But think of it this way (as Bernie Sanders has done): If each and every senator thought of what would be best for the American citizen, that is, what would enable that citizen to enjoy a decent living and do work that called on the best he/she had in him/her and each senator thought of the benefits of higher taxes on ordinary working people irrespective of the party of that senator and what the party bosses dictated that the senator do and how he voted, perhaps many Republican senators would "cross over" and vote the way they're supposed, not for the good and power of the Republican party but for the good and prosperity of the American people. The fact of the matter is that while Manchin and Sinema seem to doom Democratic proposals and policies (and they are egregious in claiming to be Dems), they are not the real root of the problem...that root is the tendency of senators to substitute the good of the party (and party Leader) as what this is really about instead of the well-being of the population and benefits to the people doing the work and paying the bills. Members of both parties are more than willing to go the party-line and do what the party leaders ordain (Manchin and Sinema are a bit outside the norm in that they seem to toe the GOP party line but they also prove the point: it's not the merits and benefits and improvements of any piece of legislation for the people of the nation; it's what will serve to advance the blatant self-interest of party leaders and the chances of securing a life long position in the party mechanism. None of this is particularly democratic but I gather that most in Congress gave up deals about democracy and the welfare of the general working people for personal wealth and advancement within their party. That's what gave us the 45th president...few GOPers thought of what the 45th pres would offer and how he would serve, that didn't matter as long as they stayed on his good side and increased their own wealth and power. So, it;s not just Manchin & Sinema who are throwing a cog in the wheel--it's all those Congresspeople who are voting self-interest instead of the interest of the working classes.
Unfortunately, this is the New Democracy, and has nothing to do with the old Democracy. But it seems few people are willing to look to see what democracy has become. Rule of the msjority by the minority.
I don't really believe that what we now have can go by the moniker "democracy." I think that, unfortunately, the general population (the voters) dropped the ball, they forgot or never knew that "the price of democracy (literty) is eternal vigilance,," that it was their duty to stay informed and to demand the teaching of civics, history, government, ethics, critical thinking skills. When the schools dropped teaching such subjects, many folks simply didn't care as they were too involved in trying to become wealthy and powerful and stiff others in the process. There was no longer any such thing as civic responsibility, the schools didn't teach it and former governor (then president) Reagan said we didn't need to learn such things any more....and, you know what?, he was correct if the object of life was to make as much dough as you could by the easiest and quickest method possible. It is ironic that a small nation in Eastern Europe is fighting so very hard to remain free and independent while freedom and independence are of such little concern that we will trade all our principles for wealth. Democracy is not old or new; it is simply (and regrettably) irrelevant in a country where values, traditions, even the rule of law are intellectual concepts that aren't worth anything tangible but a great deal in terms of self-respect and respect for others--and we or most of us don't care whether we have them or not as long as our coffers are bulging.
There’s political democracy, and there’s economic democracy. More or less, given the weirdness of our 18th century constitution, we have representative democracy, which isn’t too bad — except for the totally legal entry of big money into politics. As for economic democracy, I suspect that only if we have lots of worker co-ops will the workplace, where we spend most of our non-sleeping time, become democratic.
I'm not sure that we had anything like representative democracy in the 18th century or rather those who did have representative government and could vote were not very legion (numerous). Women, slaves, indigenous people, citizens of other nations, migrants, indentured servants, under age people, orphans, and those not owning land were not represented and did not vote. (Slaves were considered individually 3/5 of a white male owning property but I don't reckon that gave them much of a vote) That meant that what it came down to was: if you were a white male of considerable means and owned any property, you were represented and could vote; otherwise, you were basically out of luck. As now, the ownership of real estate was a kind of barrier for a lot of people, just as people who own property (even a modest house) are considered to be of a more affluent class. Education also counted for something (and was linked to property ownership). So what we had to start with were: affluent/well educated white males who owned property (and people) and generally belonged to the same patrician class as their ancestors from England. I guess you could call it representative govt if your idea of representation (and who got to be represented) was restrictive. I believe that those with wealth call the shots and pull the levers and this has always been the case and probably always will be. At various times in the past, various leaders have sought to weaken the Gilded Class and level the playing field; it seems to work for a while but then (alas) we're back to another Gilded Age until the bottom falls out and a depression means we return to trying to even the score--but only for a while. An endless cycle built on who (and how many) have the dough and who doesn't.
You’re absolutely right. I’ve always suspected that MLK’s assertion that the arc of justice bends toward the good (or something like that) is more a wish than a reality. In contrast with progress in science and technology, progress in ethics seems to lag far behind; some people would call it nonexistent. I don’t have the answer.
I recently saw a (female) representative of the Russian Federation who was eagerly defending the Russian invasion and attempted obliteration of Ukraine. She was very determined of the justice of the Russian cause and would tolerate no opposition to her views. The central argument of her defense (propaganda for the Western Nations) was that Ukraine and Russia were one people under the Motherhood of Russia. (She put it in exactly those terms.) She went on to give as proof of their unity the fact that both shared the same Eastern Orthodox Christian Faith. I do not know that anyone in either country could claim that there is a shared faith and that both countries are the essence of devout Christianity...I don't think that Eastern Orthodox Christianity advocates the kind of appalling attack on one's neighbor that we have witnessed for the past six weeks...or, as you say, there doesn't seem to be much progress on the front of justice and respect for others, whether or not they share MOtherhood and the same faith. So much for that Russian lady's theory.
Me either -- I've always worked in a top-down workplace. Of course, workplaces aren't designed that way; there's a hierarchic structure that can be depicted by an "org chart" like those of the military. I haven't worked in a co-op, but my understanding is that co-ops are designed to be (supposed to be) democratic.
Some are, I am sure, on some levels. But that does not mean all levels. The janitors and dishwashers are seldom deemed as important as the salesman or the sales managers (or their equivalents in other industries). The day the janitor is paid the same wage as the CEO is the day I will say a company or corporstion has achieved economic equality. That day will never come in Capitalism, or present day Communism, for that matter.
I'm afraid that we are neither a "new democracy" nor an "old democracy". We are already an oligarchy. Most politicians only care about the masses at election time. After that they are the lapdogs of the donor class.
Agreed. But ask almost any American, and they will tell you "they" live in a democracy, and that your democracy is the best democracy in the world. When I say "democracy," all I am saying is the citizens who vote have a real choice in who to vote for, though in most cases all they have to choose between is the lesser of two evils. No matter that down deep it is an oligarchy, on the surface it is still democracy. IN REALITY, though, all it takes is one vote to win an election. Without a stated minimum number of votes, or a choice between at least two worthy candidates, it is not a democracy at all.
But what happens if the national popular vote and the vote of the Electoral College do not secure the same result? This is not a theoretical possibility but has occurred twice in fairly recent history (Gore vs Bush, 2000; Clinton vis Trump, 2016). In the first case, Florida stopped counting votes before all had been counted and (for some unconstitutional reason), the decision was left to the Supreme Court (a provision not provided for in the Constitution). In the second instance, voting proceeded to the end and Clinton won by some 3 million votes, whereupon the decision was left with the Electoral College which resulted in a win for Trump. In neither of these two cases, was the situation in any way democratic and it resulted in 8 years of non-democratic rule by Bush and 4 years of even worse non-democratic rule under Trump. (Trump didn't even bother to pretend that he would act according to the Constitution and his oath of office (his what?). I am not at all sure that "any American:" would describe his/her country as "democratic." There are people who still care (a minority, it appears) and there are people who are willing to engage and try to salvage what's left but there are also those who are willing to follow Trump into the rabbit hole and sheer depravity as well as those who have given up any form for participation to pull the covers up over their heads and hide. At this point, it's hard to know which of these two groups deserve a place but, since I have to resist the urge to hide myself, I guess I'l go with that last group and try to keep fighting for a voice even if I really have none.
