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A very small niche of America's uber-wealthy have pulled off what may well be the biggest con job in the history of our republic, and they did it in a startlingly brief 30 or so years. True, they spent over three billion dollars to make it happen, but the reward to them was in the hundreds of billions - and will continue to be.
As my friend and colleague Cenk Uygur of The Young Turks pointed out in a Daily Kos blog recently, billionaire Rupert Murdoch loses $50 million a year on the NY Post, billionaire Richard Mellon Scaife loses $2 to $3 million a year on the Pittsburgh Tribune-Review, billionaire Philip Anschutz loses around $5 million a year on The Weekly Standard, and billionaire Sun Myung Moon has lost $2 to $3 billion on The Washington Times.
Why are these guys willing to lose so much money funding "conservative" media? Why do they bulk-buy every right-wing book that comes out to throw it to the top of the NY Times Bestseller list and then give away the copies to "subscribers" to their websites and publications? Why do they fund to the tune of hundreds of millions of dollars a year money-hole "think tanks" like Heritage and Cato?
The answer is pretty straightforward. They do it because it buys them respectability, and gets their con job out there. Even though William Kristol's publication is a money-losing joke (with only 85,000 subscribers!), his association with the Standard was enough to get him on TV talk shows whenever he wants, and a column with The New York Times. The Washington Times catapulted Tony Blankley to stardom.
"Fellowships" and other forms of indirect sponsorship of right-wing talk show hosts have made otherwise-marginal shows and their hosts ubiquitous, and such sponsorships of groups like Norquist's anti-tax "Americans for Tax Reform" regularly get people like him front-and-center in any debate on taxation in the United States.
All so they could run a tax con on the American people, thus keeping Moon and Murdoch and Scaife and Anschutz (and others) richer than you or I could ever even imagine.
All of this money was spent - invested, really, since it's been more than saved back in low income tax rates on millionaires and billionaires - to convince Americans that up is down and black is white when it comes to income taxes. Here's how it works:
Rich Person's Tax Effect
If a person earns so much money that he doesn't or can't spend it all each year, then when his taxes go down your income after taxes goes up. This is largely because there's little to no relationship between what he "needs to live on" and what he's "earning."
Somebody living on a million dollars a year but earning five million after taxes, can sock away four million in a Swiss bank. If his taxes go up enough to drop his after-tax income to only three million a year, he's still living on a million a year, and only socks away two million in the Swiss bank. His "disposable" income goes down when his taxes go up, and vice-versa. (Technically, the word is "discretionary" income for after-tax, after-living-expenses income, but "disposable" income has become so widely used as a phrase to describe discretionary income I'll use it here.)
The Rich Person's Tax Effect is the one that virtually all Americans understand - and, oddly, most working class people think applies to them, too (this is the truly amazing part of the con job referred to earlier).
But it doesn't.
Working Person's Tax Effect - version one
Most working people spend pretty much all of what they earn - their "disposable/discretionary" income is close to zero. Savings rates in the US among working people typically are small - one to five percent - and during the last few years of the W. Bush administration actually went negative. So the take-home pay that people have after taxes - regardless of what the taxes may be - is pretty much what they live on.
As economist David Ricardo pointed out in 1817 in the "On Wages" chapter of his book "On the Principles of Political Economy and Taxation," take home pay is also generally "what a person will work for." Employers know this: Ricardo's "Iron Law of Wages" is rooted in the notion that there is a "market" for labor, driven in part by supply and demand. So if a worker is earning, for example, a gross salary of $75,000, his 2008 federal income tax would be about $15,000 ($802.50 on first $8,025 of income; $3,687.75 on income from $8,025 to $32,550; $10,612.50 on income from $32,550 to $75,000), leaving him a take-home pay of $60,000.
Both he and his employer know that he'll do the job he's doing for around $60,000 a year in take-home pay.
So what happens if his taxes go up, cutting his take-home pay to $55,000 a year (even though his gross is still $75,000)? Over time (typically one to three years) his wages will rise enough to compensate for the lost income.
Alan Greenspan used to be hysterical about this effect - he called it "wage inflation" - and The Wall Street Journal and other publications would often reference it, although the average working person has no idea that if his taxes go up, his wages will eventually go up. Similarly, when working-class people's taxes go down, their gross wages will, over time, go down so their inflation-adjusted take-home pay remains the same. We've seen both happen over the past eighty years, over and over again.
When I was in Denmark last year doing my radio show from the Danish Radio offices for a week and interviewing many of that nation's leading politicians, economists, energy experts, and newspaper publishers, one of my guests made a comment that dropped the scales from my own eyes.
We'd been discussing taxes on the air, what the Danes get for their average 52% tax rate (free college education, free health care, 4 weeks of vacation, being the world's "happiest" country according to research reported on CBS's "60 Minutes" TV show, etc.). I asked him why people didn't revolt at such high tax rates, and he smiled and just pointed out to me that the average Dane is very well paid with a minimum wage that equals about $18 US (depending on the exchange rate from day to day).
Off the air, he made the comment to me that was so enlightening. "You Americans are such suckers," he said, as I recall. "You think that the rules for taxes that apply to rich people also apply to working people. But they don't. When working peoples' taxes go up, their pay goes up. When their taxes go down, their pay goes down. It may take a year or two or three to all even out, but it always works this way - look at any country in Europe. And it's the opposite of how it works for rich people!"
Working Person's Tax Effect - Version Two
The other point about taxes - which Obama leveraged with his "no tax increases on people earning under $250,000 a year" pledge - has to do with the fact that our tax structure in the US is progressive.
Here's how it breaks out for a single person from the 2008 federal tax tables:
10% on income between $0 and $8,025
15% on the income between $8,025 and $32,550;
25% on the income between $32,550 and $78,850;
28% on the income between $78,850 and $164,550;
33% on the income between $164,550 and $357,700;
35% on the income over $357,700.
Note that our $75,000/year worker has two full tax brackets above him, which, if they go up, will not affect him at all. (This is also true, of course, for the median-wage and average-wage American workers who earn in the low to mid-$40,000/year range.)
The top tax rate that a person pays is referred to as their "marginal tax rate" (in our worker's case 28%). So what happens if the top marginal tax rate on people making over $357,700 goes up from its current 35% to, for example, the Eisenhower-era 91%?
For over 120 million American workers who don't earn over $357,700/year, it won't mean a thing. But for the tiny handful of millionaires and billionaires who have promoted The Great Tax Con, it will bite hard. And that's why they spend millions to make average working people freak out about increases in the top tax rates.
Income taxes as the "Great Stabilizer"
Beyond fairness and holding back the Landed Gentry the Founders worried about (America had no billionaires in today's money until after the Civil War, with John D. Rockefeller being our first), there's an important reason to increase to top marginal tax rate, and to do so now.
Novelist Larry Beinhart was the first to bring this to my attention. He looked over the history of tax cuts and economic bubbles, and found a clear relationship between the two. High top marginal tax rates (generally well above 60%) on rich people actually stabilize the economy, prevent economic bubbles from forming, prevent economic crashes, and lead to steady and sustained economic growth (and steady and sustained wage growth for working people).
On the other hand, when top marginal rates drop below 50 percent, the opposite happens. As Beinhart noted in a November 17, 2008 post on the Huffington Post, the massive Republican tax cuts of the 1920s (from 73% to 25%) led directly to the Roaring '20s stock market bubble, temporary boom, and then the crash and Republican Great Depression of 1929.
Rates on the very rich went back up into the 70-90% range from the 1930s to the 1980s. As a result, the economy grew steadily; for the first time in the history of our nation we went 50 years without a crash or major bank failure; and working people's wages increased enough to produce the strongest middle class this nation has ever seen.
Then came Reaganomics.
Reagan cut top marginal rates on millionaires and billionaires from 74% down to 38% and there was an immediate surge in the markets - followed by the worst crash since the Great Depression and the failure of virtually the entire nation's savings and loan banking system.
Bush I cut taxes, and the nation fell into a severe recession while debt soared and wages for working people fell.
Things stabilized somewhat when Clinton slightly raised taxes on the very rich, but W. Bush dropped them again - including taking taxes on unearned income (interest and dividends - the "income" that people like W. born with a trust fund "earn" as they sit around the pool waiting for the dividend check to arrive in the mail) down to a top rate of 15%. (That's right - trust fund babies like Bush and Scaife pay a MAXIMUM 15% federal income tax on their dividend and interest income, thanks to the second Bush tax cut.) The result of this surge in easy money for the wealthy, combined with deregulation in the financial markets, was the "froth" Greenspan worried about and led us straight into the Second Republican Great Depression, ongoing today.
The math is really pretty simple. When the uber-rich are heavily taxed, economies prosper and wages for working people steadily rise. When taxes are cut for the rich, working people suffer and economies turn into casinos.
Roll Back The Reagan Tax Cuts
While there's much discussion about letting the Bush tax cuts expire, if we really want our country to recover its financial footing we must do something altogether different. We need to roll back the Reagan tax cuts that took the top marginal rate from above 70% down into the 30% range.
First, though, we have to help Americans realize that "no new taxes" is a mantra that is meaningful to the very rich, but largely irrelevant to average working people.
Only when the current generation re-learns the economic and tax lessons well known by the generation (now dying off) that came of age in the 30s through the 60s, will this become politically possible. Americans need to learn what Europeans know about taxes - they only matter to the rich.
