The flat tax a la Forbes
The resistance against remvoing the cap on the social security tax
And making something less progressive is making it regressive.
Take a look at our historical tax rates and tell me we aren’t regressive these days.
I guess I would say that my experience has been that CEOs take credit for a good quarter that is the result of a good business environment and blame a bad qusarter on a bad business environement. If you pegged CEO pay to how well they did compared to their peers then fine. If a CEO invests his own money in the stock of the company and becomes ridiculosly rich then fine but stock options are a questionable idea gone horribly wrong noone uses stock options in the way that management consultants introduced them to American business.
I don’t know either. Maybe it’s because you, like many conservatives, have entitilements on the brain. You’re so afraid that some poor or middle class person will get something they haven’t earned through hard labor that it makes you see entitlements in all sorts of places where they don’t actually exist. I certainly didn’t mention entitlement, and no one else has. Perhaps you should have asked a question as to why people think it would be good to have a strong middle class. I will do you the courtesy of answering said question. You are welcome.
I think that in any capitalist system, it’s inevitable that those who win under such a system will game the system, or try to. Most of the time, they will succeed, because they will have the resources to, and the drive to. After all, who is most likely to succeed in a system in which the main thing is to make money? Mostly, people whose prime interest in life is makng money, and the more powerfully interested in making money they are, the more likely they are to succeed, all other things being equal.
So it’s inevitable that wealthy people will try to influence the people who make the rules in society to see that they have an easier time of it making money, and to ensure that rules that make it difficult to make/retain money (like taxes) fall most heavily on others – the poor and the middle class, or to see that there are plenty of loopholes to escape taxation (see “Perfectly Legal”.) This is inevitable, and to a certain extent, inescapable.
No matter what happens, we may rely on the wealthy to look assiduously after their own interests, to scream like scalded cats if anything appears to harm their chances of getting more money and keeping what they’ve got, and to be utterly indifferent should any of their schemes cause suffering to others of lesser wealth.
In fact, the wealthy are so devoted to their own interests (as they should be, conservatives keep reminding us) that they are perfectly capable of making themselves poorer in the aggregate if it seems like there’s short-term gain to be made in doing so. In particular, they are perfectly capable of cannibalizing the middle class if it makes them wealthy to do so.
The middle class is important, not because it is ENTITLED to jobs and a rising income, but because its health is the key marker, the critical element, of the economic success of the US, not rich people, who will do well whenever the middle class does well, because the middle class is the market which buys the goods and services from the big corporation owned by the wealthy. If the middle class gets richer, the rich gets richer, it’s as simple as that.
In fact, if the wealthy were capable of long-term thinking instead of being driveny totally by quarterly earnings statements, the welathy as a class wold be the best friends of the middle class, treating them with the same care and solicitude that a farmer treats his livestock, for just as the farmer is directly dependent on his livestock for his living, so the rich are directly dependent on the middle class.
The poor also do well when the middle class do well. Historically, the only difference between a lower class person and middle class person is a decent job, and such jobs are generally a lot more available when the middle class is doing well.
To sum up
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The rich game the system, they will do well no matter what we do, and they will inevitably do well if the middle class does well. (Has there ever been a time when middle class indicators went up and upper class indicators didn’t?)
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The middle class the true economic strength in US society (or in any capitalist society). If it does well, everybody else does well.
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The poor do much better whenever the middle class does well, because they become middle class when they get middle class jobs.
I truly do not understand why conservatives can’t figure this out. It’s absolutely natural and logical.
I thought you said that only 2% were paid the federal minimum wage and 25% of them were teenagers. You said nothing about 98% being teenagers or young but if that’s what you intended, can you cite?
Exactly. We all know what happens when such behavior becomes pervasive in the marketplace. Hope the US middle class doesn’t become the equivalent of the Grand Banks fishery.
Its not “lets stop the rich from getting richer” its lets try to have a better distribution of wealth. That helps the middle class.
Reducing pay to reasonable levels won’t affect productivity. We used to have 90% marginal tax rates and no stock options and I never heard anyone say there was anything wrong with our economy during the 50s or 60s. There are so many problems with stock options, it encourages too much risk taking, it encourages fraud, it is not rigorously implemented, etc. that society need to start taking a much closer look at how these work. In theory they work fine but the theory assumes a lot of things.
