterprise, is likely the most valuable and solvent entity in the history of humanity, even with $31 Trillion in debt obligations. That would be due mainly to its / our power to tax, much more than our vast assets in land and resources. But I haven’t seen that analysis and arguments from anyone who is operating with deep expertise and good faith. ( Thieving land and resource villains abound, in contrast. )
So I just go back to our $135 Trillion in net personal wealth, an enormous, foundational number, 1000 times larger than any single individual or family fortune, save one or two — and those not by much, and maybe not for long.
No billionaire is the boss of us — especially not financially! — unless we are weak and allow it.
Some may say, that’s my money. That’s not the government’s money.
First, to them, I say, ‘It doesn’t have your picture on it.’
Second, I have met the government, and it is us. Household wealth is definitely part of the full faith and credit of the United States. We are all in this together.
Wealthy people in the USA who support fascism should look to history. The black shirts, the brown shirts, the silver shirts in the USA ( listen to Rachel Maddow’s ULTRA ) . . . the Klan, the Confederacy before that — all losers. Sad, twisted, doomed, dangerous, murderous, bankrupting, yes, but — losers.
But they don’t even have to go very far back. Look to Putin and MBS. Once someone gets sole financial power, and then state power, the rest of the rich dudes are just in line to be robbed, jailed, poisoned, shoved off a balcony, diluted out of ownership, removed, kicked out, exiled ( see robbed ) and it goes on from there.
Wealthy people need a strong functioning democratic republic, deep seated fairness, the rule of law, and swift dependable justice, more than most of us. They, especially the richest, had better start to pay attention.
I just gave a specific plan, using taxation, but you'll have to go to the bottom of the comments to find it, since it's a recent comment, & all recent comments go straight to the bottom.
What makes him the expert. That is the really problem. We need common sense not think tanks. We need to start with taking in as much as we spend. Best way is to get avg. people who pay the bulk of the taxes more pay while getting true competition by big business so prices don't go up. Then raise the taxes on the wealthy so they at least pay as much as there secretaries. See Warren Buffet on that one (that is his saying google it). The intellectuals and think tanks got us into this google Laffer curve and while you are doing it google RF as Nixon use to say and you will get a better idea where you stand.
Not sure I understand it. Voting out the incumbent seems to in the past just replaced one pawn with another. The rich will just give to the new person running and of course the new person is more than happy to take there money. So out with the old and in with the same old seems to be what happens. Maybe I am missing something.
Today law makers see winning office as a career. And the boss is the donor class. If you prove to your donors you will do their dirty work you will make a career in DC.
If we chose to vote for law makers that don’t plan to make a career of surviving in DC their incentive to vote on policy is entirely different.
Incentives drive behaviors. If we keep voting for the same people their incentive is to stick around and serve the powers that keep you around.
To have a long career in DC you need a huge war chest. That takes many election cycles.
Change incentives and you will change the behavior of law makers.
We have the power or we can keep doing what we are doing and thinking people like Chuck Schumer and Nancy Pelosi have our interests at heart. They don’t. The proof is irrefutable
Very true. We need to tax income over 1,000,000 at 75% and between 400,000 and 1,000,000 at 35% with no deductions allowed. Like a federal minimum tax option. Between 75,000 and 400,000 it can stay at 35%, but allow deductions. At $75,000 or below there should be no Federal income tax for a family of 4, and no tax for individuals making minimum wage (at 15/hour). Payroll taxes still apply, but no upper limit cut off. With this the government would never have to worry about debt and perhaps we could actually act on severe problems like climate change and poverty. The only way this will happen is to get the money out of politics. We are lead not by politicians, but by those who control the media and are highly skilled at propaganda, and big money buys it.
no there is national debt what we owe mainly to social security (see why they want it) and deficit spending which is spending more than taxes take in. So it would help deficit spending but still probably not get us to a break even. The real problem and Bob should have pick up on this is since Regan working wages have not kept up with inflation as a result the income going to the Gov. has not kept up with inflation either causing the deficit spending. For a little while under Clinton we had a surplus but Bush blew it all on a $300.00 refund.
One thing republicans have come up with (amazing, isn’t it?) is the Federal Sales Tax idea, with no tax on anyone’s income. With the right guardrails this no-loophole approach to gaining enough federal revenue could work.
Benjamin- the purpose of a 75% or 90% tax on incomes over X is not to collect it.
It is to discourage business owners from extracting that kind of cash out if their business.
If they have little incentive to take huge amounts of cash out of their business they have strong incentive to invest in the business and take care of their employees and community.
Benjamin - I agree. There are evidently many, many, so far legal ways to both shelter wealth from taxes and to ensure that future generations will continue the practice. Here is a link to a comprehensive article that’s a real education, New Yorker article, on 1-16-23, “The Getty Family’s Trust Issues” , by Evan Osnos. It’s not only about the Getty family but about the “creative” ways the uber-rich shelter their wealth from taxes: https://apple.news/AairlfFLWRxOkNy_2IzHkGg
I believe this article can be read by anyone, even though it’s from Apple News. Also the New Yorker allows free access for several articles, NewYorker.com, so possibly going directly to New Yorker magazine could be possible.
One thing rich people do is to spend. Spend a lot! A Federal sales tax on all goods and services could make up the deficit without being regressive (poor-middle income spend a higher percentage of their wealth). Have a 100% refund to the poor with an escalating scale up to whatever the sales tax rate is.
It's a complete circle. The wealthy control the media and the politicians to make sure their taxes remain low, which allows them to get even more wealthy ala Mr. Reich's information, and ever widening the wealth gap. All of this helped by Citizen's United and the SCOTUS.
Wouldn't a 75% tax rate encourage people to work less? Or invest less money in the economy? Once you reach a million dollar income, why bust your ass if 75% is going to the government, or why invest in risky stocks, bonds, or real estate if most of the profit goes to Uncle Sam? Just asking...
@Tim and Daniel. You can wade through Thomas Piketty or look at numerous contemporary studies across countries, tax rates and decades. Higher taxes DO NOT appear to have any real effect on motivation or productivity. Only tax avoidance and tax evasion seem to be affected. In terms of "work less" the tax rates we are discussing will not be applied at the level of anyone who works for a wage (unless you consider CEO salaries "wages"). Tax law and practice is an area where any of our personal opinions need to be parsed in the light of what experts know and can demonstrate with evidence.
Robert you're right. The wealthy must pay their fair share.
But there's more. I've laid this out previously. When we buy an item made in another country, the profit goes to that country. Although the owners of those businesses, in some cases countries, pay nothing on their profits earned in the US, benefit from the right to freely do business here, without reimbursing us for the use of our infrastructure. We should tax them.
There are shareholders in US businesses who are foreigners and do not pay taxes on US income. Best example are the Saudis who control our oil companies, make US energy policy through those companies AND through OPEC and pay no US taxes. We should tax them.
Then there are the US employers who pay workers "under the table" to avoid pau=ying taxes like SS and Medicare. We should penalize and tax them.
Then there are the people who reside in the US but cheat on their taxes. I live in Miami where a large part of our economy is produced by foreigners who reside here but are not on the tax rolls. We should get them.
Another war story. Once upon a time I worked at SSA. We had claimants who worked in this country for 35 years but had virtually no earnings record. That's because they worked "off the books." They should be forced to implicate their employers. Find them, penalize them and tax them.
We spent a lot of time discussing the "gig" economy that lends itself to cheating.
It actually doesn't work this way. There are many people who no matter how wealthy, want more. Most of us will say we don't have enough money, when many of us do have enough to live comfortably. Money for many becomes the measure of their value. This argument you pose is the one many Republicans also use, but it doesn't hold water. Just look at the time when taxes were more progressive. It didn't stop people from continuing to seek to accrue more.
My comment was based on the experience in France about 10 years ago when they imposed a 75% tax on incomes over 1 million euros. The tax was a failure and was cancelled a few years later. Some of the explanations for the failure were the items listed in my comment. Were they correct? I don't know. You are right about the greed of many people. Some rich people moved from France to avoid the tax (one was a famous French actor), and I suspect others "hid" part of their income from the government. I don't know about our experience with a 90% tax rate during Eisenhower, but I do recall tax shelters being a big deal when I was younger.
@Tim. Comprehensive tax law for very wealthy people needs to include international coordination between democracies for those who try to take their income or their wealth "off shore" from any particular administration. Like California does; the tax payer is still responsible for taxes on any income earned in California. My pro-tax stance is based on evidence that fair taxation without loopholes and evasion would result in much lower marginal taxes for everyone. Again - this finding is documented in numerous studies. Tax shelters are still a big deal, though. Precisely because the above mentioned international coordination is very weak and fraught with loopholes, and these loopholes are created by COUNTRIES who want to attract that wealth to their own shores. Lot's of news in the recent 10 years about Ireland and various other "tax advantageous" regimes.
That's why a small "wealth tax" and inheritance taxes might be more palpable.
Imposed on an individual's net wealth in addition to the other taxes, such as income taxes, that they must pay annually. Considered to be a progressive tax because its rate increases with the amount of a taxpayer's net wealth.
Why doesn't Substack have a search option so I can find your comments, by typing in your name, without wading through tons of comments by others? I am not too big on inheritance taxes, having gone through the process in my family, but definitely think the "step-up in basis upon death" tax loophole needs to be eliminated. No good reason for it!
One difficulty with a wealth tax is that much of the wealth of the rich is tied up in private businesses which can be complex and difficult to value. As we saw with Trump's "valuation" of his assets scandal, lots of opportunity for "funny business". Need lots of expert IRS agents to properly manage tax collection.
Zero taxes for minimum wage sounds attractive. Could unintended consequences include slowing increases in minimum wage and creating a barrier for workers to move to higher wage jobs because net income would be lower?
Why should the low income in this case $75,000.00 pay nothing. Don't they get stuff? I think everyone should pay something. The ones that disproportionately benefit from the country should disproportionately give back. But low income should also pay something.
L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY
"..a lot of progressives think we need to tax the rich in order to spend on the poor. That’s just wrong, we don’t need to tax the rich more to spend more on the poor, because our sovereign government can’t run out of money, it can always spend more on the poor without taxing the rich. You want to tax the rich because they are rich, you don’t tax them in order to give more to the poor. You tax the rich because they’re filthy rich and so you shouldn’t link the two in policy. In the public’s mind we need to do both, but they are separate policies. You set the tax on the rich not to equal spending on the poor. You set the tax on the rich and make it high enough so that they’re not rich. If that’s your goal – get rid of the excessive riches of the rich -you tax enough so they are not excessively rich. It’s an extremely hard thing to do politically. The final thing is rather than trying to do this with taxes, which is hard because once people have income, especially high income, they have an incentive to protect it, the means to protect it, the means to influence policy, and they are extremely powerful. In practice I think in the US, it is actually impossible to take away income from the rich through taxes because they buy off the politicians, they get special exemptions, they never pay high tax rates, they hide their income, they put it overseas, and so on. The only way that will work in a country like the U.S. is to prevent them from earning the income in the first place. You have to do something like set maximum pay for CEOs."