I am not going to pretend I know what "you" should do. I'm just saying the best time to start looking for something new is now, not once Donald Trump makes himself King, by which time something new will be impossible.
Dave, Unfortunately (for us all), I have to agree with you. Most politicians "earn" far more in "public office" than they deserve. You are correct: concern for the state of hoi polloi (that is the 90% of us who work long and hard so we can eat and have a place to sleep at night) is way, way down the list of concerns; serving the folks "who brung them to the hoe-down" (that is the wealthy funding their campaigns) is right at the top as they will in turn pave the way for legislation that benefits the wealthy. That's the system, such as it is. Members of Congress will get the best housing, the best health insurance, the best transportation, the best private schools for their kids, and the privilege to attend cushy social events. Hoi polloi will be lucky to get the crumbs and their reward will be a chance to join a cult or coup and create violence and mayhem on the promise that the future will be better and America will be great again, even as it slides into even more injustice, violence, and support for the oligarchs who are assumed to know more and (somehow) be better than the rest of us. It is no wonder that those of us who spy the truth behind this posturing and smoke-and-mirrors end up cynical and willing to skip the entire charade and just admit that we're done. I often believe we're done as well as I don't see an easy way out of it, especially since politicians have given up the idea of public service and representation for the more obvious one of self-service but that is where we are. I don't see anyone in any position of public service trying to deal with it (well, maybe Bernie Sanders tried but look where that got him). I can understand people who want to wash their hands of anything to do with politics but, well, maybe we can learn a thing or two about public service by watching Zelenskyy's 'The Servant of the People' (on netflix.com) and by focusing on how the situation is playing out in Ukraine...we can't learn much about American Democracy here, that's for sure!
Months ago, I suggested guaranteeing Manchin a SCOTUS nomination* in exchange for him (1) ending the filibuster; (2) approving 2 new senators from DC; (3) and expanding SCOTUS seats (& # Circuit Courts) to 15.
*the QOP could add to its midterm platform that Manchin's nomination proves the Dems consider SCOTUS partisan. And, Manchin clearly couldn't get 50 Dem votes. But, some retiring QOP Senators might vote for him, rather than let a younger, more progressive person get the seat.
with you. I think backwards (more than I should about how different life would be if Democrats had won senate seats in NC, Maine, Iowa, etc. - where the polls seemed to show them head for quite some time ( I don't think there was one poll in Maine that showed Collins winning again ahead of the election - could be wrong about that)
"All power tends to corrupt and absolute power corrupts absolutely" - Lord Acton (1834 - 1902)
We and the whole of American society would be best served to keep in mind who the 'absolute power' is, it is not the authoritarians and dictators of today, it is those who prop them up financially. The same applies to our representatives in the U.S. House and Senate.
I am sad to ask, what is the immediate incentive to the majority of ordinary America? As an economist you know that incentive is a strong driving force to get something done.
Not being an economist, being just a regular citizen, I would think the immediate incentives could be free healthcare and free education FOR ALL, to name only two. Getting Big Money out if politics would free the government to tax the wealthy "by the same rules" as they presently tax the poor. This is what Big Money is preventing from happening. Nobody needs to make millions or billions of $ a year, nobody can spend that much legally. So, if they insist on making those income levels, tax them at 50% or higher! They would still be able to maintain their ultra-comfortable lifestyles they seem to demand for fhemselves. But, putting all that money into government would supply the funding for every American to get the healthcare they "need" to live in "relattive comfort." Likewise, everyone could get a free and "meaningful to them" education. Not everyone has the skills and abilities, or even the desire, to go to university or college, but those who want to should be allowed to, without their economic situation putting up roadblocks. And those to whom university and college do not appeal, they should be given the chance to be freely educated in the field or industry of their choice, so they can be happy citizens, not someone forced by circumstance to take dead-end jobs that afford them a miserable life.
Maybe you (general, not specific) cannot see this, but the rich need to keep the poor penniless in order to get those jobs done that no one wants to do. The less education some people have, the more limited they are in job selection. Conceivably in our present system, you can have geniuses working a counter at McDonald's just because their opportunities were limited by their circumstances. Cancer could have been cured years ago if the right people were allowed to get the proper education! Right there should be incentive to get Big Money out of politics. Geniuses are more likely to appear in the poorer classes than the WEA.LTHY CLASS! All they need is the total access to education that free education would give them.
Call this Socialist thinking if you like, but, remember, Socialism cares about little people. Socialism is not some plot to destroy Captalists, but it can use the money from taxing capitalists to make everyone's lives better!
Extremely interesting. Thank you for clear explanation. One of the challenges for the federal government is too many layers of bureaucracy. At some point in time the White House team needs to call in Six Sigma to help stream line a better functioning government. Six Sigma refers to a methodology that is driven by data and statistics. It is used to eliminate defects and improve processes. I called IRS this past week. Spent my first 91 minutes on hold. The federal government has a spending issue on top of fixing the tax issues. If we could address both at the same time we could accomplish much more going into the future. God Bless everyone who is working hard to help this great country.
One major reason you spent so much time on hold with the IRS is that there are not enough agents. Republicans, in particular, have underfunded the IRS for years, so that their billionaire bankrollers not only legally did not pay their fair share of taxes, but could also get away with illegally underpaying the taxes that the law requires them to pay. Some of the revenue from the billionaire's tax could be used to increase IRS funding, not only to provide better service to ordinary people, but also to catch the big time tax evaders.
Carolyn. You make a good point. However, we can't keep throwing money at government institutions like the IRS or Post Office. The federal government does not have a money issue, we have a spending issue. Just like at my house. Bring in more money or spend less. I do agree the tax system is a mess but many of these large companies donate a ton of money to non profits that help our citizens. Just saying, don't rob Peter to pay Paul.
@Cecelia. The Post Office is in the Constitution. It is one of the most equalizing and democratic institutions that we have. Do you think that all the Social Security recipients in (say) Wyoming would be paid if they had to wait on the Pony Express? Or, how much would it cost to have your check sent to you by Federal Express? $12 for each mailing? The only reason the Post Office is made to look like it is losing money is because Congress underfunds the service under a theory that it should pay for itself - false theory! The Post Office is a public service, especially useful to rural citizens, and a major factor in the cohesion of our great nation! We need to get DeJoy out of our public business because he is trying to take all of the public service elements out and pass over the profitable parts to his crony buddies in the transportation industry. We will all pay through the nose!
Yes, the Post Office is indeed in the Constitution, and with good reason. The framers, in their difficult path. wanted you know, to promote democracy, a system recommended to them by their inspiration, Adam Smith - you know, the guy who invented capitalism.
Smith wanted the benefits of his economic system, through progressive taxation, to flow to all the people. Between 1948 and 1980 we had such a system in America.
It is only since that horse's ass, Saint Ronald of Reagan, became president, that people have questioned this bedrock of capitalism.
AOL is right about one thing "Tax the Rich." Everything else follows.
@Benjamin R. Stockton. I don't believe the post office should be a profit center but it should not be losing billions of my tax money. That is government waste! The Postal Service had a net loss of $4.9 billion for 2021, compared to a net loss of $9.2 billion for 2020. That to me as a tax payer is unacceptable.
