Aside from the major hiccup the economy faced during the COVID-19 pandemic, the economy has been on a steady upward trajectory ever since years ago when we were talking about extending the Bush-era tax cuts. In case you don’t remember, we did end up keeping those cuts in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Nowadays, those fortunate few who make more than that amount are paying a marginal rate of 35%.
But like I said, it’s been years since we passed the extension into law and I still don’t personally know anyone bringing home $400,000 per year. So who is actually paying that top tax rate these days? I decided to find out what kind of jobs command such high salaries:
1. The President
Perhaps the most famous $400,000 per year job is the leader of the free world. The office of the president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.
There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.
On the other hand, most presidents end up receiving so many requests for speaking engagements after they hold office that he or she will be set for life. They also get a pension equal to the salary of the head of an executive department (Executive Level I) would be paid. In 2020, that is $219,200.
2. Surgeons and specialists
Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their careers. Plastic surgeons can make up to twice that amount.
Most people are completely okay with that though. After all, these people do a very, very important job.
3. CEOs and Founders
The median salary of a Chief Executive Officer (CEO) of a public company is over $700,000. These individuals are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry inside and out (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.
There are also plenty of CEOs from private companies who make quite a bit of money. The job can be stressful, but when you are the top dog, you reap the reward whenever your company does well.
4. Wall Street Bankers and Lawyers
If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past few years.
5. Mortgage Loan Officers
This may be surprising to you because not many people think of this group of individuals as ones who can earn the big bucks. However, there are some loan officers, riding the wave of historic low rates, who are raking in the dough right now. After all, their salary is directly tied to commissions they earn as a percentage of the total loan amount they get approved for their clients. They work hard, often seven days a week in many cases due to unprecedented loan volume these days, but they are definitely getting rewarded for their hard work.
6. Speakers in Public Events
Before the pandemic, the good speakers were booking speaking engagements left and right. Not only do they speak at conferences, but they also have opportunities to speak to employees in their offices as well. Some people even write books that tie into their brand. They travel all over the country (and some all over the world), so clients are plentiful.
The pandemic has slowed business to a trickle, but these people will bounce back because everything will eventually go back to normal.
7. YouTubers
Can you see why your son or daughter would want to be a YouTuber yet? The popular video creators not only make $400,000 a year, but they can have earnings in the millions every year. The vast majority of people who try to make it big fail to amass a following, but many dream of the life of recording themselves play video games and earning the big bucks all the time. What they don’t realize is that those who earn millions not only have talent, but they also work extremely hard. If not, then they have a team of people who are behind all the videos that get produced. An entertaining video takes hours and hours of editing, but most people just see someone talk, have fun, and collect cash.
The Top Percent of the Top Percent
These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.
Thankfully, even though individuals in this bracket are few and far in between, the government estimates that raising the tax rate on this small group raise about $600 billion in new revenues a decade.
Not bad for a group that small.
What other professions that earn annual incomes of $400,000?
{ read the comments below or add one }
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What I don’t like about your post is that you say that military spending is discretionary when protecting the US is mandated in the Constitution. Medicare, Medicade and Social Security are not mentioned in the Constitution.
Your priorities are all wrong.
However, I do agree that government spending does NOT create jobs because it can only create jobs from taxes that reduce the ability of the private sector to create jobs. However, this applies to all government jobs. They come at the expense of a private sector job.
Discretionary only means that Congress has the discression to increase or decrease spending on these categories each year. It’s what they fight over and come to compromises for a final budget. It has nothing to do with the constitution or setting priorities.
Mandatory spending doesn’t require congressional action each year. It’s mandated by rules passed years before such as eligibility for Medicare. Interest on debt plus mandatory spending is 70% of budget.
You are absolutely wrong about government spending not creating jobs. Whether you pay Blue Cross or payroll taxes to Medicare, jobs are created, although since Medicare is more administratively efficient, they need fewer related positions and, of course, cost less. Think about teachers. Whether your tax dollars pay public school teachers, or your tuition pays a private school teacher, it all is spent and goes back into the economy. It’s the same with all taxes that go to pay employees within the boundaries of the U.S. Not only are those jobs created by the government, but those salaries being spent within communities create even more – just like ALL salaries. It all creates growth.
However, for anyone to credibly say we should not increase taxes but cut spending to balance the budget and pay down the national debt, the reality dawns when you detail the spending cuts. It’s one thing to say, “cut spending”, but it’s another to cut spending. That’s why Aspiekid asked you to try. So, go ahead Peter N, try.
MOR – I have similarly broken down how minor the impact is to the budget when you raise the 1%’s income tax brackets (many, many posts ago). It’s really easy to dismiss either raising taxes or reducing spending because they don’t solve the chasm of a problem that we have with our budget. But it is a start.
You don’t go from 500 lb to a healthy weight overnight. And not eating donuts might not make you lose 300 lbs. But it is a start – and to cling to your donuts under the guise of ‘what difference does it make’ is a recipe for failure.
Problem is no president or congressman wants to raise taxes or cut spending – because people get hurt. The only thing that seems acceptable across the board is taxing the 1% more heavily. And that only helps so much…..think these recent tax rate increases have definitely helped bridge the gap without suffocating economic growth – but people still want more.
Maybe your priorities are all wrong. Not all of us believe in might makes right and that we should have as much of a military presence around the world as we do currently. This military presence also causes problems and creates enemies.
The amount of military spending we do is discretionary. We don’t need to be spending the kind of money we spend to protect ourselves. We are getting involved in the business of other states, trying to impose what we feel is right or more likely what we feel will make oil or whatever cheaper for us. Rarely does getting involved actually make us safer. This creates enemies, this is why many in the muslim world are against us, because we decided they are enemies and paint them in a bad light. Muslims are no more inherently bad than Christians are inherently good. Communism is no more inherently bad than Capitalism is good. They are just ideas and ways of life, implementation of these ideas is a different thing. Greed and laziness always seem to get in the way, but that does not mean the best way of life doesn’t land between the extremes.
YES!!!! Couldn’t agree more….
Peter: It’s the “give a man a fish, teach a man to fish” parable. I guess it’s out of fashion now.
It’s become trite, but true. However, it’s not the only parable relative to either poverty or success.
And, while I’m at it, let’s expose some myths lest they be repeated here.
The Discretionary Budget, accounting for only 30% of the total budget, is blamed for deficit spending, which has created more than a $17 trillion debt. That’s a big concern, now that the debt to GDP ratio is more than 100%,
Myth #1: Just stop sending aid to foreign countries.
Fact: The U.S. spends $20.1 billion on foreign aid. Even if all of it were cut, that wouldn’t do much to reduce spending. (Source: USAID, FY 2015 Budget Request)
Myth #2: Defense spending should be increased, even if other programs must be cut.
Fact: Military spending is already 70% of the discretionary budget. That’s because many defense functions are in other agencies’ budgets: FBI and Cybersecurity ($17.6 billion), National Nuclear Security Administration ($11.7 billion), State Department ($42.6 billion), Homeland Security $38.2 billion. These total $175.4 billion. When added to the Defense department budget, and the OCO, the total is $738.8 billion.
Myth #3: If we reduce military spending, the world will think we are weak.
Fact: The U.S. military budget is greater than those of the next 10 largest spenders combined. The second biggest spender, China, only spent $166 billion, while our bitter enemy, Russia, spent $90.78 billion. Our greatest ally, UK, spent $60.8 billion — less than 10% of what the U.S. did. (Source: SPIRI, Trends in World Military Expenditure, 2012)
Myth #4: Military spending creates jobs.
Fact: Defense spending is not the best way to create jobs. A UMass-Amherst study found that $1 billion in military spending created 8,555 jobs. The same amount spent on public transit created 19,795 construction jobs. For more, see Unemployment Solutions.
Myth #5: The best way to balance the budget is cut entitlement spending.
Fact: It’s true that entitlement programs, such as Social Security, Medicare, Medicaid and welfare are the biggest portions of the budget, and they are growing. However, they can’t be cut without an Act of Congress, since they aren’t discretionary programs. That means a majority of Congress would have to agree to change the laws that enabled them.
We go round about the need to balance the budget, usually in ways that benefit ourselves without really understanding who will be affected. Of course, those in higher income brackets, the 1% or 1% wannabes, prefer no income tax increases, while the poor and middle class prefer no cuts to benefits or, “mandatory spending”. Here’s the 2015 federal budget. Aspiekid asked how we could arrive at paying off a trillion dollars each year without raising taxes. So, where do we cut?
1. Revenue
The Federal government plans to take in $3.337 trillion for FY 2015. Most of the taxes are paid by you, either through income or payroll taxes:
Income taxes contribute 46%.
Social Security, Medicare and other payroll taxes are 32%.
Corporate taxes are 13%.
Excise taxes and tariffs contribute 3%.
Earnings from the Federal Reserve’s holdings add 3%.
Other miscellaneous revenue make up the remaining 3%.
2. Mandatory Spending
In FY 2015, mandatory spending is estimated to be $2.458 trillion, a new record. This is 63% of total Federal spending, and three times greater than the military budget.
Here’s the breakout:
Social Security – $896 billion
Medicare – $526 billion
Medicaid – $336 billion
Federal Employee Retirement – $139 billion
Veterans Pensions – $79 billion
SNAP (Food Stamps) – $78 billion
Earned Income Tax Credit – $58 billion
Supplemental Income to disabled children and adults – $56 billion
National Highways – $43 billion
Child Tax Credit – $22 billion
State Child Nutrition – $21 billion
TANF (welfare) – $17 billion
Veterans Education – $14 billion
Mass Transit – $12 billion
CHIP (Children’s Health Insurance Program) – $11 billion
Farm Subsidies – $11 billion
Crime Victims Fund – $8 billion
Foster Care – $7 billion
TARP (home loan modification program) – $6 billion
All other mandatory programs – $76 billion
3. Interest on the Debt
Although not officially a part of the Mandatory budget, the interest on the national debt is also mandatory. For FY 2015, it’s projected to be $251 billion.
4. Discretionary Spending
The total Discretionary budget is $1.186 trillion. Here’s the breakout of the major spending areas:
Department of Defense (DoD): $495.6 billion for the base budget.
Health and Human Services – $73.7 billion.
Education – $68.6 billion.
Veterans Administration – $65.3 billion.
State Department – $42.6 billion.
Homeland Security – $38.2 billion.
Housing and Urban Development – $32.6 billion.
Energy Department – $27.9 billion (includes $11.7 billion for the National Nuclear Security Administration).
NASA – $17.5 billion.
Justice Department – $27.3 billion (includes $17.6 billion for the FBI and cybersecurity)
Transportation – $14 billion.
Treasury – $12.4 billion.
Interior – $11.5 billion.
For all other agencies, see Office of Management and Budget, FY 2015, Summary Tables
So, all you geniuses out there, where do you cut, not only 700 billion from the budget to balance it, but another trillion in order to pay back the national debt over 20 years?
That is an awesome summary of the budget. Thanks for putting that together.
Interesting report by S&P that was just released saying that income inequality has definitely slowed down the economic growth during this recession. Certainly don’t disagree with that statement. The interesting finding here however was that taxation and Federal policy changes have not done anything to impact this. They actually go so far as to suggest that additional education of the workforce would be the most impactful stimulus.
We all feel sympathy for people who are struggling. The difference between the various points of view on here is that some believe the solution is to continue to raise taxes on the wealthy whose incomes have risen the most. Some also believe the solution is to raise the floor – minimum wage, paying employees more than the marketplace requires, etc.
I personally think the answer lies in adjusting our society to a more modern world. (One where unskilled labor jobs are more scarce) We need mass education of people in the fields of energy and technology. It has to be changed in a slow culture shift more than an instant legislative move. Short-term moves, particularly fiscal ones, do not create any lasting positive impact – only short term good will and additional votes.
Most importantly, we need a culture shift. As the world becomes more technology based, we are all used to instant gratification. We spend what we want and worry about the future later. We eat what we want and worry about the health impacts later. Many take the jobs that pay the most right now and worry about a “career” later. Both individuals, corporations and the government have to be more prudent.
….was just thinking of a good example in my own life of this culture shift. When I first started in my career I made barely enough to live. My wife worked as well and also made very little. I was paid a meager salary (under $20k around 19 years ago) and was not paid by the hour. Yet many nights I worked until after midnight. Why? I was trying to build something lasting. I wasn’t in this job to punch a clock and make $18-19k a year. I was there because I was learning a trade and trying to show (and develop) work ethic to eventually be at the top of the ladder.
I was part of a group of 4 of us that all had the same job description and the same pay. One quit after 3 months. The other 2 NEVER stayed one minute late, no matter what work needed to be done. I studied and got my various licenses you need in my industry. The other 2 did not. The other 2 both left within 2 years. I am now part of the 1%.
I’m not saying all of this to brag. Many, many people have similar stories – I meet and talk with them every day. But I see this kind of story happening less and less than it did in the past. I don’t think this is because of entitlement programs being a ‘good alternative’ to hard work. I do think it is due to our instant gratification culture shift. And I do think it is aided by this administration’s continued polarizing language and spotlight they are putting on the “us vs them” mentality.