Thus today the uber-rich are spending hundreds of millions to make sure words like "burden" are always associated with the word "tax," and to convince average working people that they should throw out of office any politicians who are willing to raise taxes on the rich.
We have a lot of education to do...and as long as the Right Wing Machine of the uber-rich continues to "lose" (e.g. "invest") millions of dollars a year in their ongoing disinformation campaign, it's going to require all of us reciting the mantra, "Roll back the Reagan tax cuts!"
164 Comments so far
Show AllWhat a great article. Hartmann not only completely eviscerates the supply-side arguments used by the right to justify their destruction of the US economy but also gives details of how much the undeserving rich are willing to pay to perpetuate the anti-tax fantasy among the working classes.
Of course, you will never see or hear this kind of analysis in the corporate media, especially not on NPR.
The French had a rather brutal but effective plan for dealing with this kind of exploitation.
I'm going to send this article to my right-wing Reagan-worshipping associates.
Good job, Thom.
q
I agree, great article, very illustrative in explaining how tax structures work.
I agree completely, this article was very informative on tax structures. Apart from the right/left/blue/red debate which somehow works it way into any and every article here, the basic information was very helpful, and with Thom's ability to insert bits and pieces of history to make his points adds more information that is appreciated by this reader.
I notice you mentioned NPR. The loss of revenue has even hit
what should be a non-biased government service, NPR. To make up the shortfall they have sold themselevs to the corporations. This is Privatization at work and proof we have really lost control of our government and nation to these corporate feudalist MFs. Low taxes on the rich destroys the nation of the free and sends US back 500 years.
This is a persuasive argument against regressive taxation and an informative piece on how the system "works" for the rich. But: the piece starts and ends on the same questionable notes: that this it is a matter of REPUBLICAN use of the t-word and REAGAN tax cuts. While Republicans have certainly led this parade of infamy to soak the poor, they could not have done it without the complicity of the Democratic Party. This is a day after (see NY Times article this morning), the Democratic "leadership" in Congress is abandoning its plan to finance the health care plan by putting a surcharge on the taxes of the most wealthy. The leadership believes (correctly I suspect) that this provision of the "plan" will not pass, but why is this? Can a minority of Republicans accomplish this? Even with the help of a Senate filibuster (and didn't the Dems just get a "filibuster-proof" majority in the election of Franken?) Will it not require the aid of some blue and other hues of Democrats---with an eye no doubt to the same fat cat campaign contributors who bankroll themselves and GOP members of Congress and all those conservative think tanks? Will it not require the complicity of a Democratic President who caves into pressure from the plutocracy on things ranging from the EFCA to mountaintop removal legislation? Are any of these forces going to be biting the hand that feeds them? Sure we can "chant the matra" cited at the end till our faces are bluer than the souls of those conservative Democrats. Murdoch and the rest will stick their fingers in their ears to drown out our chants and calmly pull out their checkbooks to fund some more think tanks, right wing rags and TV stations and as many members of Congress as they need to buy to keep progressive taxation from ever happening. And that's the way it is, Tuesday, July 21, 2009.
I see that the response of right-wing trolls to this dagger to the heart of their mythology is to fill up this thread with long, pointless responses to discourage discussion. Frank (1st post above) is apparently drunk - he duplicates most of his nonsense - and Jerry just repeats the same old "Dems did it too!" squawk. Neither post deals with the substance of the article.
q
Note added: I see that Frank's post has been removed. Thanks, Admins.
I dealt with the "substance of the article" by endorsing and praising that substance and confined my comments to the issue of whether Hartmann's implied "the Republican did it" is accurate, an issue of the utmost importance when he and other "good Democrats" come to us at the next election to say once again that we MUST elect Democrats if we want to avoid regressive evils. If you are going to comment on my comment, I'd think you might comment on THAT substance and tell me (us) where I am wrong in my assertion that the same plutocracy that controls one branch of the duopoly covers the other as well. (Look at the corporate campaign funding of Democrats, for example, and show where it is less based on funding from well-heeled sources like Goldman Sachs). To dismiss my argument as that of a "right wing troll" is to substitute labelling for argument, and to commit a libel against me that might cause that anyone who has read my posts or who visits my daily postings of progressive news to laugh in your face.
Jerry, quicktroll is a right of center/status quo conservative who blames those to the left of the Democratic Party (and her hero Obaysmal) as being trolls; when it is in fact herself, and her dysfunctional brethren (like the status quo clown Hartmann) that ought to stand accused. Just ignore her; she tends to various melt-downs and hysteria when things don’t fit her comfortable status quo lifestyle. Her real name is Sue one of Hartmann's moderators on his message boards along with a group of disciples who follows him over on this site to prop up his ideology. True believers all!
The only laughing will be at your pathetic attempt to deflect the import of Hartmann's article from a discussion of taxation to the same old whine about Dems.
Hartmann identifies three things in his article as republican: the current effort to discredit Obama's healthcare proposal, the depression of 1929, and the depression of 2008. He implies nothing.
No one is disputing the treachery of the dems in taking corporate money and turning their backs on their traditional consituency. That subject has been beaten to death on this board and your introduction of it in this thread serves no productive purpose.
Also, no where in his article does Hartmann promote the election of Democrats. You are trying to create a straw man.
And who besides a troll would post such an obvious effort to deflect the discussion?
q
Except in this case I tend to agree with quickstepper?!
But then I agree with anyone that tries to look past the politically obvious toward a deeper discussion of the actual issues, which in this case would be the inequity of a tax structure that unduly favors the rich. As the party of the rich, and constant critic of Democrat efforts to make the tax structure less favorable to the rich, the Republicans rightly deserve the blame attributed here. That's not to say the Democrats haven't also, through attrition, become unduly influenced by the rich elite, but that's just not the core issue here.
Personally, I would like to see more discussion about the combined creation of the Fed and the income tax as a bailout system, responsible for possibly the greatest redistribution of wealth, from the poor to the rich, in the history of humanity. That private for-profit make-the-taxpayers-pay system favors elite Republicans more than any other group, and you know the adage of "follow the purse strings" for figuring out who's ultimately responsible. Which also carries with it the spectacular irony of how these same folks typically cast "redistribution of wealth" as the self-serving bleeding-heart weakness of lesser folk. Well, shame on them.
It is just plainly obvious who cries the most and loudest over increasing taxes on the rich.
Excellent article, finally somebody has the guts to tell it like it is.
Hartman says what all the lilly livered so called liberal and progressive economists like Dean Baker, Paul Krugman and Brad DeLong are afraid to say...
We Need to Return to Pre-Reagan Tax Rates!
And not just on salary but capital gains, dividends and estates. All those economists that are 'friends' of the left decry the largest income and wealth gap since 1928 but where are they when we need the solution put out in the open and discussed ... higher taxes on high income and wealth!
". . . where are [the economists] when we need the solution put out in the open and discussed ... higher taxes on high income and wealth!"
Apparently, they're living happily in Denmark.
q
Sorry, this post was to a different article,the one about President Carter.
Please excuse me.
Want to read something funny?
Glenn Beck on his radio show yesterday called the average Congressional salary of $173,000 an outrage, and demanded they be paid what "we" do, the average American salary of $45,000.
Except Glenn Beck makes $10 million a year, just from his radio show.
Plus probably $10 million a year from Fox.
Plus however much he gets from his books.
And he was screaming that the proposed tax surcharge on the wealthiest Americans would mean he would be unable to afford hiring 5-10 more people this year, except of course it doesn't kick in for a couple years. Oh, and he said he can no longer afford health insurance for his employees once any health reform bill passes...yet he makes at least $20 million a year.
Ah, hypocrisy.
Even funnier is your remark about Glenn Beck's books. Who among this clown's followers can even read?
q
They come with lots of pictures :-)
They come with lots of pictures :-)
I was wondering why they bought those. Thanks for clearing that up!
In case you didn't notice in the article: there bought in bulk and given away.
Oops, I did miss that. Not very surprising.
We have a lot of education to do...
-----------------
Yes we do Thom.
Please use your radio show to DEMAND reinstatement of a new Fairness Doctrine combined with antitrust action against our megalithic media companies.
This ONE - TWO Punch is the ONLY WAY we're going to be able to reach millions of Americans on a daily basis to educate them with this important information.
Hartmann's article makes great sense. In Denmark, the people's compact with their government is cradle-to-grave support and protection. That this comes at a cost of 52% taxes, and a significant loss of freedom is a choice which the Danes have made.
The USA citizen's compact with our government is very different. We were founded, and as a society at large, still believe that our government's job is one of protection from outside interference and freedom within that protection to conduct our lives and businesses as we damn well see fit. Social-welfare programs always restrict that freedom.
It is always possible to change the citizen-government compact. Our Declaration of Independance did just that. If we want to change from a liberty compact to a welfare compact, get busy and convene a constitutional convention. Hartmann's proposal is nothing more than using the tax code as a clandestine lever in the social-engineering project.
". . . and a significant loss of freedom . . . . "
Please give us some examples of the freedoms that the Danes have lost.
q
The freedom to have wonderful and benevolent corporations run their lives, for one.
The Danes have handed over to their government many of the choices you and I make every day. How much to charge an employer for my labor? Can I charge less to make myself more attactive to more employers? Do I want to forego 3 weeks of my vacation to work and make some extra money? Do I want to retain the means and tools to defend myself and my family and my property from predators? Do I want to to stand in the square and shout that I believe our government is wrong and should be overthrown?