The post office receives no tax dollars for its operating expenses (per the USPS website). It is funded with income from the services it provides. There are two major reasons the post office has had such deficits: 1) there has been a dramatic decrease in mail volume because much more business is transacted online, for example online bill pay; and 2) In 2006, Congress imposed a draconian requirement not imposed on any business or government agency that required the post office to fund its employee pensions 75 years into the future, that is, to fund the pensions of employees that had not yet been hired. Fortunately, this year, Congress finally repealed that requirement.
You are right on point. The other factor is that although the Postal Service receives no tax dollars, Congress regulates it. For a long time, Postmaster Generals knew that mailing was declining, and they wanted to reduce the number of postal employees by not replacing many of those that were retiring, and they also wanted to start closing some post offices. Quest what? Congressmen would not allow any closures. Politicians do not make good administrators; they give in to their constituents.
I received this pole in my mail today. Did Anyone else get one?
" we’re polling top California Democrats to see if they support the idea of Robert Reich replacing Louis DeJoy as Postmaster General. You’re the only person we selected from 94587, so your response is critical. Can you take the poll now? >>
Should Robert Reich replace Louis DeJoy as Postmaster General?"
Robert Reich, are you really seeking the Postmaster Genral Job or is this some cruel April Fool's Joke? We would no longer have your newsletters or his wisdom on other issues if you took up the mantel that was once filled by Benjamine Franklin. I think your time would be taken up with the position and you would have to resign his professorship at UC Berkley.
Carolyn Herz...is the US Post Office not delivering packages and boxes for Amazon to make up for the dramatic decrease in mail volume? I have noticed their trucks delivering on Sunday with boxes from Amazon. Perhaps government pension need to be thrown out like we have seen the past 30 years in the corporate world. Just a thought.
If you want to see an even bigger user of your tax dollars who doesn’t turn a profit, I present to you the Department of Defense. Of course, the DoD has utility, as does the Post Office. Not everything in life is to be judged on the profit-loss framework.
Cecelia you're breaking my heart. "The federal government does not have a money issue, we have a spending issue." That's Republican BS. 1. We have among other things, a collection issue. If people paid the taxes they owe we'd be able to reduce the deficit, etc. 2. The IRS and Postal Service were set up to fail by Republicans underfunding them. For every dollar spent on IRS agents, the government will collect $10. A Republican Congress made the Postal Service prepay the pension to the benefit of Republican donors and to the detriment of the public. 3. Maybe by the time you finish Robert's course you'll understand deficit spending. He tried to explain this in the section on macroeconomics.
Deficit spending goes back to the founding. Most people can't buy a house without a mortgage. Alexander Hamilton was the first Secretary of the Treasury. The real issue is allocation of resources. Guns vs. butter. If you spend more on guns you have less for butter.
To bring in more money and to reduce inequality and the vast power differential, the wealthiest need to pay their fair share, as Professor Reich says, equal sacrifice. The fact of the matter is, the IRS needs more money to hire and pay the salaries of more agents to provide better service. If, for example, there is one agent for every one million people, you will wait far longer on the phone than if there is one agent for every 10,000 people. Also, the wealthiest can hire the best accountants money can buy to evade and avoid taxes. Agents with sophisticated tax knowledge are needed to deal with this, and they don't work for free.
Companies likely don't donate as much as they would pay in taxes. Also, they can take tax deductions for their charitable contributions, so the taxpayers partially fund their alleged generosity. Moreover, private donations don't necessarily go where the need is greatest. They go to causes that suit the donors' whims. Thus, it is undemocratic. We the taxpayers pay legislators, governors, and the president to hire experts and do what is best for the country or state as a whole. I remember several years ago Bill Gates had an untested idea for an educational program. Because he was willing to fund it with his foundation money, underfunded schools grabbed the money offered. Thus, children became unwitting guinea pigs to accommodate one person's notion, which wouldn't necessarily benefit them. More tax money might be used instead to hire more teachers or upgrade dilapidated buildings.
"We the taxpayers pay legislators, governors, and the president to hire experts and do what is best for the country or state as a whole." I find it hard to believe this anymore, with the corruption in Washington and state governments. Sometimes a rich person accomplishes something worthwhile with his money. For example, John D. Rockefeller and the hookworm parasite in the American South in the early 1900s. BTY, I enjoy reading your comments!
Thank you for your vote of confidence. Yes, some philanthropists do use their money to benefit society, but they cannot be relied upon to do that. And yes, there is entrenched corruption in federal and state governments, definitely in my state. But there are elected officials who take seriously their duty to serve the people. Some of them are in the video Robert Reich posted today. I vote for, and volunteer for the campaigns of those who do the jobs we elected them to do. As Robert Reich has said, the plutocrats and would-be autocrats want us to become cynical and stop caring about our government.
'a' 'accomplishes' by your definition 'worhwhile' your definition and you a self declared rational thinker means do not tax any rich person for Welfare of The People decided by the Peoples House - really
baloney - we here this false narrative at every election cycle from Republicans. Do you think anyone would cut Military Spending for a true universal health care for ALL the people with quality of our seniors health care per Medicare? Why is it ok with your group to have 6 people have wealth of 60% of our population?
Did the IRS resolve your issue correctly? My experience is that the tax code is so complex that the agents on the phone don't understand it themselves. I gave up long ago on consulting the IRS; tax lawyers and CPAs cost money but know the rules much better!
No advice given by an IRS agent is binding or deemed reliable. The only party that can judge 'correct' or 'incorrect' is a tax court. More's the pity. A great simplification would be desirable, but too many interests benefit from the current system for that to happen.
"..streamline a better functioning government" ... and better oversight for spending - they could start with the military and it wouldn't hurt my feelings..
government and corporations - I have same experience with each of big companies who obviously not using Six Sigma in affective way but a feel good way of simple survey
Boy, that's the truth. And I saw today where Obama is going to the White House to further his delusion of how we can make the ACA work... hint: we can't!
As long as there is a profit motive, that outweighs the health of the citizens of this country, we can NEVER get a handle on out of control healthcare and the unnecessary costs that a for-profit company will always put ahead of the people.
Agreed. Health care doesn’t fall into the category called “things that need insurance.” That’s because there’s a 100% chance that you, me, everyone will get sick or injured seriously unto death — that’s our fate. On the other hand, insurance is a ‘what if’ bet on the success or failure of a particular and discrete event. For example, I own a ship, and I want to take tea to China. On the way across the Pacific, that ship may encounter typhoons or pirates (risks), and so I pay $$$ to Lloyds of London for insurance against these specific risks, which of course may or may not affect my ship. In the case of shipping, insurance is prudent and justified. However, when it comes to the condition of a frail human body, the necessity for insurance is a travesty. That’s why Obamacare is wrong-headed.
The $30 trillion number caught my interest in this morning's essay. $30 trillion, that is $30,000,000,000,000. Although "spelling it out" is useful shorthand, it doesn't really convey the sheer magnitude of that number. For perspective consider, if one were to divide that $30 trillion into one million dollar ($1,000,000) portions and invest each of those million dollar portions in individual annuities, the interest off each annuity would provide a living income for 30,000,000 (30 million) US Citizens - as the original $30 trillion principal investment remains intact.
As an afterthought: The Republicans believe in >your< hard work, and can bravely endure >your< exhaustion and/or deprivation and stress and dashed hopes. They'll sagely advise that all you need to do is just work harder, and you can "make it" - whatever the devil that's supposed to mean! After all, it's all in service to >family values< . . . . . . . . . . . . . >Their< family values.
Wouldn't it be nice? It's not a good picture for Democracy if these measures are not passed. Especially when one or two members of the 'Democrat' party is the hold out on their vote.
