The Rich actually are getting Richer...

[houndawg]

Why are the boats of the working poor and the middle class not rising with that tide?

They HAVE been rising. Take a look at the numbers at the top of this thread, which are inflation adjusted comparisons, again. The smallest percent increase over the period is 10.7 percent. 10.7 percent is a fairly substantial And look at the middle quintile identified in the source article as the "middle class." The percent increase is 29.4%. Would you not think you are better off now than you were 30 or 35 years ago if you make 29.4% more in inflation adjusted dollars than you did then? Your boat has risen.

So WHAT if somebody else's boat has risen more. How does that make YOU worse off when you're making almost 30% more than you were?

Now, I suspect that over the past 9 years or so the overall trend over time may have been disrupted. I say that because I can recall that there were at least times during the period that median incomes declined. But over any multi decade period in relatively recent history I think that inflation adjusted incomes for each given group are going to be higher at the end than they were at the beginning.

It depends on what those inflation-adjusted dollars buy, John. Costs go up too.

[Chizzang]

I will support the notion of govt. reviewed exhorbitant executive compensation to the degree that many of the so-called "overly compensated" executives manage corporations whose employee pay is so low that full-time employees qualify for welfare/medicaid/foodstamp/other govt. assistance.
In those instances, I understand that govt. has a vested interest (fiduciary responsibility) to interject some guidelines in compensation.
When I see CEO's pocketing $15m and up, BOD's drawing tens of millions, and dividends on a steady increase, while full-time, non-probationary employees are being paid near minimum wage and having to apply for medicaid and foodstamps to make ends meet, then this call for govt. intervention is just dessert.
A well managed business should be able to fund paying a living wage.

Exactly. And back when they did, America's standard of living was at it's highest.

The problem is that the rich, in general, is that they don't have any class anymore. Back in the day the rich understood that leaving a few crumbs on the table was good for them as well as the lower classes. Those crumbs enabled the poor to believe that there was something in capitalism for them too.

Of course that waas back before capitalism collapsed like Soviet collectivism.

95% of the global corporate population is absolutely in it for themselves...
When Scientific-Atlanta purchased Belgian American Radio Corp. (my employer) in 2001 for 200% of our BARCO.NET stock value everybody was in it for the Money (it was very exciting)

Then when Cisco purchased Scientific-Atlanta (my then employer) in 2005 for 150% of share value, everybody got rich again... (it was even more exciting)

Each time (in both cases) the "workers" like warehouse employees / Administrative assistants / Customer Service Dept. were simply "let go" and many of them had decades of employment while the middle management was let go and given one month of salary for each year of employment...

but upper management as well as Engineering and intellectual property were lavishly rewarded...not only did we capitalize on the shares valuation - we also got pay raises each time and bigger bonuses and restructured packages each time...

Corporate mumbo-jumbo is about making sh!tloads of money as quickly as possible then getting out...
I can't pretend or accept that it's about anything else...

[OL FU]

Exactly. And back when they did, America's standard of living was at it's highest.

The problem is that the rich, in general, is that they don't have any class anymore. Back in the day the rich understood that leaving a few crumbs on the table was good for them as well as the lower classes. Those crumbs enabled the poor to believe that there was something in capitalism for them too.

Of course that waas back before capitalism collapsed like Soviet collectivism.

Corporate mumbo-jumbo is about making sh!tloads of money as quickly as possible then getting out...
I can't pretend or accept that it's about anything else...

that sums it up quite nicely or ugly depending on your point of view. But it is the truth.

[Hansel]

They HAVE been rising. Take a look at the numbers at the top of this thread, which are inflation adjusted comparisons, again. The smallest percent increase over the period is 10.7 percent. 10.7 percent is a fairly substantial And look at the middle quintile identified in the source article as the "middle class." The percent increase is 29.4%. Would you not think you are better off now than you were 30 or 35 years ago if you make 29.4% more in inflation adjusted dollars than you did then? Your boat has risen.

So WHAT if somebody else's boat has risen more. How does that make YOU worse off when you're making almost 30% more than you were?