Not everyone values these freedoms. They willingly sacrifice them for the safety and security provided by a government run by venal, corrupt humans, and trust that every politician and bureaucrat will do what is best for each individual citizen.
I would suggest to you that the Danes live in a country totally unlike ours. Very small with a population of 5.5 million people. And a fairly homogeneous population at that.
Considering this there can be no real comparison. Perhaps they have three weeks mandatory vacations because it provides more employment? Perhaps in their country a social democracy and a mmanaged economy makes the best sense. You can do many, many things on a small scale that simply are impossible in larger forms.
I also believe you'll find that any Dane can go to a street corner and scream whatever he likes.
"Not everyone values these freedoms. They willingly sacrifice them for the safety and security provided by a government run by venal, corrupt humans, and trust that every politician and bureaucrat will do what is best for each individual citizen."
I also doubt that their government is run by that many venal, corrupt humans. Our government is different than theirs. Ours in the cotrrect form is best for us, theirs may be best for them. I found it a lovely country and I didn't see any lack of freedom.
How many humans do you know who are not at some level venal and corrupt? This is the definition of the human condition, and our striving to rise above our own corruption is what makes our lives worthwhile.
"Humans...are...venal and corrupt."
You must be a Republican.
Sorry my friend. I know vast numbers of folks that are not venal or corrupt. And Au Contraire....it most certainly is NOT a definition of the human condition.
Striving to make others lives worthwhile is what makes peoples lives worthwhile.
Perhaps we could persuade you to consider that most people are pretty good. That most people are worthwhile.
waltdimm's pro-US argument doesn't really hold up to scrutiny, though I would keep the door open to his further investigation into the supposed benefits of the "American Way". However, if he were to complete a thorough investigation and conclude that there are no real benefits, but only institutionalized ego gratification, I wouldn't be surprised.
Meanwhile, quickstepper wants Big Brother to decide everything for us, and that's not going to work because of the USA's gargantuan culture of corruption. The oligarchy already decides most things in the USA. The Danish government works for the Danes because it isn't corrupt. The Danish government FEARS the Danes, thus it serves the Danes well. Quickstepper want to bypass the question of who is going to hold the upper hand, the people or the power center, and demand the people blindly submit to the power center. No way, Jose.
I don't know what country you live in but in the US, employers base their wage offerings on job market analyses and not on what people walk in and demand. Were you to go to a company and offer to do the $15/hour job for $10/hour, they would turn you down because they know that you would leave sooner ar later for another job at a higher pay. They also figure that you probably aren't capable of doing the job they need because, if you were, you'd have one.
All of your examples are pretty simplistic and none of them represents a truly significant freedom, such as that to choose one's career or place to live. The only true freedom that you touch on is that of speech and I know that the Danes prize that freedom dearly.
In short, I don't really trust your characterization of Danish society.
q
Just wondering how many false identities you have on this site Hamster?
None other.
Why do you ask?
Excuse me, but I beg to differ with your statement about working for 3 weeks to make some extra money during your vacation. At the same job? They won't pay you for that vacation time, they will just take your time from you. In fact, we are seeing companies that are asking their workers to work for free during their vacations, instead of going on them. SO that one right there is a losing argument.
Why would you insist on the "right" to screw yourself for a job. Wouldn't it be better to have enough belief in yourself and your abilities to want MORE money? You're slitting your own throat and calling it a "freedom". Freedom to starve, maybe. Not every smart, at any rate. A rush to the bottom only benefits the rich. And it's a huge part of the very problem we are talking about here.
As to the "defense" argument, look at Denmark's crime rates. I am more than willing to bet that they are FAR lower than ours are. Unlike us, the Danes have learned that when people have opportunities, they are far less likely to turn to crime. Plus, the Europeans as a whole have learned that guns don't solve problems, they create death. That is their reason for existence.
As to standing up and demanding the overthrow of the gov't, you can be arrested for that here. Happens all the time, unless you are a rightie or a right wing pundit.
Your arguments about freedoms are very right wing, and some of them are just plain NUTS. The minimum wage was put in place to keep people from being in abject poverty for the entirety of their lives, and to keep people from being taken advantage of. You think that being taken advantage of is a right? It's a screwing for the benefit of those who already have too much.
Nice try, but your arguments show that you are a huge part of the real problem, here, which is not asking those with too much to do their part for the very country that allowed them to make so much. They benefit FAR more than you do from our system, why should YOU have to pay more for it than they do? Why not stand up for yourself instead of those who are screwing you and your children for their own benefit? It's time that you realize that they are the problem, not the solution. Waiting for the rich to trickle down on you is a fool's pastime. They have proved that they won't do anything of the sort. They will just keep stealing from you and your family. THEY are who you need to protect yourself from, not the guy you think is breaking into your home. They are stealing you blind, and you stand up for their right to do so. WAKE UP!
Great post. I'm sick of the right-wingers invoking "freedom" at the drop of a hat.
Their idea of "freedom" is freedom to exploit our asses without regulatory constraints.
How many times have you "stood in the town square" and shouted anything? If so, what?
Do you really need "more money"? If so, for what?
We're already ruled by the most obscene companies and evil political misfits ever to slide out the human birth canal.
We can't do any worse.
We were founded, and as a society at large, still believe that our government's job is one of protection from outside interference and freedom within that protection to conduct our lives and businesses as we damn well see fit.
--------------------------------------
What we 'believe' in is irrelevant to this conversation.
Our government's job is to protect and defend the Constitution.
By the way, I'd be willing to wager that there's tens of millions of senior citizens who don't think Social Security and Medicare limits their freedom. Unless of course you're referring to their freedom that comes from deciding which street corner to live and ultimately die from sickness on.
Go back to my original post (10:06). The point is not about Danish society, but about the explicit and implicit contracts between a government and its citizens. Someone pointed out that the job of government is to "support and defend the Constitution". The Constitution and the Declaration of Independence lay out our explicit contracts. These documents are somewhat hostile to European-style socialism. If we really want a benevolent social state, it is up to us to re-negotiate that contract. Using taxation to force a societal change is neither honest nor in the long run, likely to be completely effective.
We need to push a new pejorative term such as "taxphobe" or "taxophobe" or maybe "taxaphobe", and use it to describe selfish, short-sighted, ignorant, antisocial barbarians.
How about "tax chicken"?
Or just the term that we've always used: "republicans."
q
It is just that any term with "phobe" or "phobia" in it seems to be taken more seriously by Americans, as the presence of the Latin element (derived from Greek, better yet) implies that some sort of scientific rigor underlies the development of the term, and most assume that those who have a "phobia" must have some mental defect or character flaw.
good idea
kivals
I would suggest taxaphobic.
There is nothing wrong with raising the tax rates on the upper income earners. I did not notice a decline in economic activity under Clinton when the rates were higher.
The problem is raising taxes to support the worst health care proposal in the last two centuries. This stinks to high heaven. The addition of the lawyers ability to file suits on behalf of the government without the governments permission smells of Cheneyesqe shananigans and another example of what happens behind closed doors.
Whatever one thinks of John Edwards, I thought it interesting that when he was asked to criticize Obama when he was running against him in the Democratic primaries he said that Obama was too weak to accomplish much in Washington, as Obama would not be able to stand up to the many capable and confident lobbyists and lawmakers representing powerful interests. Edwards nailed that one.
Uummmm....and you nailed that one for me. I had forgotten that. It has proved to be profetic obviously.
I'm not taxophobic but I tend to get upset seeing our tax dollars slipping from our fingers into destructive purposes. See my separate post. I hope others don't call me a Republican for saying what I said.
Republican? How funny! You just told the truth about this. And thanks for it!!
They have exactly, "blown" our chance at real reform.
I don't know how they do it in your state but out here in St Louis, talk about cutting down any wasteful spending and you get labelled a Republican instantly. Not so in the rurals or even the suburbs. Sigh, I wish people knew how to hold their labels and think first. :(
Kvals,short-term I would agree with you; but, why are the hellth insurance corporations and their reactionary fellow travelers throwing all but the kitchen sink at this plan; because they are sooo fearful of its longterm implications. And, yes to finance it we should raise taxes on the rich and the filthy rich, which bush called "the haves and the have mores (the big bankers) that I call my base." And, as socialist said cut at least in half our bloated imperialist death-oriented military budget.
Hartmann has hoped that Obama is playing chess instead of checkers. I think was must do all we can to realize that hope.
The only con job on this thread is Hartmann who has a case of myopia. When it comes to his handlers in the Obama Administration he sees no evil, hears no evil, speaks no evil. I wonder why he never writes one of his essays against Obama and Dems for taking single payer off the table, or the Afghanistan war escalation, or criminal investigations of Bush, or why a fantasy called clean coal is perpetuated by Obama and the coal industry who owns the man, to name the most egregious?
Oh, Hartmann is owned by the same status quo forces.
Your fault-finding is tiresome and contributes nothing to the discussion.
Hartmann is a vocal advocate of progressive causes. In fact he has spoken forcefully on all the issues you named on his radio show. Calling him "status quo" only makes you sound foolish.
My advice is to climb on board your exercise wheel Hamster, that goes round and round in circles, because that is the only thing I've heard you offer on this site.
Perhaps you ought go back over to Hartmann's Message Boards where things are controlled via censorship and you can feel less threatened.
And just for the record, you and your handlers will never silence the authentic left, except through censorship: something Hartmann knows a great deal about.
One more thing: you and your hero don't decide or dictate the context of the discussion.
