Just today, I overheard someone say that income inequality must not be that bad, because you only need a few $100,000 to be in the 99th percentile (see CNN/Money) — that works out to be about $343k to make the top 1%.

That is factually accurate, but misses the full wealth disparity issue. To see where the big bucks are, you need to look into the top 0.5%, 0.1%, 0.01% and lastly, and lastly, the top 0.001%.

The details of this were delightfully illustrated by Catherine Mulbrandon at TBP conference – PDF presentation here, video here.

Top 1% = $368,238 (20.9% of income)
Top 0.5% = $558,726 (16.8% of income)
Top 0.1% = $1,695,136 (10.3% of income)
Top 0.01% = $9,141,190 (5% of income)

>

click for larger chart

Category: Economy, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

107 Responses to “Forget the top 1% — Look at the top 0.1%”

  1. KidDynamite says:

    barry – do you happen to have info on taxes paid by each group above?

    ie, the top 1% earn 20.9% of the income and pay ??? % of the taxes? (and for the top .5%, .1% and .01% too???)

  2. swag says:

    Apropos that, here’s an eye-opening TED talk by Richard Wilkinson on how economic inequality harms societies:

    http://www.youtube.com/watch?v=cZ7LzE3u7Bw&feature=feedu

  3. Dr. Goose says:

    The data on wages disclose
    That the specter of joblessness grows,
    Except for the few
    Making mega-bucks, who,
    In their number, substantially rose.

  4. ryans says:

    So the top 1% of the top 1% has a greater share of income than the bottom half of the top 1% (5% v. 4.1%). I guess it shouldn’t be surprising the income of the top 1% is like a microcosm of the distribution of income in society as a whole.

  5. tsk tsk says:

    According to the graphic, two married NYC school teachers each with an MA and 10 years experience are well into the 5% group. At 20 years they should be top 2.5-3% or thereabouts. They may be in the 99% but not by much on a percentage basis.

  6. Lukey says:

    That seems like it’s almost insignificant. This is starting to look like a solution (wealth redistribution) in search of a problem (wealth deserving to be redistributed). If the top .001 of our citizenry starts @ $10 million a year (low enough that more than a few mediocre athletes make the cut), I don’t understand what the fuss is all about. To the extent that CEO’s make 400 times the entry wage or that a few hedge hogs are making a billion (plus) a year, that’s probably not good for our society. But the bulk of the folks in the .01% are more likely just successful people and some who got lucky but frankly $10 mil ain’t all that much these days (and the bulk of this cohort is probably clustered near the entry point). We’re probably talking about less than maybe 5,000 people out of 300 million in there that are making the eight and nine (and no more than a few ten) figure incomes that are hard to justify.

    All the strife and enmity resulting from the redistribtionists’ atavistic focus on addressing a condition that exists in maybe three to five thousand people, and it’s spill over effect to the others who are not ripping anyone off to make their $10 mil, is probably doing more (overall) harm than good.

  7. RW says:

    I love a good visual. Here’s another (assuming BR’s site doesn’t filter the image tag in comments).

    Some more Occupy posters at http://tinyurl.com/3mekxd7

  8. DeDude says:

    I don’t think the actual number needed to be in the top 1% can tell you anything about the inequality. It’s like trying to draw a curve with a single point.

  9. Dow says:

    So true DeDude. It’s a nice way to get you to ignore the reality of life at the bottom.

    That bottom 9000 are forced to make survival decisions each week between transportation, food, clothing, health care or housing. It’s stressful and that stress takes a toll on health, and an individuals ability to work and have healthy relationships.

  10. greggk says:

    Okay. Income inequality bad.

    Does that mean confiscatory taxes good?

    What is the answer?

  11. csainvestor says:

    the answer is yes. Confiscatory taxes are good.

    tax the rich more, use that cash to help the poor and the middle class.
    as the poor and the middle class strengthen, the rich will too.

  12. DeDude says:

    As a matter of fact in a post jobs world where the need for human work is being eliminated, “confiscatory” taxes and handouts to the poor and middle class is the only way to avoid a collapse.

  13. csainvestor says:

    if you don’t want to increase taxes on the rich, there is another alternative.
    the minimum wage needs to increase by 25 to 50% in order to lift the median household income.

    one way or the other, we need to get cash into the hands of the middle class and the poor.
    if we don’t transfer wealth downwards- we all go down with the system.

  14. drewbert says:

    “the answer is yes. Confiscatory taxes are good.”

    Agreed. The rich were given large (in dollar amounts) tax cuts on the promise that they would increase hiring.

    They didn’t. They have found that they no longer need us to make money.

    Time to take the tax cuts back and then some.

  15. greggk says:

    I like the minimum wage idea. Let the super rich/rich/top 1%, within the confines of the law and a capitalist system, figure out how to stay rich. If they do, good for them. If they don’t, they don’t. The rest of us would probably benefit from a higher minimum wage (as long as it doesn’t drive prices up).

    I think taxation is not the solution. But if it could be, a flat tax would be the way to go. Everybody pays the same. The rich pay more, the poor pay less. No deductions. No gimmicks.

    I can’ believe I’m saying this, but I also think that taking the money out of politics could also help. After the banksters get hit with the regulation they deserve, they can’t buy members of the legislature and other elected officials to change (or prevent change of) the laws. Then maybe we could get legislators and other public officials who serve for the good of serving. Less purchased officials, less super rich bankster types, less income inequality, more public officials concerned with public good.

  16. wally says:

    The guy who thinks $343,000 annually is not wealthy ought to get out more and see what the vast majority of people live on.

  17. spiovesan says:

    You can have some fun with your bucks here: http://www.globalrichlist.com/index.php

  18. AtlasRocked says:

    csainvestor: So we put in confiscatory taxes and then what is left to create new jobs? Keynesian spending has never in history worked (payed back the borrow amount in 2-4 years) so forget about the gov’t borrowing our way out.

    We’re behind 40% on our revenue vs expenses. That top 1% is say, 3 million people, and to close our revenue gap and pay down the debt in 20 years we need about $1 trillion a year in new revenue. So you just taxed them how much of their $368k per year?

    Here’s the math for you: 1,000,000,000,000 / 3,000,000 = ???

  19. Dr. Goose says:

    There is a trove of income distribution data that can be downloaded in a spreadsheet from the UC Berkeley Econometrics website; it was cited in the excellent book Winner-Take-All Politics, by Jacob Hacker and Paul Pierson, and includes data on the top 0.1%.

    Also, the CBO broke out the data on the top .01% from 1979 to 2005 in this letter to Sen. Max Baucus.

  20. DSS10 says:

    I’m waiting for the inevitable battle between the “Have’s” and the “Have More’s.” Occupy Greenwich Ave!!!

  21. csainvestor says:

    much more than half of the people in this country live on less than 27k.

    the top .01%, or about 30 thousand people earn 410billion yearly in income.

    meanwhile:

    Over 105 million Americans earn 2.8 billion in income yearly.

    please check my math- but if i am right
    my lord!

  22. csainvestor says:

    i don’t consider someone making 200k in income (not capital gains) the top 1%. i don’t think occupy wall street does either. if the 200k wage earner has an effective tax rate close to 30%- they are paying their fair share.

    even though some wage earners are in the 1%, they aren’t the targets of Occupy- i think they know this. this is about people that earn millions a year, while they pay an effective rate under 30%.

    the 99.33% isn’t as catchy as the 99%.

  23. Frilton Miedman says:

    greggk Says:
    October 24th, 2011 at 4:05 pm
    Okay. Income inequality bad.