Peter,
What you are saying makes sense. Stevendad also has advocated for people getting more education and skills and adjusting to the modern world. For the record, I also think that is a good idea, but don’t see how that negates the simultaneous need for other policies like increased minimum wage for those low skilled jkos that are not going away anytime soon. But set that issuer aside for now …
The difficulty in increasing the skills of the workforce is in the actual doing. On one hand people should be responsible and motivated to get their own education. On the other hand, the people who most need those skills often do not have the resources (time and money and access) to accomplish what needs to be done. The problems as I see them are:
– Pay has stagnated or declined in the middle and working classes over 30 years.
– The recent crash has devastated the incomes of many in the middle and working class and their skills are now in less demand and their savings are in shambles and their houses have declined in value.
– Colleges have doubled or tripled in cost in real inflation adjusted terms, putting them out of reach unless you are willing to take out huge loans.
– The job market shifts quickly so that the skills needed now may be in less demand by the time the college grad acquires them.
The solutions are not easy but may involve some of the following
– Cooperation of businesses and high schools and/or colleges where business sponsors and pays for all or part of education of certain numbers of graduates in the field that benefits them.
– Training/apprenticeship programs at a business to teach the skills needed for working there.
– Or the big government approach used in Germany: Free college for those students skilled enough to qualify, paid for by the state, but also in cooperation with business so that graduates are aiming for a career position that is actually needed and available. (I am pretty sure JB and the Peters would dislike this approach.)
I’d much rather have free college options (or free trade schools) than welfare or unemployment benefits. Not against that at all.
My point is – you don’t need college to learn how to lay bricks or clean rooms in a hotel. And both jobs pay decent starting wages and have opportunities for the more motivated to move up the ladder to better paying jobs with more security. It just takes a willingness to stop thinking about punching the clock and focus more on your long-term goals. Nobody gets to the 1% by accepting their fate and the status quo.
OK we are pretty much in agreement here. Amazing!
Or there is the Peter N approach: You fine and badger and harass all the poor families and put their parents in jail until they all straighten up and stop being so lazy. Then hang them by the neck until they cheer up. 😉
This is true liberal distortion and lies. I never said anything like that. I think everyone should be free to do what they want until it adversely affects others and especially me. Then what you said applies.
Lighten up to a joke.
I’m exaggerating your absurd suggestion from July 11 that a solution to income disparity was to “Tie social security income to the success or income of their kids. That would make the parents care.” … or basically fining parents who are already in poverty when their kids screw up. You have to admit this was your lamest solution to the problem.
MOR: Soc Sec and Medicare have to be cut. That is because for pre Baby Boomers they were vote buying giveaways. A similar private system would be dubbed a Ponzi scheme and be shut down by law enforcement. Also, a huge proprotion of our $17 trillion debt is owed to the Soc Sex trust fund. Stolen by Congress for their personal agendae and cronyisitic policies. If the government just abided by it’s laws for everyone else we would have far less problems. I’m sure millions of taxpayers are just waiting to use the ” the dog ate my hard drive” excuse. Good luck.
Think it is about $1 trillion for SS and $1.5 trillion for Medicare. Another $1 trillion or so is for Fed employee benefits, which they have already reformed (in 1987) for younger employees and are continuing to do so. Over half of the debt is treasuries owned by our own citizens – which we readily issued to try and stimulate the economy or to pay for our overspending.
Yes, they either have to be cut, or fully funded. Although Medicare is only 56% funded by payroll taxes, SS will last until 2036 with the accumulated reserves. Social Security has contributed NOTHING to our 17 trillion dollar debt.
But the question is, “What are you going to cut from the budget if you don’t want increased income taxes?”
I see your point….but I thought we already raised income taxes.
And you are wrong about SS. It actually makes up 16% of the national debt. Lasting until 2036 isn’t a good thing. Promises have been made long beyond that.
Steven H
You can’t staff those huge stores with students and retirees. It just isn’t practical. There will be some translocation, but all changes in policy will cause this Once again, buy a share of Walmart, go to Bentonville and speak your piece. They have to hear you.
The problem (again for the bajillionth time) is unskilled labor. There are so many people who have no skills. Check into how much evil Walmart pays their truckers. You might be surprised to find them more than competititve. Of course not everyone can drive and 18 wheeler… Same for McDonald’s and their truckers…If such a large percentage of the country thinks as you do, they should just avoid these stores and shut them down. The reality is liberals are a very vocal minority who have strongly ensconced themselves in media and in the educational system and thus highly leveraged their messages.
Interestingly, Home Depot pays more for their “associates”. Takes some know how to maneuver people through home projects. Perhaps some employees could migrate over. That’s the order of things, starting with min wage and finding better. I migrated from $2.35 an hour to $200 an hour with dedication, deferred gains, taking risk and hard work. You continually say it is impossible for any one to do that now. I completely disagree. Move, enroll in school, start a business do SOMETHING. Don’t change the system, change yourself. To a large extent, government assistance in SNAP, Medicaid, unemployment for years just PERPETUATES A LOSING STRATEGY FOR PEOPLE.
About your billionaire article, do you support slaughtering the very rich as an answer? A la “The Dark Knight”? This seems to be where this article was heading. I don’t disagree we should tax accumulated wealth more. Again, a securities and precious metals tax for the very wealthy is a great plan. Real property is already taxed and seems acceptable to most Besides, by definition, the .01% only have .01% of the votes. SOMEONE must like the system and keep voting for it.
Why are you so adamant about bringing people’s pay up and not their skills? There are welding jobs for $25-50 and hour that employers can’t fill in my area. That requires one year in trade school, but it is hot, sweaty work in the summer and requires physical labor. In my town, a building was being built and a job simply tying wire on rebar was offered for $10/hr, which is decent enough in my low cost of living state. It was filled by Latinos whose green card status was unknown. They understand true poverty and drive thousands of miles to work.
Training, skills, education is my mantra. Not SNAP, Medicaid and regulation.
Awesome post and very well said. Part of the shame of today too is that we have less unskilled labor jobs than in years past too. So all the people with no skills are all fighting for fewer jobs which drives the wages down (or at least keeps them from rising) and leaves many out of work.
And add the welding example to the hotel business example, the securities business example, and countless others we have tried to show Steven H – but he isn’t listening. He has made up his mind as to his worldview and no stories or experiences we share are going to impact that.
I am listening. But I do have doubts that there are truly a significant number of these “medium-skilled” jobs that cannot be filled. If there are, then why doesn’t the market fill them in the proper market way, by (a) offering higher wages until someone steps up, or (b) offering training to applicants to fill the positions? Obviously, according to market economics, the employers are not offering a high enough wage to fill these positions. Isn’t that what supply and demand is all about?
This is a ludicrous repsonse! You are telling me that all of these jobs that can’t be filled would be filled if they offered higher wages? What are the unemployed doing that makes them say “I’ll pass on this job unless it pays more”. You are unemployed! It’s one thing if we had a fully employed workforce – but we don’t…. $10/hour seems to me a ‘reasonable wage’ for tying wire. Are you telling me there are people that are sitting at home passing on this until the job pays $12/hour? Again…. the real world just doesn’t work like this.
I’m telling you I don’t believe that you can’t find workers to tie for $10/hour. There is information missing here. As for the welding jobs that supposedly pay $25 an hour and up; I’m pretty sure there are experienced welders who would take that. You see this story as proof that unemployed are lazy. I see it as proof that I’m not getting the whole story.
It’s a matter of trust and perspective. Your perspective is that poor/unemployed are generally lazy and mine is that they generally are not. (Exceptions can always be found.) You can’t prove such cases with apocryphal stories that, by their nature, exclude critical information. You can’t. I can’t. No one can. Such stories illustrate a perspective, but they can never prove a case.
You wouldn’t allow me to persuade you to change an opinion of yours because of some limited second-hand or even first-hand experience, colored in the telling by what I choose to include or leave out, would you?
I don’t even think the poor are lazy. So clearly you are missing the point I’m trying to make. Just trying to have a civil discussion with facts and real world examples. The difference between me and you is – I don’t have an agenda. If you read back you will see my comments cover both liberal and conservative perspectives and never have I called the poor lazy or looked down my nose at them. Furthermore, the solutions I have offered actually hurt me more than other people. You are the one with the agenda, which is making it hard for you to see others points of view
[Note: My criticism below of your industry is not an attack against you. From your description of your pay practices, you seem generous. Read the following as an honest critique of your industry. OK?]
As for the Securities business in particular, you described a shortage of new employees as an industry-wide dilemma. That sounds more statistically interesting. It also sounds like my previous observation should be compelling to you. Your industry is not offering sufficient wages and conditions to attract employees. How can you possibly argue with such certainty that the market is objective when determining a fast-food worker’s wage, but then blame the shortage of applicants to your industry on the [non]applicants. Look at this from the outside as a supply/demand problem. Increase wages/conditions and you should overflow with applicants. Or, possibly it’s a marketing and messaging issue. People have a negative impression of such “sales” jobs and you need to market your profession better. Or you aren’t getting the message out to the proper potential applicants. Any or all of the above.
But blaming the workforce for your industry’s incompetence in marketing itself or it’s stinginess in wage offering is pretty lame. You will agree if you stop and think about it.
With all due respect I don’t think you understand what types of jobs I’m talking about. There are plenty of people doing the salaried jobs in my industry. All is well there. I’m talking about the entrepreneurial commission or fee only advisor jobs. So there are no “wages” to offer.
Think of it this way – you want to run a bookstore. A 60 year old man runs the most popular bookstore in your town but wants to retire. You could a) start your own bookstore and compete or b) enter into an agreement with the older man to transition him into retirement. It might look like this…. You start with your pay being 10% of the revenue, which after year 2 increases by 10% per year until you own the business outright. However, you will basically be running the store by year 3. You will have the long hours, but for less pay than the retired original owner.
This is just an example but more appropriate to what I was talking about. I have no problem hiring salaried employees – wages and industry reputation are very healthy – it is the entrepreneurial spirit, skill and patience that comes with it that is harder and harder to find.
I missed some of your replies in this section earlier … so hard to keep track of all the posts. This thread is old so I will be brief. I appreciate trying to discuss with real-world examples. And I can’t comment on the older example of the hotel, but as for current jobs, there are about 10.2 million job-seekers going after 4 million jobs, and every major industry has more seekers than positions. So if some jobs cannot be filled, it must be due to some really significant undesirability of the job.
I don’t know exactly what the actual job of tying wire entails. I do know that $10/hr today is about equivalent in inflation adjusted terms to the minimum wage I received in a job I had at 15 yrs old being a check-out and sales clerk in a nicely air-conditioned department store. The tying wire job, if it is outdoor labor, especially in Texas where I am, sounds like a $15/hr job to me.
I am NOT adamant about bringing pay up and not skills. You miss the point. Even if you increase the skills of low-skill workers, the low-skill jobs still exist and someone else steps up to fill them. Whoever is in those jobs deserve a roof over their heads and food on their table and the ability to see a doctor.
“About your billionaire article, do you support slaughtering the very rich as an answer? A la “The Dark Knight”? This seems to be where this article was heading. ”
So you didn’t even finish a 4 page article? You certainly didn’t get the message. Slaughtering the rich was not an answer. It is a potential consequence of ignoring the problem.
And lastly, if you take all of the unemployed and unskilled workers and give them new skills, a few of them will get new and better jobs, and most of the rest will just be overqualified at their same unskilled jobs (which have to be filled by somebody), and most of the unemployed will still be unemployed, because there is STILL a shortage of jobs in this country.
I’m not saying that education and training is not part of the answer. I’m just pointing out that it is not ALL of the answer. You are attributing a moral failing to the low-skilled and unemployed, when the vast majority of them have been upended by an economic calamity in the last decade that was way beyond their control, and economic shifts in the last 3 decades in which they were the unwilling and innocent victims.
You don’t get it. The guy sitting on the street corner unwilling to take the $10/hour wire-tying job or the minimum wage janitorial job at the hotel is not in his situation because of the banking crisis of 2008. He is there because of a number of possible reasons:
1) unmotivated to work or develop long-term career
2) shortage of unskilled labor jobs
3) ability to “get by” with welfare/unemployment/etc
4) victimization
5) higher unemployment nationwide – which has come down quite a bit of late
6) jobs being taken by illegal immigrants
All of these things play a role – but can’t blame someone’s situation like this on the “economic calamity” as you call it.
There are individuals who are lazy or mentally ill or drug-addled. Yes, they exist. They will not take a job and would be incompetent to hold one.I do not believe they represent a majority of poor or unemployed.
I just do not believe that such $10/hr. jobs cannot be filled. Or if they can’t it’s due to some other missing information. Maybe the guy who is hiring has a reputation of being a jerk. Maybe he didn’t fully pay his last crew. I have no way of knowing the details. But this story proves nothing except to those who have already made up their minds as to the unreasonable laziness of the poor and unemployed.
I don’t think the poor are by and large lazy. That was part of one of 6 reasons above. Frankly many wealthy people are lazy as well…..
The part you are missing is that many of these jobs either require skill, are difficult, or may be “beneath” what people think they should be doing (like the dot com layoffs someone else mentioned).
But if you don’t believe that these jobs can’t be filled – and that these are true stories – then I’m not sure what else to tell you.
Peter, Let me explain my perspective. I have no possible way of knowing the completeness or full significance of the stories you have related, but they are of a type that is familiar: the “I knew a guy who did thus-and-such, so now I am justified in despising a whole bunch of other folks” story.
