Income Inequality: revolution, taxes, or war?

[Johnny_L.A]

@John_Mace

I deny that any of your predictions are likely to come true. Alternatively, you could give us a timeline for them and we can see for ourselves. And if you claim it’s sometime in the distant future, then we can easily dismiss it as an unsupportable assertion meant to appeal to emotion rather than a logical argument to be taken seriously.

Really, John Mace, you know better than that. Most people would understand that the point of my post is that the country is heading toward a system where corporations have more power and the People have less. Dr. Garrett Jones, funded by the Koch Foundation, recently gave a lecture where he called for less democracy.

[rsa]

@D_Anconia

This is incorrect. The purpose of a corporation is to maximize shareholder wealth. Investing profits into projects that increase future expected earnings is one way of doing so.

The corporation can expand an existing product line, create a new one, invest in more modern & efficient PPE, extend into new markets, etc. But each of those projects are evaluated against ROI. If the ROI is not positive, the corporation won’t invest in it. If there’s not enough positive ROI investments in itself that a company can make, it should return the money to shareholders through dividends and stock repurchases.

I believe Paul Tudor Jones’ point is that societal benefit should factor into a corporation’s “return”. If you believe the only purpose of capitalism is to game the system so that the rich continually get richer without regard to main street or society as a whole, then your point of view illustrates the problem.

[rsa]

@John_Mace

People also invest for dividends. There is nothing magical about waiting to make money until you sell your stock. Think of owning a rental property. When you collect rent, you don’t necessarily plow all the rent money back into building improvements, expecting to make a profit long term when you sell the property.

Some investors are only interested in dividends and don’t care about capital appreciation. That’s fine, but it’s also fine if you happen to want both. If I owned a rental property I would like the property to appreciate in addition to collecting rent, YMMV.

[rsa]

@John_Mace

Then I would advise you not to invest in such companies. Was someone forcing you to do so in the past?

Why do you assume that I bought the stock after the activist investor started trying to control the actions of the corporation?

[John_Mace]

@Johnny_L.A

Really, John Mace, you know better than that. Most people would understand that the point of my post is that the country is heading toward a system where corporations have more power and the People have less.

In all seriousness, there was nothing in your first post to indicate you were doing anything other than making an actual prediction.

Dr. Garrett Jones, funded by the Koch Foundation, recently gave a lecture where he called for less democracy.

So what?

@rsa

I believe Paul Tudor Jones’ point is that societal benefit should factor into a corporation’s “return”.

Paul Tudor Jones is a billionaire hedge fund manager. I expect he understands the value of dividends as part of some corporations financial strategy. As for “social benefit”, sure. Corporations can take that into account, but there is no reason they must. And, of course, making a good product that people want is also a “social benefit”.

If you believe the only purpose of capitalism is to game the system so that the rich continually get richer without regard to main street or society as a whole, then your point of view illustrates the problem.

Have you seen the price of butter in Denmark lately!

Why do you assume that I bought the stock before the activist investor started trying to control the actions of the corporation?

I didn’t. Why did you assume that I did?

[rsa]

@ITR_champion

Deny it. Millions of Republicans are gay, Muslim, Jewish, Black, or Hispanic. There’s no evidence that Republicans enough masse fear those groups or accuse them of stealing anything.

You’re joking right? Not all but certainly a sizable and vocal bunch.

[Kobal2]

@Lochdale

Unions are deemed to be a person as well. Unions give more money to the Democrats then the Koch brothers do to the Republicans.

Considering the rest of your post I assume this is said tongue in cheek, but just in case : in 2012 the Koch contributions amounted to over twice that of the 10 largest unions combined.

[John_Mace]

@rsa

Some investors are only interested in dividends and don’t care about capital appreciation. That’s fine…

It is? So why did you post this:

I keep seeing more and more “activist” investors who buy a position of 1% or less of a company’s stock and then pressuring the company to raise its share price for short term gains, not what is best for the company for the long term. They want to make a quick buck and run. They couldn’t care less about the future of the company. In the case of Yahoo, an activist investor kept pushing for Yahoo to buy AOL which may have created some synergies and increased profits but would do little for future growth.

[rsa]

@John_Mace

I didn’t. Why did you assume that I did?

Umm, because you said:

Then I would advise you not to invest in such companies. Was someone forcing you to do so in the past?