People talk about the productivity increases from automation etc. as if they belong to the person who paid for the automation, someone needs more training to run that highly automated system and that person is a direct companent of that higher productivity. If we want to improve the plight of the middle class, we need to reduce the tax burden on the middle class and place it on the shoulders of those best able to bear the burden, we need to restore social services usable by the middle class (e.g. better schools and school programs; better enforcement of regulations to prevent people from getting screwed on mortgages and by car dealers; etc.).
Enlightened self interst is a great concept but I do not believe that corporations are generally capable of enlightened self interest in an environment where the CEO makes hudreds or times as much as the line worker. I think it CAN work where the CEO makes more along the lines of what they made 40 or 50 years ago, greed has gotten in the way.
Well, when a job requires less skill to do, there are usually more people competing for that job. If you force companies to pay higher salaries, that just makes more automation desireably and hastens the demise of those jobs altogether. That is what’s happening to cashiers.
And the people not smart enough to start their own companies, but smart enough to realize that someone has to fix the machines when they break down. And someone has to design the machines, and sell them, and write the technical manuals, and write the software that controls the machines…
See above.
Well, if “overseeing a large cash flow” is a rare skill, then it will be rewarded. But keep in mind that most people use credit cards these days, so there isn’t any “cash flow” in the traditional sense. And we’re moving to the point where every product will have a smart tag, not just a barcode, and all you’ll have to do is walk out the door and an RF scanner will check you out and bill you.
Don’t forget that by keeping salaries for low skilled jobs at artificially high rates, you also encourage more people to set their sights no higher than these low skilled jobs. Every distortion of the marketplace has any number of unintended consequences.
And one would be wrong. A person’s worth to a company depends on how difficult it is to replace that person. If someone is willing and able to do my job as well or better for less money, why should I expect my company to keep me on? Now, this isn’t just about salary, because it costs money to train people and bring them up to speed, too. But what do you mean by “facilitates”? Do you mean profits generated or just the $$ amount that passes thru someones hands, or something different?
If all you do is push a button, I can design a machine to do that for peanuts. Unlesss of course pushing that button takes years of training and intense knowledge about some subject. In that case, it’s incorrect to say that all you do is push a button.
Not to be snarky or anything, but the economic principles you seem to be advocating might be appropriate if everyone on earth lived in one giant commune-- like a species of intelligent social insects working for the good of the hive. But people aren’t like that and our societies can’t be structured that way. We’re a competative species that operates largely out of self-interest. That’s why communism doesn’t work. We do also have the desire to belong to groups and expect a certain amount of security from our group, as well. That’s why Libertarianism doesn work either. No democratic society would remain purely Communist or purely Libertarian for very long because both fail to take into account crucial aspects of human nature.
I have no problem with providing a social safety net for people, but I really do believe it’s best when that safety net interferes with the market economy as little as possible. Trying to manage an economy or manage technological change is a losing proposition.
My apollogies to everyone for not having read this entire thread.
The middle class today eat out way more than ever before. They live in safer larger homes, have several more colour tvs, more cars in a garage, never mind a garage, a boat, a computer or two, automatic laundry facilities etc.
These are some of the material improvements that the North American middle class achieved over my sentient lifetime of 56 years. And they are still not satisfied.
I think we all agree that wasteful spending is a larger problem than collecting more taxes but if we are talking about the welfare of the middle class then we have to discuss their tax burden. It doesn’t matter that they pay more in absolute dollars, what matters is what percentage of their dollars they pay. Can you cite the economic growth attributable to tax cuts because thats not what it looks like from where I am standing (don’t forget the great depression). I could make a pretty good argument that there is a negligible impact on the economy by raising the top marginal tax rates and having more graduated systems.
That’s not regressive. The large personal exemption retains some level of progressiveness. Besides, which politicians are advocating the flat tax these days?
Well, that’s correct, but who’s resisting that? Neither party will let the other tinker with SS. Bush tried that and got smacked down by the Dems, even though he said he as open to changing the cap. I think most people are deathly afraid of changing SS, and both sides use that against each other. So where does that get us?