The rich , or even the comfortably employed, tend to turn up their noses at people who cannot work for a living. In some individual cases, perhaps this is deserved. But when we are still in the aftermath of an economic collapse, I find such disdain for the victims of calamity unsettling and cruel, but it is all too common among men to despise those they deem less successful.
I am reading a book called “Freedom From Fear” about the period from 1929-1945. There is a particularly relevant discussion in Chapter 6 about people in the Depression and their plight. Here is a passage.
“The Depression was a wholesale social catastrophe that fell indiscriminately on vast sectors of American society. Yet the belief persisted among many Americans that the needy, new poor and old poor alike, were personally culpable for their plight, sinners against the social order, reprobates and ne’er-do-wells, sponges and bums with no legitimate claim on the public’s sympathy or purse.”
So, to resist such unjust belief, I rail against this accusatory bias, and I am reluctant to believe storied “proofs” of justification of an age-old hatred, based on sparse apocryphal and incomplete tales, told by those who already are socially detached and monetarily disinterested and necessarily uninformed as to the plight of those they despise.
So it is not that I am not listening. Your stories simply lack convincing evidence.
You make statements like “the rich turn up their noses at those who cannot work for a living” which is equally as anecdotal as my examples of real life successes from everyday people. You can choose to believe that “all” people are like those you have witnessed with your own eyes or not.
Several of my stories are from my own life. So I’m not sure how incomplete my perspective could be. I have never held any ill-will against the poor (maybe you are confusing me with Peter N). If anything I believe in them more than you because I think they are capable of getting out of their situation without the government helping them.
And by the way….
A) we did not have an economic collapse
B) this is now year 6 of the recovery
So I’m not going to buy this “aftermath of an economic collapse” angle. Give your President some credit….we have had a very healthy recovery from what was a significant recession.
Anecdotal stories, whether from your life or mine, are incomplete because the teller of those stories usually tells them to illustrate their own strongly held beliefs. We as humans tend to notice and retain only those things that we already believe. Thus we tend to leave out significant facts that contradict the story we want to tell. Sometimes this is conscious. Sometimes it is sub-conscious because we either never noticed the facts or never researched deep enough to find information that conflicts with our initial assessment of the situation.
All that said, anecdotal stories are useful to defend a belief with an example, to illustrate a complex idea, or to explain a perspective. But they seldom if ever actually PROVE a point because they are, by their nature of focussing on individuals, not statistically relevant or complete.
For instance, Reagan told the story of “The Telephone Man”:
“In California, a man was using a public telephone booth to place a call. An alleged drunk driver careened down the street, lost control of her car, and crashed into the phone booth. Now it’s no surprise that the injured man sued. But you might be startled to hear whom he sued: the telephone company and associated firms.”
Thus Reagan used an actual anecdotal story to ridicule the tort law process and imply people were being ridiculous in suing the deep pocket phone company and not the drunk driver. Problem is, he left out other relevant facts.
From a more complete recounting:
http://www.tortdeform.com/archives/2007/03/reagans_second_pop_tort_the_ph.html
The truth could not be more the opposite–the victim was Charles Bigbee, who lost his leg in the accident. He was a custodian who worked for the city of Los Angeles. The night of his injury, he was making a call in the phone booth located on a liquor store parking lot, twelve feet from a busy boulevard. He saw a speeding car, apparently coming toward the phone booth and the liquor store. He tried to flee, but could not, because the door of the booth jammed, pinning him inside like a sitting duck.
His lawyer, doing his job, learned in his investigation that twenty months prior to Bigbee’s accident, the phone booth, at the identical location, had been hit by another car on the very same destructive path. The phone company erected another booth in the exact same spot, with no guardrail or other barrier, no warning to users, and with a door that did not work properly, with no regard to what had happened prior, and without considering alternatives. Bigbee could no longer walk and could not work. The driver’s insurance did not even cover Bigbee’s medical expenses. The trial judge dismissed the case, but the California Supreme Court said that Bigbee’s case should be heard by a jury. Eleven years after the beginning of his personal version of hell, Bigbee got his case settled for an undisclosed amount. In July of 1986, after having heard of Reagan’s jab at the system that saved him some personal dignity, Bigbee came to Washington to testify at a congressional hearing on tort law. He tried to meet with Reagan and discuss the case. Reagan refused, and continued to tell the same misleading story for the rest of Bigbee’s life, which ended in 1994 when he was 52 years old.
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Now do you understand how anecdotal stories can leave out facts and do not prove anything? Reagan’s example was unusually egregious. He was offered the truth but refused it. I am not implying that for you or for most people. For many anecdotes the truths may be hidden in uninvestigated channels. And for second-hand anecdote tellers, for instance those who repeated Reagan’s anecdote, they never have a chance to know the full truth that the first teller left out.
Entrepreneurial skills are probably not taught or encouraged as much as they should be. That said, if the jobs you are talking about entail “selling” certain investments as part of an investment planning scenario, and cold-calling clients to sell the job itself, I personally would rather slit my wrists than take the position. No matter what it might pay. But that’s just me. I really hate the prospect of trying to sell abstract commodities.
I just returned from a trip from eastern Europe. The poverty, drabness and lack of economic vibrancy are a testament to the failure of central planning and socialist/communist thinking. Romania is finally beginning to recover from the economic devastation of communism, but Bulgaria, Serbia and Croatia, to say nothing of the Ukraine, are mired in decaying buildings and unemployment (32% in one city I visited). These miseries can be seen and discussed with locals as soon as one leaves the areas usually frequented by tourists. The problem with “liberal” ideas is that they don’t work. It is not a question of good or evil, it is a practical question of what works, and central planning just doesn’t. Neither does punishing productive people with confiscatory taxes, because it discourages investment, including investment in human capital. One of the biggest economic problems the eastern European countries have is the number of people who lived under communism who now don’t understand producing for themselves. One man complained not about an inability to find work or start a business, but that the current government gave him a smaller guaranteed stipend (welfare) than did the communist government. The government’s real duty is to ensure honesty and complete information in sales, deals, contracts, etc., and to enact laws to prevent “free riders”, and no I am not talking about the unemployed, a “free rider” is someone who avoids responsibility for public shared goods, like someone who goes to a public beach and leaves a lot trash behind, assuming someone else who uses the beach will clean it up. And no, the wealthy are not necessarily free riders, because they (usually) invest effort in making wealth. It is not (in my opinion) a good idea for the government to decide who will get to keep wealth and who will get wealth from others, because that ends up with central planning and increases cronyism and graft in government.
Our current system already has the cronyism and graft controlling the purse strings and the laws that change things to benefit one segment of the population over another.
Thank you for your insights, but I hardly think the “liberal” economics that were prevalent here in the US (progressive income taxes up to 90% marginal rate, strong unions, 20% higher minimum wage) in the post WW2 decades have any relation to the failings of communism which you observed. What we are observing here in the US today, with the economic landscape after the crash, are the failings of unchecked capitalism — where incomes and wealth and political power have become centralized among a smaller and smaller percentage of the population, and government economic regulatory agencies (like the credit rating agencies) were left underfunded and effectively under control of the banks and investment houses they were rating, and those banks and investment houses were left to self-regulate.
Others here will strongly disagree, but there is a strong case to be made that most of our current economic predicament is not due to a prevalence of liberal policy but the slow and steady removal of liberal policy from our government and our nation over 30 years.
It has nothing to do with liberal or conservative. It is simply the result of inept politicians who make decisions to appease the short-term … for political gain. Nobody wants to make the hard decisions that will save our country long-term. The liberal and conservative side is far more similar than the media would have you believe.
Steven H. OK, my mistake. I just keep going back to things need to be handled more locally, perhaps state, county or municipality. Can you see how disruptive a doubling of wages in localities where the cost of living is less would be? In theory, it sounds good, but there would have to be inflation and/or job loss. $15/hr is less in Seattle than folks in the rural south are making at current min wage if u rage cost of living into account.
Thank you for admitting a mistake. I have certainly also made my share.
“Can you see how disruptive a doubling of wages in localities where the cost of living is less would be? In theory, it sounds good, but there would have to be inflation and/or job loss.”
Yes, I can see that raising minimum wage too high, too fast, could, in theory, produce job loss. Studies of actual raises in minimum wage show no such correlation, however:
========
From: Business for a Fair Minimum Wage website:
http://www.businessforafairminimumwage.org/news/00135/research-shows-minimum-wage-increases-do-not-cause-job-loss
Research Shows Minimum Wage Increases Do Not Cause Job Loss
Extensive research refutes the claim that increasing the minimum wage causes increased unemployment and business closures. (See list below.)
The buying power of the minimum wage reached its peak in 1968 at $10.74, adjusting for inflation in 2013 dollars. The unemployment rate went from 3.8% in 1967 to 3.6% in 1968 to 3.5% in 1969. The next time the unemployment rate came close to those levels was after the minimum wage raises of 1996 and 1997. Business Week observed in 2001, “Many economists have backed away from the argument that minimum wage [laws] lead to fewer jobs.”
Numerous states raised their minimum wages higher than the federal level during the 1997-2007 period the federal minimum wage remained stuck at $5.15. Research by the Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.
As for local control, the national minimum wage has always been on the lower end. Individual states are always free to raise their min wage higher, so local control is not violated.
Germany, Sweden, Norway, Finland and Denmark have a population of 100M, which is 1/3rd the size of America. Norway has 3 major industries, Oil, Shipping and Lumber. Germany has the most diversified economy. But they don’t have the massive immigration problem like the US does. They don’t have 20M illegals in their countries. They have some and more people are moving there due to the free stuff, but they will become overwhelmed at some point and there will be issues. The population is pretty homogeneous across the five countries. The countries are much smaller than the US. It is unfair to compare what they have to the US. Their taxes are much higher and people are OK with it. Their political system isn’t a fucked up as ours is.
Every country is different. Every era is different. What I was pointing out earlier is that it is (to use Peter’s phrase) “categorically wrong” to assume that progressive tax rates destroy an economy. They worked here. They work in other countries, including countries with the happiest populations. You say I cannot use such comparisons to prove my case. Then you must agree that there is also zero evidence to prove they will NOT work here today.
Do you have any data that fracking is more dangerous? The US geological survey can’t directly relate earthquakes to fracking, but somehow liberals can. Interesting. Every oil well passes through the aquifer, fracking or not. Aquifers are in the first few hundred feet and American wells are usually in the 10,000 feet plus range. I have no problem with nailing corps to the wall for improperly casing wells. I even think small operators should have to pay a form of insurance to insure our water. This prevents them from just filing bankruptcy and nothing being paid to clean up. I have a well 200 feet from my house, so I am very aware of issues.
“Do you have any data that fracking is more dangerous?”
Yes I found a half-dozen studies from such “liberal” bastions as Scientific American, NOAA, and the USGS relating fracking to earthquakes, water well pollution, and air pollution. Here are a few.
Researchers from Cornell University and the University of Colorado say a large swarm of earthquakes in central Oklahoma was probably caused by activity at a few highly active disposal wells, where wastewater from drilling operations — including hydraulic fracturing — is forced into deep geological formations for storage.
http://www.latimes.com/science/sciencenow/la-sci-sn-oklahoma-earthquakes-fracking-science-20140703-story.html
In Pennsylvania, the closer you live to a well used to hydraulically fracture underground shale for natural gas, the more likely it is that your drinking water is contaminated with methane. This conclusion, in a study published in the Proceedings of the National Academy of Sciences USA in July, is a first step in determining whether fracking in the Marcellus Shale underlying much of Pennsylvania is responsible for tainted drinking water in that region.
http://www.scientificamerican.com/article/groundwater-contamination-may-end-the-gas-fracking-boom/
Tests show Texas well water polluted by fracking, despite EPA assurances.
http://grist.org/news/tests-show-texas-well-water-polluted-by-fracking-despite-epa-assurances/
A study by researchers with the National Oceanic and Atmospheric Administration (NOAA) in late 2012 reconfirmed earlier findings of high rates of methane leakage from natural gas fields that utterly vitiate any climate benefit of natural gas, even when used as an alternative to coal.
…
Gas drilling operations release airborne contaminants that can have detrimental effects on our health. Areas where there is gas production have reported significant increases in ozone, commonly known as smog, because some of the toxic precursors to smog, such as volatile organic compounds and nitrogen oxides are released during the process that brings natural gas from the ground to market.
http://www.catskillmountainkeeper.org/our-programs/fracking/whats-wrong-with-fracking-2/air-pollution/
“The US geological survey can’t directly relate earthquakes to fracking, but somehow liberals can.”
USGS: The analysis suggests that a likely contributing factor to the increase [from the long-term average of two magnitude 3.0 or greater earthquakes per year, to 109 in 2013 and 145 in just 5 months in 2014] in earthquakes is triggering by wastewater injected into deep geologic formations. This phenomenon is known as injection-induced seismicity, which has been documented for nearly half a century, with new cases identified recently in Arkansas, Ohio, Texas and Colorado. A recent publication by the USGS suggests that a magnitude 5.0 foreshock to the 2011 Prague, Okla., earthquake was human-induced by fluid injection; that earthquake may have then triggered the mainshock and its aftershocks. OGS studies also indicate that some of the earthquakes in Oklahoma are due to fluid injection. The OGS and USGS continue to study the Prague earthquake sequence in relation to nearby injection activities.
http://earthquake.usgs.gov/regional/ceus/products/newsrelease_05022014.php
Shall I go on?