We have heard much discussion about making the federal minimum wage a livable wage. In contrast, we have not heard much about a maximum wage. If a person cannot live in the USA on $999,999 per year, then he or she suffers from a psychological condition called greed and needs therapy.
The ever widening disparity between rich and poor doesn't bode well for a society. It usually results in an increasing number of people struggling, perhaps becoming disaffected and then often enough following the first charlatan to come along with a story that convinces them that a whole group of "others" are responsible for their unhappiness.
It seems to me that preferential treatment of certain income over others is one of the main problems. If gains from executing stock options, stock sales, bond sales, earned interest or wages earned from employment were all taxed alike, there would be nowhere to hide. The fact that someone working as a plumber pays higher rates on income than someone getting paid in stock options, or some other financial vehicle considered capital gains, is another contributor to the deficit. There is no reason that $70k in hard earned wages should be more punitively taxed than $70k from investment income.
As for loopholes, I understand the aversion to them but the ones that get the axe lately are only the ones helping more working people. Before my time, I understand that credit card interest was deductible, now it's only mortgage interest. High taxed states were able to deduct their home's full school and municipal taxes, then TFG ushered in the latest round of tax cuts and it got capped at $10k for itemization of deductions. At the same time, they eliminated the personal exemption for wage earners while most working people's tax rates barely dropped. The combined effect of these for working people in those states (mine included) was effectively a tax hike. Unless some congressional act eliminates loopholes all at once, I fear once again being made worse off to balance the budget while so-called "job creators" have their carve outs stay intact.
Parting shot - I fume every time I hear the uberwealthy referred to as job creators. All of us buying goods and services in an economy are creating jobs. Some working person is on the other end of every, vehicle, appliance, meal, medical procedure, tool, item of clothing or anything else you buy. This idea that only the CEO class is employing people, while the rest of our financial transactions are somehow moving goods and services around without anyone's working effort, is complete and total...choose your preferred expletive.
"...it is actually impossible to take away income from the rich through taxes because they buy off the politicians, they get special exemptions, they never pay high tax rates, they hide their income, they put it overseas, and so on..."
I have absolutely no idea how to fix it though. The absolute least I would like to see it an equal tax rate if anything - and removing the corporate influence on politics. That was probably the worst thing to ever happen.
Shanna, you are so right about the difficulty in getting the rich to pay their share of taxes. If every single donor to either candidates, parties, or PACs had to be identified and the amount donated making sure the donation was from a real person, a bit less bribery (buying of candidates) might happen and representatives might vote for what it is fair. I, like you, don't know how to get that to happen. Johnny Roberts and his team just made up crap about corporations being persons (without the accountability, though), and letting them donate whatever they wanted to donate and to whomever. I blame the Supreme court conservatives for their eagerness to bring down our democracy while they claim they are just following the law. It is amazing how people who should know better can get caught up in lying and deceit and make everyone else suffer for it.
Larry, I think it is the rich who do the claiming that they would be taxed to pay for the poor whom they despise for their poverty. I have no problem saying that social programs should not be cut to give rich individuals and corporations a tax cut. That is how it is always framed; the rich are having to subsidize the poor when it is nearly always the other way. The poor and working-class are paying for the rich. It may be two different issues economically, but the people and Congress don't see it that way. How does one change the perspective when most people don't even have a rudimentery grasp of economics. That is not meant as an insult, but the fact that economics is not required in high school or basic college programs. Now that Repubs have the House it is definitely not going to get better for at least the next two years, and after that, who knows?
Or...Eat the rich. Since we have a walking-talking example of how they seem to be able to attack the government at will...who's to stop a little crazy 18th century crazy on them ...starting with a guillotine set up outside Mary Lago?
I'm all about visual stimulation. Ha! I believe that an unimaginable situation might lead to a revolution against the ultra-rich. We know where that would end. More problems for the middle class. Other 'solutions' all seem to be unacceptable. As a futurist, technical evolution is usually unforeseeable and inevitable. We can dream.
First problem the rich have already paid required taxes on money they already have . They put it in triple tax free municipal bonds and reinvest principal and interest . The income tax system feeds them with wage slaves . Eliminate cash tax evey transaction a little bit apples new factory now builds your roads instead of collecting a subsidy for putting the wage slave factory in your town . Or we could just screw them and default there’s only 20 of them. We could build them housing …
" the rich have already paid required taxes on money they already have"
This is BS propaganda. Many high earners pay absolutely no taxes. I personally pay more than many US corporations and I am middle class and I'm pissed about it. Many inherited wealth and paid NO tax on it. I subsidize these deadbeats. .
That's why I also suggest a wealth tax. Inheritance taxes. Also see my comments below.
we seem to be on the same page so often with different concepts. Working wages need to go up they have not kept up with inflation so the deficit keeps growing. We need true competition to force this. Musk and Bezzo both have enough money to blow them self into space but can't pay their works a living wage. That is the problem
I did not say they were fairly taxed I said they were legally taxed Of course it’s bullshit . I saw a cat who saw people buying fish with dollars. The cat came to the door with a leaf in his mouth and the owner gave him a small fish the cat does it evey day now and the cat has a better idea what money actually is than any of us
While my preferred method is to use a much more progressive tax system, an alternative would be to limit top pay in a company to no more than 20 times the lowest salary or wage.
Professor Wray is correct on all counts. More people need to understand the paradigm-shifting insights of Modern Monetary Theory. A great start would be to peruse "The Deficit Myth" by Stephanie Kelton.
No simple math can't be ignored because you like someone. Economics it how it should be business is how it is. So get out of neverland and do the math. Simple question what happens when service on the debit (interest we pay on what we borrowed) exceeds the amount of money coming in? Please let me know.
Macroeconomics professor Stephanie Kelton says that "we don't need to fix the debt; we need to fix our thinking."
The U.S. Government can never go broke. It has a fiat currency, not backed by any commodity, like gold or silver. It is not like a household, city, county, state, or corporation's budget: They can't tax, set interest rates, or print money. Big, important differences; the difference, in fact, between day and night.
Professor Kelton says that "we could pay off the national debt tomorrow, and none of us would have to chip in a dime."
If that sounds wacky, it's because you're thinking that the national debt is like your debt. It isn't. Reagan knew this; it's why VP Cheney told President George Bush: "Reagan taught us that the debt doesn't matter."
The federal debt is merely a historic record of how much the government has put into people's pockets without taxing them away, according to Dr. Kelton. It's actually an expansion of our money supply, which helps all Americans.
I'm not a macroeconomist, but her book "The Deficit Myth" explains all I'm trying to say cogently and at length by a professional who makes such complex matters her life's work.
Like quantum mechanics, macroeconomics is often counterintuitive. In fact, Modern Monetary Theory requires a paradigm shift to grasp it; your past (incorrect) knowledge and common sense won't help you in the realm of how our government money really works.
We really need to get this new information into public discussion. We are worried about the wrong things and using "fixes" that won't work. Neither monetarism nor Keynesianism possess the right understanding for success.
The paradigm shift from old macroeconomics to MMT is similar to the shift in scientific thinking when Copernicus taught some of us that the earth 🌎 revolves around the sun. Some never got it as they were so wedded to old thought. About those Neanderthals....
I don’t hold with hating the rich. I question their entitled feelings of superiority, and their wisdom. As far as the USA goes, I am seeing the strengthening of the IRS as a plausible avenue to enforcing tax law that already exists, but not enforced because the playing field of accountability is not level when you have an under funded and under resourced IRS. So let’s start there, and also work like hell to enforce, and update anti-trust laws. This could go a long way to improve democratic functioning in the USA.
Research suggests that as people accumulate more and more wealth their empathy decreases. I guess it's a way to manage guilt. They can then feel freer to justify the inequality including thinking of themselves as somehow special.
@J. Nol. Research suggests that there is a correlation between higher wealth and lower empathy. Cause and effect is not established. Couldn't it be that less empathetic people (Musk) have a performance advantage in capitalistic enterprise?
Some research looked at how subjects' empathy was affected as they "won" more and more "goodies" and found that those who accumulated more, had reduced empathic responses to stimuli designed to elicit empathy. But of course, those already lacking in the empathy department can be more ruthless and thus more successful at exploiting others. After all, capitalism equals exploitation. So a bit of both, I would suggest.
Larry Kazdan ; Didn't the wealthy in some European countries face limits on their wealth? I remember reading that CEOs could not make a certain percentage more than the lowest paid workers? At least at one time this was true. Maybe even today.?
I've heard good and bad things about a flat tax. It stands as a way of applying a fair tax rate to everyone. This tax option would help the Federal Government retrieve and maintain a higher level of taxable income from the general public. A flat tax would have every citizen paying the same percentage of their income, this way the rich would have to pay their fair share, just like the little guy. There would be no deductions and no exemptions. This would allow for a reduction the the IRS's over all size and structure. How much Federal money could be saved if this tax policy was put into place?
Terry, I know a flat tax sounds really good, but here's the problem, 10% of the income of someone earning $75,000 is not the same in value to the family as 10% of the income of someone earning $1 million. $7,500 is a bigger sacrifice to the $75,000 earner than $100,000 is to the million dollar earner. A progressive tax is far more fair. I agree that loopholes need to be closed because that is how a lot of revenue is lost. Then the IRS needs to put their emphasis on the tax problems (cheating) of the rich even if it means a few middle-class folks' cheating gets through.
Ruth, you're absolutely right. For a government to achieve meaningful income, it would have to tax everyone at 50-60%. Progressive taxation is actually a foundation of capitalist theory (see Wealth of Nations), indeed the US economy boomed in the 1950s, when taxes were very high.
Then came Regan and Friedman preaching the falsehood that capitalism was opposed to high taxes.....
No Regan was all about the Laffer curve give it to rich they will then give it to the poor. Google it. Regan used to say look Kennedy lowered taxes and raised more income. But he left out that workers wages went up faster than inflation so the workers paid more in taxes.
What you're talking about is "trickle down" as a part of supply side economics. The Laffer curve is an old concept, i.e., there is an optimal rate of taxation where the government maximizes its revenue. This rate is probably around 50%, but the concept was misinterpreted (deliberately?) by the Reagan administration to justify cutting taxes on the wealthy.
If you really want to understand progressive taxation, look no further than "Wealth of Nations," which, I believe, greatly influenced Keynes (who, incidentally, had a low opinion of Marx).
Agree. Or to be more dramatic, compare someone earning $30,000 to someone earning $30 million. There are plenty of each in this country. With a 10% flat tax, the person earning $30,000 would have only $27,000 left to spend on necessities of living, a bare subsistence. The person earning $30 million would have $27 million left to spend, far more than is needed to live comfortably.
Agreed, but also in large part because nobody declares an income of $30 million a year any more. If you're that wealthy, you pay yourself $80,000 per year, to be like the little people, and keep the rest as an accumulating asset which is not taxed (as Jeff Bezos does, for example).
There has to be a wealth tax, and it has to be global.
