Surprising information

[DialecticMaterialist]

I found this piece of information very surprising and very upsetting. To me it shows the US does need economic reform and some more socialistic practices/economic dispersion through taxation.

http://www.cia.gov/cia/publications/factbook/geos/us.html

Since 1975, practically all the gains in household income have gone to the top 20% of households.

I mean I'm no communist, but that sort of scenerio seems a little extreme.

This should likewise be compared to china though which some free enterprise has greatly helped:

Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities have switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2002, with its 1.28 billion people but a GDP of just $4,600 per capita, China stood as the second largest economy in the world after the US (measured on a purchasing power parity basis).

http://www.cia.gov/cia/publications/factbook/geos/ch.html#Econ

Very interesting confirmation that both extremes are very flawed and a mixed economy may be the best there is.

[rockoon]

Originally posted by DialecticMaterialist

Since 1975, practically all the gains in household income have gone to the top 20% of households.



What does "practically all" mean exactly? Perhaps 80%? Its well known that the top 20% of the people typically make 80% of the money. Thats true almost everywhere.

Its called the Pareto (http://www.wikipedia.org/wiki/Vilfredo_Pareto) Principle.

[a_unique_person]

Except that in this case, it is being claimed that the distribution has been 100 to 0.

[Cain]

I mean I'm no communist, but that sort of scenerio seems a little extreme.

I've wondered for some time why you chose the moniker "Dialectic Materialist." Then again, I've been wondering why I chose Cain. I am seriously considering changing it to "Turtlewithsuspenders."

Anyway...

Yes, it's not any secret that the most dramatic gains in wealth over the last twenty years have gone to the very richest people. The net worth of the Forbes 400 tripled between 1983 and 1989. Then it tripled again over Clinton's term.

David Cay Johnson, the Times' invaluable tax reporter has the recent ly released figures.

http://graphics7.nytimes.com/images/2003/06/25/business/26TAXgr184.gif

The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.

...

In 2000, the top 400 on average paid 22.3 percent of their income in federal income tax, down from 26.4 percent in 1992 and a peak of 29.9 percent in 1995. Two factors explain most of this decline, according to the I.R.S.: reduced tax rates on long-term capital gains and bigger gifts to charity.
Had President Bush's latest tax cuts been in effect in 2000, the average tax bill for the top 400 would have been about $30.4 million — a savings of $8.3 million, or more than a fifth, according to an analysis of the I.R.S. data by The New York Times. That would have resulted in an average tax rate of 17.5 percent

The rate actually paid by the top 400 in 2000 was about the same as that paid by a single person making $123,000 or a married couple with two children earning $226,000, according to Citizens for Tax Justice, a labor-backed group whose calculations are respected by a broad spectrum of tax experts.


And it goes on. The actual article should still be online, but will remain up for only one week after publication.

[Tony]

Why does the disparity matter?

[BillyTK]

Originally posted by Tony
Why does the disparity matter?
Some might argue that a certain amount of inequality is a good thing to encourage people to seek to improve their lot; however, disparity (and increases in disparity) inevitably results in a plutocracy--government by the wealthy/an elite or ruling class whose power derives from their wealth--simply because the wealthy are able to use their resources to influence affirs to their benefit. This is not only anti-democratic, but also adversely affects others in terms of healthcare, education and opportunity. It also increases the financial burden on the middle classes who end up having to bear the brunt of taxation and pay for the taxation privileges that the wealthy enjoy.

[Tony]

Originally posted by BillyTK

Some might argue that a certain amount of inequality is a good thing to encourage people to seek to improve their lot; however, disparity (and increases in disparity) inevitably results in a plutocracy--government by the wealthy/an elite or ruling class whose power derives from their wealth--simply because the wealthy are able to use their resources to influence affirs to their benefit. This is not only anti-democratic, but also adversely affects others in terms of healthcare, education and opportunity. It also increases the financial burden on the middle classes who end up having to bear the brunt of taxation and pay for the taxation privileges that the wealthy enjoy.


OK, I see the dilemma, but stealing money from citizens @ gunpoint is a police state tactic and un-American.

I guess we need to find a healthy medium. Perhaps a government campaign encouraging the wealthy to, for the good of the country, voluntarily give substantial amounts of money to charitable causes?

[BillyTK]

Originally posted by Tony



OK, I see the dilemma, but stealing money from citizens @ gunpoint is a police state tactic and un-American.
:eek:

I guess we need to find a healthy medium. Perhaps a government campaign encouraging the wealthy to, for the good of the country, voluntarily give substantial amounts of money to charitable causes?
As a tax break? ;)

[Tony]

Originally posted by BillyTK


As a tax break? ;)


No. As a voluntary contribution to "society".

