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Ender
Citizen
Username: Enderw
Post Number: 95
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 4:48 pm: | 
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Definition of a modern day liberal - wrong in the present, revisionist in the future. Modern day liberals loved socialism and the Soviet Union during its hey-day of the 50s, 60's and 70's - "we should be more like them". They also hated Reagan during his tenure. Now that socialism is mocked and Reagan adored - they grudgingly dislike socialism and respect Reagan...
Reaganomics at 25
August 12, 2006; Page A8
Twenty-five years ago this weekend, Ronald Reagan signed the Economic Recovery Tax Act. The bill cut personal income tax rates by 25% across the board, indexed tax brackets for inflation and reduced the corporate income tax rate. The anniversary is worth commemorating as a seminal moment that continues to influence policy for the better in the U.S., and around the globe.
The achievement of Reaganomics can only be fully understood by recalling the miserable state of affairs a quarter-century ago. Newsweek summarized the national mood when it wrote in 1981 that Reagan "inherits the most dangerous economic crisis since Franklin Roosevelt took office 48 years ago."
That was no exaggeration. The economy was enduring a cycle of rising inflation with growing levels of unemployment. Remember 20% mortgage interest rates? Terms like "stagflation" and "misery index" entered the popular vocabulary, and declinists of various kinds were in the saddle. The perception of American economic weakness encouraged the Soviet empire to ever bolder adventures, as reflected by Soviet tanks in Kabul and Communists on the march in Nicaragua and Africa.
The reigning Keynesian policy consensus had no answer for this predicament, and so a new group of economic ideas came to the fore. Actually, they were old, classical economic ideas that were rediscovered via the likes of Milton Friedman and the Chicago School, Arthur Laffer, Robert Mundell, and such policy activists in Washington as Norman Ture and Jack Kemp, among others. These humble columns under our late editor, Robert Bartley, led the parade.
For every policy goal, you need a policy lever, Mr. Mundell likes to say. Monetary restraint was needed to break inflation, while cuts in marginal tax rates would restore the incentives to save and invest. With Paul Volcker at the Federal Reserve and Reagan at the White House, those two levers became the essence of the "supply-side" policy mix.
The results have been better than even some of its supporters hoped. The Dow Jones Industrial Average first broke 1,000 in 1972, but a decade later it was barely above 800 -- one of the worst and most enduring bear markets in history. In the 25 years since Reaganomics, however, the Dow has climbed to about 11,000, accounting for an increase in national wealth on the order of $25 trillion. To match that increase in percentage terms, the Dow would have to rise to some 150,000 in the next quarter century. American living standards have risen steadily, and U.S. businesses have created entire industries that didn't exist a generation ago.
Obviously, the economic policy path from 1981 to the present day has not been a straight line. The biggest detour occurred from 1990 through 1994, when George H. W. Bush and Bill Clinton forgot the Gipper's lesson and raised marginal income-tax rates; they suffered for it in the elections of 1992 and 1994. The arrival of the Gingrich Republicans in Congress stopped this slow-motion repeal of Reaganomics, however, and even helped to extend it at the margin with a cut in the capital-gains tax rate to 20% in 1997.
Adherents of Rubinomics -- after Clinton Treasury Secretary Robert Rubin -- are still not converts, arguing that tax increases are virtuous if they reduce the deficit. We've addressed that argument many times and will again. But even the Rubinites haven't dared to repeal indexing for inflation (which pushed taxpayers via "bracket creep" into ever-higher tax rates), and even the most ardent liberals don't propose to return to the top pre-Reagan income tax rate of 70%. They also now understand that, at some point along the Laffer Curve, high rates begin to yield less tax revenue. The bipartisan consensus in favor of sound money has also held.
Thus today, the top marginal personal and corporate tax rates are 35%, compared with 70% and 48% in 1981. In the late 1970s the tax on dividends was 70% and the capital gains rate was 50%; now they're both 15%. These reductions have increased the rate of return on capital, and hence some $3 trillion more was invested by foreigners in the U.S. between 1981 and 2005 than was invested by Americans abroad. One result: 40 million new jobs, more than the rest of the industrialized world combined.
The rest of the world, meanwhile, has followed the Gipper down the tax-cut curve. Daniel Mitchell of the Heritage Foundation finds that the average personal income tax rate in the industrialized world is now 43%, versus 67% in 1980. The average top corporate tax rate has fallen to 29% from 48%. This decline in global tax rates has been the economic counterpart to the fall of the Berlin Wall. Most of Eastern Europe has adopted flat tax rates of 25% or lower, and the Russians now have a flat income tax of 13%. In Old Europe, Ireland's corporate and personal income tax rate cuts have helped generate the swiftest economic growth in the EU.
Not bad for a President dismissed as a dreamy former actor. In his 1989 farewell address, Reagan said that "People say that I was a great communicator. It would be more accurate to say that I communicated great ideas." He was right, and a remarkable global prosperity has followed in his wake. The challenge for current and future political leaders is not to forget it.
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Strawberry
Supporter
Username: Strawberry
Post Number: 7692
Registered: 10-2001
| | Posted on Saturday, August 12, 2006 - 5:01 pm: |
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Yes, libs were and still are morons.
Anyone notice Lieberman is now up 5 points on his libby opponent?
libs. |
Factvsfiction
Citizen
Username: Factvsfiction
Post Number: 1403
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 5:09 pm: |
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Ender & Strawberry-
You guys are just not touchy-feely enough. If you drove late model Volvos, ate brie, and wore icelandic sweaters (in season) you would understand the common people, so much better.