Now, I suspect that over the past 9 years or so the overall trend over time may have been disrupted. I say that because I can recall that there were at least times during the period that median incomes declined. But over any multi decade period in relatively recent history I think that inflation adjusted incomes for each given group are going to be higher at the end than they were at the beginning.

It depends on what those inflation-adjusted dollars buy, John. Costs go up too.

People also think they "need" cell phones, internet, satellite/cable, two cars, funjions etc now regardless of whether they can afford it or not

[kalm]

And when has an increasing wealth gap eve led to anything good?

Thank you Reaganomics.

Number of Years from 1975 to 2001: 24
Number of years a Republican was in the White House: 12
Number of years a Democrat was in the White House: 12

Try again.

Low corporate taxes, low top marginal tax rates, degregulation, and free trade have been the policy of both parties.

[kalm]

Apparently ya'll have never heard this statement:

You gotta have money to make money.

I will support the notion of govt. reviewed exhorbitant executive compensation to the degree that many of the so-called "overly compensated" executives manage corporations whose employee pay is so low that full-time employees qualify for welfare/medicaid/foodstamp/other govt. assistance.
In those instances, I understand that govt. has a vested interest (fiduciary responsibility) to interject some guidelines in compensation.
When I see CEO's pocketing $15m and up, BOD's drawing tens of millions, and dividends on a steady increase, while full-time, non-probationary employees are being paid near minimum wage and having to apply for medicaid and foodstamps to make ends meet, then this call for govt. intervention is just dessert.
A well managed business should be able to fund paying a living wage.

****ing liberal.

[kalm]

And when has an increasing wealth gap eve led to anything good?

Thank you Reaganomics.

And on what basis do you think an increase in the "wealth gap" such as the one depicted by the posted income estimates is "bad?" Were any of the income groups described worse off on average? Unless you're talking about jealousy over someone else's success, why is it "bad" that the bottom quintile's average income increased by 10.7%? What was "taken" from them.

There is no great pie of wealth sent from heaven of which everyone "deserves" a share. Weath is a dynamic, generated quantity. If someone comes up with a product or service other people voluntarily purchase and they become wealthy they deserve their wealth. They haven't taken anything away from "the poor." Nobody else is necessarily worse off because they are better off.

This class envy stuff is ridiculous. If I make 10% more money this year than I did last year, am I worse off because somebody else makes 100% more than they did last year? Was anything "taken" from me? Would it make my life any better if that other person would have increased their income by only 20%?

History.

BTW, you can drop the class envy and just deserved riches memes. For one, I have very little reason for envy, and two monopolies and dynastic wealth destroy the notion of a self regulated free market.

[kalm]

The article linked at the top of this thread links another article at http://www.dailyfinance.com/story/super ... /19362705/" onclick="window.open(this.href);return false; . That second article is a classic example of the false impression created by class envy demagoguery. Take this statement from the article:

""This just-disclosed data shows that government policy is concentrating incomes at the very top and steadily lowering their tax burden, thus shifting it on to Americans who in a lifetime don't make what these people make in a week,"

The truth is that, over time, the share of the overall tax burden assumed by "the rich" has been increasing while that assumed by "the poor" has been decreasing. Yes, some people make more in a week than others do in their lifetimes. But they also pay more in taxes in a week than others to in their lifetimes. A table of shares of overall Federal tax liabilities over time can be viewed at http://www.taxpolicycenter.org/taxfacts ... ?Docid=558" onclick="window.open(this.href);return false; . Note that the top table is ALL Federal taxes; not just the income tax (important because some people falsely claim that the picture would look different if payroll taxes like the social security tax are considered).

In 1979, the bottom 20% paid 2.1% of the taxes. In 2006, they paid 0.8% of them. So their share of the burden in 2006 was less than half of what it was in 1979. On the other hand, the share of taxes carried by the top 20% increased from 56.4% in 1979 to 69.3% in 2006. To the extent that the burden has shifted, it has clearly shifted so as to have "the rich" carrying more of it.