[BillyTK]

Originally posted by Tony
"society"

Why the quote marks?

[Cain]

Billy- don't you know? "Society" does not exist; it's a fiction; an insidioius collectivist myth.

Oh, that's right, everyone "earns" their money in a vacuum and the government needs to stop stealing from the most productive members of "society": the rich. Let's see, how does the Ayn Rand School for Taughts teach the next bit of rhetoric? Ah, yes. Who cares if people have been working harder than ever over the last twenty-twenty-five years and not shared equally -- or even nearly equally -- in the dramatic economic production and wealth creation? Average people everywhere -- the hands on the production line -- need to think their lucky stars that the John Galts and Howard Roarks of the world have managed to innovate and create with the power of their minds. Without these highly motiviated captains of industry you'd probably be living in a mud hut anyway, so don't complain a bit about disparity, inequality, or even poverty. Brief summary for those of you who attended public school: things could (and would) be much worse.

Taxation is tantamount to forced labor. It's a form of slavery.* The most oppressed minority on the planet is the individual, and specifically the business man.

Get the goddam govmit off mah jack.

_______________________________
*Since the sort of crazy Libertarians, laissez-faire conservatives, and other apologists for capitalism tend only to count federal income taxes on these matters, it follows that the richest people are also used for slave labor the most by the evil Robin-hood government. Yes, you read correctly, the heroic men on the Forbes 400 list makes up the most oppressed segment of society. Erg, I mean, "society."

[Shane Costello]

Originally posted by BillyTK:
Some might argue that a certain amount of inequality is a good thing to encourage people to seek to improve their lot; however, disparity (and increases in disparity) inevitably results in a plutocracy--government by the wealthy/an elite or ruling class whose power derives from their wealth--simply because the wealthy are able to use their resources to influence affirs to their benefit. This is not only anti-democratic, but also adversely affects others in terms of healthcare, education and opportunity. It also increases the financial burden on the middle classes who end up having to bear the brunt of taxation and pay for the taxation privileges that the wealthy enjoy.

The thing about the rich is that they can afford smart accountants, lawyers or buy a villa somewhere nice and live as tax exiles. The rich are quite capable of thwarting any effort to tax them to the hilt. In the end the government actually loses revenue, and ends up having to increase tax the middle classes. This happened in Ireland.

Is it demonstrable that the tax burden has increased on the middle classes?

What would you like, a return to the situation pre-1979, when the trade unions more or less ran the country? That was democratic, right? ;)

[Tony]

Originally posted by Cain
Billy- don't you know? "Society" does not exist; it's a fiction; an insidioius collectivist myth.




Thats pretty close, althought I acknowledge that society exists, I just dont think it supersedes the rights of the individual. "Society" is all to often used as an excuse to deprive people of their rights. Gun laws, drinking law and smoking laws come to mind.

[CapelDodger]

Most comments here are US-centred, but a feature of the last thirty years or so is the globalisation of the super-rich. Many of them are domiciled in the US for tax reasons and spend a lot of time there because America caters extremely well for the rich, but they are international citizens. They have their own health system (a very good one), their own education system and no need for a social security system. They have lawyers and accountants. They have security staff and gated colonies.

They increasingly resemble the French aristocracy before that trouble they had.

[Dancing David]

I don't mind the rich being rich,
what bothers me is the myth of the meritocracy.

People usually get money because thier forefathers had money, or because they cut some back room deal and screwed the little people.

People are rich because they are lucky most of the time, there are those who deserve it through merit but there are many who are there because of power and privelege and not merit.

Then there is the myth that the rich help out the rest of the conomy, ....

[BillyTK]

Originally posted by Shane Costello


The thing about the rich is that they can afford smart accountants, lawyers or buy a villa somewhere nice and live as tax exiles. The rich are quite capable of thwarting any effort to tax them to the hilt. In the end the government actually loses revenue, and ends up having to increase tax the middle classes. This happened in Ireland.
That's what I said :confused: apart from the bit about Ireland.

Is it demonstrable that the tax burden has increased on the middle classes?
Have you heard anything on UK politics recently? Seriously, it's certainly demonstrable in the UK, and from reading commentaries on Pres. Bush's recent tax reforms, it would appear to be a similar situation in the US; basically, that once you wade through the complexities of the tax system, and take into account indirect taxation, the tax burden for the middle classes (and the lower classes to some extent) has increased.