Steven H. First I have an IQ just below 170 so please don’t feel the need to dumb down your arguments. That was insulting. I can’t seem to get through your thick Liberal skull that I’m not opposed to a fair wage. I think they should be more local. The cost of living in San Fran or Honolulu is nearly triple that of a small town in Mississippi. So the huge unwieldy hammer of the Federal government is not the best answer. One size does NOT fit all. Again, if we compel large corps to pay back Fed, state and local benefits it will encourage them to pay fairer wages without distorting prices and economies. in the whole country. Nothing will drive automation faster. Need to invest in companies that make robotics I guess.
Hold on, stevendad. If you reference my statement “It gets the point across better in language that JB, Stevendad, and the Peters may better understand.”, it had absolutely nothing to do with dumbing down arguments. From my experience on this thread, various people cease listening to arguments when they just don’t like how something was said. Just like this case. You think (incorrectly) that I was insulting your intelligence so I suspect that you did not even read the article. (Or did you?).
I have not had time to respond to all posts here, but I really like your posts indicating that you favored paying employees a good wage in order to keep good competent employees and avoid turnover.
I thought that Mr. Hanauer made arguments about the importance of income disparity better than I have, and with a different solution approach. I think it is an intelligent, well-stated argument, and should have some elements that you actually agree with. It has nothing top do with dumbing down anything.
Horizontal drilling was developed by industry without any direct government funding. I know who did but can’t check (privately held company) and see what credits they used. “Fracking” is set of old techniques that have become viable due to the high cost of oil. I wrote a program for one of the techniques in 1982. The point is, there is no direct government support for trillions of KWh of energy found by oil and gas industry. Unleashing the industry would raise taxes, cheapen energy (and promote economic growth) and can reduce defense spending by making Mideast less economically important to us. Let Hapan pay to keep the Straights of Hormuz open.
I’m not entirely against “unleashing” the energy industry but I don’t really know what you mean by that. Deregulating? That would be foolish. The fracking is under-regulated right now and the water supplies of millions are at risk, as well as the noise and air pollution that have invaded where they live. Not to mention the earthquakes. What liability for housing damage are the fracking companies willing to cover?
What do you mean, unleash?
Cut dept budgets to inflation orless would help my brother, brother in law and father were all Federal employees. They all confirmed that they scrambled at the end of the year to spend budgets on toys and gadgets so they could ask for more the next year. There is NO incentive for efficiency. If our Fed departments ran more like businesses we would make a great start.
Re: drug abuse. I think that abuse is higher in low SES, but regardless the tuch are at least paying for their own drugs. I’m sure I indirectly pay a few dollars a day for other people’s drugs and I DON’T LIKE IT.
There is a recent article by the Daily Beast citing a “Standard & Poors report released August 5 says that rising inequality—gaps in both income and wealth—between the very rich and the rest of us is hurting economic growth. The agency downgraded its forecast for the economy in the coming years because of the record level of inequality and the lack of policy changes to correct for it. The report’s authors argue against the notion that caring about equality necessarily involves a trade-off with “efficiency”—that is, a well-functioning economy.” It focuses not on who is at fault, but rather the unintended outcome of the much ballyhooed theory of trickle down economics which is starving our economy because of the lack of buying power amongst the masses. It’s not about evil or sainthood, but a reasoned explanation on cause and affect.
http://www.thedailybeast.com/articles/2014/08/08/the-big-long-30-year-conservative-lie.html
Great article, Joe. For those who don’t like the rhetoric of the Daily Beast, try this article from a 0.01%er that the article references. It gets the point across better in language that JB, Stevendad, and the Peters may better understand.
http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.U-Z1R1bfbNp
Seriously, the article above is a well-articulated discussion of the issues around income inequality, from the perspective an entrepreneur. Anyone posting on this thread should read it. It even has different solution options and some items JB and the Peters may agree with.
Interesting article. Refreshing to read something like this (or even better the original S&P article which is void of “editorial opinion”) that identifies a problem and doesn’t suggest hiking taxes on the 1-5% as the solution.
Okay, you all keep dancing around the solution to the tremendous national debt, with some saying we should only cut govertnment spending while others are willing to raise taxes also. My question is to the “NO NEW TAXES” group. We’ll be at 20 trillion dollars in debt soon. So, over a 20 year period, how would you bring that down to zero? That’s a trillion dollars per year or 27% of the current budget of 3.77 trillion. What exactly would you cut and exactly what would be the consequences? Please don’t say, “Fat” unless you can identify it and know its exact value.
We need to start by stopping the deficit which is adding to the debt. You can’t bring it down over 20 years without crushing the economy or eradicating all the benefits owed like SS and Medicare. Cutting military/defense, changing Medicare and SS for all those under 40-45 is another start. Make minimum retirement age 70-72 years old for SS, raise taxes across the board just slightly.
It’s all irrelevant though. We have juveniles who would rather polarize us all (and make it tax the rich vs cut entitlements) for their own political gain. Not gonna change until we have some open minded people in office.
HERE HERE HERE! EXACTLY! As long as we allow these fools to polarize us we will get nowhere. They are all worried about keeping their job by showing how far left or right they can go to appease some stupid extremist group that they forget to do their job which use to involve compromise to come up with the best solution.
That’s again too simplistic Peter. What would you cut Medicare and Social Security to? Remember, a large portion of retirees (40%?) now depend solely on SS for their meager pension. That’s not going to change for those under 40-45 either. How much can we save from the general fund in defense cuts and delaying retirement to 72? Can we get close to a trillion dollars?
It is complex but let me give it a shot….
More retirement age for all those born in 1970 or earlier to age 70. 71 for those born in 1980, 72 for those born in 1990, etc. The goal should be to get to age 74-75 as retirement age. Instead of jacking up taxes on the rich, put in windfall provisions and means tests for SS benefits. Much like financial aid for college. If you have a certain amount of assets or other income, your SS gets reduced. Get rid of the loophole where couples can delay their own SS and take half of their spouses, only to take theirs later and get full benefits. Could go on and on here …. But all of these options would have a minor impact on people and make a huge difference to the cost of the system. SS is an easier one to fix than Medicare because retirement is not a “right” and Medicare is largely all out of whack because of the companies that profit from it and have lobbied to put all sorts of fat in it. No company benefits from SS so it should be easier to reform.
And I don’t agree that those 40-42 will be living off of SS too. If we change the system they will change as well. Bottom line is we need a culture change. Get away from the “give me everything now” instant gratification lazy spend-happy attitude of today and begin getting people thinking about their long term future. This culture change happened in Japan but was due to a financial collapse. Hopefully it can happen here without that. Nothing else we do is going to matter unless we change the culture.
Gradual and stepped changes in Social Security is the way to go, but the problem will resolve itself if Congress would just put back what they took. Remember there is currently a large spike of retiring population which “will” resolve itself in the next 10-20 years. The current boomer generation is taxing the economy, but they are the ones that funded SSI and should the ones that benefit from it. The next generations should not be so incumbered and should benefit from a less taxing economy. If
“When Society, through government, determines that the rules that government itself created have shifted wealth to unproductive sectors of the economy”
Like investing in economically nonviable wind and solar energy I guess?
Sorry, have to poke a little fun now and then.
And what will society rule is “unproductive sectors of the economy”? When the money isn’t in their pockets. I don’t want ANYONE making this determination. Not the rich, not Obama, not the unemployed. Idealism vs real eorkd
So it is completely impossible for anybody to figure out what broad sectors of the economy are productive or unproductive? Does it take a genius to figure out that credit default swaps and banks allowed to have vested interest in cheating their own customers is a bad idea?
Poke all the fun you want at investment in these, but fact is government investment in technology has given us a lot of what we have today. Many great advances the our great companies depend on, that helps them be the best in the world, depend on tech that was government backed while it was economically nonviable. We live in a world dependent on energy. Investment needs to be made to keep us at the top as energy consumption grows continuously.
Well-stated, sir.
As long as we’re quoting wise historical figures, here’s one from Abe Lincoln, an Obama favorite:
“Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.”
JTM: Yes, I’d like to reduce taxes on business but at the same time stop currying favor for special interests by closing loopholes. This is purely to encourage businesses to stay and invest here. Don’t incentivize drillers or solar companies. The concept by some, including Obama, that business should serve anyone but their owners is false. They are morally and legally bound to maximize their profits over some time horizon. We all should pay the least tax we can within the framework of the rules.
Man this thread is long! Went way up to find my solutions. I’ll fix the typos, but no other changes.
Of course the debt relates only to changes in taxation because spending almost never goes down..
I have several ideas too:
Reduce the abilities to expense salaries over some high amount ?$2million? Having to pay twice on ridiculous salaries would give companies pause.
Make companies repay Fed/state benefits that are paid to their employees who get low wages. This incentivizes increased pay, but would not necessarily affect min wage. Besides it’s not fair for Fed government to subsidize multibillion dollar companies Re: min wage, remember, the cost of living is double in some states compared with others. This is a better a state by state decision.
Simplify the tax code and drastically reduce IRS. Eliminate ALL the deductions and loopholes, including for houses, kids, age. Note that the wealthiest ( not highest income) Americans are over 65. But they get $10,000 extra writeoff. If givng age related benefits, I’d lean to younger, < 30 yr olds, but prefer none.
Legalize sports book gambling everywhere and tax it. A $200 billion industry.
Legalize marijuana and tax it. A $250 billion industry.
Quit subsidizing but unshackle the energy industry.
Tax wealth in securities / cash over some amount. Perhaps $10 million. We already tax real property.
Liberalize work visas and collect taxes from migrant workers. Nail cheaters to the wall.
Begin Soc Sec and Medicare means testing.
Disallow any further municipal bonds that are Fed tax deductible. Let localities support local projects.
And an addition: limit government departmental growth to inflation rate.
These collect presently uncollected taxes, prevent Congress from crony giveaways, reduce expenses and gives benfits to those who need them.
Tie all taxes to the type of expenditures. Gasoline taxes only to highway improvement and auto safety; tax sugar in food and drinks to pay for obesity treatments and expenses (maybe fat too); property taxes should go only to the protection and improvement of real property; schools should be funded by income taxes since their success directly relates to the income of all; tax food to assure we have safe consumption, etc. By tying taxes only to those goods and services which they improve, taxpayers can get a much better handle on whether they are getting value for their money and collectively decide whether additional investment by way of taxes is warranted or whether it’s worth cutting back, understanding the exactly what the consequences will be.
Although I initially agree with many of your ideas here, some of which I haven’t seen before, I greatly disagree with limiting gov’t department growth to inflation just like I’d disagree with limiting any corporations growth to inflation. That would severely limit flexability and our nations ability to respond to different needs of her citizens which change over time. For example, we currently need to respond to the humanitarian crisis taking place at the Texas border where the numbers of unaccompanied kids from central America crossing into the U.S. has exploded. Reconfiguring departments for greater efficiency would also be undercut or made impossible. And over the long term, we can’t expect employees salaries to stagnate in real dollar terms when they go up due to increased productivity in the private sector. After a while, few good people would apply as wage disparities grow.
You have some interesting ideas however, and much worth exploring. Thanks
I listed the three ways taxes is made up, increased new taxes on new revenue, increased income/employment taxes for new jobs, decreased support payments
I have been meaning to tell this true story for a while, just haven’t had time:
There are 4 sisters, one worked in my office (S), who tells the story. She had 2 sisters who had a child and subsisted on SNAP, reduced housing, Medicaid and AFDC. The 4th sister got pregnant. S recommended abortion or adoption and to go to college the next year (please don’t bring up abortion debate on this blog). The other two said keep and live their lifestyles of free money from the government. Incidentally, they partied with meth they traded benefits for. Who is right? Should we actively support these lifestyles? How can we give out money and keep it from being diverted from kids to meth? Discuss.
And how do we stop corporations from abusing government money given to them?
This is simple. Don’t give businesses money. The same goes for everyone else.
Simple.
No Peter N, it’s not simple at all or we’d be doing it. It’s simplistic to think so.
Read carefully, My replay was about abusing government money given to business. The government shouldn’t be picking winners and losers. People should be free to decide what products to buy or companies to deal with.
JTM answers well. No one likes to subsidize waste or fraud, but you cannot use the small percentage who abuse a program to excuse eliminating the good you do for the majority.
And there is a much bigger cost to society in corporate fraud and waste, and, again, the destructive nature if an investment system that is still “too big too fail”, and too powerful to jail..
There will always be addicts who will lie, cheat and steal to support a habit. Eventually they either get caught, or life deteriorates to a point of misery where they either get help or they die. Studies have shown, however, that the percentage of people abusing drugs is equal to or less among those collecting welfare compared to the general population. Our stereotype of the black mother of 5 kids from 5 separate fathers, watching TV all day and doing crack all night has been manufactured by those opposed to granting any social benefits. It does not exist in any greater numbers in the poor that in the wealthiest members of society.
Because the amounts are so much greater for corporations and wealthy individuals, cracking down on both illegal and legal corruption, abuse, and fraud in the U.S. would yield many times greater returns than reducing welfare and safety nets for the poor and middle class.
Steven H: I like your business analogy. Why give 22% of your capital to your worst performing division, the US government? You just argued to reduce government and taxes. ROI is negative for government where it is 10 to 15 % in private sector.