    Does that mean confiscatory taxes good?

    What is the answer?

    Your answer lies in the “Powers of Congress” section of the Constitution

    When a family making $32K can pay an effective tax rate of 22% (after write-offs) and a BofA executive makes 8 figures and pays 11% after write-offs….who’s taxes are “confiscatory”?

    When so many corporations are reaping the benefits of “job creating” tax loopholes that amount to $1 trillion in revenue losses per year (per Simpson Bowles commission), while they gradually lay off Americans and send those jobs oversea’s….who’s taxes are “confiiscatory”?

  24. csainvestor says:

    Frilton Miedman, well said.
    its even worse than that though, when the family that makes 32k is hit with the inflation tax (real inflation that is)- you are literally one paycheck away from losing it all and living on the street.

  25. greggk says:

    Nice job, Frilton. My use of the term “confiscatory” was ill-advised. I have already posted a comment (awaiting moderation….??) that opines that a “flat tax” might be the answer. Perhaps we think alike after all…

  26. darth beta says:

    And the quarterback gets all the girls, thank you for highlighting some guys get more than others.
    Inequality isnt the issue.
    Income bracket mobility, income for efficiency/ productivity and tax inequality are.
    The question is why do CEO’s make millions in shady compensation (stock options, equity, special dividend payouts) paid out at other workers detrment for margin expansion (neutral growth/rev & exp cuts- i.e layoffs, outsourcing) in an near sighted quarter to quarter effort to increase stock price. Action that has no long term economic benefit. With the bulk of said shady compensation is taxed at long term cap gains/dividend gains tax rates.
    While labor is paid salary that has no upside capture and is taxed at higher withholding rates?
    Feel free to throw in the 7 figure HFT types.

  27. VennData says:

    You people in the lower 99.9% are inferior to us. By keeping our temporary tax breaks we will make your world better, we will decide how that happens, but trust is. It’s worked out great so far, hasn’t it?

  28. arogersb says:

    In the end, the issue is not income or wealth inequality but poverty. The real question is how you get that bottom 10 percent to be better off. Is it by redistributing wealth or by creating wealth? The historical evidence points overwhelmingly to the later. I find amazing that after countries all over the world experimented and failed with systems based on wealth redistribution; this is still an issue even among informed people.

  29. Frilton Miedman says:

    Darth, I’m sorry but I have to correct you.

    Inequality is THE issue, on two levels – power – and wealth (in terms of consumption/economic activity & growth)

    Whether intended or accidental, the gradual increase of influence that corporations and the wealthy exude over our government since the Nixon admin is the cause, it has now gotten to the extreme of blatant bribery, “Citizens United” was the tipping point.

    No law in D.C. is voted on without first giving consideration to bribery (in the form of campaign funds)..this equates to the preservation and promotion of wealth for those who pay, at the expense of those who cannot afford to pay.

    In terms of wealth, let’s take one of the favorite cited economists of the NeoCon movement, Milton Friedman, read his “permanent Income hypothesis” and his “Negative Income Tax” on what money does in the hands of lower income groups vs higher incomes….hint, “velocity”.

    Our current government is hell-bent on the preservation of wealth for the highest bidder.

    Dylan Ratigan ftrequently discusses the reason, 94% of all political campaigns are won by the person with the most campaign funds.

    If a politician fails to comply with the hidden demands of his biggest campaign contributors, like David Koch for example, his career is over.

    Worst of all, bribery has reached the level of our Supreme Court, courtesy of Koch brothers and Rupert Murdoch.

    Most people don’t realize it, but “Citizens United” applies to Supreme Court Justices as well, they voted to make bribery legal for themselves.

  30. ctc says:

    While the inequality is a problem, raising taxes on the rich won’t solve the problem. In fact it’s rather brain dead. There simply aren’t enough to go around. You could confiscate all their income and nothing would change. You’d still have the same problems of debt and deficit.

  31. csainvestor says:

    I’m sorry but as Frilton Miedman Says- Inequality is the issue.

    The top 1% has reached critical mass; at this point they pretty much own half of all the assets in America.

    While the top one percent has grown, the bottom 40% have pretty much lost all wealth. While the networth of 1% has exploded, the bottom 40% doesn’t even have 2000 dollars saved in the bank in case of an emergency.

    -When the rent goes up for the 99%, it goes into the pockets of the 1%.

    -Every year, the top 1% sell widgets to the 99%, but the price of those widgets go up every single year.
    -As the 99% pays more for widgets the 1% that sell them make a larger profit.

    Wages for the 99% are going down YOY, either nominally or adjusted for inflation- sometimes both.

    The top 1% is compounding wealth like a snowball rolling downhill. At some-point you won’t be able to stop it without being trampled to death, it might cause an avalanche.

  32. arbitrage789 says:

    “…income inequality must not be that bad…”

    _________________________________

    Anyone who wants to move to a country with very few rich people can go ahead and do so (a country in Africa or South America, for example).

    I’m certainly not going to.

  33. willid3 says:

    thinking if they didn’t pay at least 50% of all taxes, they really have the tax game rigged in their favor, since they make 50% of all income. paying less means that the rest of us (who total up less than 50% of all income) are having to pay more

  34. Thor says:

    csainvestor: So we put in confiscatory taxes and then what is left to create new jobs?

    Wrong, we’ve already been trying that or the last 30 years and the jobs were not created. At least not here. If you were referring to Chinese jobs, then by all means, continue, otherwise, I think it’s time we put this right wing drivel to bed once and for all.

    In fact it’s rather brain dead. There simply aren’t enough to go around.

    More right wing drivel. there is more than enough to go around if we start taxing the companies who have shipped all our jobs to China and who do not pay taxes.

    Next?

  35. Frilton Miedman says:

    ctc Says:
    October 24th, 2011 at 6:28 pm
    ” While the inequality is a problem, raising taxes on the rich won’t solve the problem. In fact it’s rather brain dead. There simply aren’t enough to go around. You could confiscate all their income and nothing would change. You’d still have the same problems of debt and deficit. ”

    Incorrect.

    I mentioned above, the Simpson-Bowles commission, with full access to the resources, records and data from the U.S. treasury, concluded that America loses $1 TRILLION per year in revenues per year in redundant tax loopholes.

    The Bush tax rates alone account for $325 billion per year.

    The $1 Trillion in lost annual revenues we lose are from special interest loopholes that completely fail in the label of “job creation” they were founded on.

    If you really believe tax reform can’t do anything for our problem, please, stop watching Fox network long enough to hear another perspective than Roger Ayles & Rupert Murdoch’s.

  36. Factualist says:

    Barry shows that the top 1% grabbed 20.9% of income.

    In response to the question of how much do they pay in federal taxes?, the TaxFoundation.Org indicates in 2009 that the top 1% paid 36.7% share of income taxes.

    As for other data, the top 10% paid 70.5% share of income taxes; and the bottom 50% paid 2.3% of income taxes.

    Unfortunately, I was not able to determine if the TaxFoundation’s numbers include payroll taxes, but I presume not.

    Randy P

  37. streeteye says:

    @KidDynamite

    Taxes paid by income quintile (attributes all federal tax receipts by quintile, including corporate income tax to quintiles that own stock)

    http://www.nytimes.com/imagepages/2009/02/27/business/27policy_sub.html

    Shares of taxes vs. shares of incomes – in addition to above adds state and local taxes

    http://krugman.blogs.nytimes.com/2011/04/22/zombie-tax-lies/

  38. Joe Friday says:

    greggk,

    Okay. Income inequality bad. Does that mean confiscatory taxes good?