The argument against estate taxes is that it prevents struggling family farmers from passing their farm to their heirs. But, AgriBiz has essentially killed family farms.
And, of course, folks still benefit from transferring assets (including 401ks) into Roth IRAs, which taxes don't touch
I am afraid I have a hard time comprehending Economic laws, and although I understand this article I do wonder about one thing: Should Biden’s tax plan go through (and I hate to be pessimistic but) for how long would this last in other words could the uber-wealthy still weasel their way around paying their fair share and if (Heaven forbid) the GOP gained control could they simply undo what President Biden accomplished? Forgive my ignorance.
Civilization is a constant, unending struggle between the avaricious and the average person. You must be on guard always. Greed, one of the 7 deadly sins, doesn’t go away.
I came across all that while studying abroad in in the Far East, as an independent research project for the Lutheran theological seminary I attended at the time. It was at the time of the Sapporo Olympics and "Ping Pong Diplomacy."
The first proposal sounds like it would accomplish the objective. But the latter sounds like primarily another assault on the working middle class. If only that latter proposal passes, what would it mean for middle class working people who've managed to keep their houses and a comparatively small amount of savings? Their children keep half of those assets, not enough to afford to keep the house, while the wealthy's children barely notice the loss of half of their billions?
I didn’t see anything in the article that would point to taxing anybody who is considered middle class. I don’t think I missed anything so why would you be against this?
I don't see anything concerning in the first proposal. It targets only the ultra-wealthy. I'm all for that. I just don't see anything in the second proposal that protects middle class or any group from new taxes on anything they might manage to save -- house, money, anything -- to pass down to heirs. I think it's inaccurate to assume that, over a lifetime, a hard-working, saver from the middle class couldn't save something to help their heirs. Maybe I'm missing where that second proposal targets only the ultra-rich.
If you can’t live on $999,999 per year, you have a mental illness-character flaw called greed. Palm Sunday is coming up: time to take stock on our society’s direction.
Middle class is earning within 50% of median household income. About $35K to 95K per year. Very few families with that kind of income will have vast wealth to pass on that is taxable. Allowing a modest exclusion would be an easy solution.
I agree, however I knew a family with a family farm and when the parents died the land was worth a hefty amount (acres of farmland next to a freeway and growing community). This was a while back when there was an inheritance tax. They didn’t make much farming and didn’t want to sell as the land had been in the family for generations. Guess what - got squeezed out. There would nee to be provisions.
Though in theory I support both tax reforms, contrary to the 20% minimum tax on household net worth exceeding $100 million, repeal of the “stepped-up-basis-at death” loophole strikes me as a relatively easy, albeit structurally beneficial, adjustment both literally and politically, and hence not likely to create much resistance. With a 50-50 Senate, the election season kicking in, and the need promptly to pass a progressive piece of legislation, I would advise, for the present, to focus mostly on enacting the one reform of closing the “stepped-up” loophole.
Paula, People, who own stock that passes to their beneficiaries, die on a regular basis. Were the stepped-up loophole repealed, beneficiaries would owe taxes on capital gains earned from the time the stocks initially were purchased as opposed only to owing taxes on gains earned as of the stockholders’ death.
I’m so grateful for your information and how you keep us informed . I only wish every American who follow you and understand how we can solve such incredible problems and repair our democracy. Thank you for your work
First eliminate the filibuster clause, second, get rid of the electoral college, which is obsolete for our generation, third, stop the massive tax loop holes, meaning tax the wealthy and stop the hidden overseas funds only the crooks have access to. I know there is a war going on in Ukraine, but we must keep our focus on the nations needs also. A must to conquer soon is aid to education debt, it’s a definite promise to the youth. Get it done
Would the tax on unrealized cap gains be creditable toward future cap gains tax?
If so, I think one effect of the tax would be to mitigate stock volatility and overvaluation. For example, Elon Musk paid $11 Billion in taxes last year because he had to sell a lot of stock to take advantage of options that were expiring, but in most years he pays very little tax because he and other wealthy stockholders don't normally sell stock. They just borrow against their equity. The cap gains tax causes people to hoard their equity holdings, which creates scarcity, which leads to stock overvaluation, which increases stockholders' net worth, which increases their cap gains liability, which creates more of a disincentive to sell when they would otherwise be cashing out, ... . A creditable tax on unrealized cap gains would break the cycle and create an incentive for wealthy stockholders to gradually sell off their holdings before their accumulated credit exceeds their tax liability. Stock prices would be lower and more affordable to ordinary folks.
Perhaps a step-up in basis should be allowed when taxes are paid on unrealized gains, so the taxable gain on the next tax event - either capital gain or inheritance - would be less ?
Probably the heir could have the option of taking the stepped-up basis and forfeiting any accrued credit from prior taxes on unrealized gains. Or they could forfeit the stepped-up basis and carry over the credit.
The only thing about the 'taxed at death' thing is if the only person inheriting is an equally old, living off that account spouse, who actually needs the money to live on. I would have an issue with that.
I would add that some of our money that we're living off of was inherited but we both worked as long as we could. And our income tax is obscene just on capital gains even though it's not that large an account, especially when the medical and Rx bills start piling up. And we spend way too much time on the phone arguing with insurance companies. :(
Einstein is reported to have said, "Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.” The same is true of any Return on Investment (ROI for short, and coincidentally, ROI means 'King' in French.)
There is a book about all this that everyone should read, "Capital in the Twenty-First Century" by Thomas Piketty and his large team of researchers. It is a blend of economic analysis and anthropology. They go way back though history of civilizations to find a constant: accumulated capital continues until the whole thing becomes unstable and topples over. If Piketty et al are right, and I am sure they are, then our right turn back in 1980 put us on this trajectory.
I am very concerned by this upcoming transfer of wealth to a generation that has never known anything but wealth. I spent a considerable portion of my professional career in service of such people, and the idea of them having immense power with no applicable skills, inclination or concern for the 99% will end this American Experiment within a generation or two.
Children of inherited wealth form a subgroup of victims who need to deal with psychological issues, like not feeling worthy of their wealth. It takes all kinds!
No, it’s not that. It’s their parents’ values, which are very progressive. I’m lucky in that most of the people I grew up with are progressive and their kids are too. What I’m trying to say is that it’s a sweeping and unfair statement to say that the next generation is spoiled, entitled, and lazy.
If there were 52 Democratic senators, the Manchin and Sinema dog & pony show would be over. Those two make me spitting mad!
Me too.
If there were no filibuster "rules" - esp being applied willy-nilly - the pony show would also be over..
But think of it this way (as Bernie Sanders has done): If each and every senator thought of what would be best for the American citizen, that is, what would enable that citizen to enjoy a decent living and do work that called on the best he/she had in him/her and each senator thought of the benefits of higher taxes on ordinary working people irrespective of the party of that senator and what the party bosses dictated that the senator do and how he voted, perhaps many Republican senators would "cross over" and vote the way they're supposed, not for the good and power of the Republican party but for the good and prosperity of the American people. The fact of the matter is that while Manchin and Sinema seem to doom Democratic proposals and policies (and they are egregious in claiming to be Dems), they are not the real root of the problem...that root is the tendency of senators to substitute the good of the party (and party Leader) as what this is really about instead of the well-being of the population and benefits to the people doing the work and paying the bills. Members of both parties are more than willing to go the party-line and do what the party leaders ordain (Manchin and Sinema are a bit outside the norm in that they seem to toe the GOP party line but they also prove the point: it's not the merits and benefits and improvements of any piece of legislation for the people of the nation; it's what will serve to advance the blatant self-interest of party leaders and the chances of securing a life long position in the party mechanism. None of this is particularly democratic but I gather that most in Congress gave up deals about democracy and the welfare of the general working people for personal wealth and advancement within their party. That's what gave us the 45th president...few GOPers thought of what the 45th pres would offer and how he would serve, that didn't matter as long as they stayed on his good side and increased their own wealth and power. So, it;s not just Manchin & Sinema who are throwing a cog in the wheel--it's all those Congresspeople who are voting self-interest instead of the interest of the working classes.