Government is outside of Business. It is within the purview of Society, to accomplish the goals of Society. It is not for Business to control.
The Banks and investment sector are the worst performing sector. They have expanded from 2% of the economy to 8% of the economy, and with this outsized capital they created destructive financial instruments and almost destroyed our country. They are not only non-productive, they are, in their present excesses and over-capitalization, dangerous to the very continuance of our nation.
JTM & Steven H:
Tax,tax,tax,tax. Do you have any other ideas at all?
No. Not Tax tax tax. But if we are going to give up taxes on corporations it needs to be made up somehow. We are already hugely in debt. Do you propose we go further in debt? We already need to cut expenses, there is only so much to cut. The reason given for reduced rates on investment is that it is double taxation. Is that not true? Cut cut cut, sorry that doesn’t work any better when you ate insanely in debt. We can’t grow out of it. What is your solution to the loss of taxes?
Nope. That’s it. Again it is working backward from the desired solution that leads to this. He wants richer people to pay more in tax. Period.
And what do you offer besides cut taxes? How do you propose to cut a huge portion of business taxes and not increase our debt even more? What amount of spending cuts do you think are even possible with this congress? Let’s try to at least be reasonable as to what is likely to pass in Congress.
I don’t think we should cut taxes – never said that at all. I actually think raising them made sense. I have also proposed many other things on here as well, including tiered (over time) entitlement reform and spending cuts.
Peter, I have missed where you ever indicated that raising taxes made sense. I applaud this acknowledgment. I also agree that entitlement reforms over time make sense.
Unfortunately it’s hard to follow at times with so many Peters. One seems to only argue that taxes are to high. Stevendad seems to think i only want to raise taxes, i don’t but I also don’t want to recklessly cut them. I feel they are fairly appropriate currently. I don’t see how it can be argued to cut taxes until spending and debt are under control. Tiered entitlement reform is most likely necessary to keep ss, medicare and the like solvent, even if it will likely cost me.
Peter, you disappoint me. The US already has the second highest business taxes. That is why there is the inversion problem.
Peter N – I think peter didn’t notice stevendad was most likely posting against the other post above. I’m sure he would agree corporate taxes should be cut. Correct me if I’m wrong.
What would you say if someone told you, you disappointed them, just because you don’t back their view 100%? Come on. Let’s have a productive discussion not continue to put each other down!
These posts get jumbled when people start a new post (sometimes forced? ) instead of replying direct to a post.
I have jus pointed out repeatedly that we have already raised taxes. My taxes are the highest they have been in my working lifetime. You just think they should be raised more. But none of it matters without spending reform – it won’t make a bit of difference in the wealth inequality thing you are talking about.
That said I am so tired of hearing about how I make so much money because of luck, who I know, or some sort of rigged society with rules that need to change. It is exhausting. The irony is that the majority of my clients are benefactors of the out of control federal spending. Yet I want that to stop which means my clients possibly losing their jobs and my pay going down considerably. I would rather have that than higher taxes and more money for the government to spend. This is the opposite of self serving – but it is better for society at large.
Peter, You just want additional taxes off the table period, even if they are for marginal tax rates above your income. You realize that government will not be cut sufficiently to eliminate deficits, but refuse revenue as an option? Yet you are reasonable and I am not? Society has the right to rule over Business. That is what I am saying.
Understand this: I was wrong to say you did not earn your money. You received it through valid and legal contract and that is what earning is. But if Society changes the rules, and you receive or take home less, then you will earn a different amount and that amount will be no more or less fair than what you receive today. It will be what you earn. Society should not make rules based on what an individual seems fair to himself. Every individual wants a bigger share. But in order to further the visions Americans have for their nation, Society, which is government via you and I, must set and maintain rules that prevent excesses of centralized wealth, alleviate poverty, and allow everyone — EVERYONE — to have a chance to climb the economic ladders.
Never said take taxes off the table. Just think tax rates are way down the list in the “solutions”. But you will see. We have raised tax rates considerably in the last few years. We will see when we stop feeding the economy with stimulus whether these higher tax rates help anything. I don’t think they hurt , but I don’t think they help.
And yes, I am talking about personal taxes. Corporate taxes should not be raised.
What I want, Peter, is to raise taxes to cover expenses and slowly decrease or contain expenses/GDP over time. You yourself have said taxes may need to go up. Should they go up only on the poor? Of course not. They have to go up on the people who actually can afford to pay more. What is so unreasonable about this argument?
I have said repeatedly….taxes have already gone up – significantly so on the higher incomes. And that’s fine – let’s 1) use the money wisely and 2) not raise them anymore.
You continue to misunderstand me. I do not think we need tax cuts from here but absolutely don’t think we should raise taxes on anyone from this point. We made the revenue move by raising taxes and enjoying the fruits of the recovering economy. Now let’s get serious about the spending side once and for all.
Stevendad, I clearly mentioned other approaches than tax. I’ll repeat:
We, the people, through our duly elected government have the right and indeed the responsibility to limit the unmerited and outsized accumulation of wealth by applying highly progressive tax rates, strengthening unions, applying a reasonable minimim wage, or any other means that will benefit Society.
The question I was answering was whether Society has the right to rile over business. It is pretty clear that it does, by law, my moral right, and by founder’s design.
You seem to think I am unreasonably obstinate in proposing taxes and revenue that sustain our government. Are you not more unreasonable in refusing those taxes and revenue to sustain our government? We have already established that you cannot quickly cut enough government to eliminate the debt, yet taxes are completely off the table?
… rule over business … not “rile”
You, congress and Obama don’t have the wisdom to know what is unmerited.
Perhaps not, but “immoderate” and “excess” are pretty easy to figure out.
… by moral right not “my” moral right …
wish we could edit these posts …
OK, smart companies just leave the $2 trillion overseas and the treasusry gets ZERO.
My link and question were sincere and legitimate. Tax amnesty has been tried. If it was designed poorly (which it apparently was), how can it be designed to work differently? I have no doubt that our, and the world’s, management of international companies and “stateless capital” is insufficient. But the previous attempt, only summarized at my link, seems to clearly show that tax amnesty, applied simply and directly, will not give the desired result.
A small revelation:
Peter N and others on this thread have repeatedly asked:
– What gives anyone the right to limit how much money people take home as pay (by limiting wages or raising taxes with a highly progressive rate)?
The answer was right in front of me. I verbalized part of it in an earlier post, and restate here.
– Business is the economic system, and the manner of business in the US is capitalism, where wages and prices are adjusted by supply, demand, and negotiation.
– Society is how we live and the rules are determined via rules and processes of our Democratic Republic.
The other points that complete the revelation are:
– Wages and prices set by capitalism are not absolute. They are both objective (in range at a given time) and subjective (varying widely in specifics according to multiple variables). They vary according to at least three variables: the negotiating power and skills of all parties, the discretion of the managers of the wage distribution systems, and most importantly, the rules that society puts in place to govern capitalism.
– The rules that govern capitalism include items such as minimum wage, tax rates, regulations, consumer protections … all the stuff that government does in the name of establishing and maintaining a fair, just, and prosperous society. These rules are arbitrary and subjective, in the sense that there is no single fixed right way to put the rules in place, yet also objective, in the sense that impacts of rules can be measured over time, and the desired impacts selected by selecting certain rules.
– Here is the clincher: Business exists to serve Society. Society does not exist to serve business.
The reason that it is OK to put highly progressive tax rates in place that limit the outsized accumulation of wealth, is because Society has the right to improve how we live at the expense of Business. Business serves Society.
The reason that Business hates big government is because Business thinks it is most important and it wants to suppress Government and control Society. Business warns of Government as a tyrant, yet in fighting government and gaining control, becomes the Tyrant.
We, the people, through our duly elected government have the right and indeed the responsibility to limit the unmerited and outsized accumulation of wealth by applying highly progressive tax rates, strengthening unions, applying a reasonable minimim wage, or any other means that will benefit Society.
This is not only American, but echoes the words and intents of our founders.
“The great object should be to combat the evil [of divisive political factions]: 1. By establishing a political equality among all. 2. By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches. 3. By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort. …”
James Madison
The Founders’ Constitution
Volume 1, Chapter 15, Document 50
Remember:
Business serves Society. It is not the purpose of Society to serve Business.
Lol do you really really believe this? I could draw up a similar “thesis” to support Hitler’s regime or slavery. Saying that these changes “serve society” and that we have the “right” to enact laws that help society at large. Your statement that wages are “subjective subject to multiple variables” makes NO sense whatsoever. I really think i understand where you are coming from ….. I just wish you would spend more time in the actual real-life business world.
Perhaps the statement is dramatic, but the point I think is sound, and the perspective is useful. You cannot justify limiting capitalism from within the rules of business and capitalism. I have listened to you and JB and Peter N pound on me repeatedly about this. Supply and Demand objectively sets low wages for people with low or common skills. Yet instinctively I know that a minimum wage is a good and necessary policy, and that janitors, and maids and food servers should receive a livable wage for their labors. The only answer to justify that policy is that Society can choose to override Business by setting certain rules according to subjective judgments of human decency. And as to excesses of wealth, any student of the latter 19th century and early 20th century would attest to the destructive nature of centralized wealth and vouch for limitations at the high end. This also can only be justified by the society applying its superiority over business via setting rules, whether they be anti-monopoly, wage and labor polices, or tax policy.
So the “revelation” that Business serves society and not the other way around, establishes the proper pecking order. Business is still important and the purest principles and desires of Business and Society, individually, must be compromised to advance the joint requirements of both. But somebody must rule. And in America, Society, which are the people ruling through representative government, are clearly intended to have the upper hand.
“Yet instinctively I know that a minimum wage is a good and necessary policy, and that janitors, and maids and food servers should receive a livable wage for their labors.”
The dollar amount they may get will go up but after everything equalizes they will still be at the bottom.
You must consider that everything is relative. If we all put an extra 0 behind all of our accounts and money would any of us be better off? The prices would soon have extra zeros behind them so there is only inflation but no wealth created.
“So the “revelation” that Business serves society and not the other way around, ”
Business serves the owners. It is that simple. When business in OWNED by society that usually doesn’t work out well. Socialized business fail more often than not or require huge subsidies.
Its the weekend am ready for your next stupid idea. Bring them on.
I love picking on Marixist, Socialist and Progressives. Their arguments are so lame. It would be so much easier of they would just see the light and accept that there are no answers but survival of the fittest, or more accurately survival of the those that are most adaptable to the current conditions. This is the way it has been for millions of years. Steven H, you and I can’t change that. It may sound hard and cold but it is fact. What we are living through now is an anomaly.
Steven H, you can tax all you want but you have come up with NO solutions as to how you will make all the poor more adaptable to the current conditions. You and others like you have no solutions.
Peter N – Sorry you are no better. You are just at the opposite ends of the spectrum. I have seen no more solutions from you, especially practical, viable solutions.
“Peter N – Sorry you are no better”
There aren’t a lot of answer and no answer that people would accept because it would impose on their freedom to be irresponsible, uneducated or lazy.
One could always pass some very strict laws forcing people to be responsible in many areas. There are motorcycle helmet laws and baby car seat laws as an example but I could think of a whole lot of laws that would be similar or more extreme but libertarian in me finds this approach to be simply wrong but a libertarian shouldn’t be made to pay for other people’s right to screw up.
Nobody disagreed with minimum wage.
Livable wage is debatable – we have some of the wealthiest poor in the world.
Maybe their wages would be more livable with lower health care costs and more subsidized housing rather than trying to force employers to pay more money for jobs anyone can do.
There is growing evidence and support for raising wages for the lowest paid jobs. Someone noted that putting more money in the hands of the poor will only be spent and not reinvested or saved. But that is a flawed premise because it totally ignores the effect of more dollars stimulating the local economies which results in private sector job growth. The concept of a “living wage” is to set a floor and tie it to GDP or inflation. There are pockets of this idea being shown to be successful without overpricing the goods or services these companies market.
I share your sentiment but this is a bit ridiculous.
“The reason that it is OK to put highly progressive tax rates in place that limit the outsized accumulation of wealth, is because Society has the right to improve how we live at the expense of Business.”
Look at where that has got the nations that have done this.
“Business serves Society.”
No, it serves its owners or stock owners.
If a business doesn’t like the rules under which it is operating it can go to another country. Haven’t you or anybody been paying attention the the “inversion” of businesses to avoid paying high US taxes? Now the US gets less than it did. You can’t kill the geese that lay golden eggs like the US does.
I don’t see any problem with Madison’s points IF you read them carefully.
The key word in point 2 is UNMERITED. Who are you or anybody to say what is unmerited?
Point 3 said “without violating the rights of property”
The fruit of my labor is my property.
Steven H all you have wanted to do is take away property.
1) America did fine for decades with highly progressive tax rates and strong unions and enforcement of anti-monopoly laws. It is since we abandoned those policies and institutions that our economy has declined.
Germany is doing fine with higher tax rates. The 5 happiest nations on earth have high tax rates and strong social programs. Greece and some other nations have severe economic problems, due to bad management, like not making sure their revenue covers their expenses.
High progressive tax rates are not predictors of a failing economy. It is only one policy among many, but our economy has done better with it than without it.
2) With respect to whether Business or Society takes priority, Society must rule. You know that is what I am saying, don’t be difficult.
