In favor of increasing taxes on the wealthy

[ThomasT]

we have to reduce govt, thereby reducing the control of the wealthy ...

I don't think that reducing the federal government would necessarily reduce the control of the wealthy. Isn't it in part because of the wealthy's exploitation of the poor that government was increased in the first place?

I also don't agree that increasing taxes on the wealthy would necessarily be irrelevant. I agree that by itself it won't solve the problem. But it might be part of the solution if other measures (like reducing SS, etc.) are taken as well.

 

[WhoWee]

I want to go on the record with a prediction.

WhoWee's prediction 8/8/2011: if the DJI drops below 8,500 - our "leaders" will clamor for hefty increases to capital gains rates and the media will sing in praise of their initiative.

 

[mheslep]

I think PL's correct, reducing government size and scope would lessen the influence of the wealthy and connected over society. I'll go further and say its a necessary, if not sufficient condition to accomplish this.

 

[mheslep]

I want to go on the record with a prediction.

WhoWee's prediction 8/8/2011: if the DJI drops below 8,500 - our "leaders" will clamor for hefty increases to capital gains rates and the media will sing in praise of their initiative.

This, along with other such predictions by many is just a bet on 'Red 11' and then spinning the wheel, signifying nothing, without a good rationale.

 

[WhoWee]

This, along with other such predictions by many is just a bet on 'Red 11' and then spinning the wheel, signifying nothing, without a good rationale.

The rationale is that it wouldn't raise revenues, it wouldn't cause a sell-off and they could claim they did something.

 

[EWH]

Perhaps some data would help?

About a year ago, I tried to figure out what the distribution of income was from IRS figures. Adjusted Gross Income (AGI) has some quirks and pitfalls, the data is for households with varying numbers of earners, the SS and Medicare taxes complicate the situation, and even figuring out the State tax correction is a huge snarl of figures. That said, this should be pretty close in general outlines to the actual distribution. Nearly all the data came from the IRS public data, the estimates for SS, medicare and State taxes came from Wikipedia. The figures only run through 2008 projected numbers - the newer numbers are always delayed by about two years.

Sorry that it's a bit sloppy and it only has the basic source data and the resulting numbers - the cell formulas and the extra data from the IRS would not fit within the 100K attachment size limit. Some formatting errors may have crept in in converting to .xls from .ods (Open Office). PM me if you would like an email of the whole thing in either format.

The most interesting calculations are probably the one in the lower left of the sheet, "Share of total income / percentage of population" and the one in the lower right: "Share of total income, net of taxes/ percentage of population"

 

[mheslep]

Perhaps some data would help?

About a year ago, I tried to figure out what the distribution of income was from IRS figures...

If it was me making $20K/year, I'd care about how much I made last year, and how much I was likely to make the next, and the year after, etc. The heck with how much Bill Gates is making as if I was entitled to some of his take, as long as my family and neighbors have an opportunity to improve.

 

[ThomasT]

I think PL's correct, reducing government size and scope would lessen the influence of the wealthy and connected over society. I'll go further and say its a necessary, if not sufficient condition to accomplish this.

I doubt this. For example, wasn't it, at least in part, a relaxation of governmental oversight that allowed the proliferation of toxic investment and over-leveraging that led to the financial meltdown?

How would reducing governmental control lessen the influence of the wealthy?

 

[WhoWee]

I doubt this. For example, wasn't it, at least in part, a relaxation of governmental oversight that allowed the proliferation of toxic investment and over-leveraging that led to the financial meltdown?

How would reducing governmental control lessen the influence of the wealthy?

If you relax the rules of lending and the wholesale re-financing of that debt on one hand - then mandate who to loan funds to - is that really a reduction of Government control (aka de-regulation)?

 

[ThomasT]

If you relax the rules of lending and the wholesale re-financing of that debt on one hand - then mandate who to loan funds to - is that really a reduction of Government control (aka de-regulation)?

No. But I was asking about the reassignment of hundreds of people away from oversight on the financial sector during the latter part of the Bush administration. If this didn't actually happen, then what I read was a lie.

And the question remains: how might reducing governmental control lessen the influence of the wealthy. Because it seems to me that it would increase it.

 

[WhoWee]

No. But I was asking about the reassignment of hundreds of people away from oversight on the financial sector during the latter part of the Bush administration. If this didn't actually happen, then what I read was a lie.

And the question remains: how might reducing governmental control lessen the influence of the wealthy. Because it seems to me that it would increase it.

Government regulations over business activities are similar to taxes in one respect - they don't typically effect the activities of the poor - unless the specific regulation or tax policy is giving something to the poor person.

 

[Physics-Learner]

govts are established by the wealthy.

look at the beginning of ours. it was thought that the commoner wasnt smart enough to have any ideas, so they were to rely on their representatives.

just look at history. go back to the roman empire. they continued to conquer and grow, until they got to big to handle it all. just who do you think was doing this, and benefiting from it ? the common folk ? of course not. it was the wealthy.

why do you think there is a drive towards a one world economy ?

the wealthy want to control as much as possible. the bigger the govt, the more dependent the population, the more control the govt gets.

it is very simple. it has been done this way for the past 2000 years.

it just takes some years of living to see the bigger picture.

 

[WhoWee]

govts are established by the wealthy.

look at the beginning of ours. it was thought that the commoner wasnt smart enough to have any ideas, so they were to rely on their representatives.

just look at history. go back to the roman empire. they continued to conquer and grow, until they got to big to handle it all. just who do you think was doing this, and benefiting from it ? the common folk ? of course not. it was the wealthy.

why do you think there is a drive towards a one world economy ?

the wealthy want to control as much as possible. the bigger the govt, the more dependent the population, the more control the govt gets.
it is very simple. it has been done this way for the past 2000 years.

it just takes some years of living to see the bigger picture.

my bold
I'll try to consider the bigger picture as you've described.

First, given your logic, a tax increase on the poor will maintain or increase the size of Government and thus secure the control of the wealthy.

The flip side would then be - if we don't increase taxes and instead cut the size of Government the wealthy will have less control?

 

[Physics-Learner]

the wealthy does not always increase taxes on the majority. they need to keep them happy to some extent.

but certainly reducing govt will give them less control.

 

[mheslep]

I doubt this. For example, wasn't it, at least in part, a relaxation of governmental oversight that allowed the proliferation of toxic investment and over-leveraging that led to the financial meltdown?

I submit that it was the government creation of Fannie Mae and Freddie Mac that allowed the admittedly inevitable market bubbles to become catastrophic in this case.

How would reducing governmental control lessen the influence of the wealthy?

Take Microsoft. Before the government's lawsuit against them MS spent essentially nothing on lobbying for two decades. Now, I read MS's lobbying budget is $100M/year. The point being that many years ago most corporations did not bother to have any 'government relations' department - it was a waste of money to bother with a small, far away federal government. Now, all of the Fortune 500 do, and not to eliminate regulation but in many cases to increase it. Why? Because the the threat to big business shareholders is not so much government but competition from new business, as it has always been. Hence the reason why one will see a monster company like GE enter every heavily regulated industry one can imagine - energy, finance, healthcare, yet it has no presence in the free for all industries like the dot com internet.

 

[WhoWee]

Hence the reason why one will see a monster company like GE enter every heavily regulated industry one can imagine - energy, finance, healthcare, yet it has no presence in the free for all industries like the dot com internet.

The same can be said for the high capital requirements (or the minority/special interest criteria) to compete for Government contracts. It's certainly not a level playing field for competition - which is troubling when you consider the expansion and scope of Government creep into private industry.