Unfortunately, this is the New Democracy, and has nothing to do with the old Democracy. But it seems few people are willing to look to see what democracy has become. Rule of the msjority by the minority.
I don't really believe that what we now have can go by the moniker "democracy." I think that, unfortunately, the general population (the voters) dropped the ball, they forgot or never knew that "the price of democracy (literty) is eternal vigilance,," that it was their duty to stay informed and to demand the teaching of civics, history, government, ethics, critical thinking skills. When the schools dropped teaching such subjects, many folks simply didn't care as they were too involved in trying to become wealthy and powerful and stiff others in the process. There was no longer any such thing as civic responsibility, the schools didn't teach it and former governor (then president) Reagan said we didn't need to learn such things any more....and, you know what?, he was correct if the object of life was to make as much dough as you could by the easiest and quickest method possible. It is ironic that a small nation in Eastern Europe is fighting so very hard to remain free and independent while freedom and independence are of such little concern that we will trade all our principles for wealth. Democracy is not old or new; it is simply (and regrettably) irrelevant in a country where values, traditions, even the rule of law are intellectual concepts that aren't worth anything tangible but a great deal in terms of self-respect and respect for others--and we or most of us don't care whether we have them or not as long as our coffers are bulging.
There’s political democracy, and there’s economic democracy. More or less, given the weirdness of our 18th century constitution, we have representative democracy, which isn’t too bad — except for the totally legal entry of big money into politics. As for economic democracy, I suspect that only if we have lots of worker co-ops will the workplace, where we spend most of our non-sleeping time, become democratic.
And there is illiberal democracy.
Yes, of course, you’re right: most people aren’t saints.
I'm not sure that we had anything like representative democracy in the 18th century or rather those who did have representative government and could vote were not very legion (numerous). Women, slaves, indigenous people, citizens of other nations, migrants, indentured servants, under age people, orphans, and those not owning land were not represented and did not vote. (Slaves were considered individually 3/5 of a white male owning property but I don't reckon that gave them much of a vote) That meant that what it came down to was: if you were a white male of considerable means and owned any property, you were represented and could vote; otherwise, you were basically out of luck. As now, the ownership of real estate was a kind of barrier for a lot of people, just as people who own property (even a modest house) are considered to be of a more affluent class. Education also counted for something (and was linked to property ownership). So what we had to start with were: affluent/well educated white males who owned property (and people) and generally belonged to the same patrician class as their ancestors from England. I guess you could call it representative govt if your idea of representation (and who got to be represented) was restrictive. I believe that those with wealth call the shots and pull the levers and this has always been the case and probably always will be. At various times in the past, various leaders have sought to weaken the Gilded Class and level the playing field; it seems to work for a while but then (alas) we're back to another Gilded Age until the bottom falls out and a depression means we return to trying to even the score--but only for a while. An endless cycle built on who (and how many) have the dough and who doesn't.
You’re absolutely right. I’ve always suspected that MLK’s assertion that the arc of justice bends toward the good (or something like that) is more a wish than a reality. In contrast with progress in science and technology, progress in ethics seems to lag far behind; some people would call it nonexistent. I don’t have the answer.
I recently saw a (female) representative of the Russian Federation who was eagerly defending the Russian invasion and attempted obliteration of Ukraine. She was very determined of the justice of the Russian cause and would tolerate no opposition to her views. The central argument of her defense (propaganda for the Western Nations) was that Ukraine and Russia were one people under the Motherhood of Russia. (She put it in exactly those terms.) She went on to give as proof of their unity the fact that both shared the same Eastern Orthodox Christian Faith. I do not know that anyone in either country could claim that there is a shared faith and that both countries are the essence of devout Christianity...I don't think that Eastern Orthodox Christianity advocates the kind of appalling attack on one's neighbor that we have witnessed for the past six weeks...or, as you say, there doesn't seem to be much progress on the front of justice and respect for others, whether or not they share MOtherhood and the same faith. So much for that Russian lady's theory.
I have never known a workplace, any workplace, to be democratic.
Me either -- I've always worked in a top-down workplace. Of course, workplaces aren't designed that way; there's a hierarchic structure that can be depicted by an "org chart" like those of the military. I haven't worked in a co-op, but my understanding is that co-ops are designed to be (supposed to be) democratic.
Some are, I am sure, on some levels. But that does not mean all levels. The janitors and dishwashers are seldom deemed as important as the salesman or the sales managers (or their equivalents in other industries). The day the janitor is paid the same wage as the CEO is the day I will say a company or corporstion has achieved economic equality. That day will never come in Capitalism, or present day Communism, for that matter.
I'm afraid that we are neither a "new democracy" nor an "old democracy". We are already an oligarchy. Most politicians only care about the masses at election time. After that they are the lapdogs of the donor class.
Agreed. But ask almost any American, and they will tell you "they" live in a democracy, and that your democracy is the best democracy in the world. When I say "democracy," all I am saying is the citizens who vote have a real choice in who to vote for, though in most cases all they have to choose between is the lesser of two evils. No matter that down deep it is an oligarchy, on the surface it is still democracy. IN REALITY, though, all it takes is one vote to win an election. Without a stated minimum number of votes, or a choice between at least two worthy candidates, it is not a democracy at all.
But what happens if the national popular vote and the vote of the Electoral College do not secure the same result? This is not a theoretical possibility but has occurred twice in fairly recent history (Gore vs Bush, 2000; Clinton vis Trump, 2016). In the first case, Florida stopped counting votes before all had been counted and (for some unconstitutional reason), the decision was left to the Supreme Court (a provision not provided for in the Constitution). In the second instance, voting proceeded to the end and Clinton won by some 3 million votes, whereupon the decision was left with the Electoral College which resulted in a win for Trump. In neither of these two cases, was the situation in any way democratic and it resulted in 8 years of non-democratic rule by Bush and 4 years of even worse non-democratic rule under Trump. (Trump didn't even bother to pretend that he would act according to the Constitution and his oath of office (his what?). I am not at all sure that "any American:" would describe his/her country as "democratic." There are people who still care (a minority, it appears) and there are people who are willing to engage and try to salvage what's left but there are also those who are willing to follow Trump into the rabbit hole and sheer depravity as well as those who have given up any form for participation to pull the covers up over their heads and hide. At this point, it's hard to know which of these two groups deserve a place but, since I have to resist the urge to hide myself, I guess I'l go with that last group and try to keep fighting for a voice even if I really have none.
I am not going to pretend I know what "you" should do. I'm just saying the best time to start looking for something new is now, not once Donald Trump makes himself King, by which time something new will be impossible.
