patrick.net

Peter P says

To some people, the label of "rich" may give them enough emotional satisfaction to support the tax plan.

I just can't begin to see what this anti-rich emotion you think is out there. You sound like Romney talking about envy of the rich.

Americans in general love the rich, and hope to be there themselves one day.

Or did you mean that the high income guy who wants to pay more(thinks the marginal rate needs to go up), would want to because he gets to be in the "rich" group?

That's just crazy.

marcus says

And I can even take in to account my opinion of the degree to which that rich person may feel justified in not wanting to pay a little more, and objectively whether I think they are correct.

And I even go further than that and can see that just giving the bottom 50% a free ride on taxes will result in the private rent-seekers being able to beat more rents out of them!

So when we get soft-headed with government charity what really happens is the productive upper-middle class has to support both the lower 50%'s subsidies and pay the freight on the actual government economy.

I could be wrong about this, but AFAICT the high-tax Nordic states solve this problem by having high taxes on everyone, all the time. They also have progressive taxation to redistribute better, but their tax system starts high and stays high.

German social welfare tax rates (ie "FICA") are very, very high, I know that.

Beyond that comes the structural problem of Kobe Bryants' children living off their financial inheritances. If they just go out and create a $400M rental empire with their fortunes, Kobe's past savings will just result in more redistribution UP the socio-economic pyramid.

The key thing is to break the rents in the major life necessities of housing, energy, health-care, and finance. Henry George had the answer for the first two, and the socialist states have tackled the latter two pretty well I guess (having learned from their 1990s crises I hope).

Peter P says

Corruption is a symptom of market inefficiency.

The efficient market is a fairy tale.

Markets, being human constructions, corrupt themselves.

And what's worse, the more market power a market participant has, the more he can corrupt the market. See the 19th century for how that works.

This is why democratic socialism beats free market fundamentalism here in the real world, it changes the one-dollar one-vote dynamic of minarchism to one man one vote, providing an EXTRA-market correcting force not present in pure markets.

We call this democratic socialism a MIXED market economy.

http://en.wikipedia.org/wiki/Mixed_economy

marcus says

That's just crazy.

nah, Peter P is just going ad-hom, which is what people do when they run out of rational supports for their arguments.

this whole thread was just a 'when did you stop beating your wives, liberals' troll

I was attacking a label, not anyone in particular.

Bellingham Bill says

This is why democratic socialism beats free market fundamentalism here in the real world, it changes the one-dollar one-vote dynamic of minarchism to one man one vote, providing an EXTRA-market correcting force not present in pure markets.

I think you're right Bill, and it's always interesting hearing your insights.

What if at this point, the way our economy is structured, rent seeking is such a key and fundamental feature or 'engine'of our economy, that it can't change?

How much of our GDP is from rents of one form or another?

It seems like it goes all the way to the foundation, at this point.

But understanding it is important, even if only for very small little baby step policy changes. The deeper in to the rabbit hole one goes, the more clear it becomes that in the long run our system has to change.

I believe it will, maybe in a century or two, if we make it. After our role in the world has changed somewhat.

marcus says

Americans in general love the rich, and hope to be there themselves one day.

That's what I thought. But the whole idea of progressive taxation is not consistent with this view.

As boomers grow old, they discover that the prospect of them getting rich is now dim. Then they focus on getting hand-outs themselves. As a result, they come up with reasons to justify taxing someone just "richer" than them.

Peter P says

I was attacking a label, not anyone in particular.

Your thesis was very clear, except I'm not sure what a psuedo rationalist is. Go back and read it.

Peter P says

But the whole idea of progressive taxation is not consistent with this view.

Wrong. It's about the governemt paying for what it spends, and possibly about one ideology which says govenrment can't do anything well versus another that says, that's not always true.

When Bush initiated his famous tax cuts, he said, "you know how to spend your money better than the government." But he was essentially taking money out of the social security surplus, and further engaging in deficit spending on unfunded wars etc.,.. Those tax cuts were skewed towrds benefitting the rich.

Someone has to pay for all that deficit spending.

This is logic, it isn't a personal "feeling" about the rich.

Somehow we need to pay more of our bills. Before we further lower the standard of living on the middle class, since the standard of living has been going up on the rich, they can afford to pay more.

Let's start there. That's all.

Peter P says

As a result, they come up with reasons to justify taxing someone just "richer" than them.