We probably agree on many things but you're too busy finding fault and delighting in throwing insults to realize that.
If you pay attention, Hartmann has come out sharply critical of Obama on many issues you've named. He speaks frequently and strongly against the expansion of wars in the mideast, and for single-payer health care, against wiretapping, in favor of prosecuting Bush era war criminals, etc. Apparently in your world, anyone with a slightly different take than you only deserves derision, and you are the arbiter of what the "authentic left" is.
And I don't have any "handlers", thank you very much.
The only thing more hilarious than your whining is your belief that Hartmann is a progressive. Do you ever think before you speak? Hartmann advocated for Obama and urged people to vote for him. Now you are asserting that Hartmann is condemning the policies of Obama in direct contradistinction of his vote. Do all you wannabe progressives have a bipolar disorder?
"The only con job on this thread is Hartmann"
You beat me to it.
Wasn't the 16th amendment about Capital Gains taxes, and was interpreted to mean Income taxes?
From what I understand, federal income tax is unconstitutional...
Has anyone seen the documentary "freedom to fascism"?
If I am wrong about this, will someone please explain?
Thank you...
GoldenMean, you are right, but progressives in general feel that there is mandate on people to pay taxes. Since most of this money is used to fund the defense department, I find this very strange. I could agree with them if the taxes were used for social purposes, but clearly the money the government extorts from its citizens is used to enrich those that own far too many things already(the owners of the military/security/intelligence/wealth creation/information/media/prison/industrial complex).
I can't believe that Americans have allowed the Dems and the Repugs to steal from them with impunity for 96 f-----g years and still vote for these MF'ers every time there is an election. I have no sympathy left for Americans, truly "they get what they deserve" for their blind loyalty to these criminal organizations. Only in America do you see people paying for crap that they get no benefit for. Tithing and taxation are things that should be frown upon by the majority of Americans, but sadly most Americans put up with it or even willfully participate in activities that are against their best interest.
I would vote for Ron Paul just to see him abolish the unconstitutional, malignant agency we call the IRS. For those progressives that still don't understand(like Thom Hartmann) that their greatest enemy is the Federal government, they need to open their mind and question all the actions taken by the Federal Government and all of its semi-private entities like the Federal Reserve to see what it is that they are actually promoting through their policies.
We need new leadership, the Repugs and Dems have failed the American people time after time. It's time for the duopoly to DIE a horrid death, and forevermore be spoken off as the most criminal and shortsighted organization(s) in recorded history.
There is absolutley no point to this article, except the ideological jerk off that Hartman is not really a liberal.
Love
Zero
So as an open-minded person with conservative leanings, this article has given me much to think about. The evidence of high taxes during the middle of the 20th century is quite strong, especially in light of the problems that followed tax reductions in the early and later parts of the century.
There are a couple of things that don't quite make sense to me, though, and I welcome some dialog. Mr. Hartmann talks about the rich people's "take-home pay", as if they only lived on or saved their income. This ignores another option: (re-)investment. How did businesses in the 50s and 60s procure capital? Where did the money come from to pay the workers? Did the wealthy really take the 9% left after taxes and reinvest it? I would expect them to horde that money like nothing else. But maybe I would expect incorrectly. It had to come from somewhere, but I just can't figure out where. Was everyone really working for small businesses with profits smaller than the top income bracket? Is there another explanation?
I also find it interesting that Mr. Hartmann failed to mention the Carter recession. What led to those economic problems? Reagan's tax cuts had not taken effect. Higher energy prices were surely related, but can they account for the entire problem? In fact, according to The National Bureau of Economic Research in a report posted on CNBC (http://www.cnbc.com/id/20510977), there were twenty recessions/depressions during the 20th century, including four during the very period lauded by Mr. Hartmann. Is it possible that the rise and fall of the economy is independent of taxation rates and that both sides cite the figures that correspond with their side's claimed successes?
As an alternative, is it possible that the real cause of our economic problems is not one of lower taxes, but increased government involvement? Perhaps the reason we have companies like AIG, Chrysler, and GM taking huge risks is they believe that when push comes to shove, the government will bail them out (as they did with Chrysler so many years ago). I seem to remember several car companies from the 40s, 50s, and 60s who no longer exist. In other words, they were allowed to fail when they made stupid business choices.
Perhaps the problem is a combination of both. I'm not an economist, but I do know that when we start pointing fingers and vilifying specific parties and people, we lose the ability to really analyze what has happened. This is why George Washington refused to join a political party--he wanted to do what was best for the country, not what was best for his party. The only chance we have for saving this nation is to do just that.
So, I encourage everyone to stop blaming the Republicans, Democrats, conservatives, and liberals, and start looking for solutions. I submit that there are some good pieces of advice looming on both sides of the aisle, but that neither side has everything completely right.
"Is it possible that the rise and fall of the economy is independent of taxation rates and that both sides cite the figures that correspond with their side's claimed successes?"
I'm afraid that you're ignoring a key aspect of Mr. Hartmann's analysis. He points out that the lowering of tax rates on the wealthiest contrinbutes to economic bubbles whose bursting produces dire economic downturns, linking them to the two worst economic periods of the past century and to the Reagan market crash.
Nowhere does Hartmann claim that cutting taxes for the rich is the only explanation for all economic declines (which your own link shows to occur peridically). He simply argues that such tax cuts make inevitable declines worse, sometimes much worse.
"Perhaps the reason we have companies like AIG, Chrysler, and GM taking huge risks is they believe that when push comes to shove, the government will bail them out (as they did with Chrysler so many years ago)."
Your grouping of these three companies is a bit odd. The reason for AIG's failure has clearly been shown to have been its exposure to the faulty credit intruments that developed and flourished in the absence of government intervention. GM and Chrysler failed precisely becuase they DID NOT take risks, turning out the same old gas-guzzling crap that they had been manufacturing for decades.
q
Quickstepper, you illustrated my point exactly. Tax-cutters point to the "booms" that happen before the bubbles burst, tax-raisers point to the bursts that follow the booms. Might the bursts have happened without the booms? Might the booms have happened without the burst? Both sides can cite a study to support their belief system. In the end, and despite taxation levels, the general thrust of the economy (despite the occasional waxes and wanes) is upward. Life is cyclical, and it makes sense that there would be ups and downs in the economy as well.
What if both booms and bursts are naturally occurring cycles that have nothing to do with taxation and everything to do with, for example, artificially inflated housing prices (created by impulse buying and easy credit), carefree investing (caused by a perceived lack of consequences for bad choices), and other non-tax-related issues? The "bursts" during the 50s, 60s, and 70s had nothing to do with lowered tax rates--those happened as tax rates were rising.
My point with the companies I mentioned is that both groups made bad business decisions: AIG in buying faulty products (are you trying to tell me that they had NO IDEA that they were risky investments?) and Chrysler and GM in not keeping up with their competitors. In both cases, there had to have been in the back of their minds the thought, "we're too big to fail". Because it was planted there when the government bailed out Chrysler and the Savings & Loan industries. Is it possible to change that corporate mindset? If so, how do we do it? (There is a parallel in College Football where a coach is guilty of NCAA violations, brings penalties upon his school, and then leaves. The players and coaches who remain, most of whom are innocent, are stuck with the penalty--how do we allow the coach/CEO/board of directors/those responsible to receive the full brunt of their actions' consequences without destroying the workers they leave behind? Is that possible? Is it even necessary?)
My main goal was to point out that neither side has a monopoly on perfection, and until we realize that and start working together for real solutions, we're destined to drown in the same mindless drivel that floods both the right and left. Thank you, quickstepper, for engaging in some real conversation. Let's see if we can keep it going and find a way to move forward together. Imagine the results that could happen if the combined forces of the grass-roots left and right found a way to work together for change!
"What if both booms and bursts are naturally occurring cycles that have nothing to do with taxation and everything to do with, for example, artificially inflated housing prices (created by impulse buying and easy credit), carefree investing (caused by a perceived lack of consequences for bad choices),"
But high levels of taxation on those wealthy enough to impulse buy a home and to invest carefree could prevent them from being so careless with their money, maybe preventing these things.
It might also prevent them from making careful and effective investments. Can you limit one without limiting both?
I don't know. Perhaps I am relying too much on the assumption (or common sense) that if one has less money, one will be more careful with it.
So who decides how much is too much? And what will those limits do to the entrepreneurial spirit? Why work a little harder if you know you'll only be able to keep 9% of what you earn for going the extra mile? Isn't there a point where people just become content with average? If that becomes the case, how does it change the economic landscape?
In strictly economic terms, it probably will harm the entrepreneurial spirit to some extent. However, every reader on this site knows that the economic landscape needs to change. Sustainability, not growth and profit, needs to become the focus.
Since many of the professions that would produce an income that could be taxed at the 91% for going the extra mile are unproductive financial sector jobs, what does it ultimately matter that it would discourage those people from working harder? It seems to be we'd be a lot better off if the financial sector became simpler.
According to the figure given above (ca $357,000), the highest income bracket would also include corporate CEOs, actors, sports figures, doctors, lawyers, and members of virtually every economic sector. Perhaps you are willing to add a sixth level. If so, someone's going to have to decide exactly how much income makes a person too rich. Would you like to suggest a number? Please also include the credentials which make you (or another suitable judge) worthy of declaring that number.
I don't mean to be argumentative, but at some point, we can't continue with vagaries. Laws should be clear, concise, and to the point (unlike the current healthcare bill). Otherwise, there are too many unintended consequences. Let's throw out some details and see if we can come to an agreement.