Dave, Unfortunately (for us all), I have to agree with you. Most politicians "earn" far more in "public office" than they deserve. You are correct: concern for the state of hoi polloi (that is the 90% of us who work long and hard so we can eat and have a place to sleep at night) is way, way down the list of concerns; serving the folks "who brung them to the hoe-down" (that is the wealthy funding their campaigns) is right at the top as they will in turn pave the way for legislation that benefits the wealthy. That's the system, such as it is. Members of Congress will get the best housing, the best health insurance, the best transportation, the best private schools for their kids, and the privilege to attend cushy social events. Hoi polloi will be lucky to get the crumbs and their reward will be a chance to join a cult or coup and create violence and mayhem on the promise that the future will be better and America will be great again, even as it slides into even more injustice, violence, and support for the oligarchs who are assumed to know more and (somehow) be better than the rest of us. It is no wonder that those of us who spy the truth behind this posturing and smoke-and-mirrors end up cynical and willing to skip the entire charade and just admit that we're done. I often believe we're done as well as I don't see an easy way out of it, especially since politicians have given up the idea of public service and representation for the more obvious one of self-service but that is where we are. I don't see anyone in any position of public service trying to deal with it (well, maybe Bernie Sanders tried but look where that got him). I can understand people who want to wash their hands of anything to do with politics but, well, maybe we can learn a thing or two about public service by watching Zelenskyy's 'The Servant of the People' (on netflix.com) and by focusing on how the situation is playing out in Ukraine...we can't learn much about American Democracy here, that's for sure!
Months ago, I suggested guaranteeing Manchin a SCOTUS nomination* in exchange for him (1) ending the filibuster; (2) approving 2 new senators from DC; (3) and expanding SCOTUS seats (& # Circuit Courts) to 15.
*the QOP could add to its midterm platform that Manchin's nomination proves the Dems consider SCOTUS partisan. And, Manchin clearly couldn't get 50 Dem votes. But, some retiring QOP Senators might vote for him, rather than let a younger, more progressive person get the seat.
with you. I think backwards (more than I should about how different life would be if Democrats had won senate seats in NC, Maine, Iowa, etc. - where the polls seemed to show them head for quite some time ( I don't think there was one poll in Maine that showed Collins winning again ahead of the election - could be wrong about that)
"All power tends to corrupt and absolute power corrupts absolutely" - Lord Acton (1834 - 1902)
We and the whole of American society would be best served to keep in mind who the 'absolute power' is, it is not the authoritarians and dictators of today, it is those who prop them up financially. The same applies to our representatives in the U.S. House and Senate.
VOTE
Which is why a top priority for us all should be to get big money out of politics.
Citizens United (a misnomer if ever there was one) should NEVER have been enacted and needs to be challenged.
I am sad to ask, what is the immediate incentive to the majority of ordinary America? As an economist you know that incentive is a strong driving force to get something done.
Not being an economist, being just a regular citizen, I would think the immediate incentives could be free healthcare and free education FOR ALL, to name only two. Getting Big Money out if politics would free the government to tax the wealthy "by the same rules" as they presently tax the poor. This is what Big Money is preventing from happening. Nobody needs to make millions or billions of $ a year, nobody can spend that much legally. So, if they insist on making those income levels, tax them at 50% or higher! They would still be able to maintain their ultra-comfortable lifestyles they seem to demand for fhemselves. But, putting all that money into government would supply the funding for every American to get the healthcare they "need" to live in "relattive comfort." Likewise, everyone could get a free and "meaningful to them" education. Not everyone has the skills and abilities, or even the desire, to go to university or college, but those who want to should be allowed to, without their economic situation putting up roadblocks. And those to whom university and college do not appeal, they should be given the chance to be freely educated in the field or industry of their choice, so they can be happy citizens, not someone forced by circumstance to take dead-end jobs that afford them a miserable life.
Maybe you (general, not specific) cannot see this, but the rich need to keep the poor penniless in order to get those jobs done that no one wants to do. The less education some people have, the more limited they are in job selection. Conceivably in our present system, you can have geniuses working a counter at McDonald's just because their opportunities were limited by their circumstances. Cancer could have been cured years ago if the right people were allowed to get the proper education! Right there should be incentive to get Big Money out of politics. Geniuses are more likely to appear in the poorer classes than the WEA.LTHY CLASS! All they need is the total access to education that free education would give them.
Call this Socialist thinking if you like, but, remember, Socialism cares about little people. Socialism is not some plot to destroy Captalists, but it can use the money from taxing capitalists to make everyone's lives better!
Is this not a worthy goal to strive for?
Extremely interesting. Thank you for clear explanation. One of the challenges for the federal government is too many layers of bureaucracy. At some point in time the White House team needs to call in Six Sigma to help stream line a better functioning government. Six Sigma refers to a methodology that is driven by data and statistics. It is used to eliminate defects and improve processes. I called IRS this past week. Spent my first 91 minutes on hold. The federal government has a spending issue on top of fixing the tax issues. If we could address both at the same time we could accomplish much more going into the future. God Bless everyone who is working hard to help this great country.
One major reason you spent so much time on hold with the IRS is that there are not enough agents. Republicans, in particular, have underfunded the IRS for years, so that their billionaire bankrollers not only legally did not pay their fair share of taxes, but could also get away with illegally underpaying the taxes that the law requires them to pay. Some of the revenue from the billionaire's tax could be used to increase IRS funding, not only to provide better service to ordinary people, but also to catch the big time tax evaders.
instead of Six Sigma it is Regan's Starve The Beast methodology per Republican propaganda
Carolyn. You make a good point. However, we can't keep throwing money at government institutions like the IRS or Post Office. The federal government does not have a money issue, we have a spending issue. Just like at my house. Bring in more money or spend less. I do agree the tax system is a mess but many of these large companies donate a ton of money to non profits that help our citizens. Just saying, don't rob Peter to pay Paul.
@Cecelia. The Post Office is in the Constitution. It is one of the most equalizing and democratic institutions that we have. Do you think that all the Social Security recipients in (say) Wyoming would be paid if they had to wait on the Pony Express? Or, how much would it cost to have your check sent to you by Federal Express? $12 for each mailing? The only reason the Post Office is made to look like it is losing money is because Congress underfunds the service under a theory that it should pay for itself - false theory! The Post Office is a public service, especially useful to rural citizens, and a major factor in the cohesion of our great nation! We need to get DeJoy out of our public business because he is trying to take all of the public service elements out and pass over the profitable parts to his crony buddies in the transportation industry. We will all pay through the nose!
Yes, the Post Office is indeed in the Constitution, and with good reason. The framers, in their difficult path. wanted you know, to promote democracy, a system recommended to them by their inspiration, Adam Smith - you know, the guy who invented capitalism.
Smith wanted the benefits of his economic system, through progressive taxation, to flow to all the people. Between 1948 and 1980 we had such a system in America.
It is only since that horse's ass, Saint Ronald of Reagan, became president, that people have questioned this bedrock of capitalism.
AOL is right about one thing "Tax the Rich." Everything else follows.
Yes Benjamin! Totally.
@Benjamin R. Stockton. I don't believe the post office should be a profit center but it should not be losing billions of my tax money. That is government waste! The Postal Service had a net loss of $4.9 billion for 2021, compared to a net loss of $9.2 billion for 2020. That to me as a tax payer is unacceptable.
The post office receives no tax dollars for its operating expenses (per the USPS website). It is funded with income from the services it provides. There are two major reasons the post office has had such deficits: 1) there has been a dramatic decrease in mail volume because much more business is transacted online, for example online bill pay; and 2) In 2006, Congress imposed a draconian requirement not imposed on any business or government agency that required the post office to fund its employee pensions 75 years into the future, that is, to fund the pensions of employees that had not yet been hired. Fortunately, this year, Congress finally repealed that requirement.
You are right on point. The other factor is that although the Postal Service receives no tax dollars, Congress regulates it. For a long time, Postmaster Generals knew that mailing was declining, and they wanted to reduce the number of postal employees by not replacing many of those that were retiring, and they also wanted to start closing some post offices. Quest what? Congressmen would not allow any closures. Politicians do not make good administrators; they give in to their constituents.