Oddly, that is exactly why it's equal. 10% from everyone effects us all the same way. It doesn't matter how much money we look at being taken from two different incomes, what matters is the percentage taken is the same.
No, it doesn't affect everyone the same way. A flat tax is orders of magnitude harder on poor people than on the wealthy, who incidentally use far more taxpayer-funded amenities than poor people. A flat tax is not fair at all.
Taking the same percentage from John Doe or Trump hits their pocket books in the same way. You take 10% of their income, by definition of the term flat tax is an equal assessment rendered by everyone. Naturally the amounts will vary but that's the beauty of that form of taxation, it affects everyone equally.
Donald, no matter how you try to make it look the same, it isn't. Flat taxes are regressive and just pump up the rich even further. We don't need that. We need the rich paying a whole lot more. They have gotten their wealth from everyone else, so they have a responsibility to give back to everyone else. They did not do anything totally on their own as they would like us all to believe.
With a flat tax if a rich man makes 10 million in a year and the tax rate is ten percent that guy has to pay 1 million dollars to the federal government, he can't get away from that, the tax demands it. That money along with all the rest will help support the underprivileged through the social programs that tax money will fund. We have to find a way to make the wealthy pay their part.
I'm not promoting the implementation of a flat tax. I see it as a way to get the wealthy to pay their fair share and a flat tax forces the rich to pay the same percentage as the less fortunate. Right now the rich are pay very little, the question is how do we get them to pay up, as it were.
First $50K of income should be exempt from taxation (aside from SS taxes, etc. that have already been withdrawn from your salary). Next $50K up to $100K is taxed at 20%. $100-200K taxed at 40%, $200-500K at 60%, $500K-1M 80%. Any additional income above $1M is taxed at 90%.
It's clean, crisp, easy to calculate. Reduces taxes for majority of Americans while bringing in considerably more revenue for government, paid mostly by those who can most afford it. It alleviates this destabilizing record disparity in wealth & power. It leaves more money in pockets of ordinary people so that they can spend more in the local economy, boosting small business.
I am also for a wealth tax, removing the ceiling on Social Security taxes, taxing or assessing fees (+ dividend) on greenhouse gases, raising the gasoline tax a dollar per gallon or so, assessing taxes on meat & plastic, transaction fees on hedge funds & other large money exchanges, closing all tax loopholes & removing tax havens, & making it much harder for corporate takeovers & mergers to take place.
No, because there is a certain amount everybody has to pay to survive. You'd have to at least exempt that amount from taxation.
You should look at it not as how much money you have to tax, but how much you have left after taxation. And how much you need to survive & how much you need to thrive. It is much better to use a very progressive system. No more than a couple hundred thousand dollars per year salary is necessary for a very comfortable life with the ability to obtain most of the important things in life. A million or a billion dollars won't enhance your life that much unless you feel compelled to buy elections like Koch & Thiel do, which should be discouraged if not forbidden, anyway.
It just seems unfair, the rich get richer and the poor get just the opposite. No real solution, sort of like the border problem. Odd the be confronted with issues that don't seem to have answers that we can apply them to.
Oops, sorry. I must have gone too far back when checking on the person I was responding to. Using a screen reader is a challenge and I will be more careful in the future.
You need to read Thomas Piketty's "Capital in the 21st Century" - a daunting task but the only way to learn enough not to be fooled by the latest unproven theory. Piketty's data shows that, as in industry, there's and economy of scale in finance. Greater wealth has greater leverage in investing to get greater returns. Just look at the exponentially graduated interest rates your bank offers for different sized accounts. Therefore, the rich will get richer without a significantly/exponentially graduated tax. A flat tax will not work. It's defenders use incomplete data to put lipstick on this pig, the devil is in the details, and the devil will have his due. I repeat: the complete data reveals that the leverage of wealth is exponential. Even our current rates are too compressed to prevent the formation of a financial aristocracy strong enough to influence government to protect their power. That's where we are, exactly as Picketty's empirical formula predicts, thanks to Reagan and the Federalist Society hold on our government. The rich fear democracy, that we are coming to tax it all away, that we are stupid and will kill the goose that lays the golden eggs. These fools have it backwards; they only collect the gold created by the labor of their workers. By giving voices to their billions of dollars, Citizens United enables them to drown out Robert Reich's lone voice.
Be careful about what economists you follow! Universities controlled by Charles Koch and his cabal of billionaires, like George Mason University, crank out indoctrinated minions to promote the Gospel according to Any Rand. They lie by omission. Rand's imaginary capitalist paradise would implode in the real world. John Galt unlearned the vital lesson of Henry Ford, that those union workers Galt abandoned are his customer base. Rand's hero oligarchs cannot thrive picking each other's pockets (as best I can remember to book from my naive youth since I can't stomach re-reading it). Capital is the life blood of the economy, and as with a body, if you strangle the flow to the extremities, they will not be able to support the head.
Today's column is one of the most important ones of all. I only wish I had some good advice on how to get this message out to enough voters to matter. When I talk to my representatives, their stock answer is, "I can't do anything unless I can get re-elected. Please give me money." They don't get it that I'd give them the money if the gave me a reason to first.
Excellent excellent excellent. Pikkety and his team of researchers studied societies from ancient times to the present. Their book, including footnotes, is about 700 pages long. They did not put it quite this simply, but societies become increasingly unstable as wealth becomes more concentrated at the top, and in time the whole thing topples over.
Beginning with Reagan we greatly increased transfers of wealth to the top by crippling "shunts", like high progressive taxes, that slowed those transfers. Wealth transfer upwards then took off, and today wealth inequality here is the greatest it has been in over one hundred years. We did reduce income inequality in the aftermath of the Great Depression, and the nation prospered, but we have undone much of that since. And now they are coming for Social Security, Medicare, Medicaid because, they say, "we can't afford it".
@Dennis L. Green. Getting the word out is hard. People don't read. There are too many conflicting messages. Rich guys are paying politicians to NOT represent the people and Rich guys are paying the media to persuade the less literate people that cultural issues are more important than limiting the oligarchs. My smart-but-ignorant cousin thinks that if there is a more well-resourced IRS that they will come after his paltry income. Sad to see the distortions that gullible people will embrace...
No, a very progressive tax like we had in the 1950s is the way to go. If we had a flat tax, it shouldn't be applied to wages under subsistence level in any case. I would prefer several steps of increasing tax rates until the maximum level in the 80-95% range at about a million or so dollars per year salary.
If you think it's wrong, don't cede ground by saying "if we had a flat tax..." It's not our job to make silk purse out of THEIR sow's ear. One deduction leads to another, which is how the rich end up paying nothing even now, so the flat tax just lowers their starting point. Congress won't go Laissez Faire. They always find a need to stimulate something or the other because the greedy corporations don't see the public good as profitable. And, this brings us full circle to the influence of dark money and the capture of SCOTUS that invented rights for corporations 'not enumerated in the Constitution' just like abortion, which proves my point about corruption.
I have twice posted a detailed specific proposal on how I think we should solve our revenue problem while easing the tax burden on lower & middle income taxes, including somewhere in this thread (I think).
see my post on intellectuals and listening to them. We run out of money when the service on the debit (interest we pay I think Bob said 473 billion) exceeds what we take in. It will really happen sooner as service on debit eats in to spending forcing a reduction in spending or higher taxes. This is all simple math we don't need some overpriced guru telling you white is black and the sky is purple. 2+2 is 4
Except that's not how things, particularly $$, work. As Mark Twain once put it: "It Ain’t What You Don’t Know That Gets You Into Trouble. It’s What You Know for Sure That Just Ain’t So" You needn't be an intellectual to agree with that.
A rock-ribbed Conservative-ish suggestion: impose an AMT that adjusts to zero out the budget deficit. You want to see a huge campaign by the “captains of industry” to cut the military waste? Bring it on!
I have never understood the logic -- if you can call it logic -- of wailing about the National Debt being sooooo high, and then deciding to reduce Federal income by handing out tax breaks measured in the hundreds of billions of dollars.... instead of using that money to pay down the Debt. Instead what We are told is "trickle down economics". BbbbbbbbbbbbSssssssssss.
Captain Patch; It would be truly great if there was a disclaimer along with any statement made by the national debt whiners to clarify what is really being advocated. Giving trillions of dollars to billionaires is not helping : especially when they are not paying anything in taxes that reflects their wealth, and what they are taking!
I doubt We would _ever_ see such a disclaimer. What they're REALLY doing? They're paying back their biggest "campaign donors", the ones that paid to get Us to vote them into office -- where they work for the Very Wealthy instead of We The People. Think they would ever actually admit what they are doing? But what can _We_ do about it? We can't even choose who the candidates will be. We have to choose from slates of candidates created by the Democrat and Republican Parties -- _after_ the candidates swore an oath to serve their Party FIRST. (Actually second, after those "campaign donors".) In practice, We The People are little more than cash cows for those that rule over Us, directly and indirectly.
Captain Patch ; I was being 'funny', sarcastic/joking with the idea that a disclaimer of honesty would be included in such a statement by the whiners. But you are right.; the voters pay in two ways , taxes, and donations to a campaign where our wishes are completely disregarded, and we are sold out. We are the cash cows in every way.
While I fully appreciate the clarification regarding how the wealthy both contribute to and also benefit from the nation’s increasing national debt, additionally, I would note, adding insult to injury, that the radical extremist Freedom Caucus and the so-called establishment Republicans alike are intent on further confusing a largely ignorant population by falsely conflating raising the debt ceiling with spending money we don’t have.
Hence, I think it imperative that we flood the White House with letters urging the President to clarify, as often as warranted in prime time, that raising the debt ceiling doesn’t give the government permission to borrow money; it gives government the permission to pay back the money we’ve already borrowed. Further, in my view, the President is obligated to educate the public of the economic calamity that would ensue were the U.S. to default on its national debt.
The inaction, complacency, and ignorance of the electorate play right into their hands . And at the crux of such situations is that the vast majority of Congress, the Executive, and Judicial all have bought and paid for tickets on the gravy train . And they're all sitting in first class . The system of drafting elected officials onto the 1%ers squad has always been the ideal for them . Seeing as
the worship of filthy lucre has replaced the basic virtues, decency, and morals of our nation and people, such situations are ALL just outcroppings thereof . To simplify yet again, until the temptations of wealth and perceived social status stop being dangled in front of pols noses, until the carpets of government are given a good shaking out and ALL monies, both light and dark are removed from our election process, i.e.; Citizens United done away with, along with corporate citizenship and their access to our elected officials, this and all similar situations shall go on and on and on . I'm not talking a Jan 6th type revolution, but a waking up of the average American to see that our system is corrupt, contrived and controlled by the 1%ers, their corporate wrappings and their buying, selling and ownership of this nation and government. Without the occasional revolution democracy dies . Ours is long overdue . WAKE THE HELL UP AMERICA ! !
I paid mine! 23% to the feds and another 12.8% to California! Holy Moley! Republicans often prance around exhibiting some kind of self-righteous anger at paying their taxes. That's just drama. Who's really angry are Democrats like me who pay my taxes only to end up listening to the grifters, cheaters, dodgers and liars bitch, bitch, bitch. For fair tax policy we need a public culture that will get them to shut up and a public policy that will ensure they pay up!