The justification is that without this redistribution from the rich, our economic system would be running on an closed-loop positive feedback without any stabilization.

The rich -- top 5% -- didn't make their $2.5T in AGI in 2010 from the Mines of Zanzibar or trading among themselves. They get their incomes largely from the 95% below them.

http://research.stlouisfed.org/fred2/series/CP/

shows our skyrocketing corporate profits are operating on a similar trend of "#Winning".

The economy we've structured for ourselves has become catastrophically unbalanced. We can see that in our rising Gini ratio:

http://research.stlouisfed.org/fred2/series/GINIALLRH

and in our reliance on consumer credit 1999-2006:

http://research.stlouisfed.org/fred2/graph/?g=dBV

and after that flow failed in 2008, now government debt:

http://research.stlouisfed.org/fred2/series/FGTCMDODNS

to keep the rubber side down.

The asymmetric, multiple, trillion-dollar flows from working class to parasitical wealthy is what the issue is here.

"I don't have any solution but I certainly admire the problem"

Bellingham Bill says

The asymmetric, multiple, trillion-dollar flows from working class to parasitical wealthy is what the issue is here.

So what? In the age of 12-month-old $1B companies anyone can be anything.

No one needs to be in the working class.

The important thing is, there should be no artificial barriers of social mobility.

Peter P says

No one needs to be in the working class.

LOL

Choice is the most wonderful gift from God.

When you think you have no choice, in many cases you are simply not giving yourself a choice.

To be fair, many workers are conditioned by the system to think they have "a place" in the society. Bullshit.

Peter P says

As boomers grow old, they discover that the prospect of them getting rich is now dim. Then they focus on getting hand-outs themselves. As a result, they come up with reasons to justify taxing someone just "richer" than them.

Does Peter P stand for Peter Plutocrat ?

I take it that by "Then they focus on getting hand-outs themselves" you mean boomers not wanting their social security or medicare cut?"

These are programs that people paid in to, they aren't handouts. And if it weren't for GWB,, we wouldn't be talking about raising the age that medicare kicks in.

marcus says

I take it that by "Then they focus on getting hand-outs themselves" you mean boomers not wanting their social security or medicare cut?"

They certain want to make sure the music will play on.

marcus says

These are programs that people paid in to, they aren't handouts. And if it weren't for GWB, we wouldn't be talking about raising the age that medicare kicks in.

It is either a handout program or a ponzi scheme.

Medicare should be abolished. It should be replaced by a universal healthcare system for all.

Peter P says

To be fair, many workers are conditioned by the system to think they have "a place" in the society. Bullshit.

Yes, you're right, today it's easier than ever to go from poverty to wealth in America. All it takes is a little elbow grease. Any average intelligence American who feels stuck in their hard working job, barely getting by, needs to wake up and realize that there's always lots of room at the top.

You know that intelligence is an illusion, right?

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

It is quite often a matter of focus and introspection, not a case of innate intelligence.

Drive and discipline too, of course.

One secret: there is no formula of success. Market efficiency applies here too.

Academics are not comfortable with "knowledge" that are not universal. Hence they have DECIDED that education OUGHT to be the universal key to personal success and that anything beyond what education can provide is a source of inequality.

I'm having trouble with this thread. There's no facts in the thread to support the thread. It must be an opinion piece.

My opinion is : Damn! I've been Trolled.

It is an opinion.

"Facts" are more harmful because they are presented as such.

Facts can be spun. Statistics can prove any lie.

Opinions? You just agree with them. Or you can have your own.

Peter P says

You know that intelligence is an illusion, right?

Peter P says

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

I think I'm seeing a pattern here.

Peter P says

they try to invent reasons to explain why wealth beyond a certain point (i.e. a level attainable by their professions) should be re-distributed away.

The consequence of accepting that some people "deserve" their "excess" wealth is too severe for their egos to bear.

Peter P says

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

Peter P says

"Facts" are more harmful because they are presented as such.

Facts can be spun. Statistics can prove any lie.

Opinions? You just agree with them. Or you can have your own.

HEY YOU says

My opinion is : Damn! I've been Trolled.

Funny.

Enlighten me.

Peter P says

Enlighten me.

"If you lose your job, your marriage and your mind all in one week, try to lose your mind first, because then the other stuff won't matter that much."