I'm not so sure that the wealthy people's share of the tax responsibility going up doesn't prove Chizzang's point. Perhaps if CEO's paid their janitor's more, or stopped outsourcing jobs and materials overseas the working poor could pay a little more in taxes and/or we could reduce social spending. Higher paying jobs for the working poor and middle class might actually be a good thing - it could even shrink the size of government.

[houndawg]

The article linked at the top of this thread links another article at http://www.dailyfinance.com/story/super ... /19362705/" onclick="window.open(this.href);return false; . That second article is a classic example of the false impression created by class envy demagoguery. Take this statement from the article:

""This just-disclosed data shows that government policy is concentrating incomes at the very top and steadily lowering their tax burden, thus shifting it on to Americans who in a lifetime don't make what these people make in a week,"

The truth is that, over time, the share of the overall tax burden assumed by "the rich" has been increasing while that assumed by "the poor" has been decreasing. Yes, some people make more in a week than others do in their lifetimes. But they also pay more in taxes in a week than others to in their lifetimes. A table of shares of overall Federal tax liabilities over time can be viewed at http://www.taxpolicycenter.org/taxfacts ... ?Docid=558" onclick="window.open(this.href);return false; . Note that the top table is ALL Federal taxes; not just the income tax (important because some people falsely claim that the picture would look different if payroll taxes like the social security tax are considered).

In 1979, the bottom 20% paid 2.1% of the taxes. In 2006, they paid 0.8% of them. So their share of the burden in 2006 was less than half of what it was in 1979. On the other hand, the share of taxes carried by the top 20% increased from 56.4% in 1979 to 69.3% in 2006. To the extent that the burden has shifted, it has clearly shifted so as to have "the rich" carrying more of it.

I'm not so sure that the wealthy people's share of the tax responsibility going up doesn't prove Chizzang's point. Perhaps if CEO's paid their janitor's more, or stopped outsourcing jobs and materials overseas the working poor could pay a little more in taxes and/or we could reduce social spending. Higher paying jobs for the working poor and middle class might actually be a good thing - it could even shrink the size of government.

Aww, kalmster, that's such "old America" thinking .............it's also the way things were when I was a lad and America was at it's peak....... government was much smaller back then, America's word was good as gold, and we were the envy of the world. It saddens me that so many on this board never had a chance to live in the real America, never got to see the real thing.........

[kalm]

Why are the boats of the working poor and the middle class not rising with that tide?

They HAVE been rising. Take a look at the numbers at the top of this thread, which are inflation adjusted comparisons, again. The smallest percent increase over the period is 10.7 percent. 10.7 percent is a fairly substantial And look at the middle quintile identified in the source article as the "middle class." The percent increase is 29.4%. Would you not think you are better off now than you were 30 or 35 years ago if you make 29.4% more in inflation adjusted dollars than you did then? Your boat has risen.

So WHAT if somebody else's boat has risen more. How does that make YOU worse off when you're making almost 30% more than you were?

Now, I suspect that over the past 9 years or so the overall trend over time may have been disrupted. I say that because I can recall that there were at least times during the period that median incomes declined. But over any multi decade period in relatively recent history I think that inflation adjusted incomes for each given group are going to be higher at the end than they were at the beginning.

Didn't you admit that you worked your way through college? Try doing that these days.

I agree with the notion that people in general are spending beyond their means. As mentioned in a previous post, when I was kid there were no cell phones, computers, playstations, psp's, high speed internets, or cable television. Now these things exist in every house, and yes people and their children who can't really afford these trinkets feel a sense of entitlement toward them - which contributes to the problem for sure. By the same token, our economy is driven by the marketing and consumption of these products - most of which are produced overseas.

And as Houndawg alluded to above and Teddy Roosevelt spoke about a 100 years ago, the cost of things we truly need like healthcare, a college degree, and a dignified retirement are becoming less and less achievable for the middle class. My parents on middle class incomes of the 60's-80's were able to afford these things. Should we sacrifice the affordability of a decent standard of living for the sake of protecting Reagan's legacy and the myth of supply side economics?

Our country is better than that.