Let's not forget that a goodly chunk of our national debt is for Chickenhawk George's unfunded military misadventures in the ME. At least he got to be a War Pres-i-dent.
Miss Anne, you are right about so much of our debt being ?Georgie Porgie's responsibility. He maybe got to be a war president, but a really bad one. His wars went on well past his administration and the Democrats had to end them, and in neither case did they end well because they didn't begin well with a clear mission. In many ways, we're still paying.
This is part of a comment I made to an email from Alexandria Ocasio-Cortez. The figures are an approximation of the actual wealth sloshing around in the US economy, perhaps about 96 trillion dollars. (This doesn't include, as far as I know, the estimated 20 to 30 trillion+ in offshore accounts according to one British university study.) I did a very rough estimate of America's total worth and came up with about a quarter of a quadrillion dollars. This is (sigh) unfortunately in today's inflated money but still a goodly amount! Here is my modest proposal (thanks to Jonathan Swift) which might have some difficulty in Congress:The current national debt is about
31.46 trillion. The top 10% control a bit more than 73 trillion,
leaving about 23 trillion for us in the 90%. I would suggest
a modest graduated tax of 43.9% on the top 10% that would
produce 31.46 trillion and pay off the national debt. This is less
than 1/2 the 90% in the 30's. 40's, and 50's which the rich paid.
These very wealthy folks would still be quite rich but not as much
as before. Of course the country would continue to collect taxes
from them so that we could fund National Healthcare and a Basic
Income safety net for all to have proper housing and medical
assistance. And the (still) rich would have the satisfaction of
being patriotic benefactors!
Tony Heller
Former Adjunct Professor of English (Strictly an amateur Economist!)
You are citing wealth, and therefore a wealth tax of 44%. That should get the attention of the wealthy. In these discussions, income is often compared to wealth. Different -- Income statement v balance sheet.
We have heard the insane Rs are floating a 30% sales tax -- that would have to be welcomed by working voters everywhere! . . . wait, what??!!
A 30% wealth tax as a counter, as above, ought to focus the conversation. Good on ya!
Thank you for this enlightening perspective. I had never heard the debt explained that way. So, not only do the wealthiest not pay their fair share of taxes, they actually take the taxes middle class people pay from the United States of America.
There has been much reporting that Kevin McCarthy is refusing to raise the debt ceiling without concomitant spending reductions due to the irresponsible extremists in his caucus. I can't help wondering whether he, and they, are really bought and paid for by the wealthy plutocratic plunderers, who want to take, take, take from this great country, but give nothing back. Biden is scheduled to meet with him tomorrow. I hope Biden stands strong against him. Your explanation of the debt should be included in Biden's State of the Union address.
I have suspected that we need to tax the wealthy. It makes sense that those who profit so much on worker's labor should pay a proportionately higher tax. It seems like some of them pay nothing at all.
The capital of any country is largely the product of the labour invested by the people. Thus, when bankers invest capital in business, they invest the labour of the people in the business, and the profits on that capital should be returned to the people as fruits of their labour, not pocketed by the bankers and a few individuals -- let's name them again the Robber Barons -- who have managed to snaffle an unfair share. Because capital has been a thousand times through the laundromat of the banks and lawyers and billionaires does not wash away the rights of wage slaves and those forcibly enslaved to demand repayment of the full costs of their labour.
The bank makes in the end 5x what the builder charged and for what? Lending you dollars created out of air as your deposit hit the banks reserve account ..
Absolutely Professor Reich. I’m going to tell as many people as I can. This is not only outrageous but demoralizing to Americans that believe in the entity AMERICA. How much can we take as citizens of this country. These wealthy are bleeding this country and profiting by it. I’m going to pray to God help us please!! End this wealthy bloodsucking!! Thank you as usual for your Enlightenment!!
The funny thing is that in middle America, working class white people have been fed so much disinformation that they actually believe Reaganomics benefits them and the middle class. They keep saying things like we have to take this country back without realizing that the policies of the last 42 years, going back to 1981, are to blame. I am 63 years old and grew up in a small town in the Heartland and I know the way a lot of those people think and talk, although of course not all.
This horrible gimmick has a history. In the stillborn Weimar Republic, so much capital was destroyed that there was no trustworthy domestic money. The remaining wealth at the top was loaned into the State, but there was little prosperity produced to pay the debt. The Versailles reparations didn’t stop. No capital was confiscated-that might be Communism! or taxation on wealthy-Socialism! So all prosperity, what there was of it, was siphoned off in the dark. Hitler’s brilliant economic plan was to invent the fiction of International Jewry as the hidden destroyer of prosperity. All was solved! Liquidation of the Jews had a cash reward! When life hands you lemons, build Killinghausen! The rich industrialists remaining got off from blame, everyone had an enemy to hate - what a job by the fox and his friends, Joe Goebbels! Except for producing hell among nations, what’s not to like? We try it again.
This is very depressing. Robert since you're an expert, what CAN be done? Lay out a plan and we will all back you up. Give it to your congressional friends... I mean it! You know how it all works, right? If not, when will it ever stop? Something needs to be done!!!! Have at it, please!
Exactly!
Thank you!
Capitalism is defined as:
An economic and political system in which a country's trade and industry are controlled by private owners for profit.
What professor Reich has explained is what I call “Runaway Capitalism “.
The problem in the US is our Capitalism has been leveraged by industry and private owners, not for the benefit of the country, but rather for their personal benefit in many ways, such as: Reduction of taxes on the wealthy, offshoring manufacturing and parking profits in safe haven country bank accounts, spending astronomical amounts of money to “buy” politicians, monopolizing industries, owning controlling share of the media, leveraging inflation to their benefit, hampering the IRS from conducting audits on the wealthy…
In short, we are falling into an abyss.
The previous Gilded Age came to an end after the stock market crash and WWI. Later FDR enacted programs that were beneficial for the country as a whole, which led to the prosperous 1950’s and 1960’s. And, even though they were still very solvent, the wealthy hated it. Which in turn has led us to this current Gilded Age.
What will it take to end this current Gilded Age?
It won’t be easy and it won’t occur immediately/overnight.
1) Public funding for political races.
https://www.fec.gov/introduction-campaign-finance/understanding-ways-support-federal-candidates/presidential-elections/public-funding-presidential-elections/
2) Empower and fund the IRS.
3) Ensure the wealthy are paying their share of taxes.
4) Return manufacturing to the US.
5) Eliminate or reduce the Congressional handicap that overly empowers the political minority.
These are but a handful of actions that would make a dramatic difference. It’s time to get to work to implement them!
I would add a #6 & #7 to your list:
#6. Make gerrymandering illegal.
#7 Make CIVICS classes mandatory in schools & in college
Excellent suggestions.
See my remarks under Leon R. about greed and excessive executive compensation.
Thank you, Leon. I will check it out.
Well said. I think you meant WW1 not 2, The Gilded age died at the hands of President Theodore Roosevelt and others. The current Gilded age was conceived in the 1970's and came to full fruition under the trumpster.
Yes, thank you!
"What will it take to end this gilded age?"
Uncontrolled imperialism and corruption - which have brought down every empire in history and are rampant in our own. Given the rapid acceleration of both in the past 40 years, it probably won't be much longer.
Yes, and the ones to feel the effects first will be 1) the environment and the natural world, as we continue to extract more and more to sell more and more to try vainly to keep up with the insatiable debt; 2) the middle class, or what's left of it, because the loss of many conveniences will impact them than the poor, who've learned to deal without them; and 3) the bottom of the income heap. The crowds in the amphitheater gathered to watch the bottom heap slug it out to the death are already thinning. How long will it be before #1 and #2 will see through the delusion of corporate-induced sports and entertainment and start rebelling against the multi-million dollar contracts?
Excellent!
Words are powerful. I didn’t look for a definition of capitalism, but I would recommend most highly the Professor’s book, ‘Saving Capitalism’ That was an eye opener for me.
Professor Reich outlines 5 building blocks of capitalism, then writes that if we want a ‘free market’ we have to build those blocks: ( verbatim )
• PROPERTY: what can be owned
• MONOPOLY: what degree of market power is permissible
• CONTRACT: what can be bought and sold, and on what terms
• BANKRUPTCY: what happens when purchasers can’t pay up
• ENFORCEMENT: how to make sure no one cheats on any of these rules
This is way more enlightening than ‘he who has the gold makes the rules,’ a summary of the usual use of the word, in my experience.
In other words, there is no ‘free market’ without laws and a society to regulate and enforce those laws. That’s the opposite of the usual use of the term.
The professor does not go to a dictionary or elsewhere to define capitalism if I did not miss it — maybe there is something in the documentary based on the book — he illuminates the myths of the ‘free market’ and details problems and opportunities to make a vision of capitalism work.
As above, the most profound realization for me from that book, first pages worth the price of the whole thing, was that the definition of capitalism is not set in stone at all, but that real life beneficial capitalism has structure and rules, essentially a working definition, that we don’t often talk about. Instead we get wrong, wild claims that should not be accepted, but are not even questioned in my experience. Like ‘socialism,’ the term is skewed and twisted to suit the aims of many different actors, for worse and better.
‘Saving Capitalism,’ very highly recommended — b.rad
<https://www.penguinrandomhouse.com/books/227780/saving-capitalism-by-robert-b-reich/>
Yes, Brad I have read Dr. Reich's book 'Saving Capitalism' and add my recommendation to yours.
#5 probably isn't going to happen, but should for cerian strategic items like steel, electronics, and chips if possible. But rates of exchange and worker exploitation makes foreign sites for factories very attractive.
Is it time to return to tariffs?
Is she serious?
Donald Hodgins <silencenotbad@gmail.com>
8:58 AM (0 minutes ago)
Greene is upset that President Biden lowered gas prices prior to the mid-term elections, in essence, to swing public opinion over to the Democratic way of thinking. Well maybe the rest of us should be upset with the huge oil concerns, that exist only to mingle with the Republican way of not thinking, artificially raising gas prices to make the Biden administration look bad during the same mid-terms election cycle. Ms. Greene, it's all in how you look at it. The end result was the lowering of the gas prices at the pump. What's your problem, besides a missing mass of fatty material lodged loosely between your ears? The stupidity this woman exhibits every time she opens her mouth is only surpassed by the emptiness of the thought she is trying to convey. Georgia must be suffering from "Peach Pit Poisoning" (I think that qualifies as being alteration) and this fool must have swallowed a belly full. The House has a quantity of honest elected officials that are being forced to listen to Greene's ridiculous rantings centered around her flagrant inability to act in a responsible manner. Her female bulldog mentality, that we all know by another name, stands as a testament to her lack of understanding of why she is and where she shouldn't be. If her state reelects this woman in the next election cycle maybe 49 is a more significant number than 50. She ain't no Georgia Peach and that's a pity.
These are all good.
What needs to be done is not difficult to figure out.