You really should be reading Barbara Streisand's web site for tips. |
tom
Citizen
Username: Tom
Post Number: 5470
Registered: 5-2001
| | Posted on Saturday, August 12, 2006 - 5:38 pm: |
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I don't know why you're laughing; you're that one that believes this nonsense, not us.
Ender of course gives not one example to back up his opening claim about how we feel about Reagan, or about socialism, for that matter. And just who are the "modern-day liberals" who loved the Soviet Union in the '60s and '70s?
As for the main part of the story, well it's the usual half-truths.
Quote:The bill cut personal income tax rates by 25% across the board
The top rate went from 70% to 50%; the bottom rate from 14% to 11%. So while technically you could say that 50 is 25% less than 70, the vast majority of Americans saw their rates go down only a few pennies on the dollar. But of course, that's not who the Republicans are interested in helping. Indexing for inflation, which helps people on the lower tiers of the spectrum but doesn't much matter if you're in the top tier, didn't begin for four years after.
Paul Volker: Appointed as Fed Chairman by Jimmy Carter. Pathetic that the cons can't even bring themselves to give Carter credit for this.
Quote:U.S. businesses have created entire industries that didn't exist a generation ago.
You could have said this just as truthfully in 1830; or 1870; or 1900; or 1920; or 1950; or 1981 (IBM announced the "personal computer" the day before the Reagan tax cuts were signed into law). Believe it or not, technology has been on a steady upward path since before the pyramids were built. Hundreds of human generations have passed and each contributed its own new technologies, even generations not blessed by the presence of Ronald Reagan.
Quote:The biggest detour occurred from 1990 through 1994, when George H. W. Bush and Bill Clinton forgot the Gipper's lesson and raised marginal income-tax rates
Revealing of course the real interest of the author, marginal tax rates. Not "tax rates," of course, because that might carry some benefit for the "lucky duckies" at the bottom or in the middle. No, only marginal rates will do. The big money for the big dogs.
Quote:The arrival of the Gingrich Republicans in Congress stopped this slow-motion repeal
Though I notice they didn't reduce the rates, and the deficit disappeared. And the economy boomed anyway.
Quote:But even the Rubinites haven't dared to repeal indexing for inflation
So when will the conservatives index the AMT -- which every year hits the middle class harder -- for inflation? Don't make me laugh.
Quote:Thus today, the top marginal personal and corporate tax rates are 35%, compared with 70% and 48% in 1981.
And the low rate is now 15% instead of 14%. What happened to that 25% cut? It looks more like a 50% cut for the Chairman of Tyco, but an increase for the guy who sweeps the floors there at night.
Quote:and even helped to extend it at the margin with a cut in the capital-gains tax rate to 20% in 1997.
A cut helping which end of the economic spectrum?
it's greed, but a greed that dare not say its name. Instead, it pretends it's helping everyone while funneling a bigger and bigger share of the pie to the top. The tragedy is, a lot of people think that these cuts are done for them. Trust me, if you're sitting at your own computer reading this article, they're not for you. If your secretary printed it out so you could read it in the limo on the way home, maybe.
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Innisowen
Citizen
Username: Innisowen
Post Number: 2252
Registered: 3-2004
| | Posted on Saturday, August 12, 2006 - 10:15 pm: |
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All this is just more feces tossed at America by the Republican monkeys who are "running" Washington.
Real wages for the middle class are down a minimum of 11% since 2000.
Jobs are not being created in this economy in a number that keeps pace with the population's growth.
The jobs available are in the low-pay service economy: home health aides, retail employees, cleaning companies, and the wages in those jobs are being pressed down by illegal immigrant workers.
Unemployment is higher than the government would have you believe, as significant numbers of job-seekers have given up looking for work and thus are not counted.
For those of us who are independent entrepreneurs or highly skilled/paid professionals, the world is, frankly, great. But that is more because of our own initiative, contacts, specialties, than the economy. So it would be great for us anywhere.
The deficit would be higher if part of it were not camouflaged by the social security fund. Our trade deficit is so out of whack it should be on another planet.
You'd better duck when those Republican monkeys start to put their hands behind their backs. |
anon
Supporter
Username: Anon
Post Number: 2965
Registered: 6-2002
| | Posted on Saturday, August 12, 2006 - 11:11 pm: |
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I don't know what a "modern day" liberal is, but if it's someone under the age of 40 he or she wasn't old enough to have an opinion about the Soviet Union in the 50s, 60s or 70s. Liberals at that time hated the Soviet Union. (JFK, LBJ, Hubert Humphrey, Jimmie Carter) |
Dave
Supporter
Username: Dave
Post Number: 10473
Registered: 4-1997
| | Posted on Saturday, August 12, 2006 - 11:16 pm: |
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It's not nice to point out the obvious to the ignorant. Or is it? |
anon
Supporter
Username: Anon
Post Number: 2966
Registered: 6-2002
| | Posted on Saturday, August 12, 2006 - 11:16 pm: |
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Trust me, if you're sitting at your own computer reading this article, they're not for you. If your secretary printed it out so you could read it in the limo on the way home, maybe.