3) Walgreens just backed off from Inversion, because Society was about to kick their butt. Government is also considering how to block such inversions. Society must rule over Business. When Business tries to take control, they need to be put in place. Globalization has gone unchecked for too long.
4) “Who are you or anybody to say what is unmerited?” I just told you Society, through government gets to rule over Business, and they (we) get to judge if a company is a monopoly, or if any sector of the economy is rewarded excessively. That is society’s RIGHT and RESPONSIBILITY.
Madison is clearly recognizing that unmerited accumulation of wealth can occur. Do you deny it?
“Madison is clearly recognizing that unmerited accumulation of wealth can occur. Do you deny it?”
No, there are always going to be Madoffs and other illegal activities but we are talking about legal businesses.
“High progressive tax rates are not predictors of a failing economy. It is only one policy among many, but our economy has done better with it than without it.”
Wrong. Just categorically wrong.
I was perhaps overly dramatic. But it does spur the conversation.
The idea is that repatriated profits raise the economy and help the treasury in 3 ways: new income taxes for more workers, increased taxes on new profits and reducing safety net payments.
Tax amnesty failed before. Why would it succeed in doing anything but making the rich even richer, if we try it again?
http://taxjustice.blogspot.com/2009/06/new-evidence-on-bushs-tax-amnesty.html
That is why we need tax reform, not amnesty. Tax the investors not the investment. It is harder to justify investment in tax avoidance the smaller the earnings are. There is also no need to worry about housing earnings outside the US.
I think I am more egalitarian than some on this blog, but agree completely using the Federal as the collector and redistributor of wealth is a counterproductive strategy.
Agree!!!!
Taxes do not redistribute wealth. They improve society and the way we live by preventing wealth and income from accumulating in nonproductive sectors of the economy.
If you are running a business, you do not allow one sector of your business to control most of the resources of the company if they are not using those resources productively.
When Society, through government, determines that the rules that government itself created have shifted wealth to unproductive sectors of the economy, government has the right to change those rules to make the nation more productive and to improve society. That is not “redistribution”. That is just good business.
“Taxes do not redistribute wealth.”
It certainly redistributes money. However, it does take wealth from the wealthy and wastes it on the poor. The poor just consume it. They don’t build anything with it. There is nothing that permanent that happens with this money. It is just gone.
“When Society, through government, determines that the rules that government itself created have shifted wealth to unproductive sectors of the economy”
And who in the government is qualified to know this? Certainly not Obama.
” government has the right to change those rules to make the nation more productive and to improve society.”
When has the government changed rules to make society more productive?
” That is not “redistribution”. That is just good business.”
It is still redistribution and the gov doesn’t do much for main street businesses that don’t have a lobby.
“However, it does take wealth from the wealthy and wastes it on the poor. The poor just consume it. They don’t build anything with it. There is nothing that permanent that happens with this money. It is just gone.”
So feeding the American poor is a waste. Is Ebenezer Scrooge your actual role model?
StevenH: ” government has the right to change those rules to make the nation more productive and to improve society.”
Peter N: When has the government changed rules to make society more productive?
StevenH reply:
Well, I know an example of when the government changed rules to make the country LESS productive. It was when the tax and business laws changed to create more income inequality. This according to multiple studies, slows GDP growth. Therefore, to make the nation more productive, we need to reduce income disparity. But that is the whole thrust of our disagreement isn’t it? Any attempt to fix the problem that is making our country less productive is seen by you as a threat to you, personally. The irony is that you are fighting against the very principles that would benefit you. Even a smaller share of a faster growing economy could actually make you richer.
You don’t have to keep forcing the poor to be poor to keep yourself rich.
“You don’t have to keep forcing the poor to be poor to keep yourself rich.”
No one is forcing the poor to be poor except the welfare programs that provide a disincentive to work. Even that is FORCING the poor to be poor but welfare programs provide an easy solution for those that can’t think of or achieve another solution.
A lot if those record profits are over seas and will have to be double taxes to put to work here. Too bad Obama won’t consider an amnesty to put that capital to work.
We WILL have inflation if wages go up a lot. That is simple economics, more money chasing goods.
That’s true for some. I would love for corporate taxes to be drastically reduced, I feel it would create a boom here. Of course, the revenue would need to be made up. I don’t have a problem with taxing investments that directly generate jobs at a reduced rate, but if the corps no longer are taxed highly, investment income from stocks should be taxed higher to make it up (there could be some amount that is taxed at a lower rate to not hurt retirement incomes).
As for inflation, we have it already. Not helping the workers keep up with it while management stay ahead of the curve doesn’t seem like a way to fix it. And more money chasing goods applies to investments also. It helps intensify bubbles when a few have huge amounts of money and nowhere good to invest. The workers having money always seems to create wealth for the wealthy and gives them some place to invest.
That is a great point. Nothing separates the wealth gap like a bubble. And we have had one after the other the last 20 years. People continue to walk right into them before they burst.
These employees are risking their jobs for the CEO. The company might not survive.
http://www.bostonglobe.com/business/2014/08/07/role-arthur-demoulas-complicates-market-basket-bid-from-competitor/NKEPQJEfXboltCMVMIVNRP/story.html
Yes the family board may kill the goose that laid the golden egg. Ridiculous, isn’t it? All they have to do to restore a happy, healthy company is to be less greedy. What are the odds that will happen?
The whole discussion is a big generalization about 500 ‘greedy’ CEOs out of thousands and what the “poor” people need to do to make more money. If it was an easy solution, don’t look to Congress to help. There are cultural issues that might take a generation to fix. Even if the rich “only” owned 50% of the world and not 75%, there are always people that will be on the wrong side of having a good life. Shit happens. You can’t make the poor wealthy by making the wealthy poor. Any money that goes to DC is overspent and wasted in general. Give them less, they have to do more with less money or some things don’t get done.
I think you are missing a big part of the discussionof that is all you get out of it. As for giving government less, the reps have been trying that for decades, remember”starve the beast”? It is why deficits and spending soar under them. They don’t cut spending, never met a defense increase they didn’t like, they just worry about cutting taxes not paying for anything. Doesn’t work any better than”trickle down”.
I think we need to quit focusing so closely on CEO pay. Most of the income inequality is due to globalization. Middle class manufacturing jobs have largely melted away due to competition with other, mostly Asian workers. As their economies grow, we should gain them as customers.
As far as systemic poverty in the rural and inner city areas, we may have to do radical things like youth hostels or boarding schools to get away from toxic families. THAT may break the cycle. By the way, look into the history of poor, mostly black neighborhoods in the North and In LA. Many we’re created by government perturbations of the natural economy.
You missed Native Americans and gays in your last stereotyping paragraph…..
There are plenty of rich and poor gay people. only a few native americans that control the casinos are rich. 🙂
Henry, Welcome to the thread. It feels like Ive been sitting at a bar arguing with these guys for 4 months.
Somewhere way back, I proposed having Wal mart and McD be charged all the costs for SNAP, Medicaid, housing subsidies, etc. this would encourage increased pay for those who need it most (with families) and not necessarily students or hobby jobs like an across the board min wage would. It would also be limited to higher revenue companies and not effect Mom and Pop businesses.
That isn’t fair though. Where do you draw the line. And who draws it.
This is an idea I really like. We don’t need corporate welfare, and that is what these programs ultimately feel like. Though it would potentially have some fallout. Kids may be hired at a faster rate than they are now at big chains. I like limiting so that it doesn’t effect mom n pops also.
stevendad, I am reluctant to tear this idea too far apart, because I like the intent, and agree with your perspective. We should not be subsidizing Wal-Mart low wages with government benefits.
But there are two problems with your plan (for fining companies like Wal-Mart for the cost of government subsidies to their employees), at least with the way you describe it (and the way I understand it).
1) It violates your own principle of getting government in the middle. Ion this plan, Wal-Mart underpays, employes get money from government, government gets fine payments from Wal-Mart. This is way more complicated than just raising minimum wage, yet has no added benefit that I see.
2) This incentivizes Wal-Mart to fire all of the poorest people, and only hire kids or retirees or people who are scraping by just above SNAP wage levels. Then Wal-Mart pays no fine and the poorest are even worse off. Again, raising minimum wage is the simpler more direct solution.
What benefit to your plan am I not seeing, other than sticking to a purely philosophical position of not raising minimum wage?
How does a company profit by inflation? Inflation means costs are going up and if a company can’t raise prices, the profit margin is less. Paying higher salaries is inflation and that means something has to give. Either you raise prices or profits go down. That is assuming there are profits. Again, the saleman can bring in a ton of business, that doesn’t mean the AP clerk would necessarily get a raise just because the company is more profitable.
But, profits are going up, we are in an era of massive, record profits for many companies. They are raising prices. They can profit through inflation by keeping wages stagnant while justifying price increases due to raised prices of materials. This allows them to grow their profit margin as they raise prices to the inflation adjusted rate.
“Paying higher salaries is inflation ” I would disagree here. They do not go hand in hand. One does not necessarily follow the other. Increased pay can mean increased productivity, acknowledgement of good service, or an employer maintaining his employees purchasing power, among other reasons.
Profits are going up for some because companies have slimmed down, automating and using new technology wherever possible.
Many companies are getting hit with the Obama Care taxes and that will cause some companies to lay off people. Especially if they are just over a hiring threshold where one must follow new mandates when there are 50 employees.
Increase pay should result in more productivity.
The more I read through this entire thread, the more I think that Stevendad is right in what he just posted. People just have to pay their employees more. If CEOs weren’t so greedy and taking so much for themselves, and shared with their hard working employees (who really do all the work anyway) with higher wages, life would be better for everyone. The middle class would have more money to spend which would probably increase business and improve the economy. It’s amazing CEOs are so stupid not realizing that they could maybe even make MORE money by paying their employees more. Regardless it is the right thing to do because they have more than they need anyway.
Henry – I’m not quite sure that’s what Stevendad is truly proposing. CEOs are often only looking at their bottom line and often for only the next few quarters. What they miss, is that they could actually create more wealth for themselves, their shareholders, and their employees if they tool a bit longer view. When it comes to local employment, many employers look at the initial costs of employment and miss the fact that a good employee can be paid better and still provide better productivity than a low paid employee or having to constantly train new employees.
There are many businesses in highly competitive markets (grocery, fast food) that pay better than average wages and not just survive but thrive because they have employees that know their jobs well (higher productivity) and are willing to work harder because they feel valued. The problem is, most in management don’t see this (or their superior doesn’t). They see money in money out, employees are just cogs. Stevendad gets this, but many others don’t. I’ve seen many examples.
For one, my wife and I enjoy a McD breakfast now and then on a Saturday. Not the best, sure, but one of us can go grab it quickly and we can have it home. There are 4 store close by, all flooded with customers. Of the stores, I guarantee 1 surpasses the others by a wide margin. They have employees that have been there a long time and know what is what, they easily serve double the meals as the others, the employees look calm in the storm, and there is never a problem with an order. The rest have continuous employee turnover, the employees look very stressed, order taking is slower, cooks are slower, lines are huge and slow-moving, and getting service is always stressful.
I’ve read multiple stories about Walmart. They follow the low pay, high turnover model, and there is a reason people complain of empty shelves and bad attitude employees. Walmart actually tries to push employees to leave when the average age of workers becomes to long that wages start creeping up! To me, this doesn’t make much sense as there are many studies showing the price increase to Walmart would be a fraction of a percent and one would think they would reap some increased sales from employees. Anyhow, this low pay mantra bleeds over to other stores that feel they can’t complete unless they do the same.
It is hard to get wages to rise when many employers feel the need to keep pay down because their competition pays low wages and they can’t figure out how to pay more while staying competitive. That’s a reason why we have minimum wages, it provides a floor so that a companies cannot undercut other companies in a race to the bottom when there is an oversupply of workers.
Personally, I feel, if a company cannot pay a reasonable wage for a good employee, they don’t need to be in business. It drags on the economy. On the other hand, if you want to pay low wages and have workers on public aid, you shouldn’t be also fighting to cut that aid. You can’t have it both ways.
But to each their own with business, right? It should result in lower business for WalMart since the buying experience is so bad. Who is to say what someone greeting people at the door or answering a phone is worth? Maybe it is worth $100/hour? Maybe $5/hour? Seems like you just have to figure out what everyone else is paying and pay more to get the best employees. But then again that wouldn’t be fair because the middle class needs more money to live a normal lifestyle. Alot to think about.
So as long a a CEO is paid “reasonably” according to you, employees can be paid the highest amount possible while the company basically has zero profit because all profits must go to the employees? Guess, what, it still won’t matter. An AP clerk at ExxonMobil isn’t going to make a ton more than an AP Clerk at a small drilling company if they have similar skills. There are ZERO companies paying an AP Clerk $250,000 a year to be a basic data clerk. Every job has a salary range. From your basic job to an extremely skilled job. Most heart surgeons all make around the same amount of money. Not all lawyers make the same, but it depends on the type of firm you are employed at the and reveneues of the firm. You can be a sole proprietor and you can’t pay yourself $1,000,000 a year if your billings are only $100,000 a year. Salesmen don’t have the same structure. If a guy can go out and kill it and make $10,000,000 in sales when his counterparts are selling $500,000, should they all be paid the same? Nope, sales guy selling the most should make the most and he might make more than the CEO since the sales guy is bringing in the business. A WalMart cashier is going to be paid unskilled labor rates no matter what the CEO is paid. That is life in a Capital system. Profits keep a business running and if there are no profits, employees don’t get paid. But you aren’t just going to overpay out of the goodness of the CEOs heart just because the company makes a huge profit. FYI, Exxon only made 11% profit even if the amount of the profit was large.