What voters need to do to accomplish this is what matters.
Most Democrats are as controlled by the donor class as the GOP. That is why the problem keeps getting worse.
What should voters do?
I would eliminate cash and income tax completely. I would put a “ use tax “ on all transactions. Apple builds a factory use tax … Mrs gotrocs buys a bond or whatever use tax . That eliminates subsidies to get factory’s to build wage slave farms and factories. It also solves border problem’s as no one undocumented can work here with no cash to pay them .. everyone rows the natonsl boat and if corporations ate people too they grab an oar …
Not to disagree with you but has there been any studies done in an effort to project the amount of revenue the government would receive under your idea as compared to the old way of funding the activities necessary for the operation of the country..
I agree... I would like to see some research on this "USE TAX". Again, not to disagree, only that i have never heard of it and I am pretty well read on tax policy...
On it's face it sounds like a Value Added Tax, which as been researched and is extremely regressive (IE the poor pay higher rates than the rich).
Who knows .. I see the
Whole money system as tilted money is supposed to represent a token for like effort. It took hours to make wampum .. banks are creating money out of air and demanding unreal “ interest “ in those funds and have created laws and paperwork and confusing language your deposit in the bank is called a debit because the bank owes it to you . They take 10x your money and loan it out at interest that makes you pay. 5x before you own it … they make money and you pay back with earned money . The 29.99 % offers I get from credit karma are criminal. We need the value of loaned money to be capped ( usury) and banks need to loan money they have earned not created from air . The tax system creates wage slaves feeding elites
First, We ( capital W ) are *not* in debt. <http://uswealthclock.com>
The simple story is that We have $135 Trillion in net household wealth — net! — and $31 Trillion in federal debt. Every citizen should know both numbers, cold. But all we hear about is the debt. This is not an accident.
A more complex story points out that the United States of America, the federal enterprise, is likely the most valuable and solvent entity in the history of humanity, even with $31 Trillion in debt obligations. That would be due mainly to its / our power to tax, much more than our vast assets in land and resources. But I haven’t seen that analysis and arguments from anyone who is operating with deep expertise and good faith. ( Thieving land and resource villains abound, in contrast. )
So I just go back to our $135 Trillion in net personal wealth, an enormous, foundational number, 1000 times larger than any single individual or family fortune, save one or two — and those not by much, and maybe not for long.
No billionaire is the boss of us — especially not financially! — unless we are weak and allow it.
Some may say, that’s my money. That’s not the government’s money.
First, to them, I say, ‘It doesn’t have your picture on it.’
Second, I have met the government, and it is us. Household wealth is definitely part of the full faith and credit of the United States. We are all in this together.
Wealthy people in the USA who support fascism should look to history. The black shirts, the brown shirts, the silver shirts in the USA ( listen to Rachel Maddow’s ULTRA ) . . . the Klan, the Confederacy before that — all losers. Sad, twisted, doomed, dangerous, murderous, bankrupting, yes, but — losers.
But they don’t even have to go very far back. Look to Putin and MBS. Once someone gets sole financial power, and then state power, the rest of the rich dudes are just in line to be robbed, jailed, poisoned, shoved off a balcony, diluted out of ownership, removed, kicked out, exiled ( see robbed ) and it goes on from there.
Wealthy people need a strong functioning democratic republic, deep seated fairness, the rule of law, and swift dependable justice, more than most of us. They, especially the richest, had better start to pay attention.
best luck to US — b.rad
I just gave a specific plan, using taxation, but you'll have to go to the bottom of the comments to find it, since it's a recent comment, & all recent comments go straight to the bottom.
You can change your setting for that at the top of the comments section. I get most recent first.
What makes him the expert. That is the really problem. We need common sense not think tanks. We need to start with taking in as much as we spend. Best way is to get avg. people who pay the bulk of the taxes more pay while getting true competition by big business so prices don't go up. Then raise the taxes on the wealthy so they at least pay as much as there secretaries. See Warren Buffet on that one (that is his saying google it). The intellectuals and think tanks got us into this google Laffer curve and while you are doing it google RF as Nixon use to say and you will get a better idea where you stand.
Lucy Socha ; Yes! I wonder what such a plan would look like! ?
Here is you you make change. Vote!
Vote in every primary. And never ever vote for the incumbent. Ever!!!
Then vote your party in the General Election
It takes away all of the power of rich donors if their law makers can’t get re-elected
Not sure I understand it. Voting out the incumbent seems to in the past just replaced one pawn with another. The rich will just give to the new person running and of course the new person is more than happy to take there money. So out with the old and in with the same old seems to be what happens. Maybe I am missing something.
I think your missing something.
Today law makers see winning office as a career. And the boss is the donor class. If you prove to your donors you will do their dirty work you will make a career in DC.
If we chose to vote for law makers that don’t plan to make a career of surviving in DC their incentive to vote on policy is entirely different.
Incentives drive behaviors. If we keep voting for the same people their incentive is to stick around and serve the powers that keep you around.
To have a long career in DC you need a huge war chest. That takes many election cycles.
Change incentives and you will change the behavior of law makers.
We have the power or we can keep doing what we are doing and thinking people like Chuck Schumer and Nancy Pelosi have our interests at heart. They don’t. The proof is irrefutable
He’s passing the baton after doing his best.
Very true. We need to tax income over 1,000,000 at 75% and between 400,000 and 1,000,000 at 35% with no deductions allowed. Like a federal minimum tax option. Between 75,000 and 400,000 it can stay at 35%, but allow deductions. At $75,000 or below there should be no Federal income tax for a family of 4, and no tax for individuals making minimum wage (at 15/hour). Payroll taxes still apply, but no upper limit cut off. With this the government would never have to worry about debt and perhaps we could actually act on severe problems like climate change and poverty. The only way this will happen is to get the money out of politics. We are lead not by politicians, but by those who control the media and are highly skilled at propaganda, and big money buys it.
@Wayne. When experts run the numbers those marginal rates could be much lower if everyone paid without loopholes!!
Wouldn’t “without loopholes” solve a great part of the debt problem?
no there is national debt what we owe mainly to social security (see why they want it) and deficit spending which is spending more than taxes take in. So it would help deficit spending but still probably not get us to a break even. The real problem and Bob should have pick up on this is since Regan working wages have not kept up with inflation as a result the income going to the Gov. has not kept up with inflation either causing the deficit spending. For a little while under Clinton we had a surplus but Bush blew it all on a $300.00 refund.
One thing republicans have come up with (amazing, isn’t it?) is the Federal Sales Tax idea, with no tax on anyone’s income. With the right guardrails this no-loophole approach to gaining enough federal revenue could work.
You nailed it! Loopholes are the problem with our tax system, not the marginal rates!
Benjamin- the purpose of a 75% or 90% tax on incomes over X is not to collect it.
It is to discourage business owners from extracting that kind of cash out if their business.
If they have little incentive to take huge amounts of cash out of their business they have strong incentive to invest in the business and take care of their employees and community.
Incentive drives behaviors.
Benjamin - I agree. There are evidently many, many, so far legal ways to both shelter wealth from taxes and to ensure that future generations will continue the practice. Here is a link to a comprehensive article that’s a real education, New Yorker article, on 1-16-23, “The Getty Family’s Trust Issues” , by Evan Osnos. It’s not only about the Getty family but about the “creative” ways the uber-rich shelter their wealth from taxes: https://apple.news/AairlfFLWRxOkNy_2IzHkGg
I believe this article can be read by anyone, even though it’s from Apple News. Also the New Yorker allows free access for several articles, NewYorker.com, so possibly going directly to New Yorker magazine could be possible.
One thing rich people do is to spend. Spend a lot! A Federal sales tax on all goods and services could make up the deficit without being regressive (poor-middle income spend a higher percentage of their wealth). Have a 100% refund to the poor with an escalating scale up to whatever the sales tax rate is.
It's a complete circle. The wealthy control the media and the politicians to make sure their taxes remain low, which allows them to get even more wealthy ala Mr. Reich's information, and ever widening the wealth gap. All of this helped by Citizen's United and the SCOTUS.
Wouldn't a 75% tax rate encourage people to work less? Or invest less money in the economy? Once you reach a million dollar income, why bust your ass if 75% is going to the government, or why invest in risky stocks, bonds, or real estate if most of the profit goes to Uncle Sam? Just asking...
@Tim and Daniel. You can wade through Thomas Piketty or look at numerous contemporary studies across countries, tax rates and decades. Higher taxes DO NOT appear to have any real effect on motivation or productivity. Only tax avoidance and tax evasion seem to be affected. In terms of "work less" the tax rates we are discussing will not be applied at the level of anyone who works for a wage (unless you consider CEO salaries "wages"). Tax law and practice is an area where any of our personal opinions need to be parsed in the light of what experts know and can demonstrate with evidence.
@Tim. I agree with u on the need for search features!
You missed my comments. I say again...
Robert you're right. The wealthy must pay their fair share.
But there's more. I've laid this out previously. When we buy an item made in another country, the profit goes to that country. Although the owners of those businesses, in some cases countries, pay nothing on their profits earned in the US, benefit from the right to freely do business here, without reimbursing us for the use of our infrastructure. We should tax them.
There are shareholders in US businesses who are foreigners and do not pay taxes on US income. Best example are the Saudis who control our oil companies, make US energy policy through those companies AND through OPEC and pay no US taxes. We should tax them.
Then there are the US employers who pay workers "under the table" to avoid pau=ying taxes like SS and Medicare. We should penalize and tax them.
Then there are the people who reside in the US but cheat on their taxes. I live in Miami where a large part of our economy is produced by foreigners who reside here but are not on the tax rolls. We should get them.
Another war story. Once upon a time I worked at SSA. We had claimants who worked in this country for 35 years but had virtually no earnings record. That's because they worked "off the books." They should be forced to implicate their employers. Find them, penalize them and tax them.
We spent a lot of time discussing the "gig" economy that lends itself to cheating.
It actually doesn't work this way. There are many people who no matter how wealthy, want more. Most of us will say we don't have enough money, when many of us do have enough to live comfortably. Money for many becomes the measure of their value. This argument you pose is the one many Republicans also use, but it doesn't hold water. Just look at the time when taxes were more progressive. It didn't stop people from continuing to seek to accrue more.
@J. Nol. You got it right friend.
Perhaps for once!
My comment was based on the experience in France about 10 years ago when they imposed a 75% tax on incomes over 1 million euros. The tax was a failure and was cancelled a few years later. Some of the explanations for the failure were the items listed in my comment. Were they correct? I don't know. You are right about the greed of many people. Some rich people moved from France to avoid the tax (one was a famous French actor), and I suspect others "hid" part of their income from the government. I don't know about our experience with a 90% tax rate during Eisenhower, but I do recall tax shelters being a big deal when I was younger.