    What’s your definition of “confiscatory” ?

    The most economically prosperous periods in this country over the past century were when the top tax bracket (that’s BRACKET, not percentage of one’s income) was 87% and even 91%, or just after taxes on the Rich & Corporate had been increased.

  39. Joe Friday says:

    AtlasRocked,

    Keynesian spending has never in history worked

    Of course it has.

    As to your tax math, according to the independent non-partisan Congressional Budget Office, just reversing the failed Chimpy Bush tax cuts which overwhelmingly benefited the Rich & Corporate would eliminate 75% of our future federal deficits & debt. Throw in the Buffett Tax and a transaction tax, and we’d be rolling in federal budget surpluses.

  40. Madame Sosostris says:

    So this is the distribution of income that the current political economy produces. What distribution would you propose? What set of rules would you be willing to live with to achieve your chosen distribution? What would you do when your chosen set of rules failed to produce the results you sought?

    When will we give up the illusion that we can control these outcomes within a meaningful margin of error?

  41. Thor says:

    what exactly are we trying to say with the fact that the uber wealthy pay the lions share of income taxes? Who gives a shit, they take more than their fair share of the income pie in the first place. I’d rather have a massive, healthy, well paid middle class paying 90% of the taxes with a small, less disgustingly rich minority paying a small share of the total.

    It’s like some of you folks think that we should be OK with ever increasing income equality because the wealthy pay most of the taxes. That’s not a valid argument and it’s certainly not one that’s going to help us out of our current situation. The wealthy, along with corporations, need to pay more, period. Those at the bottom should be paid more in income so that they can afford to pay for a larger share of total taxes. Maybe the trillions being stored offshore, or sitting in the federal reserve earning interests of our tax dollars could be used to increase the wages of the lower classes.

  42. Mike S says:

    Mass Production requires Mass consumption. We seem to have forgotten this principle of economic growth.

  43. Frilton Miedman says:

    Joe Friday, correct.

    The booming post war bull of the 1950′s saw a 90% top marginal tax rate for most of that decade.

    This doesn’t mean that higher taxes on the wealthy automatically equates to economic boom, but it definitely disproves Fox Network, Heritage Foundation, Carl Rove and Koch Brothers scare tactics of the complete opposite.

    “Job creating” tax breaks should be in direct proportion to “jobs created”, not under the deceptive guise that simply labeling a tax cut for political bribers as “job creating” is creating jobs.

    Two of the biggest problems with our tax code are corporate tax and capital gains.

    Both forms of taxation are based on data configured decades ago as well as cherry picked snippets of economic theory, long before investment into emerging markets was so prevalent and theories on foreign trade & globalization assumed we would see reciprocal job & wealth creation in our foreign trade agreements since, which is blatantly failing to be the case.

    Simply put, if I’m a billionaire, I can buy stock in more profitable multinational corporations that derive earnings off cheaper foreign labor that harms our own employment rate while I pay out a starting rate on that income of 15% before write-offs, and simultaneously the multinationals I’d invested in also reap tax breaks based on decades old assumptions that jobs are created inside America.

    As we continue to lose on both ends, jobs and revenues … politicians who are on the payroll of political bribers now try to sell us the idea that we should extract those losses on medicare, social security, food stamps, pensions, firefighters, police, teachers and a plethora of other programs that inevitably detract from consumption & GDP.

    Doing this further will inevitably hurt all but the top 0.1%, further degrading economic activity, further decreasing tax revenues evoking still more cuts later on if we don’t start seeing past the lies we’re being fed by corporate puppets and vote accordingly.

  44. Barry,

    If you want a laugh, watch how fast they cut my interview on BNN when I start talking about income disparity in the US.

    http://watch.bnn.ca/#clip555203

  45. JohnT says:

    In another forum, Doug Henwood distinguishes between income inequality and wealth inequality. I gather from his comments that there is data to grapple with income inequality, but there is nothing that will help us understand wealth distribution.

  46. Asymptosis says:

    “you only need a few $100,000 to be in the 99th percentile”

    Barry, this income vs. wealth confution really needs to stop.

    A “millionaire’ *has* a million dollars (and isn’t really “rich” by today’s standards; can only spend circa $60K a year while preserving capital, somewhat more while spending it down over decades).

    Somebody *earning* a million dollars a year is a *mega*-millionaire.

  47. [...] Forget the top 1% — Look at the top 0.1% | The Big Picture [...]

  48. ctc says:

    Milton
    @9:01

    You’ll want to re-read Bowles-Simpson. It was about lowering tax rates and broadening the base. That’s an admission that simply raising taxes on the rich is insufficient to achieve budgetary stability.

    Again raising tax rates will not address income inequality.

  49. Francois says:

    AtlasRocked:
    “Keynesian spending has never in history worked (payed back the borrow amount in 2-4 years) so forget about the gov’t borrowing our way out.”

    You’d have some credible sources to support this rather extraordinary claim, wouldn’t you?

    Inquiring minds want to know.

    PS: BTW, I insist on the word “credible”.

  50. roxy says:

    Frilton Miedman:

    As we continue to lose on both ends, jobs and revenues … politicians who are on the payroll of political bribers now try to sell us the idea that we should extract those losses on medicare, social security, food stamps, pensions, firefighters, police, teachers and a plethora of other programs that inevitably detract from consumption & GDP.

    Absolutely right. This is already happening. I’m frightened that more people don’t see this when they seem suprised that consurmer confidence is not higher. Gee, let me see, I’m on a pay freeze now, and it looks like my pension is going to hell along with social security and medicare. I already can barely afford my medicine…….I don’t really feel like going to the mall.

    The problem is who to vote for. It seems everone is intent on selling us down the river.

  51. DeDude says:

    “Again raising tax rates will not address income inequality.”

    But it will address “after tax income” inequality!!!!

  52. Frilton Miedman says:

    ctc Says:
    October 25th, 2011 at 10:15 am
    Milton
    @9:01

    ” You’ll want to re-read Bowles-Simpson. It was about lowering tax rates and broadening the base. That’s an admission that simply raising taxes on the rich is insufficient to achieve budgetary stability.

    Again raising tax rates will not address income inequality. ”

    You’re completely incorrect to derive the idea that tax reform cannot help, unless you somehow feel $1 TRILLION per year in revenues is too small (I suggest a calculator in that case), thought the report does call for cost cutting and cost controls in entitlements, it also cites revenue losses of $1 TRILLION per year in erroneous loopholes that fail in their promoted “job creation”..

    Alan Simpson wrote an op-ed in the NYT to follow up the report, these are his words –

    “And we must address the tax code. We need new revenue to finance the increasing costs of our health care system and an aging population — but it should come from reducing or eliminating tax breaks, not from higher rates. The tax code is riddled with annual tax breaks amounting to $1 trillion — most of which are just government spending in disguise. By reforming them, we can reduce individual and corporate tax rates in a way that keeps the tax code progressive while promoting economic growth and reducing the deficit at the same time.”

    U.S. corporate taxes are among the highest in the world, yet we collect relatively little actual taxes due to loopholes.

    Ireland has the lowest corporate tax rates, so much for the “job creation” there.

    Income taxes for the top 1% account for hundreds of billions in revenue losses annually, mainly from the capital gains rate that’s promoted to the public under the lie of “job creation”, total tax loopholes account for $1 TRILLION per year.

    Again, $1 TRILLION per year would be more than adequate revenues to rapidly undo the damage that’s now being proposeds to get taken out on the jobless, seniors, vets, the poor and disabled.