[89Hen]

But I always find it funny when we're told over and over again how America over taxes the wealthy

We do. The fact that they are able to outpace the unjust tax is meaningless.

[danefan]

Corporate mumbo-jumbo is about making sh!tloads of money as quickly as possible then getting out...
I can't pretend or accept that it's about anything else...

that sums it up quite nicely or ugly depending on your point of view. But it is the truth.

+100000000000000000

[93henfan]

But I always find it funny when we're told over and over again how America over taxes the wealthy

We do. The fact that they are able to outpace the unjust tax is meaningless.

I'm all for a flat tax or consumption tax of some sort. Sure the wealthiest few percentiles are in a graded bracket, but those people are usually shrewd enough to find the loopholes to weasel out of paying what they're supposed to pay. Some would argue the semantics of "loophole" and say that if one exists and you can find it, then you are in fact paying what you should pay. I disagree with the spirit of that. Surely we can find a way some day to find middle ground and simplify this math problem that is the tax code. That is an area where I find JSO's opinion completely sane.

In regard to the 20% brackets listed in the original post, I fall somewhere in the unlisted top 61-80%, for lack of listed term, upper-middle class group. My wife stopped working five years ago to be a stay-at-home mom. If in three years, when our youngest child starts full-time school, she decides to start working again, we will kick up well into the top 20% bracket. Unfortunately, under the current tax code, we'd take a pretty severe hit on taxes and she'd effectively be working for a fraction of the face value of her salary. How pathetic is our system when people have to decide if it's worth it to go back to work?

[89Hen]

those people are usually shrewd enough to find the loopholes to weasel out of paying what they're supposed to pay. Some would argue the semantics of "loophole" and say that if one exists and you can find it, then you are in fact paying what you should pay. I disagree with the spirit of that.

I would be willing to bet they still pay a much higher percentage of income.

[93henfan]

those people are usually shrewd enough to find the loopholes to weasel out of paying what they're supposed to pay. Some would argue the semantics of "loophole" and say that if one exists and you can find it, then you are in fact paying what you should pay. I disagree with the spirit of that.

I would be willing to bet they still pay a much higher percentage of income.

Yes. I forgot to add one thought to my post in that very realm. I don't know if it's by design (probably is), but even within that top bracket there is built-in inequity. Let's say you're a top 10%'er, but not in the elite top couple of percent. You are hammered by the tax code, but you don't have the unlimited resources to hire the accountants, attorneys, and money men to move your stash all over the world, hide it under exotic shelters, and so forth. You're so close to the glass ceiling you're tapping on it, and the 90% looking up at you can't tell you're not in there smoking cigars with Warren Buffett and Oprah, but they can still see you and they want you to pay up - and you do. That's the group that is rightfully angry: the almost elite. The angry old white men of CS.com.

[AZGrizFan]

I would be willing to bet they still pay a much higher percentage of income.

Yes. I forgot to add one thought to my post in that very realm. I don't know if it's by design (probably is), but even within that top bracket there is built-in inequity. Let's say you're a top 10%'er, but not in the elite top couple of percent. You are hammered by the tax code, but you don't have the unlimited resources to hire the accountants, attorneys, and money men to move your stash all over the world, hide it under exotic shelters, and so forth. You're so close to the glass ceiling you're tapping on it, and the 90% looking up at you can't tell you're not in there smoking cigars with Warren Buffett and Oprah, but they can still see you and they want you to pay up - and you do. That's the group that is rightfully angry: the almost elite. The angry old white men of CS.com.

You just described me. I got HAMMERED on my taxes this year. FUCKING HAMMERED.

[kalm]

I would be willing to bet they still pay a much higher percentage of income.

Yes. I forgot to add one thought to my post in that very realm. I don't know if it's by design (probably is), but even within that top bracket there is built-in inequity. Let's say you're a top 10%'er, but not in the elite top couple of percent. You are hammered by the tax code, but you don't have the unlimited resources to hire the accountants, attorneys, and money men to move your stash all over the world, hide it under exotic shelters, and so forth. You're so close to the glass ceiling you're tapping on it, and the 90% looking up at you can't tell you're not in there smoking cigars with Warren Buffett and Oprah, but they can still see you and they want you to pay up - and you do. That's the group that is rightfully angry: the almost elite. The angry old white men of CS.com.