Wrong. Educate yourself: Regressive Taxes
::Takes a look at our historical income tax rates:: They’re not regressive now and they never have been.
Even if you want to argue that the overall tax burden (federal income + SS + state income + sales…) is regressive, you’d be wrong. But I invite every state that wants to contribute to the progressiveness of the tax code to ditch their sales tax.
Rising prices are an economic problem, by definition. If prices rise faster than wages for long enough there will be no middle class, also by definition. Care to explain how pointing out an inevitability is “a vast overstatement and exaggeration”.
If they want to live in the sort of country where hungry mobs don’t break down their doors and rob and kill them, yes it is. For a business, optimal = slavery. Being in business doesn’t give you a pass on sociopathy.
Translation : They lay all of the risks on the employees, and none on themselves. They make plenty of money whether or not the company does well or not, or even fails; the workers have to take wage cuts for “the good of the company”, and don’t share in the benefits if it does well.
A myth, unless you go to the point of out and out nationalization. That’s why so many communities have handed various corporations tax cuts, and then watched them go elsewhere anyway. A good private school for the CEO’s kids and a good golf course or opera house or whatever other pretentious nonsense the CEO likes; that’s far more important than taxes.
By going into debt, and by women going to work. If we went back to women being housewives and stopped living in debt, the middle class would vanish and the US economy would collapse.
I gave the cite way back in the post where I first mentioned the statistic. 98% of all workers who earn the federal MW are 25 or younger. 25% of all MW workers are teenagers. [Note: This does not take into account those who make state MW rates higher than the federal rate. But I was only trying to make the point that raising the federal rate to $6.50 (to pick a realistic number) wouldn’t change the numbers we’re talking about by very much. Sure, doing so would be be a boon to those affected, but that’s a different matter.]
Sweden seems to be doing fine. As is Great Britain, France, Holland, and the like. In fact, I can’t think of a single industrialized nation that has gone down the tubes through regulating and ameliorating the negative effects of their markets on the general citizenry. Can you?
I certainly wasn’t trying to insult you or trying to put words in your mouth. I was responding to the troubling assertion that, “Labor is simply another element in the market after all…” Labor is people and people are what’s important. If you don’t wish to be mistaken for an economic extremist then you should avoid using their cant.
Just my 2sense
Come on, XT. Come clean with us. Admit that you have a cat named Kira, a dog named Roark and you call your homstead “Galt’s Gulch.” 
One thing that hasn’t been considered here is the incremental cost of a two earner family. If both spouses work outside the home, there is cost for childcare, additional clothes, additional wear and tear on a car or commuting expenses, etc. I expect that much of the additional meals outside the home, or purchase of prepared food, comes from this also. A couple earning twice as much as a person in the '60s certainly does not have twice as much income after these expenses are considered - and they also pay taxes at a higher rate, thanks to the marriage penalty.
This certainly does not hurt two upper middle class wage earners as much as it does two lower income wage earners, where the second income has become necessary to stay afloat.
This has nothing to do with plundering, but it could explain why many people don’t feel nearly as well off as you’d think they are considering their household income.
Can I? Sure. How about Great Britian, France, Holland and the like in the mid-70’s, 80’s and even into the 90’s? They all left the socialist paradise (just kidding…they left their heavily regulated state owned world though) and came back to the dark side of capitalism and if not complete free at least moderately free markets…in order to make their various systems work. I predict that France will be making more strides along those lines this decade…or they will have some rather severe problems.
YMMV, and perhaps you feel that Europe is economically alive and kicking due to its heavy regulation, vast entitlements and social programs and high tax structure…or just alive and kicking and an economic powerhouse. Personally I think that they only averted hitting a rather hard wall by toning things back just enough to make it all work…for a while. And IMHO it aint working all that great for the majority of them (there are some notable exceptions, most of which have come even further to the dark side…or who have valuable natural resources they can tap into to make things work)…though its sure good if you are on the receiving end of the benifits trough, as long as the food lasts anyway.
Lets re-open the thread in 10 years and see if France and the rest continue to keep those wonderful entitlements (and where the US is in that time economically), those secure jobs (and the high unemployment that happily goes along with it), and all the other goodies the average French citizen thinks is their due, and the average Doper drools at.