    Simpson-Bowles absolutely did not sate that tax reform would not help, they only kept the report fair in the bi-partisan sense

  53. Theba says:

    I never understand this; if they really want to get everyone in the tent, why not play to the top 99.5%.)

    The idea that you might make a couple hundred thousand a year someday is a stability creating attribution for the middle class and one of personal pride (that you want to work that hard, because you have to assume hard work is involved, otherwise …. well you see where I’m going here) so why ask them to give it up???

    In other words, the thought experiment “is it OK to raise tax rates” works at $500K plus in a way it just doesn’t at $250K for the “average” American.

    But maybe that’s the point, keep the “rich” threshold low, middle class Americans will balk at any attempt to address the inequality.

  54. ctc says:

    Milton you should try reading what i’ve said, not what you think i’ve said.

    My only comments have been to the effect that raising taxes will not address income inequality and they will not address the fiscal insanity driven by our resident politicians. Your quote of Simpson is exactly what i’ve been saying.

    To wit i’ve said nothing about tax reform, in fact i’d agree wholeheartedly that tax reform is something that needs to be done.

    Taxes on capital gains and dividends were not created under the notion of job creation. They were taxes at a lower rate on the basis of not taxing revenue twice (double taxation).

  55. Frilton Miedman says:

    ctc Says:
    October 25th, 2011 at 5:11 pm
    “Milton you should try reading what i’ve said, not what you think i’ve said.”
    ************************************
    ctc Says:
    October 25th, 2011 at 10:15 am
    Milton
    @9:01
    “Again raising tax rates will not address income inequality.”
    ************************************

    Frilton Miedman Says:
    October 25th, 2011 at 12:13 am
    “As we continue to lose on both ends, jobs and revenues … politicians who are on the payroll of political bribers now try to sell us the idea that we should extract those losses on medicare, social security, food stamps, pensions, firefighters, police, teachers and a plethora of other programs that inevitably detract from consumption & GDP.”

  56. Frilton Miedman says:

    CTC, again, incorrect on cap gains.

    The ENTIRE premise behind lower cap gains was intended to induce investment in companies that “create jobs” (Americans, in theory), instead, the big money goes into emerging markets with much greater growth potential, and lower indigenous wages.

    I trade, and if you do, you know exactly what I’m talking about when I say that it’s been a much better bet to invest in multinationals like CAT because we openly know China has stronger growth because of China.

    All the while, I reap the benefits of a 15% cap gains tax on any income I derive from CAT….and my money goes into creating more jobs in China than America.

    Where the top 1% derive a much greater portion of their income from cap gains, they own 40% of the market, that equates to a double negative….less taxes for less jobs, all the while we’re continually sold the guise of “job creation”.

    I think it’s you who needs to read what’s being said, this is the third time I’ve said this.

    In terms of disparity, we’re denying employment to Americans and hiring in other parts of the world for fractions the cost an American needs to survive, which then reduces wages, as well as employment rates, from an oversupply of domestic workers.

    We’re also told we’ll have to cut programs those who are now hurt the most and will need to fall back on social security, medicare, Vet benefits, food programs, which then further diminishes economic activity & consumption…further depleting the middle and lower classes.

    All done to preserve the wealth of “job creators” who aren’t creating jobs, but happen to make sizable political contributions.

  57. Joe Friday says:

    ctc,

    You’ll want to re-read Bowles-Simpson. It was about lowering tax rates and broadening the base.

    But “lowering tax rates” is just MORE tax cuts for the Rich & Corporate, and “broadening the base” is simply code words for raising taxes on the Middle-class and Working Poor.

    Been there, done that.

    Dismal.Miserable.Disaster.

    “That’s an admission that simply raising taxes on the rich is insufficient to achieve budgetary stability.”

    Nonsense.

    Again raising tax rates will not address income inequality.

    Depends what one does with the money.

  58. Frilton Miedman says:

    Joe, though you have a point that “broadening the base” will effect some middle class tax write-offs, the bulk of the $1 Trillion in lost annual revenues is in cap gains, corporate and wealthy write-offs, a mere 5% progressive rate on capital gains would raise substantial revenues. ( mind – progressive rate for cap gains so not to hinder the middle further)

    On cap gains-
    80% of the stock market is owned by the top 10%, 40% is owned by the top 1%, that means the largest source of total wealth is being taxed at the lowest rate, including HFT trading that serves absolutely no purpose in stock market or economic growth, leaves the market every day with nothing invested – yet they reap 15% tax rates under the label of “job creation”.

    In perspective – the top 1% of earners make $2+ Trillion total income. a return to the Clinton rate of +5% just for this bracket alone would yield $100 billion per year in revenues, or $1 trillion off the budget deficit instead of taking it out on seniors, the poor, police, teachers and firefighters..
    Taxing the top 10% at Clinton’s rate would double that, and that’s not including loopholes or corporate tax reforms.

    The CLinton rate doesn’t account for loopholes (broadening the base)

    Corporate tax reform would induce staggering revenues, corporations largely account for the reference to Simpson-Bowles $1 Trillion per year.

  59. ovtomato says:

    Confiscatory taxes? When the tax rates were 70-91 % NO ONE PAID that rate. There were also import duties, so we manufactured things here in the USA. Financial firms didn’t gobble up 40% of corporate profits. Those who COULD be in the top bracket, reinvested their profits in plant, equipment(American made) and training. Once the tariffs disappeared and the tax rates dropped the rich took their profits out of the USA and invested them in low wage countries. There is an easy answer – impose tariffs, raise tax rates, bar the phony baloney “double Irish”, Bermuda Swap and all other tax schemes to move US made profit overseas and we will NEED those illegals to fill all the jobs we will have. (Tax credits for offshore profits was started when we MADE the stuff HERE that generated the offshore profit.) Read some David Cay Johnston and Ha-joon Chang.

  60. victor says:

    1) See Huffington Post’s: http://fundrace.huffingtonpost.com. Interesting info on big campaign donors 2008 and 2010 in the: Entertainment, Business, Tech and Media arenas. Also by cities and finally you can just type in a name of a friend or of one in the uber rich category and see where his/her campaign contributions go. I suspect that many will be surprised….

    2) I’m still surprised that not more attention is paid to the CAUSES of income/wealth inequality before solutions are offered to redress the balance. Once the obvious preventable causes are “in check” discrimination: (racial, nationality, religion, sex, etc), inheritance, crime, what remains are the well known legal crimes (CEO’s robbing the shareholders via corrupt BOD’s for example), education, family issues (single Mom’s heads of households) and finally ability/risk taking/luck/, not all of us can be a Steve Jobs, RIP. I hope most here agree that inequality is here to stay but nowadays situation cries for an “adjustment” to more acceptable ratios with middle class share increased and the richs ‘ share’ decreased. One small step would be to repeal the Bush tax cuts for the rich (worth about $675 B over 10 years) and to revamp the existing estate/inheritance/death tax codes to prevent perpetuation of large estates over generations and encourage charity foundations a la Gates/Buffett and even Koch!

    3) Just about any serious economist agrees that to balance our out of control federal budget a “balanced approach is needed: raise taxes (called revenues as many see red when you say taxes) and lower spending. Problem is, that in our Republic, it’s OK to do that as long as it’s not MY taxes you want to raise and especially MY benefits you want to cut, right?

    4) Consolation: an ever increasing economic pie WILL benefit all of us, will also close the gaping federal budget benefit. As most wealth has been created only in the last few decades (little inherited), with new actors replacing older ones and the descendants likely not to offer repeat performances of their parents, in a few years, the landscape will change dramatically. Will Jobs’kids grow new AAPL’s?