Yep, not even close enough to what I said to reply. But thanks for the same tire tirade.
Steven H and JTM (among others)
This is not a facetious statement. I am serious. I suggest you open a business and pay workers very well. It was eye opening experience to both sides of this issue in a way no other can for me. The likelihood of legislative change is very low. So all the liberal bloggers should start up green, generous businesses. This is a productive way to further your agenda of fairness to all. I sincerely hope this does not jade your views.
Stevendad – I’ve never advocated paying workers “very well” (overpaying), especially if the skills needed don’t warrant it. I do advocate that jobs need to be done and therefore they should pay better than the current minimum wage after a training period. Employers using the excuse of supply and demand as a reason to not pay a proper wage so that they can taking home an out-sized paycheck is not right. This is especially true when those same workers then need to rely on the government to keep food on the table. Why shouldn’t those who use the service (customers) pay the full cost? Isn’t that what many conservatives argue as a reason to cut taxes and create user fees?
Companies have had huge profits for many years now and are sitting on record piles of cash while worker pay has stagnated (shrunk in real terms). It is shrinking the middle class and growing bottom. I feel, if the middle class shrinks too much, if we take too much discretionary spending ability from the non-wealthy, we will all be in for some very hard times.
And when corporate profits sag and they don’t have lots of surplus income and cash on the books they will lay off people in droves. Particularly if the employees are overpaid.
That’s not what I’m talking about, and you know it. I’m not advocating overpaying!
Why shouldn’t employers at least try to keep up with inflation? They are profiting from inflation. It wouldn’t come close to eating up profits in these companies as profits have increased dramatically. Many of these companies have so much money they don’t know how to invest it, how about investing in their employees? You know, the employees they cut pay on to during the last down turn. The employees they used the down turn as reason to pay less as they hired again during the recovery. Upper management often didn’t participate in the pay-cuts and have received pay increases since, often more than making up for inflation. Nobody is complaining about those raises, why should lower level employees take a pay cut (actual or due to inflation) while management fattens themselves? If they need, they can just cut everyones pay again, in the meantime, it will help the economy and the employees.
Heh heh… I know – I am certainly increasing my employees pay faster than inflation. Life is definitely better without employee turnover in my profession. But I can totally see why WalMart (among others) would do what they do too. Different animal.
Peter – Yes, in the short term I get it why Walmart would want to keep pay down. I’ll not understand why they want to keep turnover high just to keep pay down though. It seems counterproductive, ultimately increasing costs and decreasing sales due to poor service and reduced employee spending. Walmart could definitely benefit from a higher minimum wage, though if they raise wages while others keep them lower it would hurt a bit in the short term.
While they don’t love turnover, they probably don’t care because they are still filling these really easy jobs with “adequate” employees. It is all part of the marketing of Wal Mart as somewhere that doesn’t spend money on overhead (yes that includes employees) to “pass the savings on to you”. Whether this is really what happens or not – this is their marketing plan and it is working quite well.
Peter – Actually, there were a few articles I’ve read that said Walmart wanted more churn. Upper management would tell the lower management that turnover was to low! I can’t find those right now, but I did find some showing Walmart is doing better now, 45% turnover instead of 70%. Though, that seems like it may be partially due to just not replacing workers. So, to say they don’t love turnover, doesn’t sound right. Maybe local management doesn’t like it, since they have to deal with the fallout, but those at the top sure do.
Oh didn’t mean that so literally. Just saying they probably don’t do it for turnover sake….more for the reasons I wrote in prior entry.
Regarding the question as to whether I (and any other with my perspective) am naive about how our economy works and whether income and wealth inequality are actually a serious problem. Consider the opinions of these rather wealthy folks who believe it is a problem that should be fixed, despite it impacting themselves negatively.
http://capitalandmain.com/10-business-leaders-who-just-say-no-to-economic-inequality/
My favorite entry:
Leo Hindery, Jr.
This former CEO of AT&T Broadband, trustee of the New School University and a director of the Library of Congress Trust Fund, has written in Politico in support of the right of all Americans to join a union. When asked by Associated Press about tax cuts for the rich as a method of economic stimulus, he bluntly replied, “Do you think I don’t own every piece of clothing, every automobile? I already have it. You spend money. Rich people just get richer.”
There are plenty of grocery stores/Home Depot etc that have self check out. One person watches 4-6 stations. That is way cheaper than having 1 person for each lane, which most aren’t even open all the time. Less than 10-12 items, I do it my self. Should I get a discount, yes, but I get done faster.
The housekeepers come with the building. I generally pay 20-25% above competition. My key employee was 60% above market. It is not completely altruistic, I think the cost of employee turnover is underestimated. It goes to almost zero if you pay above scale. Stable, happy employees are worth every penny. I do not disagree it is the best way. I just don’t think money should be taken in taxes, run through our horrific political system and given to friends of the elected.
This all comes to economics. Increase your skills and increase your demand. Make your skills rare. This will raise your wage.
Stevendad, You are wiser than many in recognizing the benefit of a happy skilled employee. But the world we live in requires many lesser skill jobs, and the abundance of labor should not also dictate that the people filling these jobs live miserable lives mired in poverty. It is easy to just say “increase your skills” but there is a cost, a chasm, of both time and money to do so that often cannot be easily bridged. And worse, many who have devoted years and all their savings to achieve greater skills may find the market has changed, that their expensive skills are still more abundant than job positions actually available, or that the pay is less than that needed to pay back the loans they had to acquire.
You’re right Steven H – People have it so hard. There is no winning or getting ahead anymore. Too hard to get better skills. Or even if they have the skills, it’s always someone else getting their job. We just need companies to pay more or the government to give us more. Getting ahead on your own is such a struggle in today’s America.
Alan H – Yes, of course, you are right, things are not as hard as Steven H makes them sound. But, truthfully, they are not as easy as you make them out to be either, especially once there are children involved. Unfortunately, many grow up with no one in their lives to inspire them or show them there is a different way of life. There are many who instead of being pushed up are put down early in life because they do well. We as a society need to figure out a way to change this, as too few are able to escape mentally from the resulting mindset. The question is how? As throwing money in the form of welfare is a band aid, not a solution.
There are three kinds of lies: white lies, damn lies and statistics.
Will Rogers
JTM
“I didn’t call you out, though you do seem quite vocal about poor people deserving to be poor.” This is an absolute falsehood. I never said that. I believe our system of Federal handouts is not the best solution. I am respectful and appreciate to the housekeepers. I DID that. Did you?
“Many if my cohort in school came from more and ended up with less due to poor life planning, drug and alcohol use, lack of investment if time and money, poor family planning, etc. A few had bad luck, most made bad choices.” sounds to me like poor people deserving to be poor.
Upon reviewing your other posts, I think we are more in agreement than not. I don’t get your previous post explaining how you “DID build it”, it seems a bit of a knee-jerk reaction as my post I think you were responding to was obviously not aimed at you and your previous posts. Let’s stop going down this line and get back to more productive posts.
Do you show respect and appreciation to your housekeepers by paying a reasonable wage? Hopefully one that keeps them off of those federal handouts that you dislike. I don’t have full time employees, but I do hire local workers on a daily basis when I need to and I pay reasonable wages dependent on the task.
Reasonable wage is totally subjective though, isn’t it? All I know is my teenage daughters get $12 an hour for babysitting – and half the time the kids are in bed when they arrive. Seems “unreasonable” to me…. 🙂
Thousands and Thousands of people drinking coffee create a coffee industry. This creates thousands of jobs. To say getting a cup of coffee doesn’t help the GDP is short-sighted. All transactions help the GDP. If starbucks or other coffee places didn’t exist, we would still be drinking Folgers at home. There are now 3,000 breweries in America because we like drinking good beer. The economy can come to a standstill if people sit at home and drink water.
I didn’t say drinking coffee and making burgers doesn’t help the GDP. It just doesn’t create wealth. Growing the coffee does. Making something from nothing or mining something creates wealth. Making the the coffee or burger business does because they aren’t consumed. Obviously we need to eat or drink so not everything can be directed to mining or building business. The point that I am trying to make is that just because the GDP goes up it doesn’t mean we are better off.
JTM:
I went from outhouse to penthouse with education and hard work. First paycheck job at 14 was cleaning urine and vomit off the floor of bathrooms in the pancake house where all the partiers came to after bars closed. I got BEOG ( now Pell) for a year (about $1800). A pretty good investment as at $1.6 mill or so in Fed taxes I’ve paid so far. So don’t patronize me about not understanding the poor! Many if my cohort in school came from more and ended up with less due to poor life planning, drug and alcohol use, lack of investment if time and money, poor family planning, etc. A few had bad luck, most made bad choices. I DID build it.
stevendad – Good for you!!!!! Did I say it can’t be done? Did I deny that you worked hard to be where you are at? Did I say no person is poor just because of bad choices? NO. How did I patronize you? I didn’t call you out, though you do seem quite vocal about poor people deserving to be poor.
But, people don’t need to be belittled by your ilk just because their job title or earnings don’t measure up. Many poor are hard working people and perform jobs that are necessary for the rest of us. Do you deny that? You seem to want to deny their hard work by blaming their position on “poor life planning, drug and alcohol use, lack of investment if time and money, poor family planning, etc. “, instead of acknowledging not everyone can be rich.
Many people are fine living on much less. I know I am happy with what I have, I don’t desire more and more, I gave that up years ago and have been better off since. There are many who earn less and feel the same. It is easier to be happy with what you have than if you continuously don’t feel like you have enough or feel that others are always after you for your money (whether true or not).
Yes, there are poor who use the systems in place for their own gain (both honestly and dishonestly), of course middle class and wealthy do it too as we are all the same. Wealthy don’t have the corner on morality any more than the poor have the corner on alcoholism or drug abuse, the wealthy just have better quality drugs and alcohol. There are more poor, so in raw numbers there are more scammers, of course a wealthy scammer can bilk us a 1000Xs more than a poor scammer.
One can build whatever they want, in the end what generally matters is, did you build it honestly and morally? Did you build it on the backs of others? If so, did you pay good wages and benefits, or the bare minimum? What you built, did it help, hurt, or do anything for society? Because, what good is it if your business hurt the rest of society just so you could get rich? No, I’m not passing judgement on you or your business which I know nothing about.
Debt is not going down anytime soon. http://www.usgovernmentspending.com/debt_chart
Debt hasn’t gone down appreciably in any year since WW2.
But Debt/GDP has. That is the stat to use.
Peter, I already regret using you as an example to post a political rant. Sorry about that. It’s been a long day.
No worry. Didn’t read the 2nd paragraph anyway as political rants from either “side” don’t interest me. No harm done.
Peter, you have made two egregious mistakes in trying to make your point with statistics, and while anybody can make mistakes, these two examples are representative to me of how the arguments on the right are detached from reality. You claimed, first that we now have some of the “least centralized wealth in our history”, when that is not even remotely true and easily disproved with a 1 minute search for data. You then tried to counter my assertion that spending had gone down over 4 years by claiming it had gone up every one of those 4 years, and then even provided a link … which you apparently did not actually look at because it proved you wrong and me correct.
But I’m not harassing you for making a mistake or two. Really I’m not. I’ve made my share. The troubling thing I see is that you had such faith in your intuitions – that wealth inequality is not really high, that spending could not possibly have gone down – that you did not see the facts even when you were staring directly at them.
Perhaps I should not be pointing this out. You’re a smart guy, and have been generous with your time in this conversation, so maybe I should not use your temporary oversight as an example. But this has been happening over and over and over in the political and economic conversations throughout the country and it astounds me. “The Obama spending spree” … which never existed, because spending has actually gone down for this President. “The Debt Ceiling Crisis!” in which Congress bravely tries to prevent the spending that Congress had already authorized, and people bought into that. Then there was the absolute economic absurdity of the GOP leaders of our country claiming it might be a good thing for the country if we actually defaulted on debt. And now the imperial President needs to be sued or impeached … for delaying a bureaucratic deadline with executive orders, just Like Bush did on Medicare Part D and who knows how many other Presidents have done on previous legislation with no fanfare, because really … it’s not a big deal. Today’s GOP stares directly into the face of facts and logic and sees … whatever they want to see because the facts remain completely unnoticed.
The second one was an oversight. Even if I concede that income or wealth inequality is at a relative high in the period since the depression…..that is not where we disagree. You think the solution is very different from me. You think the economy works differently than I do. And you think that someone like me is preventing the middle class from getting ahead. Or that I make more than I deserve. I disagree
Steve H said, “The benefits of those tax cuts went mostly to you, not me.”
My reply deserves an new start. I have a ready made reply for this one.
Part 1
Subject: Re: An easy to understand version of how our tax system works
Below is a easy to understand version of how our tax system works, and how people can spin it.
BAR ROOM ECONOMICS – HOW THE TAX SYSTEM WORKS
Suppose that every day, ten people go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four (the poorest) would pay nothing.?The fifth would pay $1.?The sixth would pay $3.?The seventh would pay $7.?The eighth would pay $12.?The ninth would pay $18.?The tenth (the richest) would pay $59.
So, that’s what they decided to do.