Good points, and I think the entire middle class and small businesses need to be protected. Still, the top 400 richest families effective tax rate for 2008 was 16%, and Warren Buffett's secretary pays a higher tax rate than he does.

[danefan]

Yes. I forgot to add one thought to my post in that very realm. I don't know if it's by design (probably is), but even within that top bracket there is built-in inequity. Let's say you're a top 10%'er, but not in the elite top couple of percent. You are hammered by the tax code, but you don't have the unlimited resources to hire the accountants, attorneys, and money men to move your stash all over the world, hide it under exotic shelters, and so forth. You're so close to the glass ceiling you're tapping on it, and the 90% looking up at you can't tell you're not in there smoking cigars with Warren Buffett and Oprah, but they can still see you and they want you to pay up - and you do. That's the group that is rightfully angry: the almost elite. The angry old white men of CS.com.

You just described me. I got HAMMERED on my taxes this year. FUCKING HAMMERED.

Wahhhh................

And you still live a more comfortable life than the vast majority of people in the world.

[OL FU]

I would be willing to bet they still pay a much higher percentage of income.

Yes. I forgot to add one thought to my post in that very realm. I don't know if it's by design (probably is), but even within that top bracket there is built-in inequity. Let's say you're a top 10%'er, but not in the elite top couple of percent. You are hammered by the tax code, but you don't have the unlimited resources to hire the accountants, attorneys, and money men to move your stash all over the world, hide it under exotic shelters, and so forth. You're so close to the glass ceiling you're tapping on it, and the 90% looking up at you can't tell you're not in there smoking cigars with Warren Buffett and Oprah, but they can still see you and they want you to pay up - and you do. That's the group that is rightfully angry: the almost elite. The angry old white men of CS.com.

Sounds about right. I don't make the money I used to and didn't make a large sum but about five years or so ( or at least large to me). A low six figure salary doesn't add up to what you think it would after paying $50,000 in fed taxes, $7000 in FiCA taxes, $15,000 in state tax and add on top it of the $40,000 in child support (I realize that ain't the federal government's fault). But add on the fact that I didn't get the dependant deductions after paying $40,000 in child support while the ex got earned income credit tax refund from the government (because child support isn't a taxable item) while receiving $40,000 in child support simply made me shake my head.

[Baldy]

Good points, and I think the entire middle class and small businesses need to be protected. Still, the top 400 richest families effective tax rate for 2008 was 16%, and Warren Buffett's secretary pays a higher tax rate than he does.

Well, it's a pretty good bet that Buffett's 'secretary' makes well over 6 figures. If so, that makes her one of those 'evil' rich people who should pay higher taxes, correct?

Love that old, much too quoted comment, by Buffett, anyway. He's complaining about the tax structure because his "secretary pays a higher tax rate" than he does, but if he didn't consciously take advantage of the loopholes, he wouldn't.
Love the hypocrisy.

[danefan]

Good points, and I think the entire middle class and small businesses need to be protected. Still, the top 400 richest families effective tax rate for 2008 was 16%, and Warren Buffett's secretary pays a higher tax rate than he does.

Well, it's a pretty good bet that Buffett's 'secretary' makes well over 6 figures. If so, that makes her one of those 'evil' rich people who should pay higher taxes, correct?

Love that old, much too quoted comment, by Buffett, anyway. He's complaining about the tax structure because his "secretary pays a higher tax rate" than he does, but if he didn't consciously take advantage of the loopholes, he wouldn't.
Love the hypocrisy.

Its not hypocrisy. He's not taking advantage of any "loopholes". He structures his personal finances in a way that the takes advantage of tax benefits specifically provided for people like him. Take away preferential tax treatment of capital gains and qualified dividends and Buffet's effective tax rate would go through the roof. That is what he is referring to and that is why his secretary's effective tax rate is much higher than his. His income is 99% dividends/capital gains and 1% salary. Her's is 99% salary and 1% dividends/capital gains.