Jack Handy (deep thoughts)

“I hope some animal never bores a hole in my head and lays its eggs in my brain, because later you might think you're having a good idea but it's just eggs hatching.”

Jack Handy

I guess the universe does not exist without the Mind.

“If a kid asks where rain comes from, I think a cute thing to tell him is "God is crying." And if he asks why God is crying, another cute thing to tell him is "Probably because of something you did."”

Jack Handy

marcus says

And if he asks why God is crying, another cute thing to tell him is "Probably because of something you did."

I get it.

It is about self-empowerment. If you can make God cry, you can be anything.

More: http://www.angelfire.com/empire/dragonskeep/quote/jh.html

marcus says

you mean boomers not wanting their social security or medicare cut?"

the boomers (with some help from Gen X 1989-2009) completely pre-paid the social security (to the extent the system is not a weird quasi-paygo wealth transfer from young to old) thanks the $2.6T in the SSA "trust fund". This total is about $1.5T in FICA contributions + accrued interest.

Medicare is another story, alas.

http://research.stlouisfed.org/fred2/graph/?g=dC0

blue is medicare outgo, red is payroll x 2.9% (the tax was raised to 2.9% in 1986).

The society needs a universal healthcare system as much as it needs an army. Medicare is just something for the special interests.

Peter P says

Medicare is just something for the special interests.

I hope if dogs ever take over the world and they choose a king, they don't just go by size because I bet there are some Chihuahuas with some good ideas.

Jack Handy

Moderation in all things.

One of the most boring and useful truisms my parents ever taught me.

Here is the problem with extreme wealth of which I believe you are speaking: It buys things that make getting even richer at the expense of the working class too easy.

So the solution is simple: Level the playing field by redistribution through taxation. And guess what? The rich are still rich and the society is more balanced as a whole.

Federal taxes are lower than they have been in a LONG TIME. Why not just try the tax rates of the 90s for 10 years like we tried Bush's "temporary" tax cuts of the last 10? The rich will survive. The economy will survive.

Greed is not good. Moderation in all things.

The sad thing, though, is about $1T of the SSTF is just FICA payments from illegal aliens over the decades.

Our nation's finances are actually pretty parlous from every angle.

Except our ~1% .

Corporations kinda suck though:

pretty debt-ridden since the 1980s.

Peter P says

Medicare is just something for the special interests.

Medicare was a compromise because conservatives successfully fought off universal health care for decades.

http://en.wikipedia.org/wiki/Operation_Coffee_Cup

80% of our problems today stem from conservatives not getting with the program, or worse, being allowed to implement their own programs of mass wealth destruction.

rooemoore says

Greed is not good. Moderation in all things.

Greed is at worst morally neutral. I think Greed is the only source of true progress.

I agree that rent-seeking needs to be looked at. High barrier of entrance (usually in the form of regulatory compliance) is a drag on the entrepreneurial spirit.

The problem with moderation is that it tends to reduce everything to a linear spectrum.

Even though your avatar is not animated, it is still quite something. LOL.

Bellingham Bill says

Medicare was a compromise because conservatives successfully fought off universal health care for decades.

I call on conservatives to fight FOR universal healthcare. Any reliance on employer-provided plans is bad for entrepreneurs.

Besides, health insurance does not make sense. There is too much moral hazards.

Nowadays many "conservatives" are religious fanatics. They are trying to fight economic collectivism with behavioral collectivism. It sucks either way.

Ppl, I'm running a hedge fund and let me tell you ... we mint money and thus, I'm on a train which reads "1% - Here I Come".

Now, as a former engineer (& ITer), I was nowhere near that level of earnings potential and at the same time, my technical work was controlled by MBA types. Do I resent those folks above me? Absolutely, they were living off the fruits of my labor, paying me ordinary wages.

Today, in contrast, I'm living in a world of zero worries about the future. My home was paid off, within 2 years of this HF work, and in a short time, I'll never have to worry about cash again. Do I feel that this work is meaningful and worthy? Absolutely not, it's simply about money now, not on one's contributions to society et al.

With the above stated, do I want to soak the rich? No. And the reason for that is that I intend to become one of them and be able to do my own science/engineering work (plus medical school), unimpeded unlike when I was working under corporate America. However, can I say that the average heir to Kobe Bryant's or Julia Robert's fortune will have the same motivation? Probably not, but whose business is that anyways?