@Tim. Comprehensive tax law for very wealthy people needs to include international coordination between democracies for those who try to take their income or their wealth "off shore" from any particular administration. Like California does; the tax payer is still responsible for taxes on any income earned in California. My pro-tax stance is based on evidence that fair taxation without loopholes and evasion would result in much lower marginal taxes for everyone. Again - this finding is documented in numerous studies. Tax shelters are still a big deal, though. Precisely because the above mentioned international coordination is very weak and fraught with loopholes, and these loopholes are created by COUNTRIES who want to attract that wealth to their own shores. Lot's of news in the recent 10 years about Ireland and various other "tax advantageous" regimes.
That's why a small "wealth tax" and inheritance taxes might be more palpable.
Imposed on an individual's net wealth in addition to the other taxes, such as income taxes, that they must pay annually. Considered to be a progressive tax because its rate increases with the amount of a taxpayer's net wealth.
https://catalyst.independent.org/2019/12/14/understanding-elizabeth-warrens-radical-wealth-tax/?gclid=CjwKCAiAleOeBhBdEiwAfgmXf1qYNJtmWCb7VYp3wK1eo8Env9tCNWv5Z71EIF2UNaLtsz6JPZ55fxoCMuAQAvD_BwE
For more, see my comments below.
Why doesn't Substack have a search option so I can find your comments, by typing in your name, without wading through tons of comments by others? I am not too big on inheritance taxes, having gone through the process in my family, but definitely think the "step-up in basis upon death" tax loophole needs to be eliminated. No good reason for it!
One difficulty with a wealth tax is that much of the wealth of the rich is tied up in private businesses which can be complex and difficult to value. As we saw with Trump's "valuation" of his assets scandal, lots of opportunity for "funny business". Need lots of expert IRS agents to properly manage tax collection.
Zero taxes for minimum wage sounds attractive. Could unintended consequences include slowing increases in minimum wage and creating a barrier for workers to move to higher wage jobs because net income would be lower?
how much slower could minimum wage grow?? It already hasn't moved in how long??
everyone benefits everyone needs to pay
Why should the low income in this case $75,000.00 pay nothing. Don't they get stuff? I think everyone should pay something. The ones that disproportionately benefit from the country should disproportionately give back. But low income should also pay something.
L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY
http://neweconomicperspectives.org/2014/04/mmt-policy.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+neweconomicperspectives%2FyMfv+%28New+Economic+Perspectives%29
"..a lot of progressives think we need to tax the rich in order to spend on the poor. That’s just wrong, we don’t need to tax the rich more to spend more on the poor, because our sovereign government can’t run out of money, it can always spend more on the poor without taxing the rich. You want to tax the rich because they are rich, you don’t tax them in order to give more to the poor. You tax the rich because they’re filthy rich and so you shouldn’t link the two in policy. In the public’s mind we need to do both, but they are separate policies. You set the tax on the rich not to equal spending on the poor. You set the tax on the rich and make it high enough so that they’re not rich. If that’s your goal – get rid of the excessive riches of the rich -you tax enough so they are not excessively rich. It’s an extremely hard thing to do politically. The final thing is rather than trying to do this with taxes, which is hard because once people have income, especially high income, they have an incentive to protect it, the means to protect it, the means to influence policy, and they are extremely powerful. In practice I think in the US, it is actually impossible to take away income from the rich through taxes because they buy off the politicians, they get special exemptions, they never pay high tax rates, they hide their income, they put it overseas, and so on. The only way that will work in a country like the U.S. is to prevent them from earning the income in the first place. You have to do something like set maximum pay for CEOs."
We have heard much discussion about making the federal minimum wage a livable wage. In contrast, we have not heard much about a maximum wage. If a person cannot live in the USA on $999,999 per year, then he or she suffers from a psychological condition called greed and needs therapy.
Or we could tax any additional income above $1 million at a high rate like 90%, which would increase federal revenue.
Stan, I like your idea. I know the yacht builders wouldn't be happy with a maximum wage, but it would be worth a try.
I like that idea.
The ever widening disparity between rich and poor doesn't bode well for a society. It usually results in an increasing number of people struggling, perhaps becoming disaffected and then often enough following the first charlatan to come along with a story that convinces them that a whole group of "others" are responsible for their unhappiness.
Also reinstate the law that prevents companies from paying their executives in stock as well as company stock buybacks.
It seems to me that preferential treatment of certain income over others is one of the main problems. If gains from executing stock options, stock sales, bond sales, earned interest or wages earned from employment were all taxed alike, there would be nowhere to hide. The fact that someone working as a plumber pays higher rates on income than someone getting paid in stock options, or some other financial vehicle considered capital gains, is another contributor to the deficit. There is no reason that $70k in hard earned wages should be more punitively taxed than $70k from investment income.
As for loopholes, I understand the aversion to them but the ones that get the axe lately are only the ones helping more working people. Before my time, I understand that credit card interest was deductible, now it's only mortgage interest. High taxed states were able to deduct their home's full school and municipal taxes, then TFG ushered in the latest round of tax cuts and it got capped at $10k for itemization of deductions. At the same time, they eliminated the personal exemption for wage earners while most working people's tax rates barely dropped. The combined effect of these for working people in those states (mine included) was effectively a tax hike. Unless some congressional act eliminates loopholes all at once, I fear once again being made worse off to balance the budget while so-called "job creators" have their carve outs stay intact.
Parting shot - I fume every time I hear the uberwealthy referred to as job creators. All of us buying goods and services in an economy are creating jobs. Some working person is on the other end of every, vehicle, appliance, meal, medical procedure, tool, item of clothing or anything else you buy. This idea that only the CEO class is employing people, while the rest of our financial transactions are somehow moving goods and services around without anyone's working effort, is complete and total...choose your preferred expletive.
**BINGO**
"...it is actually impossible to take away income from the rich through taxes because they buy off the politicians, they get special exemptions, they never pay high tax rates, they hide their income, they put it overseas, and so on..."
I have absolutely no idea how to fix it though. The absolute least I would like to see it an equal tax rate if anything - and removing the corporate influence on politics. That was probably the worst thing to ever happen.
Shanna, you are so right about the difficulty in getting the rich to pay their share of taxes. If every single donor to either candidates, parties, or PACs had to be identified and the amount donated making sure the donation was from a real person, a bit less bribery (buying of candidates) might happen and representatives might vote for what it is fair. I, like you, don't know how to get that to happen. Johnny Roberts and his team just made up crap about corporations being persons (without the accountability, though), and letting them donate whatever they wanted to donate and to whomever. I blame the Supreme court conservatives for their eagerness to bring down our democracy while they claim they are just following the law. It is amazing how people who should know better can get caught up in lying and deceit and make everyone else suffer for it.
Larry, I think it is the rich who do the claiming that they would be taxed to pay for the poor whom they despise for their poverty. I have no problem saying that social programs should not be cut to give rich individuals and corporations a tax cut. That is how it is always framed; the rich are having to subsidize the poor when it is nearly always the other way. The poor and working-class are paying for the rich. It may be two different issues economically, but the people and Congress don't see it that way. How does one change the perspective when most people don't even have a rudimentery grasp of economics. That is not meant as an insult, but the fact that economics is not required in high school or basic college programs. Now that Repubs have the House it is definitely not going to get better for at least the next two years, and after that, who knows?
Or...Eat the rich. Since we have a walking-talking example of how they seem to be able to attack the government at will...who's to stop a little crazy 18th century crazy on them ...starting with a guillotine set up outside Mary Lago?
Oh, keto is so last-year!
While I enjoy the vision, I'm pretty sure it creates more problems than it resolves.
I'm all about visual stimulation. Ha! I believe that an unimaginable situation might lead to a revolution against the ultra-rich. We know where that would end. More problems for the middle class. Other 'solutions' all seem to be unacceptable. As a futurist, technical evolution is usually unforeseeable and inevitable. We can dream.
First problem the rich have already paid required taxes on money they already have . They put it in triple tax free municipal bonds and reinvest principal and interest . The income tax system feeds them with wage slaves . Eliminate cash tax evey transaction a little bit apples new factory now builds your roads instead of collecting a subsidy for putting the wage slave factory in your town . Or we could just screw them and default there’s only 20 of them. We could build them housing …
" the rich have already paid required taxes on money they already have"
This is BS propaganda. Many high earners pay absolutely no taxes. I personally pay more than many US corporations and I am middle class and I'm pissed about it. Many inherited wealth and paid NO tax on it. I subsidize these deadbeats. .
That's why I also suggest a wealth tax. Inheritance taxes. Also see my comments below.
we seem to be on the same page so often with different concepts. Working wages need to go up they have not kept up with inflation so the deficit keeps growing. We need true competition to force this. Musk and Bezzo both have enough money to blow them self into space but can't pay their works a living wage. That is the problem
I did not say they were fairly taxed I said they were legally taxed Of course it’s bullshit . I saw a cat who saw people buying fish with dollars. The cat came to the door with a leaf in his mouth and the owner gave him a small fish the cat does it evey day now and the cat has a better idea what money actually is than any of us
@Daniel. I'm pissed about it too!
Original thinking!
While my preferred method is to use a much more progressive tax system, an alternative would be to limit top pay in a company to no more than 20 times the lowest salary or wage.
I would agree with that, since it might provide an incentive to pay people at the bottom more.
Yes, a higher minimum wage & a lower maximum wage.
Professor Wray is correct on all counts. More people need to understand the paradigm-shifting insights of Modern Monetary Theory. A great start would be to peruse "The Deficit Myth" by Stephanie Kelton.
No simple math can't be ignored because you like someone. Economics it how it should be business is how it is. So get out of neverland and do the math. Simple question what happens when service on the debit (interest we pay on what we borrowed) exceeds the amount of money coming in? Please let me know.
Macroeconomics professor Stephanie Kelton says that "we don't need to fix the debt; we need to fix our thinking."
The U.S. Government can never go broke. It has a fiat currency, not backed by any commodity, like gold or silver. It is not like a household, city, county, state, or corporation's budget: They can't tax, set interest rates, or print money. Big, important differences; the difference, in fact, between day and night.
Professor Kelton says that "we could pay off the national debt tomorrow, and none of us would have to chip in a dime."
If that sounds wacky, it's because you're thinking that the national debt is like your debt. It isn't. Reagan knew this; it's why VP Cheney told President George Bush: "Reagan taught us that the debt doesn't matter."
The federal debt is merely a historic record of how much the government has put into people's pockets without taxing them away, according to Dr. Kelton. It's actually an expansion of our money supply, which helps all Americans.
I'm not a macroeconomist, but her book "The Deficit Myth" explains all I'm trying to say cogently and at length by a professional who makes such complex matters her life's work.
Like quantum mechanics, macroeconomics is often counterintuitive. In fact, Modern Monetary Theory requires a paradigm shift to grasp it; your past (incorrect) knowledge and common sense won't help you in the realm of how our government money really works.
We really need to get this new information into public discussion. We are worried about the wrong things and using "fixes" that won't work. Neither monetarism nor Keynesianism possess the right understanding for success.
The paradigm shift from old macroeconomics to MMT is similar to the shift in scientific thinking when Copernicus taught some of us that the earth 🌎 revolves around the sun. Some never got it as they were so wedded to old thought. About those Neanderthals....