  61. AtlasRocked says:

    @francois, JoeFriday

    You must have missed the Keynesian beauth contest:

    Keynesian Beauty Contest
    $25 gift certificate for the winning example:
    Keynesian stimulus was used in the
    country _____ in the years ______,
    during a __ recession/__ depression,
    then the economy turned around within 2
    years and then produced ___ years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within ______ years.

    Google it. Look on Wiki. Surely the web would be flooded with proponents who’ve found examples of success. I can’t find any. When you find them, post them for us, please.

    Keynesian stimulus has been used nigh
    on 27 years hear in the US, and the
    deficits keep rising. Same for 19 of
    the 20 western democracies: All
    have massively increased deficits that
    are larger per capita than the US over
    the last 2 decades. None are paying
    back the increasing debts. Three
    (Greece, Italy, and England) are
    abondoning stimulus and trying austerity.

  62. DeDude says:

    “Three (Greece, Italy, and England) are abondoning stimulus and trying austerity”

    Yeah, and that is working out so much better than stimulus??? right??? right???

    You only have to go back a few years right here in US to find a glorious example of how well stimulus works. We were in free fall and stimulus ended that free fall and even the recession. It was as predicted by most competent economist a way to small stimulus to get us back to 3% annual growth, but it did considerably better than expected when people use a $0.8 trillion (poorly composed) stimulus to fill a predicted $2 trillion hole in demand. China at the same time conducted a stimulus that was exactly as big as their predicted loss of demand, and they never even went into a recession. Now these are just the fact and I don’t expect someone on the right to have their ideology disturbed by something as trivial as facts.

  63. AtlasRocked says:

    Dedude – it’s not a success unless it pays back the debt. You just celebrated dumping the debt on our kids. 80M kids under age 20 are getting a bill for $50k at their high school graduations ceremony, and they had no vote on it. You are dancing in celebration.

    Find the instance that has paid back the debt.

  64. DeDude says:

    The issue of what level of debt the nation decide to have and for how long is actually not relevant to whether there is a positive effects of Keynesian stimulus. Lots of debt gets accumulated for other reasons than to stop a recession. Keynesian stimulus is a success if it as predicted turns the economy around. Adjusting taxes and/or money printing to deal with debt (from previous tax cuts or stimulus) does not have anything to do with proving whether the stimulus worked or not. However, after a decade of moronic tax cuts for the wrong group of people and unfunded spending on wars the last thing you want to do is to reduce GDP with austerity and reduce the size of the economy that has to shoulder that debt. I was strongly against the tax cuts and believed we should have a war-tax if we go to war. When the economy gets back to reasonable growth rates I am all in favor of paying down the debt that has been accumulated since Reagan and regardless of how much of that was due to reduced revenue and counter-cyclical spending during recession and how much was just plain old stupid and irresponsible GOPster “tax cut and spend your children’s money” policies.

  65. AtlasRocked says:

    Dedude: You are 100% correct. If you don’t care about amassing more and more debt without ever paying it back, Keynesians stimulus works great.

    Nice work, Copernicus.

  66. AtlasRocked says:

    It’s a slam dunk case, there is NOTHING on the web that shows Keynesian stimulus pays back debts.

    One article from 2 years ago claimed Germany was going to be a success story, but I look at their debt since then – still rising. Wiki page on Keynesian stimulus – it was successful after WWII!! So if we apply it after a world war it works – hardly a case for peace time application, hardly a success story at all, a completely singular, post-devastation event. And all the cases other than that are failing. One a per year basis, that adds up to 100s of cases of failure across tens of countries that are western-style democracies.

    It is the greatest scam ever perpetrated on a mass of people in history: Zero non-World-War success cases, 100s of failures, yet proposed as a slam-dunk solution by both parties.

  67. DeDude says:

    “It’s a slam dunk case, there is NOTHING on the web that shows Keynesian stimulus pays back debts”

    If you think the purpose of “Keynesian stimulus” is to “pay back debt” then you need to go back and read a little more. When it comes to the actual purpose of Keynesian stimulus the world is full of examples of the success of this approach. What all of those successes can teach the teachable is that when you apply stimulus to get out of an economic downturn, you have to be willing to do it with sufficient intensity and for sufficiently long time.

  68. AtlasRocked says:

    Dedude: Then everything is fine now. We’re in a period of unprecedented economic success.

    Why are you writing?

  69. Joe Friday says:

    Frilton Miedman,

    “Lowering tax rates” and “broadening the base” is in reference to federal income taxation, not cap gains.

  70. Joe Friday says:

    ovtomato,

    Confiscatory taxes? When the tax rates were 70-91 % NO ONE PAID that rate.

    Of COURSE they did. It’s a marginal rate.

  71. Joe Friday says:

    AtlasRocked,

    Lets see:

    * After FDR’s New Deal, GDP rose to +13% and the Unemployment Rate fell to 9%, from the NEGATIVE 13% GDP and a 25% Unemployment Rate he inherited.

    Worked like a charm.

    ~

    * Before the stimulus bill was enacted in early ‘09, the GDP in the 4TH QTR of ’08 was a NEGATIVE 8.9% during the previous administration.

    * After the stimulus bill was enacted, 1ST QTR ’09: -6.7% > 2ND QTR ’09: -0.7% > 3RD QTR ‘09: +1.7% > 4TH QTR ’09: +3.8%.

    * That’s a swing of more than 12% GDP from negative to positive.

    * The almost 750,000 a month job losses during the previous administration prior to the stimulus was replaced by an average of almost 200,000 a month job gains. That’s a reversal approaching a MILLION jobs a month.

    Worked like a charm.

  72. AtlasRocked says:

    @JoeFriday: I can go charge out a nice life style on my charge card too. But then I have to pay the bills. You are pronouncing these stats like Bush did before the Iraq war really started: Mission Accomplished. No, the mission is to pay back the debt too.

    By the way, Bush did a spending stimulus with Pelosi in ’08, you left that out. He did both a stimulus tax cut and a stimulus spending bill in his tenure. Neither worked, neither recouped the revenue loss.

    Keynes never proposed permanent deficits. He proposed the money be recouped in out-year taxes. I’ll repeat the challenge, just fill in the blanks to win your gift certificate. Please spare us the absurdity of using WWII as an example. WWII was not a Keynesian plan.

    Keynesian Beauty Contest
    $25 gift certificate for the winning example:
    Keynesian stimulus was used in the
    country _____ in the years ______,
    during a __ recession/__ depression,
    then the economy turned around within 2
    years and then produced ___ years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within ______ years.

  73. DeDude says:

    “We’re in a period of unprecedented economic success”

    No because:
    a) the stimulus was not big enough to do the job.
    b) on top of cyclical problems our economy has structural problems (and Keynes never suggested that stimulus could fix structural problems).

  74. AtlasRocked says:

    @Dedude: You’re still proposing a solution that has hundreds of failure examples and zero successes. Bring on the historical or contemporary success stories.

    All we hear are crickets so far.

    Your ideas are why America is failing. You are proposing something that has never worked. Your opinion does not trump fact.

  75. ctc says:

    Milton

    @6:42
    you’ll have to draw a line to connect the two statements.

    Milton
    @ 7:01
    Perhaps because i’m a bit older than you i can reach back further. The original premise was around double taxation. That’s why dividends are taxed at a different rate. Only more has the notion that capital gains are job promoters (a notion with which I would partially disagree).

