How the Rich Soaked the Rest of Us

[^_^ 5,021]

Thought about that place too. I had visions of retiring and opening up a night club/####### house. Getting married sorta made that dream disappear.

Just tell her it's a "bar".

[Danno 1,228]

Those progressive tax policies of yesteryear have a proven track record of working. It helped create the largest Middle Class this country has ever seen. The economists and policy experts back then obviously understood what they were doing. They understood that wealth doesn't happen in a vacuum. If the wealthy don't want to pay that much in taxes, then they're income levels will drop. Executive pay will return to the ratios of yesteryear. Tax policies can and have effected economic behavior and that's what progressive taxation is for.

I think if you look at your graph you will see it was "manufacturing" post WW2 which should get the credit.

What we don't have any more is manufacturing... what we do have is an ever growing business class which packs up and leaves when conditions elsewhere are more favorable.

We have seen this in States which use your concept and we are seeing it on an international scale as well.

[^_^ 5,021]

I think if you look at your graph you will see it was "manufacturing" post WW2 which should get the credit.

What we don't have any more is manufacturing...

Wrong!

Manufacturing isn't dead. Not even close.

US manufacturing still tops China’s by nearly 46 percent

[I AM NOT THAT GUY 5,715]

8TBVBN, on 02 March 2011 - 10:18 PM, said:

Those progressive tax policies of yesteryear have a proven track record of working. It helped create the largest Middle Class this country has ever seen. The economists and policy experts back then obviously understood what they were doing. They understood that wealth doesn't happen in a vacuum. If the wealthy don't want to pay that much in taxes, then they're income levels will drop. Executive pay will return to the ratios of yesteryear. Tax policies can and have effected economic behavior and that's what progressive taxation is for.

I think if you look at your graph you will see it was "manufacturing" post WW2 which should get the credit.

What we don't have any more is manufacturing... what we do have is an ever growing business class which packs up and leaves when conditions elsewhere are more favorable.

We have seen this in States which use your concept and we are seeing it on an international scale as well.

The income tax was created after the industrial revolution began that only affected a small percentage of the population. With the onset of Wilson's War, the tax was greatly expanded to affect more and more people. Calvin Coolidge created the modern middle class by cutting taxes, resulting in the roaring twenties. Later progressive reforms to the tax system have helped to destroy the middle class, not sustain it, creating a barrier to those that want to move up the economic ladder.

[^_^ 5,021]

The income tax was created after the industrial revolution began that only affected a small percentage of the population. With the onset of Wilson's War, the tax was greatly expanded to affect more and more people. Calvin Coolidge created the modern middle class by cutting taxes, resulting in the roaring twenties. Later progressive reforms to the tax system have helped to destroy the middle class, not sustain it, creating a barrier to those that want to move up the economic ladder.

The WSJ suggests income disparity levels in 2007 were last (before 2007) reached in the 1920s.

Income-Inequality Gap Widens

October 12, 2007

The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.

...

Research suggests the rich last had this high a share of total income in the 1920s.

[Danno 1,228]

Wrong!

Manufacturing isn't dead. Not even close.

US manufacturing still tops China’s by nearly 46 percent

NOt exactly "wrong" I just over stated things a bit on the minor point.

Now show how tax rates expanded the middle class and not the fact that manufacturing .. after WW2 ... and the devastation much of Europe suffered.

Wasn't there even some provision in the Marshall Plan which required US manufacturing to benefit from the rebuilding?

Edited March 3, 2011 by Danno

[^_^ 5,021]

NOt exactly "wrong" I just over stated things a bit on the minor point.

A bit?

[mawilson 2,133]

First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People's Republic of China.

Third, the richest Americans take the money they don't pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans, and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

These paragraphs contain so many red herrings and falsehoods, I'm genuinely surprised they were written by a Professor of Economics.

[^_^ 5,021]

... hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

mawilson is right - this is almost certainly false. Most stock is 'owned' by institutional investors who trade it on behalf of the little guys - people waiting for their pensions and 401k/403b account holders.

[one...two...tree 2,762]

mawilson is right - this is almost certainly false. Most stock is 'owned' by institutional investors who trade it on behalf of the little guys - people waiting for their pensions and 401k/403b account holders.

When did 401k's come into existence? Before 401k's, workers had pensions.

[mawilson 2,133]

Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-2007

Concentration of stock ownership in the United States, 2001-2007

Percent of all stock owned:

Wealth class            2001    2004    2007
Top 1%                  33.5%   36.7%   38.3%
Next 19%                55.8%   53.9%   52.8%
Bottom 80%              10.7%   9.4%    8.9%

Edited March 3, 2011 by mawilson

[^_^ 5,021]

When did 401k's come into existence? Before 401k's, workers had pensions.

Take your strawman and stick it up where the sun don't shine.

Concentration of stock ownership in the United States, 2001-2007

Percent of all stock owned:

Wealth class            2001    2004    2007
Top 1%                  33.5%   36.7%   38.3%
Next 19%                55.8%   53.9%   52.8%
Bottom 80%              10.7%   9.4%    8.9%

How do institutional investors figure into this?

/confused

[mawilson 2,133]

When did 401k's come into existence? Before 401k's, workers had pensions.

1980's.

[mawilson 2,133]

How do institutional investors figure into this?

Good question... I'm trying to find out.

The numbers are from Wolff (different Wolff), but I'm not sure if they include indirect ownership through 401(k)s, mutual funds, etc.

[mawilson 2,133]

How do institutional investors figure into this?