What if I have my secretary sit on my lap and read it to me? |
tom
Citizen
Username: Tom
Post Number: 5480
Registered: 5-2001
| | Posted on Saturday, August 12, 2006 - 11:26 pm: |
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Then its definitely for you. And so is weaker enforcement of laws about sexual harassment in the workplace! |
anon
Supporter
Username: Anon
Post Number: 2967
Registered: 6-2002
| | Posted on Saturday, August 12, 2006 - 11:31 pm: |
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Strawberry
Supporter
Username: Strawberry
Post Number: 7693
Registered: 10-2001
| | Posted on Saturday, August 12, 2006 - 11:32 pm: |
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Defending liberal politics over the last 25 years isn't easy. No record of accomplishment to speak of. |
anon
Supporter
Username: Anon
Post Number: 2968
Registered: 6-2002
| | Posted on Saturday, August 12, 2006 - 11:34 pm: |
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I'll say it again:
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Ender
Citizen
Username: Enderw
Post Number: 96
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 11:35 pm: |
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JFK was a tax-cutter, not a liberal - and yes, not a communist lover. LBJ - Great Society was right out of the socialism playbook. Hubert Humphrey - founder of the Democratic-Farmer-Labor Party - America's Socialist Party. Jimmie (sic) Carter - don't really think of him as a liberal. More of a hapless do-gooder who reveres corrupt 'elections' and questions America.
Regarding LBJ, I guess you could say his continuation of the losing battle (Vietnam War) in the ultimate Cold War victory could present him as hostile to socialism - but I was referring to socialism the economic ideology rather than socialism - the murderous political one. |
Dave
Supporter
Username: Dave
Post Number: 10474
Registered: 4-1997
| | Posted on Saturday, August 12, 2006 - 11:39 pm: |
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If you're referring to economic ideologies, then you are likely a liberal.
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Ender
Citizen
Username: Enderw
Post Number: 97
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 11:43 pm: |
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Quote:
The bill cut personal income tax rates by 25% across the board
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The top rate went from 70% to 50%; the bottom rate from 14% to 11%. So while technically you could say that 50 is 25% less than 70, the vast majority of Americans saw their rates go down only a few pennies on the dollar. But of course, that's not who the Republicans are interested in helping. Indexing for inflation, which helps people on the lower tiers of the spectrum but doesn't much matter if you're in the top tier, didn't begin for four years after. " (end)
Not sure what your critique here is? The math works - unless you are quibbling with 70 to 50 not being exactly 25%? Also, if you are pointing out that all people do not have the same amount of $$ and that lower tax rates on those with lower income is a bad thing? Then, are you in favor of a flat tax - maybe we can agree on something?
Also, are you suggesting that all people are equal at creating jobs? The whole idea of lowering taxes is to let the most dynamic job creators in society keep more $$ and put less into the hands of the Ted Kennedy's of the world. Who creates more jobs - Bill Gates or Ted Kennedy? Are you in favor of taxing the most successful people even higher amounts and equalizing all incomes? If yes, which it sounds like, then you are agreeing with my first statement which I thought you disagreed with?
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Ender
Citizen
Username: Enderw
Post Number: 98
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 11:49 pm: |
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Paul Volker: Appointed as Fed Chairman by Jimmy Carter. Pathetic that the cons can't even bring themselves to give Carter credit for this.
If you were around then, if you remember the economic environment, the run on the dollar, the 15% Treasury bond rates, the languishing stock market - then I think you would have known that Carter nominated Volcker not out of a position of strength, but one of abject weakness. Him taking credit for the nomincation of Volcker would have been quite bold. But then again - my point - liberals like to re-interpret history to suit their beliefs.
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Dave
Supporter
Username: Dave
Post Number: 10475
Registered: 4-1997
| | Posted on Saturday, August 12, 2006 - 11:52 pm: |
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A NJ Dem (Bill Bradley) was critical to Reagan's tax reform.
In the Senate, Bradley acquired a reputation for being somewhat aloof and was thought of as a "policy wonk," specializing in complex reform initiatives. The best known of these was the 1986 overhaul of the federal tax code, which reduced the tax rate schedule to just two brackets, 15% and 28%, and eliminated many kinds of deductions. (from BB's wikipedia entry)
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Ender
Citizen
Username: Enderw
Post Number: 99
Registered: 4-2006
| | Posted on Saturday, August 12, 2006 - 11:58 pm: |
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Quote:
The biggest detour occurred from 1990 through 1994, when George H. W. Bush and Bill Clinton forgot the Gipper's lesson and raised marginal income-tax rates
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Revealing of course the real interest of the author, marginal tax rates. Not "tax rates," of course, because that might carry some benefit for the "lucky duckies" at the bottom or in the middle. No, only marginal rates will do. The big money for the big dogs.
Yes - marginal taxes are the only thing that matters. I'm not sure why you snicker at that observation? See above - giving the entrepreneurial and more dynamic people in our society more incentive to create jobs is a good thing, not a bad thing. The whole world is realizing that - see the table in the article on the website (it didn't copy well). Tax competition between countries competing for capital is a good thing, not a bad thing. Lower taxes are good for us all. It sounds like you are a 're-distributionist' of the Soviet Union ilk if you are unhappy with lower marginal tax rates - once again - proving my point.
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Quote:
The arrival of the Gingrich Republicans in Congress stopped this slow-motion repeal
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Though I notice they didn't reduce the rates, and the deficit disappeared. And the economy boomed anyway.
Wrong - by 1997, Clinton was pushed (by the Republican Congress) into reducing the long term cap gains rate dramatically which tremendously helped the market and economy (some would say too much - leading to the market bubble) - and also passing the housing tax exemption (increasing it to $500k per couple) which caused the past many year housing boom nationwide. The deficit disappeared because of tax cuts post 1994 Republican takeover of Congress and the Cold War peace dividend, which in hindsight weakened our military deterrence globally. |
Ender
Citizen
Username: Enderw
Post Number: 100
Registered: 4-2006
| | Posted on Sunday, August 13, 2006 - 12:03 am: |
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Quote:
But even the Rubinites haven't dared to repeal indexing for inflation
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So when will the conservatives index the AMT -- which every year hits the middle class harder -- for inflation? Don't make me laugh.