    1) As to your assertion that the money you pay to buy and trade shares of CAT (or any other company) goes into CAT’s treasury and is used to fund their growth overseas is absolute nonsense. Your understanding of capital markets and how companies fund their growth is beyond ignorant.

    2) Your assertion that the top 1% own 40% of the market is equally ludicrous. I’m sitting here looking at charts from MS Quant & Derivative strategies & FRB. Household ownership across all income quintiles is a little over 40% and has been on a steady decline from 1945 when it was @95%. The current 42(?)% number could be reduced further because much of stock ownership is indirect thru mutual funds and 401ks. The conclusion you draw that the gov’t is missing out on untold capital gain revenues is complete and utter speculation. The notion that taxes creates jobs? PFFFFFFFFFFFFFFT. Silly.

    The rest of the stuff you’ve posted is more nonsense. Denying employement to Americans? WTF is that? They have some inalienable right to employment? In what parallel universe is that occuring? It does indeed result in lower revenues and pressure on gov’t programs but more taxes aren’t going to solve those problems. The gov’t should be focussing on how to create the environment to create jobs. And quite honestly that’s going to be difficult to do. Globalization is forcing the world to reorganize its’ social order. We’re going to have to find new ways of doing things as technology impact the way the world organizes itself.

    Joe Friday @ 8:15

    You’ve made the basic mistake of drawing a line between two facts that seem to be related. Correlation does not equal Causation.

    Here’s the basic math for you and why it has to be spread over a larger base.
    The census bureau in 2006 reported that there were 2.2 million households with income over 250K. With a deficit in 2012 projected to be $1.1 trillion you’d have to raise taxes by an average of $500k per household just to break even. There is a big chunk of that 2.2 million that are closer to $250K than to $2,500k. So let’s look at a smaller slice. Let’s look at those earning over $1 million. That’s about 200,000 households. You’d have to raise their taxes by $6 million to break even. And like the previous sub-group there are a lot more under $6 million than there are above it.

  76. AtlasRocked says:

    I missed that you put a bit of a smart comment in the last post, DeDude: “The economy has structual problems.”

    The problem is ALL of the economic growth of the last 30 years has been based on gov’t borrowing. I can get a chart for you, made from Z1 data, that shows none of the gov’ts borrowing has produced more GDP growth than the amount borrowed. It’s nearly perfectly below 1.0 since 1983.

    Here’s another, Check this chart, bro: NO BORROWING HAS WORKED.

    http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-americans-income-and-the-us-debt/241463/

  77. DeDude says:

    “You’re still proposing a solution that has hundreds of failure examples and zero successes”

    You are still doing classic Foxified right wing BS. Throwing out a statement with absolutely no connection to reality and ignoring all the facts brought to your attention that falsify your statement. I have no more time for this high school crap. Every time stimulus (borrowed or not) has been applied it has had a positive effect on GDP because GDP is spending. You cannot change the definitions nor can you wish away their implications. Oh- I forgot you are living in Fox world – that who you are.

  78. AtlasRocked says:

    I don’t need to label your facts or call you names or swear to make my case, DeDude.

    The thread documents clearly 2 things.

    One we all knew already: If you borrow money your standard of living gets better if you don’t think about paying the money back.

    Two, is a new fact for you: You are advocating a policy with zero percent success rate and hundreds failures, I am against consistently failing policies.

  79. Frilton Miedman says:

    ctc Says:
    October 26th, 2011 at 2:30 pm
    Milton

    ” 1) As to your assertion that the money you pay to buy and trade shares of CAT (or any other company) goes into CAT’s treasury and is used to fund their growth overseas is absolute nonsense. Your understanding of capital markets and how companies fund their growth is beyond ignorant. ”

    The premise of that statement is that investing in a company serves no purpose to grow the company, and the company is allowed to decide where to invest it’s capital…and the funny part is you tell me I’m ignorant after making the statement.

    Your cookie cutter statement mirrors the unintentionally Fascist stupor of the Neocon Tea Party that blankly stares at the screen as Fox network programs your thinking,

    You can tell me I’m ignorant till the cows come home when I say capital is NOT creating the American jobs our current tax code was structured to do….but you’ll have to show me the jobs first, then explain where all the “trickle down” is..(hint, China, India, Mexico, Korea, Brazil…,etc)

    If U.S. multinationals are failing to create American jobs, yet reaping massive profits atop lower tax rates after loopholes designated for “job creation”, all the while investor are reaping 15% tax rates for buying their stock…guy..it looks like you’re the ignorant one.

    Empirical proof, real data, show me the jobs that justify that lack of revenue that’s resulting in cuts to those who have not seen any “trickle down” to begin with, put up or shut up.

  80. Joe Friday says:

    AtlasRocked,

    By the way, Bush did a spending stimulus … He did both a stimulus tax cut and a stimulus spending bill in his tenure. Neither worked, neither recouped the revenue loss.

    Of course not.

    A) Tax cuts are not stimulative.

    B) The “stimulus checks” failed because they were not incentivized. The vast majority of the money was saved, used to pay down debt, or to purchase necessities which would have been purchased anyway. None of those were stimulative, as I predicted at the time.

    As to your so-called “challenge”, you posted:

    Keynesian spending has never in history worked”

    I demonstrated (TWICE) that you are incorrect.

    Lemme know when you put down that goalpost you keep moving around.

  81. Joe Friday says:

    ctc,

    You’ve made the basic mistake of drawing a line between two facts that seem to be related.

    I’m afraid not.

  82. Frilton Miedman says:

    AtlasRocked Says:
    October 26th, 2011 at 2:37 pm
    “I missed that you put a bit of a smart comment in the last post, DeDude: “The economy has structual problems.”

    The problem is ALL of the economic growth of the last 30 years has been based on gov’t borrowing…”

    Though I agree on your statement of government debt, I definitely agree our economy has been predominantly debt based consumption for the last thirty years, current consumer debt levels are even more terrifying.

    You’re missing half the equation, at the same time debt has increased, the top 1% income has also increased while at the same time their tax rates have declined.

    Clinton was the only president to reverse this trend in the last thirty years, tsake from that what you will.

    Even Greenspan (a personal friend to Ayn Rand when she was Alive) , is now pleading with the neocons to cut the shit on the whole Oliver Norquist tax insurrection routine, he states he never wanted Bush to continue the lowered taxes, they were only intended as a short term economic “bonus” until Clinton’s surplus was gone.

    Alan Greenspan, personal friend and stout believer in Ayn Rand (I have to assume you know who she is, by your screen same), is saying we’ve gone too far overboard.

  83. Frilton Miedman says:

    Joe Friday Says:
    October 26th, 2011 at 1:28 pm
    Frilton Miedman,

    “Lowering tax rates” and “broadening the base” is in reference to federal income taxation, not cap gains.”

    Joe, I know, and for the record I largely agree with your overall ideology on the topic (in case you hadn’t noticed)…I was pointing to the fact that a large portion of revenues from tax reform would come from the top 1% and cap gains is a large portion of that revenue source.. (HFT, dark pools, prop trading and commodity futures manipulation, for example, actually detract from economic growth, yet reap cap gains benefits)

  84. AtlasRocked says:

    @Dedude: You did not demonstrate any place where Keynesian deficit spending produced enough Revenue in the later years to pay itself back with increased tax revenue. You know the Obama deficit is much higher now, unemployment hasn’t come down, employment is down, way down, and the FDR deficit never came down until the war started, it grew continuously from $33B to $70B in the 1932-40 years.

    http://www.usgovernmentspending.com/spending_chart_1928_1940USb_13s1li011mcn_H0t

    The new deal just borrowed from the future, just like Obama did. Hoover did stimulus before FDR, by the way. You may recall Hoover was considered a complete failure as a president, the depression accelerated under him, he was doing what they later called Keynesian stimulus. It failed for him too.