I would include some level of millionaire in another, higher bracket. Can you tell us what the 91% bracket under Ike was, in today's dollars? That might be a good starting point.
And I totally agree that we need details, but I am the farthest thing from an expert when it comes to economics. All I have in economics training is a couple of badly taught international economics classes at college.
And this is part of the problem. You and I are in the same boat. Neither are trained in economics (and truth be told, no one would trust us if we were), and both trying to solve a problem in exactly that field. I pulled the $357,000 figure from the current highest tax bracket, assuming that would become the 91% bracket. If you say it is $1 million, that still includes a lot of people who aren't financial executives.
That being said, neither of us can say that the other is completely off base, because neither of us has the years of dedicated study to back it up. At best, we are basing our arguments on anecdotal experiences and what we've been told. Does that make it a stale mate? Is this really an informed discussion?
And if we decide that we aren't the best people to be making these decisions, then who is? I think this is the ultimate question raised by this and other articles. Who do we trust to run our country? Can you really say with a straight face that Barack Obama, Nancy Pelosi, and Harry Reid are really more independent and uncorruptible than George W. Bush, Dick Cheney, and Michael Steele? Are Keith Olberman and Rachel Madow more trustworthy than Rush Limbaugh or Sean Hannity? Aren't they all depending on corporate profits to fund their respective shows?
How are we as average, ordinary people to know the truth about what is really going on? In the end, is it even possible?
This is exactly why the founders set up an extremely limited federal government. They knew that the average person would never be able to follow what was happening in Washington. Instead, they distributed power among various local governments, with the idea that each citizen would be more able to learn about local issues, and that by holding those local politicians accountable, good judgment would filter up to the national level. Unfortunately, that way of governing went out the window with the party system that invaded the first Adams/Jefferson election. Perhaps if we could learn that lesson, we might be able to fix a lot of these problems.
Thanks for the stimulating discussion. Perhaps if corporate personhood was eliminated and corporations no longer held so much power, we could go back to a more limited federal government. It might not be possible though...many problems are far more complex and the solutions global and interdependent now than they were back then.
When I took finance in graduate school, the first thing I was taught was "whole sale volume sale good, quality not important and not good for the economy" and that was the basis for this entirely crooked finance course. In accounting which I took in undergrad studies, it was all about projections and predictions without the substance overall. Put those two together and you get ENRONOMICS. Talk about ruining the young minds. :(
Very few creative or inventive people work hard because they want to get wealthy. The idea that inventiveness is driven by selfish lust for wealth is dradful myth out of Ayn-Rands novels. It has no basis in observation of real human behavior.
One reason is because satisfying the human creative drive is a motivation in itself, which is why the most creative people of all (Einstein, Mozart) were not at all rich.
The other reason is because being inventive only works poorly, and hard work not at all, in gaining wealth under capitalism. Capitalism rewards ruthlessness far more than inventiveness, and doesn't reward hard work at all, or the hardest toiling people on the planet wouldnt be it's poorest.
But just keeping the discussion to crativity, inventors like the Wright Brothers, Edison, Tesla or Bessemer only did so-so financially. The really rich people, Howard Hughes, George Westinghouse, Andrew Carnegie, didn't invent squat.
"It might also prevent them from making careful and effective investments."
What else will they do with their capital? In times of high - or better, realistic - taxation, equity investment is generally the only opportunity for capital gains otuside of starting one's own business. In stable economies, bond rates, savings, returns, and precious metals tend to be stable themselves.
People will invest in stocks because, even with higher taxes, they're still the best long-term choice if one doesn't have the entrepreneurial touch.
q
Yes.
And much more importantly, that investment in stocks will be only one method in the more general investment in enterprise, period.
And since huge windfalls on stock trades or other market moves would be just as highly taxed in a proper system, speculation would decrease and what was left would ALSO push investment in productive enterprise, charities, other not-for-profits, and public works.
I cannot believe that people could be as ignorant of how taxes effect a capitalist economy as some have shown today!
Let's hope some are just lying and know the real truth, otherwise I'll be afraid to drive the roads in this country! ;)
No. No. No.
You've got this totally wrong!
High tax rates on income in excess of regular expenses (Disposable income) ENCOURAGE investment, they don't "prevent" them!
To avoid paying such high rates on their excess income, people invest in productive enterprises. This is exactly why the economy was more "stable" with 70%-plus taxation on excessive income.
As the quarters pass, folks that make this much money are advised by their accountants to ivest in this or that as a "tax shelter" for precisely this reason.
When taxes on this excessive income drop to the low rates they are today, people who earn this much are DISCOURAGED from investing, productive enterprise falls to pieces, speculation and gambling in the market creates a "bubble", and eventually the "buuble" bursts. If things go far enough, we see a horrible contraction like the one today, because production was allowed to fall so badly that it broke the production-consumption cycle that capitalism is based on.
High Taxes on unearned income, corporate income, and excessive income are a fundamental part of ecouraging investment and stability in capitalist systems.
I cannot believe that no one has corrected you on this yet!
Somone MUST have further down.
Exactly right.
High marginal tax rates also encourage small business growth (and thus job creation), since entrepreneurs will tend to re-invest excess profits into their business to create future wealth, rather than pulling profits out and paying high tax rates on money they really don't need to live on.
I'm trying to figure out how this works. I don't want to accuse you of being wrong, but this doesn't make sense to me. If I make $40,000 in a year and invest $5,000 in someone else's business, I am still taxed on $40,000 of income. I am then taxed on any profit made from my investment. If the investment loses, I can write off some of the losses. Giving to charity is obviously another matter, but am I mis-interpreting something?
If I make $10 million (say as a professional baseball player) and want to avoid paying a ridiculously high percentage of taxes, I can give some to charity (at least the charity may be able to spend it better than the federal government) but if I invest half of that, I'm either going to be taxed on the profits or take losses. Especially if the capital gains rate is higher, how is that going to encourage me to invest in anything?
What is the basic purpose of investment in a business? To profit from it, and to raise funds for that business, right?
Well if you're able to invest 12.5% of your income for something that is not necessarily a quick return, you obviously don't need the profit from that investment to live off of. And for a business to raise money, there are banks that provide loans, as well as government subsidies.
So what is the basic purpose of investment in a business?
Probably just a way for the already rich to get richer.
So who cares about investment?
For one, the people who work for a business care about investment. As capital comes into a company, it can expand, hiring more workers. As capital is lost, people are fired. Furthermore, loans come with interest rates, further limiting the company's growth and profitability. And truth be told, as much as people may love a cause, if it fails to make money (or constantly loses money), one can only support it for so long. If it is a charitable enterprise, you may be able to keep it up, but if not, it will eventually fail. Whether you like it or not, we need businesses to survive. And that means that we need profits--at least marginal ones.
Though some businesses are run by "evil" people for "evil" purposes, there are a few (perhaps many) good and honorable ones out there. We need to focus on supporting them.
The capital from investment is just money, like that from a loan, right? And does the company not have to pay out money in the form of dividends to those that invest, like interest on a loan? I don't know the difference in amount between the payout of loans vs dividends, but capital investment is not a free grant, is it?
Dividends aren't required, but are helpful in procuring further investors. Stocks that pay out regularly tend to have more people invest in them. Those that don't generally have a cheaper share price (another way of encouraging people to invest).
"Whether you like it or not, we need businesses to survive. And that means that we need profits--at least marginal ones."
You're citing old-century laissez-faire capitalist "conventional wisdom" now being buried under its own avalanche. The truth is being discovered today by more and more USans that "whether you like it or not" we don't need conventional business and we don't need profits at all. Take a look at all the non-profit enterprises both domestically and worldwide. They are in fact more efficient than profit ventures, especially the profit ventures relentlessly promoted by the loudest psych-ops machine in world history. Look at public education, research, transport, healthcare around the world. Look at non-profit utilities, public infrastructure and security enterprises worldwide. Where these enterprises have managed to resist the fanatical US mission to privatize everything, we see great efficiencies, especially when compared to US profit enteprises. Compare the value of Linux vs Windoze. Now the public sector is not alone enjoying its great productivity advantages over big profit business. Small businesses are also far more efficient than big businesses. If we managed to block the corrupting influence of big businesses in Washing-town they might get their acts together. But who really wants them around to menace us another day? We on the far-left are setting up the alter-economy comprised of the optimum combination of public and small private enterprise that works for the people. There's no role for big businesses, and small businesses won't need profit - they won't be growing. We don't want them to grow. Why the hell would we want them to grow? We can watch godzilla on dvd.
Here's the deal. People are motivated by different things. Some by helping others, some by money, some by curiosity, some by lack of self-esteem. If we make a system where only for-profit businesses are allowed to exist, many people will have no motivation. If we make a system where only non-profit entities are allowed to exist, other people will lose interest. We as a nation work best when we allow people to pursue the objectives that interest them. If a non-profit entity can be successful in delivering cable, electricity, or toys, then by all means, they are welcome to do so. There are no laws to stop this kind of behavior (and if there are, they should be immediately repealed).
On the other hand, if someone wants to provide a service or good and make a profit, then they should be allowed to do so. Honestly, non-profit entities should (theoretically) be able to do anything for less cost than a for-profit entity. I can't for the life of me understand why such entities haven't caught on. If they are so wonderful, why do they need government subsidies at all? Why not just compete in the open marketplace (as Credit Unions, Public Utilities, and other companies have)?