Wait a minute! The Earth revolves around the Sun? I'm sticking with Ptolemy.
This may help http://keynesforkids.com/
There's always this: https://keynesforkids.com/
I don’t hold with hating the rich. I question their entitled feelings of superiority, and their wisdom. As far as the USA goes, I am seeing the strengthening of the IRS as a plausible avenue to enforcing tax law that already exists, but not enforced because the playing field of accountability is not level when you have an under funded and under resourced IRS. So let’s start there, and also work like hell to enforce, and update anti-trust laws. This could go a long way to improve democratic functioning in the USA.
Research suggests that as people accumulate more and more wealth their empathy decreases. I guess it's a way to manage guilt. They can then feel freer to justify the inequality including thinking of themselves as somehow special.
Numb.....just plain numb.
@J. Nol. Research suggests that there is a correlation between higher wealth and lower empathy. Cause and effect is not established. Couldn't it be that less empathetic people (Musk) have a performance advantage in capitalistic enterprise?
Some research looked at how subjects' empathy was affected as they "won" more and more "goodies" and found that those who accumulated more, had reduced empathic responses to stimuli designed to elicit empathy. But of course, those already lacking in the empathy department can be more ruthless and thus more successful at exploiting others. After all, capitalism equals exploitation. So a bit of both, I would suggest.
Just in case: https://en.wikipedia.org/wiki/L._Randall_Wray
Larry Kazdan ; Didn't the wealthy in some European countries face limits on their wealth? I remember reading that CEOs could not make a certain percentage more than the lowest paid workers? At least at one time this was true. Maybe even today.?
Donald Hodgins
just now
I've heard good and bad things about a flat tax. It stands as a way of applying a fair tax rate to everyone. This tax option would help the Federal Government retrieve and maintain a higher level of taxable income from the general public. A flat tax would have every citizen paying the same percentage of their income, this way the rich would have to pay their fair share, just like the little guy. There would be no deductions and no exemptions. This would allow for a reduction the the IRS's over all size and structure. How much Federal money could be saved if this tax policy was put into place?
Terry, I know a flat tax sounds really good, but here's the problem, 10% of the income of someone earning $75,000 is not the same in value to the family as 10% of the income of someone earning $1 million. $7,500 is a bigger sacrifice to the $75,000 earner than $100,000 is to the million dollar earner. A progressive tax is far more fair. I agree that loopholes need to be closed because that is how a lot of revenue is lost. Then the IRS needs to put their emphasis on the tax problems (cheating) of the rich even if it means a few middle-class folks' cheating gets through.
Ruth, you're absolutely right. For a government to achieve meaningful income, it would have to tax everyone at 50-60%. Progressive taxation is actually a foundation of capitalist theory (see Wealth of Nations), indeed the US economy boomed in the 1950s, when taxes were very high.
Then came Regan and Friedman preaching the falsehood that capitalism was opposed to high taxes.....
No Regan was all about the Laffer curve give it to rich they will then give it to the poor. Google it. Regan used to say look Kennedy lowered taxes and raised more income. But he left out that workers wages went up faster than inflation so the workers paid more in taxes.
What you're talking about is "trickle down" as a part of supply side economics. The Laffer curve is an old concept, i.e., there is an optimal rate of taxation where the government maximizes its revenue. This rate is probably around 50%, but the concept was misinterpreted (deliberately?) by the Reagan administration to justify cutting taxes on the wealthy.
If you really want to understand progressive taxation, look no further than "Wealth of Nations," which, I believe, greatly influenced Keynes (who, incidentally, had a low opinion of Marx).
It's not very difficult.
Agree. Or to be more dramatic, compare someone earning $30,000 to someone earning $30 million. There are plenty of each in this country. With a 10% flat tax, the person earning $30,000 would have only $27,000 left to spend on necessities of living, a bare subsistence. The person earning $30 million would have $27 million left to spend, far more than is needed to live comfortably.
That's why a wealth tax is more equitable.
Agreed, but also in large part because nobody declares an income of $30 million a year any more. If you're that wealthy, you pay yourself $80,000 per year, to be like the little people, and keep the rest as an accumulating asset which is not taxed (as Jeff Bezos does, for example).
There has to be a wealth tax, and it has to be global.
Ruth.....I'm not a supporter of a Flat Tax....that's Donald Hodgins. I'm on board with Keynes, Wray and Shelton and MMT.
Thank-you, Ruth! That is the way to go.
Oddly, that is exactly why it's equal. 10% from everyone effects us all the same way. It doesn't matter how much money we look at being taken from two different incomes, what matters is the percentage taken is the same.
No, it doesn't affect everyone the same way. A flat tax is orders of magnitude harder on poor people than on the wealthy, who incidentally use far more taxpayer-funded amenities than poor people. A flat tax is not fair at all.
Taking the same percentage from John Doe or Trump hits their pocket books in the same way. You take 10% of their income, by definition of the term flat tax is an equal assessment rendered by everyone. Naturally the amounts will vary but that's the beauty of that form of taxation, it affects everyone equally.
Donald, no matter how you try to make it look the same, it isn't. Flat taxes are regressive and just pump up the rich even further. We don't need that. We need the rich paying a whole lot more. They have gotten their wealth from everyone else, so they have a responsibility to give back to everyone else. They did not do anything totally on their own as they would like us all to believe.
With a flat tax if a rich man makes 10 million in a year and the tax rate is ten percent that guy has to pay 1 million dollars to the federal government, he can't get away from that, the tax demands it. That money along with all the rest will help support the underprivileged through the social programs that tax money will fund. We have to find a way to make the wealthy pay their part.
I'm not promoting the implementation of a flat tax. I see it as a way to get the wealthy to pay their fair share and a flat tax forces the rich to pay the same percentage as the less fortunate. Right now the rich are pay very little, the question is how do we get them to pay up, as it were.
Let me repeat & embellish on what I posted below.
First $50K of income should be exempt from taxation (aside from SS taxes, etc. that have already been withdrawn from your salary). Next $50K up to $100K is taxed at 20%. $100-200K taxed at 40%, $200-500K at 60%, $500K-1M 80%. Any additional income above $1M is taxed at 90%.
It's clean, crisp, easy to calculate. Reduces taxes for majority of Americans while bringing in considerably more revenue for government, paid mostly by those who can most afford it. It alleviates this destabilizing record disparity in wealth & power. It leaves more money in pockets of ordinary people so that they can spend more in the local economy, boosting small business.
I am also for a wealth tax, removing the ceiling on Social Security taxes, taxing or assessing fees (+ dividend) on greenhouse gases, raising the gasoline tax a dollar per gallon or so, assessing taxes on meat & plastic, transaction fees on hedge funds & other large money exchanges, closing all tax loopholes & removing tax havens, & making it much harder for corporate takeovers & mergers to take place.
No, because there is a certain amount everybody has to pay to survive. You'd have to at least exempt that amount from taxation.
You should look at it not as how much money you have to tax, but how much you have left after taxation. And how much you need to survive & how much you need to thrive. It is much better to use a very progressive system. No more than a couple hundred thousand dollars per year salary is necessary for a very comfortable life with the ability to obtain most of the important things in life. A million or a billion dollars won't enhance your life that much unless you feel compelled to buy elections like Koch & Thiel do, which should be discouraged if not forbidden, anyway.
It just seems unfair, the rich get richer and the poor get just the opposite. No real solution, sort of like the border problem. Odd the be confronted with issues that don't seem to have answers that we can apply them to.
Ruth, you keep replying to me for something Donald Hodgins wrote? Why?
Oops, sorry. I must have gone too far back when checking on the person I was responding to. Using a screen reader is a challenge and I will be more careful in the future.
You need to read Thomas Piketty's "Capital in the 21st Century" - a daunting task but the only way to learn enough not to be fooled by the latest unproven theory. Piketty's data shows that, as in industry, there's and economy of scale in finance. Greater wealth has greater leverage in investing to get greater returns. Just look at the exponentially graduated interest rates your bank offers for different sized accounts. Therefore, the rich will get richer without a significantly/exponentially graduated tax. A flat tax will not work. It's defenders use incomplete data to put lipstick on this pig, the devil is in the details, and the devil will have his due. I repeat: the complete data reveals that the leverage of wealth is exponential. Even our current rates are too compressed to prevent the formation of a financial aristocracy strong enough to influence government to protect their power. That's where we are, exactly as Picketty's empirical formula predicts, thanks to Reagan and the Federalist Society hold on our government. The rich fear democracy, that we are coming to tax it all away, that we are stupid and will kill the goose that lays the golden eggs. These fools have it backwards; they only collect the gold created by the labor of their workers. By giving voices to their billions of dollars, Citizens United enables them to drown out Robert Reich's lone voice.
Be careful about what economists you follow! Universities controlled by Charles Koch and his cabal of billionaires, like George Mason University, crank out indoctrinated minions to promote the Gospel according to Any Rand. They lie by omission. Rand's imaginary capitalist paradise would implode in the real world. John Galt unlearned the vital lesson of Henry Ford, that those union workers Galt abandoned are his customer base. Rand's hero oligarchs cannot thrive picking each other's pockets (as best I can remember to book from my naive youth since I can't stomach re-reading it). Capital is the life blood of the economy, and as with a body, if you strangle the flow to the extremities, they will not be able to support the head.
Today's column is one of the most important ones of all. I only wish I had some good advice on how to get this message out to enough voters to matter. When I talk to my representatives, their stock answer is, "I can't do anything unless I can get re-elected. Please give me money." They don't get it that I'd give them the money if the gave me a reason to first.
Excellent excellent excellent. Pikkety and his team of researchers studied societies from ancient times to the present. Their book, including footnotes, is about 700 pages long. They did not put it quite this simply, but societies become increasingly unstable as wealth becomes more concentrated at the top, and in time the whole thing topples over.
Beginning with Reagan we greatly increased transfers of wealth to the top by crippling "shunts", like high progressive taxes, that slowed those transfers. Wealth transfer upwards then took off, and today wealth inequality here is the greatest it has been in over one hundred years. We did reduce income inequality in the aftermath of the Great Depression, and the nation prospered, but we have undone much of that since. And now they are coming for Social Security, Medicare, Medicaid because, they say, "we can't afford it".
@Dennis L. Green. Getting the word out is hard. People don't read. There are too many conflicting messages. Rich guys are paying politicians to NOT represent the people and Rich guys are paying the media to persuade the less literate people that cultural issues are more important than limiting the oligarchs. My smart-but-ignorant cousin thinks that if there is a more well-resourced IRS that they will come after his paltry income. Sad to see the distortions that gullible people will embrace...
Donald: You have been sold a bill of goods. A flat tax is by its very nature regressive. Think sales tax on everything.
It's a bill of goods that requires the rich to pay their fair share. How many other ways do we see this happening.
You haven't done the math or your homework. Therefore its impossible to take what you say seriously
https://www.investopedia.com/terms/f/flattax.asp#:~:text=Generally%2C%20a%20flat%20tax%20is,those%20with%20a%20larger%20amount.