The AMT exemption has been increasing over time - just not as fast as inflation. However, I agree - the AMT amounts should obviously be indexed for inflation. Alternatively (no pun intended), a better approach would be to lower the AMT tax amount from 26 or 28%, whichever it is (haven't been affected by it yet) to something like 15-18% and and we would have something approaching the highly desirable flat tax. However, it would be a flat percentage tax, not a flat $$ amt, which would be even more fair. |
Ender
Citizen
Username: Enderw
Post Number: 101
Registered: 4-2006
| | Posted on Sunday, August 13, 2006 - 12:05 am: |
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Quote:
Thus today, the top marginal personal and corporate tax rates are 35%, compared with 70% and 48% in 1981.
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And the low rate is now 15% instead of 14%. What happened to that 25% cut? It looks more like a 50% cut for the Chairman of Tyco, but an increase for the guy who sweeps the floors there at night.
I think you are mixing up your income taxes and your capital gains and dividend tax rates. One of the things that should drive people across all ends of the spectrum crazy is the complexity of the tax code. It has bamboozled somebody even as wise as you Tom.
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Ender
Citizen
Username: Enderw
Post Number: 102
Registered: 4-2006
| | Posted on Sunday, August 13, 2006 - 12:17 am: |
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Here's some evidence that the low tax, dynamic US economy is kicking tail, something you most definitely read much about if you rely on the Gray Lady for your economic updates. Every day, we should thank God we don't have to be stifled under the socialist French (or German or Italian) economic model.
Alive and Kicking
By Lawrence Kudlow
The great American consumer has been written off so many times in the last couple of years, just like the rest of the economy. But he/she is alive and kicking. Another great story never told.
Retail sales came in at 1.4 percent for July, way above Wall Street expectations, while core sales excluding autos, gas and building materials -- a number that feeds directly into GDP -- increased 0.6 percent. Over the past three months, core sales rose 6.7 percent at annual rate, and in the past year they're up 7.4 percent. Excluding autos alone, sales have gained 9.2 percent in the last 12 months. That's big-time.
Sales of consumer durables also were strong. Some economists sounded the death knell for consumers when durable sales dropped in the second quarter. But in the newly released July report, durable-goods sales rose across the board: 3.1 percent for cars, 1.9 percent for electronics and appliances, 1.8 percent for building materials, and 0.5 percent for furniture. These are fat monthly gains.
Far too many investors, hedge fund managers and economists link the housing slowdown to an imminent consumer collapse. These bears are also quick to add rising gas prices and higher interest rates into their pessimistic outlooks. But they skip two very significant data points: Jobs and incomes are still climbing.
It may well be that Wall Street keeps overestimating the monthly job gains, but the fact remains that jobs are being added at a noteworthy clip of about 125,000 per month and the unemployment rate remains low. Because hours worked and wages continue to rise, incomes are still increasing at a comfortable 6 percent to 6.5 percent yearly pace. If jobs and wages were falling each month, you could write off consumer spending. But that's simply not happening.
Charles Biderman, of Trim Tabs Investment Research in Santa Rosa, Calif., adds an additional bullish factoid: Individuals now hold $6.3 trillion in savings accounts, money market funds and CDs. In contrast, short-term debt -- notably credit card and installment debt -- stands at only $2.2 trillion, and is growing slowly. So, despite the housing slump, consumers have an excellent cash position. That is why Biderman is very bullish on the stock market, which he thinks will rise by 15 percent to 20 percent by year-end.
The cult of the bear will also be wrong on business cap-ex spending. American businesses have even more cash on hand than consumers, bolstered by second-quarter profits that came in 4 or 5 percentage points above estimates. Even though business equipment and software investment declined 1 percent at an annual rate in the second quarter, it rose 15.6 percent in the first quarter. Averaging the two gets you 7.3 percent business cap-ex for the first half of the year, and 6.9 percent for the last four quarters. Pretty hefty.
Since low tax rates on capital have rejuvenated investment returns and the overall economy's animal spirits, this trend will only continue. Today's low-tax environment is also a job creator, as is the red-hot corporate and commercial real-estate market.
Exactly 25 years ago, Ronald Reagan signed into law the first supply-side tax cuts since the JFK plan of the early 1960s. By reducing high marginal tax rates, Reagan transformed the American economy and opened the door to two-and-half decades of prosperity. Economic behavior responds significantly to the incentive power of low tax rates that raise the after-tax return on work, investment and risk-taking.
Over this time span, the United States has experienced only six quarters of negative GDP -- a remarkable performance. Roughly 45 million new jobs have been created, with the economy averaging about 3.5 percent real growth each year. In the 1980s, as the economy supplied more goods to absorb the Fed's money supply, inflation plunged from the stagflationary 1970s. Meanwhile, entire new technology industries sprung up, forming an information economy that has transformed business and productivity.
Stock markets exploded in the Schumpeterian environment of entrepreneurship that Reagan helped launch. Wealth creation reached unheard of levels among the 100 million investors who were spurred by new incentives to keep more of what they earned, saved and invested. Capitalism was rejuvenated in the United States, and then it spread around the world.
Ankle-biting, demand-side Keynesians (most of whom reside in the Democratic Party) are always looking for blotches, hanging toenails and the occasional scrape on what is today's muscular and statuesque American economic body. But the genial and optimistic Reagan undoubtedly chuckles from his perch on high, as he watches his critics scramble to come up with a coherent opposing idea. They can't, and they won't.