None of your statement above pertains to the behavior of a small-business owner, who is in fact encouraged to re-invest in her business by the existence of high marginal tax rates.
ComposerJules sez: "I also find it interesting that Mr. Hartmann failed to mention the Carter recession. What led to those economic problems?"
***
The bill for the Vietnam War, a can which Johnson and Nixon kicked up the road. It didn't help that the U.S. hit domestic peak oil in the early 70s and OPEC responded by flexing its muscle.
That sounds like factors other than taxation can effect the economy. Perhaps we should focus on those instead of taxation. Maybe we could make a bigger impact there. I'm not saying that taxes aren't part of the overall issue, but it looks like taxation has caused three or four of the 20 recessions in the last 100 years. Perhaps they were the most severe, but might the elimination of the other 17 recessions have greatly overshadowed those losses?
I just want to make sure that we aren't throwing the baby out with the bathwater.
You ask about the recession during Carter's years. Why did that occur? Because Carter was dong the unpopular but responsible thing and was paying back our debt for Viet Nam. As a result, we had economic issues that resulted in a recession. And if we had a gov't that was responsible and courageous enough to do the right thing and pay for the debacle in Iraq, the same thing would happen, but now it would be worse, as a result of the off shoring of jobs and factories for the benefit of business profits. We still had jobs and factories back then, now those things are gone, so our ONE way to REALLY pay the debt off is to tax those who made out like bandits over the last 29 years, that being the rich.
In fact, they have NOT paid over 2 TRILLION in taxes over that time. Ever wonder why THEY should be getting to pay less while benefiting more than the rest of us? If you want to pay for health care, to pay for infrastructure upkeep, for paying off the debt, then the rich and ultra rich HAVE to be made to pay their share. Those of us who have lost damn near everything have nothing left to give. THEY have it all. It's time to get it back from those who have it, and stop soaking those who haven't got it.
You want a solution? Repeal the REAGAN tax cuts, put the rich back to a 72% tax rate and don't allow deductions that make it possible for them to skate on their obligations to society. And YES, they ARE obligations. It's this society that allows them to get rich in the first place, and we are supposed to allow them to pay LESS than WE do? I don't think so. They have been doing that for nearly 3 decades and it's that game that has cost us what USED to be a society.
I believe a lot of the economic problems during the Carter administration involved the Arab Oil Shock and mistakes made by the Federal Reserve.
A constant throughout history is the super rich's feeling entitled to pay as little tax as possible, or as in the bad old days of Medieval feudalism, none at all. Thus it is no surprise the rich troglodytes mentioned in Hartmann's piece fund right wing press organs, as it is an investment that has paid off handsomely. What is truly pathetic &/or scary are the poor dupes (literally and figuratively) who actually believe the swill peddled by well paid media lap dogs of the aforementioned troglodytes, some of whom choose to troll around here.
I don't mind increasing taxes on the wealthy and in fact support it. However, I am sick and tired of watching our tax dollars slip out of our hands into destructive purposes such as wars and Wall $treet. Obama and his gang had the perfect opportunity to pass single payer and shut down the Republican argument about taxes since single payer would actually cut down the current wasteful spending being done for Big Insurance and Big Pharma. Even my conservative parents and some of their friends have a strong heart for single payer and I almost feel like pulling my hair out just watching the Democrats in Washington inventing excuses !! They have a filibuster proof majority and yet they're blowing their chances !
And can we all just forget the conservative media and keep working to push for truly progressive outlets?
Well, the conservatives spent decades building up their media empire. I don't think we can have our own version of it overnight.
Personally I would love to open a theater to screen independent and progressive-themed documentaries, with more of a focus on political awareness and change...it'd ideally serve as a meeting place for activist groups too.
What you said on the first paragraph I cannot deny and George Lakoff made that perfectly clear. It will take at least a decade to undo the damage of the right privatizing all sides including itself.
On the second paragraph, that would be lovely. A theater would be lovely for teenagers and even us in our late 20s. In some ways, it's sort of happening. On some weekends for example, my mother will attend a quilt show meeting locally and there will be discussions on possible ways to experiment with eco-friendly plant material. On some other weekends, my dad would enter a pickup truck show and even there someone will try to bring up the challenge of going green while trying to win.
This article by Hartmann is typical of recent articles on CD. It has been turned into a right/left pissing match with little regard to the contents. If these articles are so distasteful to some I wonder why they are continued to be read. Honest and well defined debate is always intersting but below the belt blows to those submitting comments is disgusting and the epitomy of bad taste.
Bad taste is taking single payer off the table; it is perpetuating war and covert air strikes on non combatants in Afghanistan and the antiseptic view some have on the value of human life like those who are culpable for their advocacy and vote of Obama; it is about FISA and TARP; it is being owned by the coal industry and the insurance industry, along with the military industrial establishment. It is people like Hartmann collecting from corporate advertising for being a pundit; it is taking criminal investigations of Bush off the table; it is allowing torture in through the back door while promising otherwise, and broken promises - one after the other. What don't you understand about any of this?
"It is people like Hartmann collecting from corporations for being a pubdit; (sic)"
Please give us the names of some of the corporations from which Thom Hartmann is taking money.
q
Poor Quickobfuscation using one of her many sock puppets to accuse those who are left of the Democratic Party as trolls, while it is her and her sock puppet alter egos that ought to stand accused. Quickstepper/Hamster/Anna carrying on a conversation with herself. Hilariously Laughable.
elohim...we are all patiently waiting for your very own version of explaining the tax system and exactly how it functions. Any input at all pertaining to the subject will be greatly appreciated.
quickstep, thanks for proving my point: not once, but twice. (You are as regular as my morning crap.)
elohim...we are all patiently waiting for your very own version of explaining the tax system and exactly how it functions. Any input at all pertaining to the subject will be greatly appreciated.
But you had to have known that such a response would be inevitable. Right-wing drones target this site all of the time and Hartmann's article - disputing as it does the very heart and soul of Reaganomics - has brought their savagery to the surface.
I don't like many of these posts either (and I'm sure that many folks don't like mine) but we shouldn't let them distract us from the article's value.
q
Poor Hamster using one of her sock puppets to accuse those who are left of the Democratic Party as trolls, while it is her and her sock puppet alter egos that ought to stand accused. Quickstepper/Hamster/Anna carrying on a conversation with herself. Hilariously Laughable.
Hardly worth mentioning but thanks for illustrating the perfect example.
Almost anyone can spend money more usefully (in an economic sense) than the pathological rich.
Unfortunately, the "You can spend your money better than the gummint" mantra resonates with those who are struggling economically, keeping them from seeing that they would themselves benefit from increasing taxes on the rich.
This article is great because it gives progressives ammunition to debate conservatives and convince the undecided. This kind of "mental self-defense" is what Chomsky does so well- who else talks about the roll of military-funded research to debunk "free-market" myths? We need more Michael Hudson's, Stephen Zarlenger's and Ha-Joon Changs. We need more artists and celebrities shining light on these guys.
The Democratic party can be reformed if enough citizens are informed voters and as much as I agree with green policies, half the electorate votes republican and would love to see the dems split.
Actually, I think the key to making real change happen is seeing a viable Green candidate and a viable Libertarian candidate run in the same election, splitting the vote four ways. Though the House of Representatives might have to decide the final result, I believe that the outcry from the public after seeing such a travesty (assuming they voted on party lines rather than the will of the people) would destroy the status quo and usher in the era of multi-party politics in the U.S. Even if they didn't, a strong showing by both Green and Libertarian parties would drive fear into the other parties, perhaps causing them to reform.
Is that just a pipe dream, or can anyone else see it happening?
Well, one minor problem is that the Libertarians' main guy, Ron Paul, has joined the republican party.
The only realistic chance that I can see of forming a meaningful third party would be a coalescence of the various parties on the left (Green, Progressive, etc.) with disaffected Democrats (there are a lot more than most folks realize) and conscientious Independents.
Another scenario could be the joining of both left and right-wing forces if enough Americans could wake up to the fact that Wall Street is the source of most of the major problems in the US. This eventuality is less likely, however, because of corporate control of the mainstream media.
q
Filling congress with independent progressives is where it's at. I'm not married to the dems- as long as a representative votes independently, they're members in name only, right? Libertarian economic policies would be a disaster.
The Glue That Holds Chaos Together
The fundamental problem is that we do not have the time or the means to educate the ignorant who play into the hands of the corrupt. We have been trying to win everyone over, when we should be beating them down, and pointing out their weaknesses. We need to embarrass and humiliate citizens who refuse to progress,and learn. They are spoiled children who need to be spanked.
The ignorant are ignorant because they are stubborn and lack adaptability. They do not care what we think, or why we think. This is a war like any other, and we need to focus on what we want, not what the enemy desires.
Rock on, Thom!
Keep in mind the young undecideds, maybe visiting this site for the first time. We need to have clear, convincing arguments and patience.
As for the ones that should know better, I agree- Crush, Kill, Destroy!!
I'd like to point out one thing that I've done that Grover Norquist (et. al.) never would consider. They HATE taxes SO much - but would they ever consider to quit working and go on food stamps to re-coup some of the taxes they've paid?
I didn't think so. Thus I have to assume he doesn't think his "tax burden" is so great that he wants some of it back.
And thank you tax payers - but like I said, I'm just reclaiming some of what I've paid.
Grover Norquist is a buffoon. He only jumped on the anti-tax bandwagon to get elected.