What would you like, a return to the situation pre-1979, when the trade unions more or less ran the country? That was democratic, right? ;)
Sorry Shane, I've no idea what the releveance of this is, but if "more or less" in this context means "didn't actually", then we're in agreement. And what can be more democratic than trade unions, except non-trade union labour? :eek:

[BillyTK]

Originally posted by Cain
Billy- don't you know? "Society" does not exist; it's a fiction; an insidioius collectivist myth.

Oh, that's right, everyone "earns" their money in a vacuum and the government needs to stop stealing from the most productive members of "society": the rich. Let's see, how does the Ayn Rand School for Taughts teach the next bit of rhetoric? Ah, yes. Who cares if people have been working harder than ever over the last twenty-twenty-five years and not shared equally -- or even nearly equally -- in the dramatic economic production and wealth creation? Average people everywhere -- the hands on the production line -- need to think their lucky stars that the John Galts and Howard Roarks of the world have managed to innovate and create with the power of their minds. Without these highly motiviated captains of industry you'd probably be living in a mud hut anyway, so don't complain a bit about disparity, inequality, or even poverty. Brief summary for those of you who attended public school: things could (and would) be much worse.

Taxation is tantamount to forced labor. It's a form of slavery.* The most oppressed minority on the planet is the individual, and specifically the business man.

Get the goddam govmit off mah jack.

_______________________________
*Since the sort of crazy Libertarians, laissez-faire conservatives, and other apologists for capitalism tend only to count federal income taxes on these matters, it follows that the richest people are also used for slave labor the most by the evil Robin-hood government. Yes, you read correctly, the heroic men on the Forbes 400 list makes up the most oppressed segment of society. Erg, I mean, "society."

:roll: *applause*

[BillyTK]

Originally posted by Tony



Thats pretty close, althought I acknowledge that society exists, I just dont think it supersedes the rights of the individual. "Society" is all to often used as an excuse to deprive people of their rights. Gun laws, drinking law and smoking laws come to mind.
If society doesn't exist, individuals don't exist and rights disappear in a puff of ontological smoke as well... sorry.

[Shane Costello]

Originally posted by BillyTk:
That's what I said apart from the bit about Ireland.

That wasn't my reading of it. High marginal tax rates encourage the rich to avoid tax altogether. Decreasing these rates leads to an increase in the tax take, because it's now cost efficient for the wealthy to declare their income for taxation. As I see it the ideas of high rates of income tax for high earners is counter-productive.

Seriously, it's certainly demonstrable in the UK, and from reading commentaries on Pres. Bush's recent tax reforms, it would appear to be a similar situation in the US; basically, that once you wade through the complexities of the tax system, and take into account indirect taxation, the tax burden for the middle classes (and the lower classes to some extent) has increased.

Without seeing any figures, I'd say indirect taxation is the key. In the UK the tax burden has increased under the Labour administration, and it's all to do with indirect taxation. I fail to see how this situation could be remedied by increasin income tax rates, though.

[CapelDodger]

From Shane Costello:
That wasn't my reading of it. High marginal tax rates encourage the rich to avoid tax altogether. Decreasing these rates leads to an increase in the tax take, because it's now cost efficient for the wealthy to declare their income for taxation. As I see it the ideas of high rates of income tax for high earners is counter-productive.
This is often quoted, but unsupported. The usual ploy is to point to an increased tax-take from the rich after the tax-cutting, supply-side, Friedmanesque modern era came in with Reagan and Thatcher. Post hoc ergo ... Look back to the top of the thread and consider another reason why the tax-take on the rich may have increased.

In fact, the amount of world production dedicated to the top 1% measured on the having-an-excellent-time-thank-you scale has shot up over the last 30 years. And don't give me any guff about the terrible socialist years of 1945-1979, which gave us higher growth and wider distribution and unparalleled improvements in living conditions throughout democratic Europe. And even to a lot of people in the US.

I speak as one who has worked in the City at a high level (as a member of the artisanal class, of course). I have worked with the elite, eaten and drunk with them, dallied with their womenfolk. (One thing about Sloanies is they are mostly very fit. A good diet has a lot to do with it, I think. Also it's easier for attractive, healthy female genes to get into that circle than it is for stupid male genes to get out.) They are nothing special, but they started partying big-time back in '79, and they haven't stopped. They won't until the deluge hits them.