No, a very progressive tax like we had in the 1950s is the way to go. If we had a flat tax, it shouldn't be applied to wages under subsistence level in any case. I would prefer several steps of increasing tax rates until the maximum level in the 80-95% range at about a million or so dollars per year salary.
If you think it's wrong, don't cede ground by saying "if we had a flat tax..." It's not our job to make silk purse out of THEIR sow's ear. One deduction leads to another, which is how the rich end up paying nothing even now, so the flat tax just lowers their starting point. Congress won't go Laissez Faire. They always find a need to stimulate something or the other because the greedy corporations don't see the public good as profitable. And, this brings us full circle to the influence of dark money and the capture of SCOTUS that invented rights for corporations 'not enumerated in the Constitution' just like abortion, which proves my point about corruption.
I have twice posted a detailed specific proposal on how I think we should solve our revenue problem while easing the tax burden on lower & middle income taxes, including somewhere in this thread (I think).
Jaime, not a good idea to even introduce a national sales tax/flat tax. Once it's in play, only gods and Radicals will know where it goes.
see my post on intellectuals and listening to them. We run out of money when the service on the debit (interest we pay I think Bob said 473 billion) exceeds what we take in. It will really happen sooner as service on debit eats in to spending forcing a reduction in spending or higher taxes. This is all simple math we don't need some overpriced guru telling you white is black and the sky is purple. 2+2 is 4
Except that's not how things, particularly $$, work. As Mark Twain once put it: "It Ain’t What You Don’t Know That Gets You Into Trouble. It’s What You Know for Sure That Just Ain’t So" You needn't be an intellectual to agree with that.
Thanks Larry, not many people understand how our macro economics really works. Keep trying t get them to understand.
You likely know this but there's an old quote attributed to Jonathan Swift:
You cannot reason people out of positions they didn't reason themselves into.
I did know the quote and it's very applicable here. Thanks!
yw
A rock-ribbed Conservative-ish suggestion: impose an AMT that adjusts to zero out the budget deficit. You want to see a huge campaign by the “captains of industry” to cut the military waste? Bring it on!
I have never understood the logic -- if you can call it logic -- of wailing about the National Debt being sooooo high, and then deciding to reduce Federal income by handing out tax breaks measured in the hundreds of billions of dollars.... instead of using that money to pay down the Debt. Instead what We are told is "trickle down economics". BbbbbbbbbbbbSssssssssss.
Captain Patch; It would be truly great if there was a disclaimer along with any statement made by the national debt whiners to clarify what is really being advocated. Giving trillions of dollars to billionaires is not helping : especially when they are not paying anything in taxes that reflects their wealth, and what they are taking!
I doubt We would _ever_ see such a disclaimer. What they're REALLY doing? They're paying back their biggest "campaign donors", the ones that paid to get Us to vote them into office -- where they work for the Very Wealthy instead of We The People. Think they would ever actually admit what they are doing? But what can _We_ do about it? We can't even choose who the candidates will be. We have to choose from slates of candidates created by the Democrat and Republican Parties -- _after_ the candidates swore an oath to serve their Party FIRST. (Actually second, after those "campaign donors".) In practice, We The People are little more than cash cows for those that rule over Us, directly and indirectly.
Captain Patch ; I was being 'funny', sarcastic/joking with the idea that a disclaimer of honesty would be included in such a statement by the whiners. But you are right.; the voters pay in two ways , taxes, and donations to a campaign where our wishes are completely disregarded, and we are sold out. We are the cash cows in every way.
Totally agree.
Spending bills should be pay-go, and debt limit adjustments go for State endorsements. Look at my “I, Diogenes” post.
Captain Patch : yes, We get peed on again!
Workers are the makers ; billionaires are the takers!
Where is a Robin Hood when we need one!
While I fully appreciate the clarification regarding how the wealthy both contribute to and also benefit from the nation’s increasing national debt, additionally, I would note, adding insult to injury, that the radical extremist Freedom Caucus and the so-called establishment Republicans alike are intent on further confusing a largely ignorant population by falsely conflating raising the debt ceiling with spending money we don’t have.
Hence, I think it imperative that we flood the White House with letters urging the President to clarify, as often as warranted in prime time, that raising the debt ceiling doesn’t give the government permission to borrow money; it gives government the permission to pay back the money we’ve already borrowed. Further, in my view, the President is obligated to educate the public of the economic calamity that would ensue were the U.S. to default on its national debt.
How do we get rid of Citizens United? Let's start with that. Cap CEO's and upper management incomes. Why not tax? It was done before. How was it done?
Pack the SC for starters. They're the ones that okayed it to begin with.
The inaction, complacency, and ignorance of the electorate play right into their hands . And at the crux of such situations is that the vast majority of Congress, the Executive, and Judicial all have bought and paid for tickets on the gravy train . And they're all sitting in first class . The system of drafting elected officials onto the 1%ers squad has always been the ideal for them . Seeing as
the worship of filthy lucre has replaced the basic virtues, decency, and morals of our nation and people, such situations are ALL just outcroppings thereof . To simplify yet again, until the temptations of wealth and perceived social status stop being dangled in front of pols noses, until the carpets of government are given a good shaking out and ALL monies, both light and dark are removed from our election process, i.e.; Citizens United done away with, along with corporate citizenship and their access to our elected officials, this and all similar situations shall go on and on and on . I'm not talking a Jan 6th type revolution, but a waking up of the average American to see that our system is corrupt, contrived and controlled by the 1%ers, their corporate wrappings and their buying, selling and ownership of this nation and government. Without the occasional revolution democracy dies . Ours is long overdue . WAKE THE HELL UP AMERICA ! !
I paid mine! 23% to the feds and another 12.8% to California! Holy Moley! Republicans often prance around exhibiting some kind of self-righteous anger at paying their taxes. That's just drama. Who's really angry are Democrats like me who pay my taxes only to end up listening to the grifters, cheaters, dodgers and liars bitch, bitch, bitch. For fair tax policy we need a public culture that will get them to shut up and a public policy that will ensure they pay up!
Let's not forget that a goodly chunk of our national debt is for Chickenhawk George's unfunded military misadventures in the ME. At least he got to be a War Pres-i-dent.
Miss Anne, you are right about so much of our debt being ?Georgie Porgie's responsibility. He maybe got to be a war president, but a really bad one. His wars went on well past his administration and the Democrats had to end them, and in neither case did they end well because they didn't begin well with a clear mission. In many ways, we're still paying.
No doubt, there are those who made plenty of money! Gee, I wonder who?
Miss Ann Thrope ; Another 'President' not elected by the human citizens! George W.
"It's a new world order!".
This is part of a comment I made to an email from Alexandria Ocasio-Cortez. The figures are an approximation of the actual wealth sloshing around in the US economy, perhaps about 96 trillion dollars. (This doesn't include, as far as I know, the estimated 20 to 30 trillion+ in offshore accounts according to one British university study.) I did a very rough estimate of America's total worth and came up with about a quarter of a quadrillion dollars. This is (sigh) unfortunately in today's inflated money but still a goodly amount! Here is my modest proposal (thanks to Jonathan Swift) which might have some difficulty in Congress:The current national debt is about
31.46 trillion. The top 10% control a bit more than 73 trillion,
leaving about 23 trillion for us in the 90%. I would suggest
a modest graduated tax of 43.9% on the top 10% that would
produce 31.46 trillion and pay off the national debt. This is less
than 1/2 the 90% in the 30's. 40's, and 50's which the rich paid.
These very wealthy folks would still be quite rich but not as much
as before. Of course the country would continue to collect taxes
from them so that we could fund National Healthcare and a Basic
Income safety net for all to have proper housing and medical
assistance. And the (still) rich would have the satisfaction of
being patriotic benefactors!
Tony Heller
Former Adjunct Professor of English (Strictly an amateur Economist!)
See <http://uswealthclock.com>
You are citing wealth, and therefore a wealth tax of 44%. That should get the attention of the wealthy. In these discussions, income is often compared to wealth. Different -- Income statement v balance sheet.
We have heard the insane Rs are floating a 30% sales tax -- that would have to be welcomed by working voters everywhere! . . . wait, what??!!
A 30% wealth tax as a counter, as above, ought to focus the conversation. Good on ya!
best luck to US -- b.rad
Thank you for this enlightening perspective. I had never heard the debt explained that way. So, not only do the wealthiest not pay their fair share of taxes, they actually take the taxes middle class people pay from the United States of America.
There has been much reporting that Kevin McCarthy is refusing to raise the debt ceiling without concomitant spending reductions due to the irresponsible extremists in his caucus. I can't help wondering whether he, and they, are really bought and paid for by the wealthy plutocratic plunderers, who want to take, take, take from this great country, but give nothing back. Biden is scheduled to meet with him tomorrow. I hope Biden stands strong against him. Your explanation of the debt should be included in Biden's State of the Union address.
I have suspected that we need to tax the wealthy. It makes sense that those who profit so much on worker's labor should pay a proportionately higher tax. It seems like some of them pay nothing at all.
The capital of any country is largely the product of the labour invested by the people. Thus, when bankers invest capital in business, they invest the labour of the people in the business, and the profits on that capital should be returned to the people as fruits of their labour, not pocketed by the bankers and a few individuals -- let's name them again the Robber Barons -- who have managed to snaffle an unfair share. Because capital has been a thousand times through the laundromat of the banks and lawyers and billionaires does not wash away the rights of wage slaves and those forcibly enslaved to demand repayment of the full costs of their labour.
The bank makes in the end 5x what the builder charged and for what? Lending you dollars created out of air as your deposit hit the banks reserve account ..
Absolutely Professor Reich. I’m going to tell as many people as I can. This is not only outrageous but demoralizing to Americans that believe in the entity AMERICA. How much can we take as citizens of this country. These wealthy are bleeding this country and profiting by it. I’m going to pray to God help us please!! End this wealthy bloodsucking!! Thank you as usual for your Enlightenment!!
The funny thing is that in middle America, working class white people have been fed so much disinformation that they actually believe Reaganomics benefits them and the middle class. They keep saying things like we have to take this country back without realizing that the policies of the last 42 years, going back to 1981, are to blame. I am 63 years old and grew up in a small town in the Heartland and I know the way a lot of those people think and talk, although of course not all.
This horrible gimmick has a history. In the stillborn Weimar Republic, so much capital was destroyed that there was no trustworthy domestic money. The remaining wealth at the top was loaned into the State, but there was little prosperity produced to pay the debt. The Versailles reparations didn’t stop. No capital was confiscated-that might be Communism! or taxation on wealthy-Socialism! So all prosperity, what there was of it, was siphoned off in the dark. Hitler’s brilliant economic plan was to invent the fiction of International Jewry as the hidden destroyer of prosperity. All was solved! Liquidation of the Jews had a cash reward! When life hands you lemons, build Killinghausen! The rich industrialists remaining got off from blame, everyone had an enemy to hate - what a job by the fox and his friends, Joe Goebbels! Except for producing hell among nations, what’s not to like? We try it again.