I didn’t think you were insulting me…though I think others were giving it a shot earlier. In any case, I was merely pointing out that I’m not a head in the clouds Libertarian, nor a laissez-faire complete de-regulation nutball.
As to the rest, I don’t find it troubling that people are part of the market…in fact, I don’t see how it could be any other way. I think your unease comes from your philosophical worldview and how you perceive the market…and how you feel about the government and its role in our society. What is comforting to me is obviously disquieting to you. The converse is true of course. You are obviously comforted by the thought of government with the reigns of power firmly in their grasp, doing what they feel is best and controlling and manipulating things…for the good of the people. The thought of those fools with their hands on the economy, attempting to guide something they have little understanding of, for own good of course ( :eek: ), wakes me up in a cold sweat at night.
-XT
:smack: Drat! My carefully guarded secret is out! Actually, my cat’s name is Sabastian and the dogs name is Henry…and my wife’s name is Dagny. I make her call me ‘Galt’ at night when no one is around, but keep that just between you and me, ehe?
-XT
I’m just a naive graduate, so don’t mind my ramblings too much.
Reading posts from both sides, I notice a certain mindset repeating itself on either side. It basically boils down to, IMO, blame the companies/management vs. blame the workers. Both are bothered by the other’s attempts to game the system (legislating corporate breaks, etc, vs legislating market controls, raising MW, etc).
In either case, it’s really just playing the free-market game, IMO.
Really, if companies are suffering unduly, then go ahead and take it out on the workers. (Assuming they are unduly taxing company resources somehow.)
If the workers are suffering unjustly, place more burden on the company. (Assuming the company is taking more than its fair share.)
No side should gain too much power, or else the game is unbalanced and someone suffers.
My goofy ideals aside…
IMO, I’ve noticed my peers are way, way too eager to accept the system as timeless and good–and are so scared of the “real world” that they’ll snatch up any offer. Soon they will make up the core of the middle class. So, if the middle class is to stop this “plundering”, it needs to understand the game and treat employers with the same wariness employers treat their workers.
For example, if the company doesn’t feel like offering more than the bare minimum, then employees shouldn’t feel like doing more than the bare minimum.
The problem is the idea of competition. Someone is convinced that doing more than the bare minimum will get rewarded (and, btw, it does - I started my career as a minimum wage office clerk, moved to IT because someone recognized a talent, spent time in in consulting, and now project management). Do the bare minimum and don’t be surprised when you get the bare minimum in reward. You need to take some risks - and one of the risks is that you won’t be compensated or you’ll need to move to get the compensation. When layoffs come you are easily replaced by people willing to do the bare minimum from Mexico City at 15% of your wages.
Same deal with the idea of eat the rich. Are the rich going to stand around while we boil water, get out the salt and thyme to eat them? (I’ve heard rosemary is a better seasoning for Billionaire - and you want to marinate - tough bastards). Or are they, and their companies that employ us going to pick up and move to somewhere where they are more tolerant of the rich. Its a global marketplace - you can choose not to participate, but you can’t keep other people, other companies, and other countries from participating. We could, on a national level, pursue more isolationist trade policies, but I think we’d find ourselves worse off in the long term. Frankly, we like the cheap products China provides with their cheap labor.
To some extent, you can’t bite the hand that feeds you - even if that hand sometimes feeds you nothing but grizzle. Your choice is to find another hand.
And I’m a liberal who thinks we should raise taxes on the wealthy (just not significantly, and particularly not significantly all at once).
John, just because it isn’t laissez-faire capitalism doesn’t make it communism. There’s degrees, man.
Sure, but the society you seem to be advocating sounds like it consists almost solely of a very, very small ultra wealthy capitalist oligarchy, a larger but still very small in terms of total population of skilled workers serving them, and the rest being dirt poor unskilled workers/persons on the dole. Sounds kinda Third World to me. Is this really the kind of world you WANT? 'Cause it sure seems to me that that’s inevitably what you get when you combine unfettered free market capitalism with a social safety net. And if you make it a MINIMAL social safety net, like they have in a lot of countries, we’ll have to add a new industry to the American pantheon: kidnapping the wealthy. Big problem in Brazil and Mexico, donchaknow. What else is an ambitious prole gonna do?
This is a society that seems worth of being a GOAL???