One of Reagan's big ideas was that tax incentives matter. It has been a blockbuster, runaway success. But even today, 25 years later, it remains the greatest economic story never told.
Lawrence Kudlow is a former Reagan economic advisor, a syndicated columnist, and the co-host of CNBC's Kudlow & Company. Visit his blog, Kudlow's Money Politics.
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cjc
Citizen
Username: Cjc
Post Number: 5799
Registered: 8-2003
| | Posted on Sunday, August 13, 2006 - 11:42 am: |
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The market and resultant revenues increased after 1994 in some part due to the failure of Hillarycare and the Republican majorities in the House and Senate. Because of that you received the cap gains reduction and you had a restraint on Clinton Administration spending. The sad part is that spending restraint was tossed aside with Bush (and Dems were stereotypically no help either) even as revenues have increased by 10-15% or so for the past 3 years. |
tom
Citizen
Username: Tom
Post Number: 5484
Registered: 5-2001
| | Posted on Sunday, August 13, 2006 - 12:00 pm: |
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My beef is with the totally out of whack income distribution. Aggregate numbers on savings and consumer debt are meaningless to this argument. The problem is, the wealthy are getting far too wealthy far too fast, and the bottom and middle are going nowhere. Whether the top 0.5% are holding 75% of the $6.3 trillion in savings, or 99% of it, there is still $6.3 trillion in savings -- a meaningless statistic.
Severe income disparity between the top and bottom is bad for democracy. You can not show me an example of a free, democratic nation in history that has sustained our present ratio between top and bottom earners.
Quote:Thus today, the top marginal personal and corporate tax rates are 35%, compared with 70% and 48% in 1981.
To which you respond, "I think you are mixing up your income taxes and your capital gains and dividend tax rates." I think it's reasonable to assume, based on the quote, that the top personal tax rate was once 70% and is now 35%, without qualifying it with reference to capital gains or dividends. It's also reasonable to calculate that 35/70 = .5 = 50%.
But primarily, I reject the entire notion that there is something wrong and unnatural about what you call "income distribution." I also reject the idea that a progressive tax system is income redistribution.
Going after income disparity is not some freakish thing like human cloning or mixing ant and chimpanzee DNA. Income is not a natural process. It's decided by ordinary people, making human decisions, subject to all the same good and bad influences that affect all our decisions.
Income from stock options, dividends, bonuses and the like for top executives has nothing to do with incentive or performance. It is money handed out by compliant boards and compensation committees with conflicts of interests and political positions to play out. It's money that could be going to employees, or investors, but isn't, and instead is being handed out like candy to those connected ones who are already ultra-wealthy. You need only look at the obscene "severance" bonuses granted to CEOs who presided over losing years; or the latest, post-dated option packages.
The only incentive granted these people is the incentive to grab more money as it passes through the corporate treasury. If the top marginal rate were 70%, there's be a heck of a lot more incentive to spread the wealth around.
And this is important: this is personal income, not job-creating corporate income. That very same dollar paid out to Mr. Executive will be spent in the same economy as if it were paid out as a dividend to Mr. Stockholder or as salary to Mr. Lineworker or put into Mr. Researchanddevelopment's department.
That money doesn't disappear. It's just a question of whom it enriches along the way. But ultimately it wlll be spent and be part of the GNP and will create jobs no matter who spends it.
I also venture to guess that Mr. Lineworker is more likely to spend it on a Chevrolet or locally grown food than on a real estate broker in Tuscany.
You want a flat tax? Here's one: A single rate of 60%, and all income below $400,000 is exempt. Indexed for inflation.
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chroma
Citizen
Username: Chroma
Post Number: 53
Registered: 3-2005
| | Posted on Sunday, August 13, 2006 - 6:38 pm: |
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Tom,
Bravo!
The wealthiest of this country have disproportionately benefitted from our great system, therefore they should pay taxes in proportion to the benefits received. Seems fair.
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anon
Supporter
Username: Anon
Post Number: 2983
Registered: 6-2002
| | Posted on Sunday, August 13, 2006 - 7:32 pm: |
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You want a flat tax? Here's one: A single rate of 60%, and all income below $400,000 is exempt. Indexed for inflation.
Sounds good to me, but how much money would it bring in?
JFK was a tax-cutter, not a liberal - and yes, not a communist lover. LBJ - Great Society was right out of the socialism playbook. Hubert Humphrey - founder of the Democratic-Farmer-Labor Party - America's Socialist Party.
The "Great Society" was just a continuation, or rather a realization, of JFK's "New Frontier". After the 1964 elections LBJ had enough votes in Congress to enact the programs that JFK could not. Republicans and Conservatives at the time certainly considered JFK to be a liberal.
HHH was a cold warrior. The Farmer-Labor Party was formed as an alternative to the pro-Soviet Left, like the American Labor Party and Henry Wallace's Progressive Party, which had been infiltrated by the Communist Party. |
anon
Supporter
Username: Anon
Post Number: 2984
Registered: 6-2002
| | Posted on Sunday, August 13, 2006 - 7:41 pm: |
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Every day, we should thank God we don't have to be stifled under the socialist French (or German or Italian) economic model
Don't France and Italy have "center-right" pro-capitalist governments. I'm not sure who won the last German elections. And by the way do the French still take the whole month of August as vacation unlike we who try to squeeze in one week, and worry about business the whole time we are away? And does anyone in France, Italy or Germany worry about how they will pay for medical care if they get sick?