    DeDude, I love it when you go on with this thread, with each opportunity you allow me to put another embarrassing fact in front of you. You are documenting your profound dedication to a 100% failed idea. You demonstrate why America is failing.

  85. Frilton Miedman says:

    “DeDude, I love it when you go on with this thread, with each opportunity you allow me to put another embarrassing fact in front of you. You are documenting your profound dedication to a 100% failed idea. You demonstrate why America is failing.”

    WW2 debt was 125% of GDP, you’re wrong there, our current debt is much less.

    You’re also wrong on Hoover,
    Hoover’s “stimulus” in 1929 was a series of “job creating” tax cuts amounting to $126 million at a time when disparity was exactly what it is now and the only beneficiary of any tax cut would be people with money to be taxed , from there he adamantly refused to spend a dime, even when WW1 veterans staged a protest, “The Bonus Army”, at the White House demanding money that was owed to them from their service, he inevitably ordered the Army to attack them, killing two in the process.

    Hoover was a failure, an extraordinary failure, not because of stimulus, but for a lack thereof.

    From Hoover, 1930 – ” Economic depression can not be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body–the producers and consumers themselves. “

  86. AtlasRocked says:

    Ok your turn, Frilton, and don’t use WWII, we need peace time examples of success. Being in debt at some point in a world war, then not in debt 10 years later after playing all kinds of one sided money games, does not provide Keynesian success examples, and if it did, they would be visible and applied since WWII, so take the free dinner challenge:

    Keynesian Beauty Contest

    $25 gift certificate for the winning example:
    Keynesian stimulus was used in the
    country _____ in the years ______,
    during a __ recession/__ depression,
    then the economy turned around within 2
    years and then produced ___ years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within ______ years.

  87. Joe Friday says:

    AtlasRocked,

    You did not demonstrate any place where Keynesian deficit spending produced enough Revenue in the later years to pay itself back with increased tax revenue.

    And you keep moving that goal post around.

    You know the Obama deficit is much higher now…

    It is lower.

    unemployment hasn’t come down

    Unemployment came down.

    employment is down, way down

    Starting a decade ago under the previous administration.

    the FDR deficit never came down until the war started

    Eh, federal deficits exploded by the time the war started.

    Hoover did stimulus before FDR, by the way.

    Tax cuts are not stimulative.

  88. Frilton Miedman says:

    Atlasflopped, I’m not going to engage you, you completely skimmed over responding to everything I just said and decided to write your own “rules”. (“Keynesian only works in war…” a ridiculous premise, and it has nothing to do with what I just outlined)

    My only advice is to repeat what’s been said to you by two others in this discussion (that’s replete with circular logic) – STOP taking Fox Network’s “data” and using it as “empirical” proof that Fascism works.

    You’re entirely unaware of it, but you’re endorsing Fascism, a political state where corporations and/or other elites exude greater control over governance than it’s people – Mussolini’s dream come true.

    My suggestion, do some legwork and let us know f you can define the line when Democracy crosses over to Fascism, explore the strategy Hitler used on the Weimar Republic via propaganda to misinform and terrify them when a Communist was implicated in the burning of the Reichstag, that cross reference that strategy to Koch brothers and Rupert Murdoch’s behind the scenes manipulation of our own government and media propagnada to evoke similar fears like “socialism” and “government takeover”.

    You won’t take that suggestion because your ideology is self induced, you know it all, instead you’ll continue to use cherry picked political and economic data, spoonfed from Fox Network and Koch brothers associates like Heritage Foundation.

  89. AtlasRocked says:

    Still waiting…..
    stiiiiilll waiting….

    still waiting….

    Success story? The goal posts are still at the same place, bro.

  90. AtlasRocked says:

    @Frilton – Google my Keynesian beauty contest. It is unique in all the world. I thought of it myself.

    I’ve posted it on a dozen forums – no one has a success story.

    No one.

    You are an advocate for failure. You have documented that do so, and documented that you are deceiving people by not telling them it is a 100% failed policy.

  91. AtlasRocked says:

    For the thread readers, here is a research article that provides a course indicator that 5:1 ratio of spending cuts to tax increases has some correlation to success.

    http://www.economics.harvard.edu/faculty/alesina/files/Large%2Bchanges%2Bin%2Bfiscal%2Bpolicy_October_2009.pdf

    Again – not from Fox news. My opponents have tried to “label” my facts, but if you go to Fox you’ll get zero hits for my post keywords. Here again – these posters are making claims that have no substantiation. A pattern of behavior is being documented by the liberal policy advocates.

  92. Frilton Miedman says:

    Joe Friday Says:
    October 27th, 2011 at 12:46 pm

    ” “Hoover did stimulus before FDR, by the way.”

    Tax cuts are not stimulative. ”

    For the sake of exchange with someone who makes sense and does his own research, I wanted to delineate this, it’s not entirely true, but true at the current time for the highest wage earners.

    IF, and I absolutely STRESS the word IF a “job creating” tax cut is given in exchange for actual jobs created, they are stimulative.

    Also, tax cuts on the middle and lower classes would help for consumption, meaning Cains “9-9-9″ plan is the exact wrong solution right now, as would be any flat tax, but explicitly any flat sales tax because lower incomes consume a far greater proportion of their real income vs the wealthy.

    This consumption to oincome ratio is explained in Milton Friedman’s “Permanent Income Hypothesis”, it’s also part of why he endorsed a “Negative Income Tax”, Friedman did endorse a flat income tax, but back in his time the top marginal income tax was 90%, and a large percentage of that was cut down with the sea of loopholes and write-offs for the wealthy which caused a lack of revenues in proportion with those rates.

    The biggest problem we have right now is political bribery, coupled with the “mysterious” inability for many lawmakers to know the difference between a supply crisis and a demand crisis.

    While supply side solutions worked in the supply crisis of the 70′s, the continuance of those policies would easily explain the exponential rate of increase in consumer debt and the flattening of middle class wages.

    In other words, you are correct that tax cuts won’t reverse our current problem of depleted wages, extreme consumer debt, outsourced jobs and extreme disparity for the elite wealthy that now exercises almost complete control over our governments law-making.

    There is absolutely NO corporate tax cut that can offset the extreme spread in globalized labor costs, for example, Foxconn workers recently got a 50% raise from $0.31 cents to $0.49 cents an hour.

    To illustrate my point…what amount of corporate tax cut would make it worthwhile for AAPL to contract an American company using American workers at minimum wage of $7.35 an hour to compete with Foxconn’s $0.49 per hour?

    Add to this, the extreme fixation of the GOP on debt reduction and wealth preservation for their biggest campaign contributors, right at the worst possible time, is almost exactly the same set of mistakes that Hoover made – only worse this time.

  93. ctc says:

    Milton @ 6:19

    ctc Says:
    October 26th, 2011 at 2:30 pm
    Milton

    Again your understanding of markets is letting you down. You don’t buy the shares in order to grow the company. You buy them to participate in it’s growth. If you don’t like managements allocation of capital and the geographic destination you of said capital you have two choices 1) don’t buy the shares 2) Get enough other shareholders to share your opinion and get management to allocate capital where you think is should be. So yes, you are ignorant of how markets function.