“such companies” being ones that are being hounded by an activist investor. :rolleyes:

[John_Mace]

There is no tense in “such companies”. They could be past, present or future investments.

[Wesley_Clark]

You forgot the 4th option. The rich maintain firm control over government, military, police, religion and media and use them to influence or terrorize the public into accepting their fate.

A fifth option is giving more power over the economy to workers by allowing unions and more worker friendly legislation.

I don’t know what the future holds for countries experiencing this issue.

I believe under Obama taxes have risen somewhat on the rich. The Bush tax cuts on the wealthy ended, there is now a 3.8% medicare tax on higher incomes, there may be other progressive taxes in place too. And that is just over 6 years.

According to thisthe top 1% now make 84x as much as the bottom 20% on average. W/o Obama’s policies it would be 91x as much. It is a start I suppose.

[rsa]

@John_Mace

It is? So why did you post this:

@me

I keep seeing more and more “activist” investors who buy a position of 1% or less of a company’s stock and then pressuring the company to raise its share price for short term gains, not what is best for the company for the long term. They want to make a quick buck and run. They couldn’t care less about the future of the company. In the case of Yahoo, an activist investor kept pushing for Yahoo to buy AOL which may have created some synergies and increased profits but would do little for future growth.

Totally unrelated to your point about dividends.

[John_Mace]

@rsa

Totally unrelated to your point about dividends.

My bad. I misread your post. Nevermind!

[rsa]

Although not exclusively about income equality, I thought you might like to hear Russell Brand’s call to revolution. (video - only a minute and a half.)

@Russell Brand

We are living in a sequin-encrusted virtual prison where an economic elite can hog along in plump luxury – destroying the planet as they go. We must stop this. Our initial targets are corporate tax evaders, environmental desecraters and perpetrators of the drug war against the sick and poor.

The biggest obstacle to Revolution is your belief that it’s impossible. So start believing. Together we are the solution. Get your boots on. Pack a sandwich.

LONG LIVE THE REVOLUTION

[D_Anconia]

@rsa

I believe Paul Tudor Jones’ point is that societal benefit should factor into a corporation’s “return”. If you believe the only purpose of capitalism is to game the system so that the rich continually get richer without regard to main street or society as a whole, then your point of view illustrates the problem.

Let’s say that a company has already invested in all of the projects that will return future earnings. According to your view, as I understand it, dividends and stock repurchases are (somehow) wrong. What should they do with the rest of the profits, then?

Build factories that they don’t need? Buy machinery that will be idle? Hire employees when there is no work to be done?

[D_Anconia]

@rsa

Although not exclusively about income equality, I thought you might like to hear Russell Brand’s call to revolution. (video - only a minute and a half.)

You do know that Russell Brand is a comedian, right?

[Johnny_L.A]

@D_Anconia

Let’s say that a company has already invested in all of the projects that will return future earnings. According to your view, as I understand it, dividends and stock repurchases are (somehow) wrong. What should they do with the rest of the profits, then?

Build factories that they don’t need? Buy machinery that will be idle? Hire employees when there is no work to be done?

Sounds like their taxes are too low. Or yeah; since they are The Job Creators™, they should use the surplus to create jobs. If they don’t, then they are not The Job Creators ™, and they should acknowledge that consumers are the job creators.

[rsa]

@D_Anconia

You do know that Russell Brand is a comedian, right?

Well, he’s a bit more than that but he does remind me of Benny Hill isometimes. You have to strain his brilliance through the strainer of reality and there you go.

[D_Anconia]

@Johnny_L.A

Sounds like their taxes are too low.

No, the U.S. has one of the highest corporate tax rates in the world.

Or yeah; since they are The Job Creators™, they should use the surplus to create jobs.

As I said, create jobs to do what? Build unnecessary factories, buy unnecessary machines, manufacture products that nobody wants?

[Johnny_L.A]

@D_Anconia

As I said, create jobs to do what? Build unnecessary factories, buy unnecessary machines, manufacture products that nobody wants?

That’s my point exactly. Corporations are not ‘job creators’. The Right has to stop calling them that.

And the U.S. has the third highest corporate tax rate in the world. But there are deductions and exclusions reduce the statutory rate. For example, GE’s U.S. earnings in 2010 were $5.1 billion. GE claims they paid total taxes (federal, state, and local) of $1 billion. The statutory federal rate is 39.1%; but they paid only 20% in total taxes, so their effective federal rate was lower.