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notehead
Supporter
Username: Notehead
Post Number: 3710
Registered: 5-2001
| | Posted on Monday, August 14, 2006 - 11:27 am: |
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I forget what film character said, "When I want your opinion, I'll give it to ya," but that completely sums up the right's approach to discussion. It's just incredible how habituated the right-wingers are to this tactic on MOL and just about everywhere else. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2541
Registered: 10-2001
| | Posted on Monday, August 14, 2006 - 12:00 pm: |
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While I will agree that income distributions in this country are unacceptable, I'm not sure that the tax code will fix the problem. Tom you are making the assumption that for every dollar that isn't paid to some executive some line worker somewhere will be a dollar richer. I don't believe that's true. Another thing your forgetting is that while tax rates haven't moved very much for those at the bottom the income base has. So much so that close to 91 million people in this country pay no federal income taxes. Who cares what the lowest rate is when your taxable income is zero? This from the Tax Foundation:
"During 2006, Tax Foundation economists estimate that roughly 43.4 million tax returns, representing 91 million individuals, will face a zero or negative tax liability. That's out of a total of 136 million federal tax returns that will be filed. Adding to this figure the 15 million households and individuals who file no tax return at all, roughly 121 million Americans—or 41 percent of the U.S. population—will be completely outside the federal income tax system in 2006.1 This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more."
Granted they still pay payroll taxes but the largest portion of their payroll taxes go into the social security fund.
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tom
Citizen
Username: Tom
Post Number: 5498
Registered: 5-2001
| | Posted on Monday, August 14, 2006 - 1:18 pm: |
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Yes, but to get to the point where they have no Federal income tax liability they have to be making a pathetically small amount of money. Which goes right back to the income inequality problem.
If a given dollar in corporate income isn't given to the CEO, but also isn't given to a line worker, or doesn't go into dividends or isn't re-invested in the company -- where does it go? |
Hoops
Citizen
Username: Hoops
Post Number: 1883
Registered: 10-2004
| | Posted on Monday, August 14, 2006 - 1:25 pm: |
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Management consulting... |
tom
Citizen
Username: Tom
Post Number: 5499
Registered: 5-2001
| | Posted on Monday, August 14, 2006 - 1:51 pm: |
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An ugly thought. But it's still not lost...the management consultant spends it, and -- presto -- jobs are created, just as if the CEO had spent it. |
Innisowen
Citizen
Username: Innisowen
Post Number: 2258
Registered: 3-2004
| | Posted on Monday, August 14, 2006 - 10:38 pm: |
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"If a given dollar in corporate income isn't given to the CEO, but also isn't given to a line worker, or doesn't go into dividends or isn't re-invested in the company -- where does it go?"
The corporate jet fleet, the corporate apartments in several cities for executive use, the executive perks that are in addition to financial compensation, the $2100 bottles of wine at dinner, the CEO's and COO's executive assistant with an executive assistant of their own, for example, |
tom
Citizen
Username: Tom
Post Number: 5508
Registered: 5-2001
| | Posted on Monday, August 14, 2006 - 10:51 pm: |
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Such is the sorry state of crony capitalism. Don't forget the $5000 shower curtains. Our friends on the right wing feel that's not enough, they need more. |
Innisowen
Citizen
Username: Innisowen
Post Number: 2264
Registered: 3-2004
| | Posted on Monday, August 14, 2006 - 11:50 pm: |
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Frankly, I'm not complaining about it. CEOs' business issues pay my bills. And for every wastrel CEO, there are two prudent CEOs.
And public scrutiny is doing a better job of eliminating the wastrels and egomaniacs. But it is taking a long time for that pendulum to swing back. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2542
Registered: 10-2001
| | Posted on Tuesday, August 15, 2006 - 11:03 am: |
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C'mon Innisowen don't you know that the prudent CEOs are the exception to the rule. Every CEO has $5,000 shower curtains in their Italian Villas.
I can point to just as many lay people who play the system and bilk their employers out of $$$ every year. A friend of mine just had to write up an employee after the employee was found riding a jet-ski while he was collecting disability. This same guy has had some kind of minor surgery in something like 7 of the past 10 years in order to spend the summer on disability. Finally the insurance company sent out an investigator to snap some photos of him at his shore house. But you won't hear about that because its not as glamorous as a report on $5,000 shower curtains.
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tom
Citizen
Username: Tom
Post Number: 5511
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 11:07 am: |
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Why would he have to use disability to take a vacation, after working at a company for 10 years? What kind of Wal-Mart operation is it, that they don't they give paid vacation?
Nevertheless, it's unremarkable that people at all ends of the economic spectrum steal. It doesn't change my primary point that the ratio between the top income and the bottom income dangerously out of balance. |
Hoops
Citizen
Username: Hoops
Post Number: 1905
Registered: 10-2004
| | Posted on Tuesday, August 15, 2006 - 11:10 am: |
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sportsnut, that would be insurance fraud and would belong in its own category or thread.
maybe
Bad News for Libs/Congress votes tougher penalties for Insurance scammers
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sportsnut
Citizen
Username: Sportsnut
Post Number: 2543
Registered: 10-2001
| | Posted on Tuesday, August 15, 2006 - 11:21 am: |
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tom the point is that he took the disability in addition to his normal four weeks vacation. And I agree with you that the income distribution is skewed, just pointing out that it isn't only the CEOs who steal. BTW, the company is a major telecom company (not the one I work for).