    I’m not telling you that capital is not creating American jobs. That’s an invention (and you seem to do it regularly) of your own. You regularly invent strawmen to argue against. Why is that?

    What is the basis for the assertion that US based multi-nationals should create jobs for americans? Is there some law that says USD have to be invested in the US? You should be hoping these companies create massive profits (you are trading their stock, allegedly) the rise in their share price to reflect those profits help pay for the pensions of federal, state, local, and private pension plans. Without their growth most of those people would have a pretty crappy retirement. They’d be forced to save more of their own money and think of the impact on the economy if that were the case.

    The one who are paying 15% are the carried interest guys. And i’d agree with you 110% that the carried interest crowd’s income should be treated as taxable income, not capital gains.

    And finally if you really were trading stock you’d know that the day traders and algorithim traders are paying tax at a much higher rate than 15%. There is one tax rate for short-term gains and another for longt-term. All this bellowing you’re doing is really a bunch of crap. You’re parroting other idiots who’ve read something and now think they have a deep appreciation of the subject. You’ve been hoodwinked son.

    Hopefully you’ll take the time to find out and understand how and why things work the way they do. And then perhaps you can come up with some genuine solutions that will decrease the income gap. Good luck.

  94. Frilton Miedman says:

    CTC, you’re a hamster on a wheel, before trying to rationalize your use of the word “ignorant” by merely rewording my point that buying stock in a company contributes to that companies strategy, you’re sticking to your unloaded gun….

    You’re somehow rewording my statement that the choice to buy stock based on emerging market exposure that serves no purpose in domestic economic/job growth while yielding less revenues per capita with a cap gains rate of 15% is an ignorance of how capital markets work .

    What are the rules to your nifty game?

    Heads You win, tails I lose?

    If I buy CAT stock because of CAT’s emerging market exposure (China), which in turn is creating jobs in China in place of American jobs while they reap A 2.5% tax on U.S. imports and U.S. companies pay a 25% tariff to export to China, and I’m reaping a 15% cap gains to invest in this scheme and a proportionately larger percent of my income comes from stocks (as is common for the top 1%)

    As a billionaire, hedge fund, or corporate CEO, I’m not benefiting the U.S….however, I can seal this deal by sharing my profits with the right people in high places in the form of campaign contributions…..and you’re unable to derive any cause for disparity there.

    If that doesn’t add up to you, think, really think until it hurts, the root of our disparity is embedded in decades of unfair advantages large corporations and the wealthy can utilize in tax, regulatory and foreign trade policies that come out of median wages, cuts U.S. revenues, and diminish U.S. jobs.

    I’m all for fair trade agreements and tax policies, but fair trade agreements and tax policies actually have to be fair, reciprocal.

    “Job creating” tax cuts and loopholes actually should “create jobs”, it’s really not that complicated to grasp – so grasp it, stop burrowing further into the rabbit hole.

  95. Joe Friday says:

    AtlasRocked,

    For the thread readers, here is a research article that provides a course indicator that 5:1 ratio of spending cuts to tax increases has some correlation to success.

    Impossible.

    Tax cuts are not stimulative, and cutting spending SLOWS the national economy.

    Still waiting…..

    Yes we are.

    For you to post anything substantive.

    Success story?

    I’ve given you two HUGE success stories.

    The goal posts are still at the same place, bro.

    I’m afraid not. First it was:

    Keynesian spending has never in history worked

    which is demonstrably false.

    Then you moved the goalposts to a 2 year arbitrary timetable, then you moved the goalposts to increased revenue within an arbitrary timetable, then you moved the goalposts again, and again….

    Nobody’s jumpin’ through the hoops in your circus, bro.

  96. Joe Friday says:

    Frilton Miedman,

    IF, and I absolutely STRESS the word IF a ‘job creating’ tax cut is given in exchange for actual jobs created, they are stimulative.

    Nah.

    As Mark Zandi (who was the economic advisor for John McCain’s presidential campaign) has shown, tax cuts only return 35 cents on the dollar spent, which is a dismal miserable failure:

    http://www.cbpp.org/images//12-22-10econ-t1.jpg

    Also, tax cuts on the middle and lower classes would help for consumption

    Not if they are not incentivized. When you give Americans more money in a down economy without incentives, they save it, pay down debt, or spend it on necessities they would have bough anyway, none of which are stimulative.

  97. Frilton Miedman says:

    Joe, Mark Zandi’s only problem is that he doesn’t know how to invoke shock value, fear mongering or at least entertain audiences with an angry sensationalist rant from time to time. (pun intended)

    In other words, I listen to him as well, but it sometimes takes effort to drown out the more colorful Zerohedge, Santelli, Kudlow, lez-affaire, Atlas Shrugged theatrics.

    His assessment is based on the trend from traditional tax cuts over recent decades and he is correct, think about what I said – “I absolutely STRESS the word IF a ‘job creating’ tax cut is given in exchange for actual jobs created”.

    TRUST me, if you specifically stipulate a tax cut in direct proportion to a job created, that $0.35 multiple on the actual tax cut would be dramatically altered.

    This has not been the case in recent decades since the advent of Reaganomics, which has since evolved into something a hair away from Fascism to the extent that Reaganomics founder Craig Paul Roberts is ranting the word “NEOCONS” like a card carrying liberal.

    Supply side tax policy has just assumed putting more money into the hands of the wealthy automatically equates to “job creation”, I call the bluff and say any “job creating” tax cut is only honored AFTER the job is created, period.

    On your comment to the tax cuts for middle and lower classes, your point has validity, but only for the fact that consumer debt is at an all time historic high not seen since 1929, so yes, much of that freed income would be used to deleverage.

    However, there is absolutely NO denying that the multiplier for middle/lower class tax cuts is dramatically higher than the current “job creating” tax cuts that are drying revenues and forcing discussion of entitlement and healthcare cuts to those who need it more desperately than ever.

    If you look up Milton Friedmans “Permanent Income Hypothesis”, it explains the effect on velocity that money in the hands of lower wage earners has relative to the upper class, without a question low income households spend more per capita.

    If you’re going in the direction of infrastructure spending to create jobs, forget any debate on my end.

    I was ranting that Obama’s original stimulus was lacking on infrastructure the day I read how it was broken up, the tax incentives like cash for clunkers, home buyers and home efficiency upgrades DID help, but long term we are going to have to deal with the structural problems created by going ape in recent decades over new foreign trade agreements with no thought on the imbalances & ramifications beforehand.

    A.K.A. the Foxconn dilemma I mentioned above, there is no tax incentive that we can give to incentive hiring an American when a Chinese worker can do the job for $0.49 an hour, the same problem now applies to vocations as well now that emerging markets are offering college education the way we offer grade school.

  98. AtlasRocked says:

    JoeFriday – You showed that borrowing money DEFINITELY makes things better if you don’t think about having to pay it back. That’s all. If you call this success, then you should stop writing about how bad things are – by your definition, we are in a boom period and everything is fine. All we have to do is keep borrowing.

    I’ll issue you another challenge: Show where Keynes said the borrowing is supposed to be permanently increasing, and nothing has to be paid back.

    Please – keep documenting your adherence to a failed idea.

    Check this chart to see what borrowing (tax cuts OR spending increases) does to our average income vs the national debt. It shows the borrowing consistently making things worse.

    http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-americans-income-and-the-us-debt/241463/

  99. AtlasRocked says:

    Here’s another chart for you, JoeFriday: GDP added per unit of debt added:

    http://market-ticker.org/akcs-www?get_gallerynr=2000