Of course, when the stuff hits the fan they'll still come out of it remarkably well.

[CapelDodger]

From Shane Costello:
Without seeing any figures, I'd say indirect taxation is the key. In the UK the tax burden has increased under the Labour administration, and it's all to do with indirect taxation. I fail to see how this situation could be remedied by increasin income tax rates, though.
When you analyse it, the indirect tax-burden - which includes such things as ending tax-relief on pensions contributions - are impacting the baby-boomer generation, who have done very nicely on the growth decades of terrible socialism. The Tory government payed for their income-tax reductions by increasing VAT from 8% to 15%, an indirect-tax increase that hit everybody, including those who joined the job-market in the non-growth decades. (The divide comes where hippies stopped and punks began; '73-76 I'd say.)

New Labour have at least removed the upper limit for National Insurance, which is a direct tax that was increased by the Tories. With the upper limit, it was a direct-tax increase that had very little effect on the rich.

Anectdotally, I actually started avoiding tax in 1981. Before that I'd been quite diligent about paying up - state-educated socialist lad that I was. However, I couldn't point to anybody else I know who wasn't at it anyway.

Enough bitching about the last lot. The point about having another, higher rate of income tax is to balance it by raising the starting level for the middle band. This is what is catching a lot of not markedly well-payed people, including the better-qualified public employees. And also hitting middle-class post-Baby-Boomers who are being expected to make better provision against their futures than the Baby-Boomers did.

We, as they say around here, pissed it up the wall. Loved every minute of it myself.

[DialecticMaterialist]

plutocracy--government by the wealthy/an elite or ruling class whose power derives from their wealth--simply because the wealthy are able to use their resources to influence affirs to their benefit. This is not only anti-democratic, but also adversely affects others in terms of healthcare, education and opportunity. It also increases the financial burden on the middle classes who end up having to bear the brunt of taxation and pay for the taxation privileges that the wealthy enjoy.


Also then the leaders and those in power in society are so by priveledge, not merit. Insuring that, unless money can by good character, the leadership will be full of many people of poor character and the nationwill in the end become weaker.

[Tony]

Originally posted by BillyTK

If society doesn't exist, individuals don't exist and rights disappear in a puff of ontological smoke as well... sorry.

Duh!! are you stupid? Did you miss the part where I said I acknowledged society existed?

[DialecticMaterialist]

Well Tony what determines rights? I think its social values. And hence what counts as individual rights is determined in a sense by society.

Hence if society decides to increase taxation for the purpose of redistribution how is that a violation of rights?

[Dancing David]

Oook, taxation for redistribution is what we have now they take from the middle class to give to the rich and poor.

Seriously I would just stand for a flat tax, no exemptions, for anybody, you get money you pay.

[Tony]

Originally posted by DialecticMaterialist
Well Tony what determines rights? I think its social values. And hence what counts as individual rights is determined in a sense by society.



What you're talking about is mob rule. I would rather think for myself and determine what I can and cant do. You can keep your collectivist society, Ill be a freethinker.


Hence if society decides to increase taxation for the purpose of redistribution how is that a violation of rights?

Yes, the pitchfork and torch weilding mob has the power to deprive people of their rights, but dont be surprised when the people you are attempting to disenfranchise fight back.

[Shane Costello]

Originally posted by CapelDodger:
This is often quoted, but unsupported. The usual ploy is to point to an increased tax-take from the rich after the tax-cutting, supply-side, Friedmanesque modern era came in with Reagan and Thatcher. Post hoc ergo ... Look back to the top of the thread and consider another reason why the tax-take on the rich may have increased.

In fact, the amount of world production dedicated to the top 1% measured on the having-an-excellent-time-thank-you scale has shot up over the last 30 years. And don't give me any guff about the terrible socialist years of 1945-1979, which gave us higher growth and wider distribution and unparalleled improvements in living conditions throughout democratic Europe. And even to a lot of people in the US.

I speak as one who has worked in the City at a high level (as a member of the artisanal class, of course). I have worked with the elite, eaten and drunk with them, dallied with their womenfolk. (One thing about Sloanies is they are mostly very fit. A good diet has a lot to do with it, I think. Also it's easier for attractive, healthy female genes to get into that circle than it is for stupid male genes to get out.) They are nothing special, but they started partying big-time back in '79, and they haven't stopped. They won't until the deluge hits them.

Of course, when the stuff hits the fan they'll still come out of it remarkably well.

Maybe you could back up your unsupported assertions with some facts and figures?