As the political tide shifts away from supply-side thinking, Norquist will never catch on. He'll die thinking that Reagan is waiting to greet him at the Pearly Gates.
q
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On the other hand, I wonder if those who think taxes should be higher would be willing to voluntarily give a bit more? Do we really need a law to force us to act according to our personal convictions? I'm sure the treasury would accept any check that anyone wants to send to them.
And let's not pretend that only Republicans are rich. There are plenty on both sides. George Soros, anyone? Most of the wealthiest in Hollywood call themselves liberals. Why don't they donate 91% of the proceeds from their next film to the cause of lowering the national debt?
"And let's not pretend that only Republicans are rich."
No, but republican-dominated institutions - banks and investment firms - control most of the flow of capital in the US. Right now, they're directing a sizable portion of that flow (through the bailout) into their own pockets, draining the economy instead of contributing to it. These are the folks who need to be paying more taxes - a lot more.
q
How about instead of raising taxes, we expose the corruption and kick out all who are responsible? They may control capital, but they don't control voters (unless the voters allow themselves to be controlled). The problem is that both the Republicans and Democrats are allowing the corruption to continue.
They don't have to control voters; they just have to control the counting of the votes - which they do thanks to black-box voting mechanisms.
q
If we're really following the conspiracy theories down that path, then the only recourse is armed rebellion. I'm not quite ready to declare that level of corruption on a national scale, but I will cede that it happens occasionally and should be prosecuted. That's a statement that you will have to back up with hard evidence before I will consider it further.
There is no national election in the US. All election processes are in state and local hands. Even the President and Vice President are elected "by the states." Accordingly, election fraud occurs at the state level.
Here are just a few links to paste into your browser.
http://www.commondreams.org/headlines04/1106-30.htm
http://www.scoop.co.nz/stories/HL0310/S00211.htm
http://www.buzzflash.com/farrell/04/11/far04038.html
http://www.whoseflorida.com/voting_machines.htm
http://www.elitestv.com/pub/2004/Dec/EEN41b5f8f70cbf8.html
http://video.google.com/videoplay?docid=-7199237087786262109
http://www.ideamouth.com/voterfraud.htm#FL
http://www.rollingstone.com/news/story/10432334/was_the_2004_election_stolen
Q
Let's assume the worst. All of the links you gave are 100% correct, and the last two elections were stolen by election officials. What do you propose we do about it?
Are you willing to take up arms? You're not going to be able to vote them out.
All I'm saying is that I'm tired of talking points. The liberals blame the conservatives for rigging the ballot boxes, the conservatives blame the liberals for rigging the exit polls. We've turned against one another, and all that matters is making sure "our side wins".
In the end, the only ones who win are the ones who are currently in control, and those are obviously not "we the people" because "we the people" are too busy counting our bribes (pork spending projects, tax cuts, kickbacks, etc.) to care what the politicians are doing.
So I ask every one of us. Are we willing to put our money where our mouths are? Talk is cheap. Let's see some kind of action.
To be clear, I'm not necessarily advocating violence (though the founders who published the second amendment to the constitution definitely did), but something clear and undeniable needs to happen. The question is, what!
Yes - I've said that if I could make, even, $100k+ a year I would give 1/2 to taxes. Because $50k/yr is more that I've ever made.
The most I'd ever made was about $30k/yr at Boeing. And I was living phat on that!
So, you see, I'm not over the top (as opposed to the party of "God, Guns & Greed" (and christ-all-mighty no new taxes!)).
I'm glad to hear that. If everyone who advocated higher taxes lived out their philosophy voluntarily, I'll bet we could pay for a lot of the debt we've accrued in the past ten years.
On the other hand, the problem with socialism/communism is the second generation. As long as people choose to participate, it works well. As soon as people are forced to participate, it runs into problems. You can see it in the totalitarian regimes of the USSR and eastern Europe, and even in the years following the early church (The second chapter of Acts describes a socialist community, but it obviously hasn't found its way into mainstream, modern Christianity. A few notable exceptions to that claim do exist, though. Google Francis Chan for more information.)
This element of choice is why I encourage the high tax enthusiasts to go ahead and make the donations. Those high tax rates have a much better chance of continuing if there is a proven track record of voluntary success.
"As soon as people are forced to participate, it runs into problems."
Dude - think about it, I never 'volunteered' for capitalism. Did you?
No, but most of us volunteer to continue in it. It isn't being forced upon you. You are welcome to join a socialist community within our country and share anything you want. You are also free to leave and join a purely socialist nation. Both of these options disappear in the totalitarian states I mentioned. Similarly, if families prevent their children from having the same freedom (should they choose to leave and be a part of a capitalist society), then the same kinds of rebellions will arise.
In Western Europe, people are free to come and go as they please. Had the USSR adopted a similar policy, they might still be around. China may want to consider these examples, or their civil unrest problems may continue to grow.
[You are welcome to join a socialist community within our country and share anything you want.]
Do they really still exist? Where?
[You are also free to leave and join a purely socialist nation.]
Ummm, which 'purely socialist nation' would be willing to accept yank refugees? I doubt that even Cuba would be willing to accept immigrants from the usa. Canada, not a totally socialist country, would only accept your immigration application if you could bring something to the country that was needed. Most other countries also operate that way. In the end, you are not 'free to leave' at all.
I recently read a book called "Crazy Love" by a pastor named Francis Chan. In the accompanying DVD, he talks about the socialist tendencies in his church. He doesn't use those terms, but he talks about sharing whatever anyone needs with whomever needs it. Be it housing, cars, food, clothing--he has lived it out. He and the church's board decided to live out the practices found in Acts 2.
There is nothing stopping anyone from founding a similar community for religious or non-religious reasons. Whether or not they currently exist is irrelevant.
"As long as people choose to participate, it works well. As soon as people are forced to participate, it runs into problems. You can see it in the totalitarian regimes of the USSR and eastern Europe, and even in the years following the early church"
But people in Western European socialist democracies seem to accept the high, more than half of income tax burden quite readily, as this article points out. And they seem to think it's a bargain, as well.
Sorry. Misplaced reply.
q
The Great Con Job is duplicitous, as this post well reveals. So, through all the ramblings of Hartmann (including an obvious Jungian slip), where to begin is my quandary.
Let’s review the “conservative media” money loss strategy. Outside of his P. T. Barnum like lack of respect for the average taxpayer (apparently HE is the only one of us suckers to see the truth for what it is), is he suggesting that the stardom of Kristol and Blankley is solely the result of spending by billionaires? Each year a dozen TV shows and Movie productions spend billions of dollars on marketing, to “get the message out there”, and still fail. More likely these blabbing heads are stars because of readership and viewership – there message is resonant, popular; in other words – desired!
What about Hartmann’s claims regarding the ‘uber-wealthy” benefits of lowering brackets? Interestingly, and contrarily, direct from the tax rolls of the IRS (drum roll, please!) we find the following:
- The last year in which the highest marginal tax bracket for individual taxpayers was as high as 50% was 1986. The top 1% of taxpayers paid 26% of all federal income tax in 1986. The highest marginal tax bracket for individual taxpayers was 35% in 2006 (note that the top bracket is still 35% today). The top 1% of taxpayers paid 40% of all federal income tax in 2006 (source: Internal Revenue Service).
Well, it seems as if the billions spent by billionaires to protect their billions leave some kinks to work through.
As we consider the issues as presented, it should come as no surprise that this information is delivered to us by a psychoanalyst turned radio personality whose only specific individual reference is a novelist!
Just out of curiosity, what do the top economists, one from the left (Paul Krugman) and one from the center/right (Ben Bernanke), have to say on the topic? From Krugman (1998 – a bit more recent, and perhaps reflective of modern economics, then, say, 1817!?!): "The way to make monetary policy effective is for the central bank to credibly promise to be irresponsible (italics Krugman’s) – to make a persuasive case that it will permit inflation to occur, thereby producing the negative real interest rates the economy needs." And from Bernanke (2003): “…a tax cut for households and businesses that is explicitly coupled with incremental BOJ purchases of government debt – so that the tax cut is in effect financed by money creation….ultimately creating a reflation to price levels previously targeted.”
Finally, when pondering why that $75,000 per year wage earner chooses (I prefer to think we ALL are capable of making informed choices, as opposed to being willing dupes) it comes down to an American value of fairness. Most of us, I believe, understand that nothing comes for free, and that ALL of us need to pay our way.
First of all, I'd like to see a link which substantiates your claim.
Secondly, the following argument can be interpreted much differently than you have done.
"The last year in which the highest marginal tax bracket for individual taxpayers was as high as 50% was 1986. The top 1% of taxpayers paid 26% of all federal income tax in 1986. The highest marginal tax bracket for individual taxpayers was 35% in 2006 (note that the top bracket is still 35% today). The top 1% of taxpayers paid 40% of all federal income tax in 2006 (source: Internal Revenue Service)."
Gee, isn't just possible that the 1% of taxpayers in 1986 and the 1% in 2006 are NOT the same group of people? Your passage doesn't say "the top 1% in terms of income or personal wealth."
With the Bush/Cheney tax-cutting madness removing much of the taxation on the forms of income enjoyed by the wealthy, isn't it possible that many of those with incomes in the top 1% are NOT in the top 1% of taxpayers?
Perhaps the bottom 99% of taxpayers paid more in 1986 because they had a bigger share of the economic pie. After twenty years of reaganomics and the accompanying decline of working-class incomes, that same group of folks was not able to pay so much.