Hoops, regardless of what you want to call it, it is still stealing and it is done by people at all levels of employment. The only difference is that only the stories of $5,000 shower curtains get told, while the stories of people like this guy fly under the radar.
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Hoops
Citizen
Username: Hoops
Post Number: 1907
Registered: 10-2004
| | Posted on Tuesday, August 15, 2006 - 11:31 am: |
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"under the radar"
I really dont think so.
current stories in the ny times
Its all over the newspapers.
Google insurance fraud and there is plenty of reporting on the subject. Its a poor argument when discussing the problems with corporate greed to deflect the argument away from the subject by pointing at the people stealing from the corporation and say 'see they're doing it too.' |
Innisowen
Citizen
Username: Innisowen
Post Number: 2265
Registered: 3-2004
| | Posted on Tuesday, August 15, 2006 - 11:43 am: |
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Sportsnut:
As I said above, CEOs' business issues pay my bills.
For every Kozlowski, Rigas, Lay, or Skilling, with a nutball CFO by their sides, there's a Don Stewart, Dom D'Allesandro, Jeff Immelt, Hank Paulson, or other topflight CEO running a great company in an excellent manner.
As to writing up an employee who was found jet-skiing while on disability, I have to assume that the consequences for that employee are far more serious than a "write-up." If not, it's the manager who needs help, desperately. Unless the disability were of a nature that did not preclude "jet-skiing." |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2544
Registered: 10-2001
| | Posted on Tuesday, August 15, 2006 - 11:47 am: |
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Hoops, as usual your reading comprehension leaves a lot to be desired. Your rush to critique the "rich" must be blinding you because no where did I argue that corporate greed was acceptable.
Find me one case of insurance fraud that has rivaled the press coverage of the Tyco trial or Grasso's pay package. You won't be able to. The $5,000 shower curtain has become synonomous with corporate greed and corruption because of the press coverage it received.
While the link you provided was nice - its not exactly front page material, nor did any of those cases stay in the headlines or on the 6 o'clock news for very long (if at all). Which again was my point. |
Hoops
Citizen
Username: Hoops
Post Number: 1908
Registered: 10-2004
| | Posted on Tuesday, August 15, 2006 - 11:57 am: |
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the press coverage for the average joe who is stealing his salary in the form of disability is never going to equal the scandal of corporate theives who steal millions. It would take quite a large number of average joes to equal 1 Grasso.
The press coverage is appropriate for the interest level of the readership. It certainly does not forgive the crimes of the average joes. They should be caught and prosecuted but those crimes are petty compared the crimes of a Ken Lay.
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Innisowen
Citizen
Username: Innisowen
Post Number: 2268
Registered: 3-2004
| | Posted on Tuesday, August 15, 2006 - 12:00 pm: |
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Sportsnut:
You are too coy. The $6,000 shower curtain was a news blow-up example of the excesses that Dennis Kozlowski enjoyed doing and which, apparently, were charged back to Tyco. The $17,000 umbrella stand, the $2mm birthday party for his wife in, I believe, Sardinia or Corsica, are no problem if they're on Koslowski's nickel. The issue is that those expenses were charged back to Tyco.
As regards Grasso's pay package, there is nothing wrong with it except that it was not publicly available knowledge (it was kept under wraps by the Compensation Committee) until too late, and the PR around it was very poorly handled. It appeared that the Xchange and the Comp Committee wanted to hush the information about Grasso's comp. That's what caused the problem.
You need to see those episodes in their context. |
tom
Citizen
Username: Tom
Post Number: 5512
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 12:44 pm: |
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There's that compensation committee again. They, as well as the board that signed off on Koslowski's expenses and forgave his loans, are dependent on those top people who hired them. And so the log rolls. Who loses? Everybody else. |
themp
Supporter
Username: Themp
Post Number: 3187
Registered: 12-2001
| | Posted on Tuesday, August 15, 2006 - 12:48 pm: |
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Defending Reagan's economics sure beats trying to defend Bush's. |
Wendy
Supporter
Username: Wendy
Post Number: 2994
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 12:50 pm: |
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Quote:Defending Reagan's economics sure beats trying to defend Bush's.
Whasamatter? Scared of a challenge, themp?  |
Ender
Citizen
Username: Enderw
Post Number: 112
Registered: 4-2006
| | Posted on Tuesday, August 15, 2006 - 1:38 pm: |
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This is the good kind of income inequality, right?
Welcome to Club Fed
August 15, 2006; Page A12 (WSJ)
The closest thing to a lifetime sinecure in America is a federal government job, and now it turns out that it's also a very lucrative way to make a living.
New data from the U.S. Bureau of Economic Analysis confirm that the average federal civilian worker earns $106,579 a year in total compensation, or twice the $53,289 in wages and benefits for the typical private worker. This federal pay premium costs taxpayers big bucks because Uncle Sam's annual payroll is now $200 billion a year. No wonder that, with a per capita income of $46,782 a year, Washington, D.C. is the fourth richest among the nation's 360 metropolitan areas.
And this pay disparity keeps widening. The Cato Institute's Chris Edwards tracks government compensation, and he finds that in 1950 the average federal bureaucrat received $1.19 for every dollar that a private employee earned. By 1990 that ratio had risen to $1.51 and is now $2. In 2005 federal wages rose 5.8% compared to 3.3% in the private sector.