[BillyTK]

Originally posted by Tony


Duh!! are you stupid? Did you miss the part where I said I acknowledged society existed?

Cut the insults tory boy; I was responding to the contradiction in your view. You state that Cain's characterisation of society being "a fiction; an insidioius collectivist myth" is pretty close to your view, yet you acknowledge society exists; one or the other please, it can't be both fiction and reality, unless you're going to get all deconstructionist, which somehow I doubt.

You also state that "althought I acknowledge that society exists, I just dont think it supersedes the rights of the individual". But society must supercede individual rights because rights are collective in nature.

[Tony]

Originally posted by BillyTK


Cut the insults tory boy; I was responding to the contradiction in your view. You state that Cain's characterisation of society being "a fiction; an insidioius collectivist myth" is pretty close to your view, yet you acknowledge society exists; one or the other please, it can't be both fiction and reality,




I said Cain's characterization was "pretty close" I didnt say he was dead on, can you not undertsand the difference.?

But society must supercede individual rights because rights are collective in nature.

non sequitur

[BillyTK]

Originally posted by Tony
I said Cain's characterization was "pretty close" I didnt say he was dead on, can you not undertsand the difference.?
Cain outlined a position which basically states that society doesn't exist, which you've said is "pretty close to your view"; yet you also "acknowledge that society exists"; would you care to explain your view of society to illustrate how you reconcile the contradiction?
Originally posted by BillyTheKat
But society must supercede individual rights because rights are collective in nature.

Originally posted by Tony
non sequitur

You might wish to check the definition of "non sequitur".

[The Thrasher]

This thread sounds like a hearty endorsement for the flat tax. This would destroy the ability of crafty lawers and thieving accountants to manipulate our tax system. Everyone making over a certain basic income (say $25,000.00 perhaps) would pay the same percentage of their income in federal income tax. No deductions, no exemptions, just a simple almost foolproof tax structure.

[BillyTK]

Originally posted by The Thrasher
This thread sounds like a hearty endorsement for the flat tax. This would destroy the ability of crafty lawers and thieving accountants to manipulate our tax system. Everyone making over a certain basic income (say $25,000.00 perhaps) would pay the same percentage of their income in federal income tax. No deductions, no exemptions, just a simple almost foolproof tax structure.

This is the situation in the UK; earnings of £35,000 and over are taxed at a standard rate of 40%, which is great for the top earners but stinky if you're at the bottom end of the tax bracket. There's also a loophole which allows people who live and work in the UK to claim non-resident status and avoid paying tax altogether.

This tax system does encourage more of the higher earners to pay tax, but still places the burden on the middle classes who are typically at the lower end of the tax scale. One of the main problems is that whilst wages have risen steadily, placing more people into the bottom end of this bracket, when inflation is taking into account the earning threshold has effectively been lowered for the higher tax rate; it's suggested that £50,000 would be a fairer threshold.

[kittynh]

It's not just the taxes

Where my husband works they are laying off 200 programers and moving their jobs to India. The company had record profits last year, but hey, gotta look out for the company stock, which is where most of the company executives make thier most money.

So, 200 nice paying middle class jobs - poof!

And more to come I'm sure....

[rockoon]

Originally posted by The Thrasher
This thread sounds like a hearty endorsement for the flat tax. This would destroy the ability of crafty lawers and thieving accountants to manipulate our tax system. Everyone making over a certain basic income (say $25,000.00 perhaps) would pay the same percentage of their income in federal income tax. No deductions, no exemptions, just a simple almost foolproof tax structure.

I would like you to not use the term 'flat tax' to describe a tax which only hits people making $25,000 and over.

A flat tax hits EVERYONE who partakes equally. If its a tax on income, then EVERYONE with an income pays the same percentage otherwise I don't believe its a flat tax but instead a graduated tax.

I think the problem with a flat tax is that those that want the burden to fall on the rich wont stand for a flat tax. Of course these same people think there are enough rich people to support the system if we would only tax them enough.

[Dancing David]

A flat tax is a flat tax, it can't have starts and stops.

There is one reason for a flat tax, to make the corporations pay thier tax share.

Right now they can cook the books and never pay taxes.

Flat tax on all income, no loop holes no provision, no nothing. Flat tax, if there is an income guideline then the next thing you know there will be depriciation, then there will be the three martyini lunches.

Flat tax is flat tax, tax the churches, tax the non profits , tax the panhandler on the street.

Flat tax is fair tax, there is no need for regressive progressive taxation, we all pay the same and the whole thing evens out.