I received this pole in my mail today. Did Anyone else get one?
" we’re polling top California Democrats to see if they support the idea of Robert Reich replacing Louis DeJoy as Postmaster General. You’re the only person we selected from 94587, so your response is critical. Can you take the poll now? >>
Should Robert Reich replace Louis DeJoy as Postmaster General?"
Robert Reich, are you really seeking the Postmaster Genral Job or is this some cruel April Fool's Joke? We would no longer have your newsletters or his wisdom on other issues if you took up the mantel that was once filled by Benjamine Franklin. I think your time would be taken up with the position and you would have to resign his professorship at UC Berkley.
Carolyn Herz...is the US Post Office not delivering packages and boxes for Amazon to make up for the dramatic decrease in mail volume? I have noticed their trucks delivering on Sunday with boxes from Amazon. Perhaps government pension need to be thrown out like we have seen the past 30 years in the corporate world. Just a thought.
Post Office Annual Budget: $77 billion
National Highways: $70.2 billion
Air Force: $154 billion
All military: $754 billion
Aid for Dependent Children (now called TANF): $31.5 billion
If you want to see an even bigger user of your tax dollars who doesn’t turn a profit, I present to you the Department of Defense. Of course, the DoD has utility, as does the Post Office. Not everything in life is to be judged on the profit-loss framework.
"Surely you jest"
Cecelia you're breaking my heart. "The federal government does not have a money issue, we have a spending issue." That's Republican BS. 1. We have among other things, a collection issue. If people paid the taxes they owe we'd be able to reduce the deficit, etc. 2. The IRS and Postal Service were set up to fail by Republicans underfunding them. For every dollar spent on IRS agents, the government will collect $10. A Republican Congress made the Postal Service prepay the pension to the benefit of Republican donors and to the detriment of the public. 3. Maybe by the time you finish Robert's course you'll understand deficit spending. He tried to explain this in the section on macroeconomics.
Here's a little history: https://www.washingtonpost.com/opinions/2020/08/24/gops-attack-postal-service-is-bigger-than-this-election/
Daniel appreciate your one side. Thank you.
Deficit spending goes back to the founding. Most people can't buy a house without a mortgage. Alexander Hamilton was the first Secretary of the Treasury. The real issue is allocation of resources. Guns vs. butter. If you spend more on guns you have less for butter.
https://www.smithsonianmag.com/sponsored/alexander-hamilton-debt-national-bank-two-parties-1789-american-history-great-courses-plus-180962954/
To bring in more money and to reduce inequality and the vast power differential, the wealthiest need to pay their fair share, as Professor Reich says, equal sacrifice. The fact of the matter is, the IRS needs more money to hire and pay the salaries of more agents to provide better service. If, for example, there is one agent for every one million people, you will wait far longer on the phone than if there is one agent for every 10,000 people. Also, the wealthiest can hire the best accountants money can buy to evade and avoid taxes. Agents with sophisticated tax knowledge are needed to deal with this, and they don't work for free.
Companies likely don't donate as much as they would pay in taxes. Also, they can take tax deductions for their charitable contributions, so the taxpayers partially fund their alleged generosity. Moreover, private donations don't necessarily go where the need is greatest. They go to causes that suit the donors' whims. Thus, it is undemocratic. We the taxpayers pay legislators, governors, and the president to hire experts and do what is best for the country or state as a whole. I remember several years ago Bill Gates had an untested idea for an educational program. Because he was willing to fund it with his foundation money, underfunded schools grabbed the money offered. Thus, children became unwitting guinea pigs to accommodate one person's notion, which wouldn't necessarily benefit them. More tax money might be used instead to hire more teachers or upgrade dilapidated buildings.
"We the taxpayers pay legislators, governors, and the president to hire experts and do what is best for the country or state as a whole." I find it hard to believe this anymore, with the corruption in Washington and state governments. Sometimes a rich person accomplishes something worthwhile with his money. For example, John D. Rockefeller and the hookworm parasite in the American South in the early 1900s. BTY, I enjoy reading your comments!
Thank you for your vote of confidence. Yes, some philanthropists do use their money to benefit society, but they cannot be relied upon to do that. And yes, there is entrenched corruption in federal and state governments, definitely in my state. But there are elected officials who take seriously their duty to serve the people. Some of them are in the video Robert Reich posted today. I vote for, and volunteer for the campaigns of those who do the jobs we elected them to do. As Robert Reich has said, the plutocrats and would-be autocrats want us to become cynical and stop caring about our government.
'a' 'accomplishes' by your definition 'worhwhile' your definition and you a self declared rational thinker means do not tax any rich person for Welfare of The People decided by the Peoples House - really
Oh no. Daniel gets it, that is "Republican BS"...in spades.
baloney - we here this false narrative at every election cycle from Republicans. Do you think anyone would cut Military Spending for a true universal health care for ALL the people with quality of our seniors health care per Medicare? Why is it ok with your group to have 6 people have wealth of 60% of our population?
Did the IRS resolve your issue correctly? My experience is that the tax code is so complex that the agents on the phone don't understand it themselves. I gave up long ago on consulting the IRS; tax lawyers and CPAs cost money but know the rules much better!
No advice given by an IRS agent is binding or deemed reliable. The only party that can judge 'correct' or 'incorrect' is a tax court. More's the pity. A great simplification would be desirable, but too many interests benefit from the current system for that to happen.
"..streamline a better functioning government" ... and better oversight for spending - they could start with the military and it wouldn't hurt my feelings..
government and corporations - I have same experience with each of big companies who obviously not using Six Sigma in affective way but a feel good way of simple survey
Another good reason to vote blue only.
well now days their are various shades of Blue with enormous difference - Medicare For All compared to Obama Care is such a good test case
Boy, that's the truth. And I saw today where Obama is going to the White House to further his delusion of how we can make the ACA work... hint: we can't!
As long as there is a profit motive, that outweighs the health of the citizens of this country, we can NEVER get a handle on out of control healthcare and the unnecessary costs that a for-profit company will always put ahead of the people.
Agreed. Health care doesn’t fall into the category called “things that need insurance.” That’s because there’s a 100% chance that you, me, everyone will get sick or injured seriously unto death — that’s our fate. On the other hand, insurance is a ‘what if’ bet on the success or failure of a particular and discrete event. For example, I own a ship, and I want to take tea to China. On the way across the Pacific, that ship may encounter typhoons or pirates (risks), and so I pay $$$ to Lloyds of London for insurance against these specific risks, which of course may or may not affect my ship. In the case of shipping, insurance is prudent and justified. However, when it comes to the condition of a frail human body, the necessity for insurance is a travesty. That’s why Obamacare is wrong-headed.
Well stated…
The $30 trillion number caught my interest in this morning's essay. $30 trillion, that is $30,000,000,000,000. Although "spelling it out" is useful shorthand, it doesn't really convey the sheer magnitude of that number. For perspective consider, if one were to divide that $30 trillion into one million dollar ($1,000,000) portions and invest each of those million dollar portions in individual annuities, the interest off each annuity would provide a living income for 30,000,000 (30 million) US Citizens - as the original $30 trillion principal investment remains intact.
As an afterthought: The Republicans believe in >your< hard work, and can bravely endure >your< exhaustion and/or deprivation and stress and dashed hopes. They'll sagely advise that all you need to do is just work harder, and you can "make it" - whatever the devil that's supposed to mean! After all, it's all in service to >family values< . . . . . . . . . . . . . >Their< family values.
Yes, the Reptilian party line is pure bullshit from the Horatio Alger novels.