Loopholes = mistakes or ommissions

Preferential capital gains and dividends treatment are not loopholes.

[OL FU]

Well, it's a pretty good bet that Buffett's 'secretary' makes well over 6 figures. If so, that makes her one of those 'evil' rich people who should pay higher taxes, correct?

Love that old, much too quoted comment, by Buffett, anyway. He's complaining about the tax structure because his "secretary pays a higher tax rate" than he does, but if he didn't consciously take advantage of the loopholes, he wouldn't.
Love the hypocrisy.

Its not hypocrisy. He's not taking advantage of any "loopholes". He structures his personal finances in a way that the takes advantage of tax benefits specifically provided for people like him. Take away preferential tax treatment of capital gains and qualified dividends and Buffet's effective tax rate would go through the roof. That is what he is referring to and that is why his secretary's effective tax rate is much higher than his. His income is 99% dividends/capital gains and 1% salary. Her's is 99% salary and 1% dividends/capital gains.

Loopholes = mistakes or ommissions

Preferential capital gains and dividends treatment are not loopholes.

Interesting question (probably deserves a thread) should earnings from capital investments be taxed at ordinary rates. (or at least higher than at present). I have mixed thoughts on it and might would say yes if the top marginal rate was lower.

[89Hen]

Good points, and I think the entire middle class and small businesses need to be protected. Still, the top 400 richest families effective tax rate for 2008 was 16%, and Warren Buffett's secretary pays a higher tax rate than he does.

Capital gains.

[Baldy]

Well, it's a pretty good bet that Buffett's 'secretary' makes well over 6 figures. If so, that makes her one of those 'evil' rich people who should pay higher taxes, correct?

Love that old, much too quoted comment, by Buffett, anyway. He's complaining about the tax structure because his "secretary pays a higher tax rate" than he does, but if he didn't consciously take advantage of the loopholes, he wouldn't.
Love the hypocrisy.

Its not hypocrisy. He's not taking advantage of any "loopholes". He structures his personal finances in a way that the takes advantage of tax benefits specifically provided for people like him. Take away preferential tax treatment of capital gains and qualified dividends and Buffet's effective tax rate would go through the roof. That is what he is referring to and that is why his secretary's effective tax rate is much higher than his. His income is 99% dividends/capital gains and 1% salary. Her's is 99% salary and 1% dividends/capital gains.

Loopholes = mistakes or ommissions

Preferential capital gains and dividends treatment are not loopholes.

i.e. loopholes

Loopholes are exceptions....purposeful omissions if you will. Regarding taxes, loopholes are put there intentionally and definitely aren't 'mistakes'.

[danefan]

Its not hypocrisy. He's not taking advantage of any "loopholes". He structures his personal finances in a way that the takes advantage of tax benefits specifically provided for people like him. Take away preferential tax treatment of capital gains and qualified dividends and Buffet's effective tax rate would go through the roof. That is what he is referring to and that is why his secretary's effective tax rate is much higher than his. His income is 99% dividends/capital gains and 1% salary. Her's is 99% salary and 1% dividends/capital gains.

Loopholes = mistakes or ommissions

Preferential capital gains and dividends treatment are not loopholes.

i.e. loopholes

Loopholes are exceptions....purposeful omissions if you will. Regarding taxes, loopholes are put there intentionally and definitely aren't 'mistakes'.

Semantics I guess, but loopholes to me are unintended consequences of certain provisions which are taken advantage of and subject to closing (amendment) upon realization by the Treasury/Congress. A prime example: credits claimed by paper industry for use of black liquor. That was not the intent nor was it anticiapted when the particular provision of the code (IRC §40) was passed. . Some smart tax attorneys and accountants in the paper industry exploited that hole in the legislation and Congress closed it in the healthcare bill.

Preferential treatment for capital gains and qualified dividends was the specific purpose of the particular legislation. Not sure how that is a "loophole".

Exemptions and specific deductions are not equal to loopholes in my book.