Let's see the link to your figures.
q
First of all, do your homework, like, say, google search "Who pays taxes?"
Gee, its possible the moon is made of cheese, but thanks for reinforcing one of my points, that the billionaires are not doing a very good job of avoiding distribution of wealth, thus the new generation of "uber-wealthy", through the various taxes in place to do just that (Income, Estate, etc.).
As for the top income earners vs the most wealthy, I was responding to Mr. Hartmann's definition (not some whimsical notion conjured reactionally) of the five million dollar earner who only needs one million for lifestyle. That example clearly falls into the top 1% of earners and taxpayers.
I could, like you, respond with a bunch of perhapses, but I prefer to operate in the actual world. You would do well to reflect on the following:
"The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest, but the myth, persistent, persuasive, and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought." - John F. Kennedy
Sounds like a Rush fan.
http://www.moderateindependent.com/v1i15taxnumbers.htm
dpjr, besides her bi-polar disorder, she has multiple personality disorder: a form of schizophrenia. Now she is quickstepper, but she/he/it is also Anna and Hamster and who knows how many other alter egos she uses. Her/him/it, makes a career of sitting in front of her computer screen defending her guru Hartmann.
Okay, let's talk about reality, shall we? The reason why the ultra rich paid 40% of the taxes is because they had pay increase that allowed them to own over 60% of all the wealth in the country. Sure, they paid more in taxes than the rest of us, but that is only because they got FAR more than we have.
Look at the stats for answers, not just the numbers. The average person's wages haven't gone up in real terms since since 1973. Most of us, in fact, have been losing ground for over 3 decades, while the rich and ultra rich have gained disproportionally to their contribution to society. They DON'T pay their fair share, and have been paying less and less as time goes on. Don't even get me started on big business, a full 54% of which pays NOTHING in taxes. And who SHOULD pay taxes, if not big business? They benefit dramatically from our system, but now they pay NOTHING. They profit wildly while they screw us for our jobs and our wages, as well as our benefits.
Quit standing up for those who are profiting off of YOUR work and screwing you every minute of the day. They aren't doing ANYTHING for YOUR benefit, they aren't even paying their fair share to be a part of this society. You really need to learn who your REAL enemy is, because it's not the "liberals" that you are so afraid of. It's those who are telling you that YOUR taxes will go up when in fact it's THEIR taxes that will. They are getting YOU to do their dirty work, and you are falling for it.
Thanks, WJM. You're starting to heal my head-ache.
You have brought up what seems to me an obviously fallacious argument. In my mind, there is no such thing as a tax on "Big Business" (or small business for that matter). Whenever a tax is levied against a business, that business, if it is fiscally sound, will pass the cost of that tax along to their customers and/or squeeze their suppliers (thus limiting their profits, viability, and workforce) to make up the difference. Sure they may eat some of the cost, but they can't eat it all. And in most cases, the businesses pass it along to those who can least afford to pay the higher prices. You even said yourself that businesses don't even pay what they are already supposed to do. Why not replace those corporate taxes with the fair tax (see above) and ensure that everyone pays "their fair share"?
Only monopolies can pass all taxes through to consumers; for all others, it is just another form of competitive pressure to be addressed through innovation and better practices.
You'll have to explain that to me. Why can't non-monopolized industries pass tax costs along to the consumer like they pass along all other expenses? If all companies in an industry receive the same tax, it would be the same as a company that holds a monopoly receiving the tax across their product line.
dpjr,
"The top 1% of taxpayers paid 40% of all federal income tax in 2006 (source: Internal Revenue Service)."
Good one! Now let's define what the top one percent DID NOT INCLUDE. It did not include more than half the corporations in the S&P 500. Yeah, I forgot, corporations aren't people unless we are talking about "free speech" (bribing money).
It DID NOT include most billionaires and millionaires because they DO NOT pay ANY taxes because of a gamed tax code that puts them in the 15% bracket from capital gains and then lets them strip off "expenses" from trading, business, etc. so they have NO PROFIT. That mansion and yacht are business expenses, don't cha know?
That top 1% includes salaried professionals like doctors who can't hide their wages. The REAL RICH are invisible to the tax code and YOU KNOW IT. That top 1% is only a small part of the "target". The MAIN part (several times larger than that top 1% in "compensation") includes the lying, crooked bastards that created and benefit from trusts, tax free income for "certified investors" (Having $100,000 plus as investment capital) and the twisting of the definition of income in the tax code to saddle the main tax burden on the poor and middle class.
Give us a fucking break, mr. PR bullshit artist! We've been there already. Sell your penile prattle to someone else.
Duplicitous, INDEED you are!
Here's the never discussed sick and twisted part:
The 'rich' hate the rest of 'us' so much that no matter how much suffering and pain their pathological, insatiable greed causes, they could care less.
There is only one answer: a couple of rogue scientists need to invent a pill that cures - or at least curbs - uber-greed. Better yet, a water-soluble solution that can then be slipped into the water supply...
Maybe the reason that it's never discussed is because it's a product of your "sick and twisted" imagination.
Most answers that are suggested here involve educating the public to vote in their interests for once. Maybe there is no degree of wage disparity that you would consider unjust.
It's so true. The rich want everyone else to live at subsistence level. You might have heard the story about English capitalists meeting to discuss workers' "burial funds." Workers would contribute a penny a week or something to finance people's burials. When the rich found out about it, they were appalled that their employees had this money to give. They used the funds as evidence that workers were overpaid, and therfore and excuse to lower wages.
They do hate us.
You know, I'm so glad you established this incontrovertible fact: "[The rich] do hate us."
I was, of course, taught that all gross generalizations were false. Thanks for reinforcing my education. That single anecdote obviously proves your point. I'll know to run for my life the next time I encounter someone who makes more than $250,000 a year. ;-)
BTW, would you agree, then, that George Soros hates most Americans?
"I'll know to run for my life the next time I encounter someone who makes more than $250,000 a year."
No, no, no. The rich see you as a cash cow. Now why would they want to kill you? Only useless cows get butchered, you know. And don't run too fast. They'll want to harness you that much quicker because you look so productive. Yeah, I know, you poor rich folks, after all that philanthropy, get such a bum rap. It's getting so you can't wear your mink stole to the theater on Broadway any more. What's this world coming too, anyway?
Oh, and remember that famous and true so true, true statement, only rich people provide gainful employment to us lesser mortals. After all, what would the fine arts and musical composers do without their generous, rich patrons, HUH?
Funny you should mention that, but I really would be out of a job. As a music teacher in a private school, my salary is paid by a lot of "evil rich people" who are actually very nice. They give tons of money to charities, support the school (sometimes even paying for those who otherwise can't afford to go there), and work in the community. Somehow I have to wonder how our community would change if they didn't have the same disposable income to pass along to others.
My point was just to say that not all rich people are evil. Neither are they all good. And for that matter, there are some pretty despicable poor people out there, too. Money doesn't change the way you were made or the way you were raised. It just magnifies your character, whether good or bad.
let me show you something worse..
this might make you a tad...upset..
remember bush's bailout, on 9/20/08?
this one came out..
"Some Companies getting bailed out, have offshore tax shelters"
here is the article:
http://crooksandliars.com/susie-madrak/some-companies-getting-bailed-out-hav
I don't think they hate us. That would mean noticing us. I think they are what I call "social narcissists". They generally take no notice of us or find some super intellectualized way to characterize our lives and problems. Read any management text about how to manipulate and fire people to get a taste of what I am saying.
Joe
Thank you for the talking points Mr. Hartmann.
Thom didn't even get to the flat taxes that hit the poor hardest like sales tax. Or tax avoidance practices of the rich like trust funds to own family wealth and off-shoring. Or punitive taxes that hit mostly the poor such as parking fines, infringement notices, emmissions fines, etc. This rabbit hole goes very deep.
It's interesting that you bring this up. I do agree that flat taxes in general are quite regressive (especially considering the point that Mr. Hartmann raised about ratios of disposable income).
However, I think the so-called fair tax is a reasonable alternative. If you're not familiar with it, here is the basic idea:
All federal taxes (including corporate, payroll, income, capital gains, etc.) are consolidated into a consumption tax. Secondly, every taxpayer (meaning every individual in America) receives a pre-bate equal to the amount of tax spent on the necessities of life. Obviously that involves a lot of details, but I believe that the CBO and/or the DHHS could create a system that fairly distributes the pre-bate according to costs of living across our nation.
In the process, we could shrink the size of the IRS (I'm not sure it would completely go away as some have suggested--someone will need to oversee the collection of sales tax and distribution of pre-bates). Also, the "filthy rich" would probably end up paying more taxes, as they would be taxed on what they spend, not what they earn (and we all know about offshore accounts, tax shelters, and other "creative" means of evading taxation). Similarly, tourists, illegal aliens, black market participants, drug dealers, and other "under the radar" income sources would also be taxed.
Most importantly (at least to me), this would help to bring transparency to our government. While it is currently easy to give a tax break to one industry, people group, or activity at the expense of another, this would make the tax system very obvious. And whenever politicians wanted to change the rate (whether up or down), it would be clear and everyone would know.
This would require a Constitutional amendment, but I think it would be well worth the challenge.
Exactly. Very deep. This is the real third rail for politicians fronting for the rich. That includes most of our corrupt congressional crooks. They won't touch the tax code with anything but kid gloves. It DOES provide lots of employment for tax accountants and lawyers, though.