Wouldn't it be nice? It's not a good picture for Democracy if these measures are not passed. Especially when one or two members of the 'Democrat' party is the hold out on their vote.
The argument against estate taxes is that it prevents struggling family farmers from passing their farm to their heirs. But, AgriBiz has essentially killed family farms.
And, of course, folks still benefit from transferring assets (including 401ks) into Roth IRAs, which taxes don't touch
I am afraid I have a hard time comprehending Economic laws, and although I understand this article I do wonder about one thing: Should Biden’s tax plan go through (and I hate to be pessimistic but) for how long would this last in other words could the uber-wealthy still weasel their way around paying their fair share and if (Heaven forbid) the GOP gained control could they simply undo what President Biden accomplished? Forgive my ignorance.
Thank You 🌻
Civilization is a constant, unending struggle between the avaricious and the average person. You must be on guard always. Greed, one of the 7 deadly sins, doesn’t go away.
The 2nd Noble Truth!
And zee 1st Noble Truth is . . . .?
There is pain and suffering in the world.
Strictly speaking, the 2nd Noble Truth is that (paraphrased) human appetites are the cause of all the pain and suffering.
Thanks for the reminder. It’s been a while since I’ve read Kerouac.
Also see:
https://www.worldhistory.org/Four_Noble_Truths/
a good synopsis:
https://www.merriam-webster.com/dictionary/Four%20Noble%20Truths , although to say its about the desire to live is a massive oversimplification. Cravings in the first link is a better characterization of desire.
I came across all that while studying abroad in in the Far East, as an independent research project for the Lutheran theological seminary I attended at the time. It was at the time of the Sapporo Olympics and "Ping Pong Diplomacy."
I'm thinking outright repeal in a Q-publican majority.
The first proposal sounds like it would accomplish the objective. But the latter sounds like primarily another assault on the working middle class. If only that latter proposal passes, what would it mean for middle class working people who've managed to keep their houses and a comparatively small amount of savings? Their children keep half of those assets, not enough to afford to keep the house, while the wealthy's children barely notice the loss of half of their billions?
I didn’t see anything in the article that would point to taxing anybody who is considered middle class. I don’t think I missed anything so why would you be against this?
Agreed.
I don't see anything concerning in the first proposal. It targets only the ultra-wealthy. I'm all for that. I just don't see anything in the second proposal that protects middle class or any group from new taxes on anything they might manage to save -- house, money, anything -- to pass down to heirs. I think it's inaccurate to assume that, over a lifetime, a hard-working, saver from the middle class couldn't save something to help their heirs. Maybe I'm missing where that second proposal targets only the ultra-rich.
If you can’t live on $999,999 per year, you have a mental illness-character flaw called greed. Palm Sunday is coming up: time to take stock on our society’s direction.
Middle class is earning within 50% of median household income. About $35K to 95K per year. Very few families with that kind of income will have vast wealth to pass on that is taxable. Allowing a modest exclusion would be an easy solution.
I agree, however I knew a family with a family farm and when the parents died the land was worth a hefty amount (acres of farmland next to a freeway and growing community). This was a while back when there was an inheritance tax. They didn’t make much farming and didn’t want to sell as the land had been in the family for generations. Guess what - got squeezed out. There would nee to be provisions.
Very good idea. Senate, make it happen.
Though in theory I support both tax reforms, contrary to the 20% minimum tax on household net worth exceeding $100 million, repeal of the “stepped-up-basis-at death” loophole strikes me as a relatively easy, albeit structurally beneficial, adjustment both literally and politically, and hence not likely to create much resistance. With a 50-50 Senate, the election season kicking in, and the need promptly to pass a progressive piece of legislation, I would advise, for the present, to focus mostly on enacting the one reform of closing the “stepped-up” loophole.
Agreed. Pass what's realistically passable >first< and squabble about the rest later.
But don’t we have to wait for people to die to get that money? That could be a long time for people like Bezos and Musk and Zuckerberg.
Paula, People, who own stock that passes to their beneficiaries, die on a regular basis. Were the stepped-up loophole repealed, beneficiaries would owe taxes on capital gains earned from the time the stocks initially were purchased as opposed only to owing taxes on gains earned as of the stockholders’ death.
I’m so grateful for your information and how you keep us informed . I only wish every American who follow you and understand how we can solve such incredible problems and repair our democracy. Thank you for your work
First eliminate the filibuster clause, second, get rid of the electoral college, which is obsolete for our generation, third, stop the massive tax loop holes, meaning tax the wealthy and stop the hidden overseas funds only the crooks have access to. I know there is a war going on in Ukraine, but we must keep our focus on the nations needs also. A must to conquer soon is aid to education debt, it’s a definite promise to the youth. Get it done
And for God’s sake do something about the climate!
One must eat the elephant >one bite at a time!<
Would the tax on unrealized cap gains be creditable toward future cap gains tax?
If so, I think one effect of the tax would be to mitigate stock volatility and overvaluation. For example, Elon Musk paid $11 Billion in taxes last year because he had to sell a lot of stock to take advantage of options that were expiring, but in most years he pays very little tax because he and other wealthy stockholders don't normally sell stock. They just borrow against their equity. The cap gains tax causes people to hoard their equity holdings, which creates scarcity, which leads to stock overvaluation, which increases stockholders' net worth, which increases their cap gains liability, which creates more of a disincentive to sell when they would otherwise be cashing out, ... . A creditable tax on unrealized cap gains would break the cycle and create an incentive for wealthy stockholders to gradually sell off their holdings before their accumulated credit exceeds their tax liability. Stock prices would be lower and more affordable to ordinary folks.
How about taxing loans to oneself made from ones own capital assets? Just wonderin'.
@DZK. You're sly and funny....
Perhaps a step-up in basis should be allowed when taxes are paid on unrealized gains, so the taxable gain on the next tax event - either capital gain or inheritance - would be less ?
Probably the heir could have the option of taking the stepped-up basis and forfeiting any accrued credit from prior taxes on unrealized gains. Or they could forfeit the stepped-up basis and carry over the credit.
The only thing about the 'taxed at death' thing is if the only person inheriting is an equally old, living off that account spouse, who actually needs the money to live on. I would have an issue with that.
I would add that some of our money that we're living off of was inherited but we both worked as long as we could. And our income tax is obscene just on capital gains even though it's not that large an account, especially when the medical and Rx bills start piling up. And we spend way too much time on the phone arguing with insurance companies. :(
Einstein is reported to have said, "Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.” The same is true of any Return on Investment (ROI for short, and coincidentally, ROI means 'King' in French.)
There is a book about all this that everyone should read, "Capital in the Twenty-First Century" by Thomas Piketty and his large team of researchers. It is a blend of economic analysis and anthropology. They go way back though history of civilizations to find a constant: accumulated capital continues until the whole thing becomes unstable and topples over. If Piketty et al are right, and I am sure they are, then our right turn back in 1980 put us on this trajectory.
I am very concerned by this upcoming transfer of wealth to a generation that has never known anything but wealth. I spent a considerable portion of my professional career in service of such people, and the idea of them having immense power with no applicable skills, inclination or concern for the 99% will end this American Experiment within a generation or two.
I do know some exceptions. Many of my friends’ kids work in modest jobs, many of them for nonprofits.
Children of inherited wealth form a subgroup of victims who need to deal with psychological issues, like not feeling worthy of their wealth. It takes all kinds!
No, it’s not that. It’s their parents’ values, which are very progressive. I’m lucky in that most of the people I grew up with are progressive and their kids are too. What I’m trying to say is that it’s a sweeping and unfair statement to say that the next generation is spoiled, entitled, and lazy.