Since 2000 only one major industry, the booming oil and gas sector, has kept pace with the automatic pay increases for employees of "Club Fed." Federal pay has risen by 38%, double the 15% pay increase in private pay from 2000-2005. This is roughly double the rate for private workers in manufacturing, retail, finance, health care and construction. (See nearby chart.) not copied from website}}
It's true that many federal employees are in white collar occupations that often command high pay, but studies find that public sector workers enjoy a 20-30% pay bonus above comparably skilled private workers. And this differential does not account for one of the biggest benefits of a government job: civil service rules giving virtual lifetime job security. Airline mechanics, auto workers and software designers must all worry about business-cycle downturns or changes in technology or outsourcing, but Uncle Sam's 1.8 million civilian employees live in a recession-proof bubble.
As for performance, Mr. Edwards reports that only one in 5,000 federal non-defense employees is fired for cause each year. One federal manager recently told us of an administrative assistant who missed work "about half the time" thanks to an assortment of ailments, sick children and funerals for a mother who died on three separate occasions. When the agency heads finally fired her, they were slapped with an anti-discrimination lawsuit and the half-time worker pulling down a full-time salary was reinstated.
Public-employee unions continue to say their members are underpaid, believe it or not. But one market test is the voluntary quit rate of these workers, and data for recent years show that rate for federal employees is only one-fourth that in private sector occupations. High-paying federal jobs are so coveted that they are now like rent-controlled apartments in Manhattan: Once you've got one, you hold on to it for life.
The big villain here is Congress, which rubber stamps public employee union demands for automatic promotions and annual "cost of living" pay raises. The result is a system in which taxpayers in private America subsidize the salaries and rich benefits of government workers who make double what they do. Once upon a time liberal politicians would have called this "unfair," but modern liberals care more about support from government unions than they do about the fate of private labor. As for Republicans, they haven't done much better in controlling the rise in federal pay.
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tom
Citizen
Username: Tom
Post Number: 5513
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 3:32 pm: |
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Thank goodness somebody is getting paid a living wage. Washington is an expensive city to live in or near.
Raising up class resentment is an interesting tactic. Do we hope to lower the pay of government workers so that they can be in as crappy a situation as those in the stagnating public sector? Fewer outlays for government spending can then lead to more tax cuts, which the GOP will ensure goes to -- let's all say it together now -- the top brackets.
The real answer is, of course, making private sector job compensation better. Stop obscene top-executive pay and distribute it out lower on the food chain.
Of course government workers are going to hold onto their jobs. They'd be absolutely nuts to wade into the corporate world, where they can get mergered or downsized into oblivion with no notice, and make a fraction of what they did. Again, the answer isn't to make government jobs as shi77t as the private sector, but to start making sure that workers in the private sector get a fair share of what they're working for. |
Wendy
Supporter
Username: Wendy
Post Number: 2996
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 3:42 pm: |
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Quote:The real answer is, of course, making private sector job compensation better. Stop obscene top-executive pay and distribute it out lower on the food chain.
I'll give a hearty Amen to that well-said sentiment.
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cjc
Citizen
Username: Cjc
Post Number: 5801
Registered: 8-2003
| | Posted on Tuesday, August 15, 2006 - 4:47 pm: |
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What would happen if Democrats honestly ran on income redistribution in 2008? |
Dave
Supporter
Username: Dave
Post Number: 10505
Registered: 4-1997
| | Posted on Tuesday, August 15, 2006 - 4:50 pm: |
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Like Bill Bradley did after he finished re-writing the '86 tax code that everyone here is crediting Reagan for? |
tom
Citizen
Username: Tom
Post Number: 5514
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 4:53 pm: |
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I don't think they can, and I don't think they should. It's dubious that it's something that could be directly legislated in a sensible way, even if there were a filibuster-proof majority. It has to come up through worker action, consumer demand, and shareholder pressure. |
dave23
Citizen
Username: Dave23
Post Number: 1952
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 4:56 pm: |
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The same thing as would happen if Republicans honestly ran on expanding the federal government, increasing the deficit, impeding on the right to privacy and incompetently waging war. |
tjohn
Supporter
Username: Tjohn
Post Number: 4700
Registered: 12-2001
| | Posted on Tuesday, August 15, 2006 - 4:58 pm: |
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As private sector salaries and benefits shrink, so must public sector salaries and benefits. It is not a choice although we will pretend it is until there is a sudden and painful reckoning.
And, the problem is not really executive compensation. Executive compensation is a convenient scapegoat and it is a sad commentary on what passes for leaderhship in America these days, but distributing executive pay amongst the rank and file won't have a big impact on income distribution.
I believe this is happening because our relative global economic clout is shrinking as China, India and a host of smaller nation grow more rapidly than we are. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 15313
Registered: 1-2003
| | Posted on Tuesday, August 15, 2006 - 6:16 pm: |
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Ender, are you complaining that the typical or average government worker earns more than his counterpart in private industry? I can live with that, given that rising to the top ranks in government won't make a person filthy rich.
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cjc
Citizen
Username: Cjc
Post Number: 5802
Registered: 8-2003
| | Posted on Tuesday, August 15, 2006 - 8:17 pm: |
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But you're right, dave23. If they honestly ran as Democrats, they'd lose. And governing at times like Democrats doesn't win any Democrat friends. |
tom
Citizen
Username: Tom
Post Number: 5515
Registered: 5-2001
| | Posted on Tuesday, August 15, 2006 - 10:13 pm: |
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For a few precious hours this thread showed signs of being an actual discussion. |
Southerner
Citizen
Username: Southerner
Post Number: 1453
Registered: 2-2004
| | Posted on Tuesday, August 15, 2006 - 10:52 pm: |
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The poor need to pay their fair share. Nothing like seeing a poor person become unpoor. It's sickening. Tax them at 60% and give them free beer! |
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