The ten drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four were unaffected. They would still drink for free. But what about the other six – the paying customers? How could they divide the $20 windfall so that everyone would get their “fair share”?
Part 2 to follow
Part 2
They realised that $20 divided by six is $3.33. But if they subtracted that from everyone’s share, then the fifth and the sixth would each end up being paid to drink their beer. So, the bar owner suggested that it would be fair to reduce each drinker’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth person, like the first four, now paid nothing (100% savings).?The sixth now paid $2 instead of $3 (33%savings). ?The seventh now pay $5 instead of $7 (28%savings).?The eighth now paid $9 instead of $12 (25% savings).?The ninth now paid $14 instead of $18 (22% savings).?The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the drinkers began to compare their savings.
“I only got a dollar out of the $20,” declared the sixth. She pointed to the tenth man, “but he got $10!” “Yes, that’s right,” exclaimed the fifth. “I only saved a dollar too. It’s unfair that he got ten times more than I did” “That’s true!!” shouted the seventh. “Why should he get $10 back when I got only two? The wealthy get all the breaks” “Wait a minute,” yelled the first four in unison. “We didn’t get anything at all. The system exploits the poor”
Part 3 to follow
Part 3
The nine drinkers surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill.
And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible!
JTM: 1 in 7 people is a small number?
SS and medicare along with defense are the majority of the budget and the parts that are growing rapidly. Sure, 1 in 7, but not all of them are just “maintaining a heartbeat” and unworthy of help, the vast majority are doing more. They are hardworking people doing jobs many won’t, getting paid very little because many employers are more worried about stock price than taking care of employees or the future. These same people running the companies then complain taxes are too high and welfare is the only cause, yet we spend more on defense than the rest of the world combined. Which is it, are we not paying employees enough to stay of welfare and contribute to the tax base, or are we paying too much taxes? They go hand in hand. Do you really think big business is any more trustworthy than big government? Unethical businesses are the cause of regulation, government usually steps in AFTER a business has shown they are untrustworthy and other businesses are the ones who end up paying in increased regulations.
JTM:
I do not consider soc sec or Medicare as charity. They are payouts for savings, disablilty and medical insurance yoiuhave paid in. I am specifically citing SNAP, EIC, free phones, Medicaid, etc. The intent if these programs are fine, I just don’t see them as a right. Just my opinion. Again, the states might best decide what they need.
Agreed that charity is not a right. But I would be ashamed if our society did not help the truly needy.
Steven H and the Peters:
The fundamental difference between your sides boils down to this: is the government efficient in redistributing and spending money in a way that is best for all. The 1% would pay more taxes very willingly if they felt it would lead to economic growth. They generally benefit more than any from a robust economy. I personally think they stink at it and should limit to essential functions: defense, weights and measures, organizing the highway system, interstate commerce and adjudicating arguments between states. Oddly, this is largely what the constitution outlines. Other issues are best handled by states in general. Of course, there are exceptions, but they should be just that, not the norm. This leads to states competing for citizens and making it a priority to make life better in general. A one size fits all approach is not the best for most situations for the citizens of most states. Alaska’s needs are very different from Florida’s. but that should be obvious.
You are correct that distrust of big government is a central issue. For me, distrust of big business and big banks is a bigger issue. They can be just as corrupt and are more highly motivated in that direction. At least I can vote out people in government.
Competition between states does not always make it a priority to make life better in general. No state wants to have generous poverty programs if all of the poor people then want to go there. States compete for business and people follow the jobs. And making sweet deals with business does not guarantee a better society.
Agree Stevendad. Right on all counts.
Steven H.
Of course the lady thrown off the balcony deserves disability. Have 1 in 7 Americans been thrown off a porch to deserve SNAP. I see / have seen the very questionable disability and abuse of system by the indigent. Have you ever?
I have no doubt there is abuse of the system, and also that others who deserve help don’t get it. It’s a difficult problem, and I applaud the workers who help these people. I am not trying to be difficult. I am simply skeptical when people start targeting safety net programs for massive savings, because so often they act like all or most of the people are underserving.
Taxes must be raised because revenue has been too low for decades to pay for expenses, and it is impractical to expect to cut expenses exclusively to fill the gap………why is it impractical to cut spending? That is the problem with the gov’t. Who cares how much money comes in when they can just spend more. There are plenty of ways to cut spending. 3 less stealth bombers, 2 less trident subs. a billion less in stupid grants that track mating habits of boll wevels. If every gov’t department had to cut 5%, it would be done pretty easily. I would rather have my taxes cut and user fees raised on parks, zoos, museums, etc. Sell some land, stop using 4000 different accounting systems…..
It actually happened with the sequestration and life moved on. And that was an irresponsible way to do it (across the board and haphazard) but the only way we were going to get spending cuts.
As Peter said, per capita real government spending has actually gone down over last 4 years. Wrong time to do it, during an economic downturn, but it happened.
“That is the problem with the gov’t. Who cares how much money comes in when they can just spend more.”
Revenue/GDP dropped to historic lows in 2009-2010 driving up deficits. Revenues since about 1982 have been too low except during Clinton when spending was controlled and the bills were getting paid … and then the GOP, who should have been ecstatic at the fiscal responsibility of a declining Debt/GDP, sabotaged the process with the Bush tax cuts. Tax cuts were the big problem here. So I am tempted to paraphrase:
That’s the problem with the GOP. Who cares how much we cut spending, the GOP will just cut taxes further and give the money to the rich.
Peter didn’t say that. Spending has gone up every one of the last 4 years. Sequestration kept it from going up more.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/hist01z1.xls
Peter, you need to get in the habit of actually looking at your stats, especially when you even go to the trouble of providing the link. Spending has NOT gone up each of the last 4 years, even in raw dollars.
Federal spending, $Trillion, in raw dollars
2009 …3.52
2010 … 3.46
2011 … 3.60
2012 … 3.54
2013 … 3.45
Note that it went down for 3 out of 4 years as well as going down across the whole 4 year period. If you calculate in real per capita terms, spending
has gone down about 10% over the last 4 years. This is in fact the first 4 year period since WW2 when that has ever occurred.
Again to be clear. I do think we need to cut expenses. It is not impractical to cut spending, but I think it is impractical for that to be the only solution, when our spending is already constrained, and when tax rates, even now, are historically low.
Steven H
I have to call a foul here. It is not “taking money from poor and elderly”. It is not giving money to poor many of whom have done nothing to earn it. Lost in this discussion is that many have done nothing but maintain a heartbeat to “deserve” this money. I do feel we need to help the needy, but it is clearly not a constitutionally appointed right to get free money / food / health care. Granted, the document has been bastardized by numerous court decisions. If all the nanny state is such a great idea, why not push and amendment through?
What are the churches doing to help the poor? I don’t see many homeless hanging around the catholic churches .
JB, How is this question even relevant?
Churches can feed the homeless easier than a gov’t agency.
And they have tax free status due to their “charity” role.
Churches and food banks and other charities were completely overwhelmed in this last downturn. Good thing we had Social Security and Medicare and SNAP or a lot of people would have died.
And, no offense intended, but if you haven’t seen churches, Catholic and otherwise, serving the homeless and poor, you haven’t really been looking.
I agree with principles of people earning their living, being responsible, working when able-bodied, etc. I heard a story about a woman who was living on the streets and has been given n apartment. She has no ability to work or earn a living. She got ion this situation largely because her abusive middle-class husband threw her off a balcony into the street and she only survived because of cushion from recent snowfall. Her (ex)husband is either in jail or otherwise out of the picture. Does she “deserve” charity from society? Just because she has a heartbeat?
stevendad – “many have done nothing but maintain a heartbeat to “deserve” this money”. Now I have to cry foul. Seriously? SS and Medicare have been worked for and paid for by most, all of their lives. You want to paint all excessive spending on this group of people who just maintain a heartbeat, when reality says different. This group you talk about is not imaginary, but it’s actually quite small. The government is constantly defrauded by businesses also which also adds up to tidy sum.
1) If you haves a system that provides aid and then you remove it, you are taking money away.
2) To be fair, JB was talking about personally opting out of SS, not ending it or pocketing the money, but to me, allowing people to opt out is the same as ending it, and ending it means getting the money back, and thus taking it away from those who currently receive benefits.
3) Nanny state is a really offensive term for helping the less fortunate.
This is from above when I was describing my employee raises….. Steven N replied as such: “Will salaries be determined by value of the work to your company, or just by the minimums permitted by the market range observed external to your company?”
My reply, which honestly I think speaks to the problem with Steven H’s idealistic view of how to ‘fix things’:
With this comment – we have isolated your main mistake. The business marketplace doesn’t pay people based on subjective measures. How is it even possible to determine the “value of their work”? If my revenues double, how much is attributable to each employee? How can you possibly answer that? All parts are certainly a part of the success, but to what proportion?
Employees are paid based on the marketplace. It is objective, not subjective. It is REAL, not idealized. I want to accomplish two goals when I give my employees a raise – 1) to reward them for their hard work and contribution and 2) to keep them here. If I don’t raise their pay enough, I will lose them.
But in no way shape or form do I think there is a “right” answer. I do not owe them a certain dollar figure empirically and it is not morally wrong for me to “only” give them 10% raises when I make 50% more.
…
Somehow Steven H thinks that if my pay goes up 400% and my employees pay goes up only 40% I am doing something either greedy, selfish or immoral. This is “Exhibit A” for the income disparity that he rails against. Yet my employees are very, very happy and business continues to thrive. Many in my industry wish they worked for me and my growing business.
Personally, I spend a great deal of my “bonus income” -which Steven H thinks I don’t deserve, or have derived from luck or “who I know”- on charity as well as employing all sorts of people (maids, landscapers, etc.) at my home.
Steven H and the other uninformed (or maybe just inexperienced) people on his “side” want to believe that my making so much money is taking money out of the hands of the middle class or poor. I would love to know….HOW? If anything my good fortune is improving the lives of many in the middle class.
Secondly, Steven H wants to believe that all of the problems of the deficit, debt and general income disparity can be remedied by increasing my tax rate (again). That giving more of my money – which Steven H says I “don’t need” – to the Federal government will be the panacea to make everything right again. While certainly this would help reduce the deficit, it is slight – unless you raise my taxes in an extreme way (say, 60-70% tax rates), which would then force me to fire the maids, landscapers, and maybe even my employees. I don’t think that’s what he wants.
However, the key point here is that raising my taxes will NOT create jobs or improve the lot of the middle class or poor. The only way this works is if we just take my increased tax revenues and flat-out give it to them – which is the very definition of Marxism which Peter N has pointed out repeatedly. Of course, if we do simply take from me and give to them, we don’t help the deficit or the debt.
I am tired of going round and round with Steven H on this who put simply has a very limited, uninformed idealistic view of how the business world and economy works. There are many things wrong with our system – and many solutions…. some folks just can’t sniff through all the rhetoric and stereotyping to talk about this reasonably.
Peter, I am disappointed. You berate me for not listening, for being insulting and for generalizing and then you prove that you have not listened to my arguments by over-simplifying them and then insulting my arguments as limited and naive.
I don’t have time right now to respond to each item in your post, but let me say that I do not think (as you claimed) that raising taxes alone is a panacea or a perfect solution. That would be foolish, and I have repeatedly said a multi-pronged solution is what we require. But the persistent response I get from you and Peter N a is that raising taxes cannot possibly be a a useful part of any solution, even when a primary problem is one of long-standing insufficient revenue to pay the nation’s debts. That argument is naive beyond comprehension, and it is rurally exhausting. So rather than leave your incorrect characterization of my views at the bottom of this thread, I will repeat my assertions correctly, pulled from earlier posts.
===
The fastest and best way to resolve most of our fiscal and social crises, including debt (federal and personal), unemployment, and the long term viability of safety nets, is to improve the economy as a whole, and especially the economic viability of the average American. This does means something in the economy will need to change. We all need to pay more in taxes, we who are able, because the revenue has been too low for decades and we have to stop living off the national credit card. We can cut some spending, and reform some programs, but that alone won’t get us there. As for people qualifying for better jobs, people are doing their d@mdest every day to do just that. Families are practically going bankrupt sending their kids to college to become better educated, and yet the unemployment among college graduates has been higher than the general population. We need to do a lot more than blame the poor for being poor and then seek to punish them for their lot and remove what safety nets and ladders sustain them.
Devoid of any judgment or moral arguments, here are the theses that have not been refuted in any factual way.
1) Taxes must be raised because revenue has been too low for decades to pay for expenses, and it is impractical to expect to cut expenses exclusively to fill the gap.
2) The current tax and business and labor policies, despite the recent tax increase, sustain a more pro-business, pro-wealth economy than has existed for most of the post WW2 era, and such policies have contributed to a shift of about 15% of all income from working/middle class to investor class.
3) If any tax increase occurs, it must primarily come from those fortunes that have increased, not those that have declined. That is just simple economics.
4) Any government programs cuts must not further the economic decline of the already struggling working and middle class.
My taxes have already been raised. You missed the point entirely. Fair enough…. My real world examples – this one, the hotel business, the succession planning one earlier …all get no reply. Idealism vs real life is a bridge we just cannot cross. Best of luck to you going forward. Like I think JB did a few weeks ago, I am going to give up at this point.
Peter, Sorry to end this in disagreement, but I am exhausted also. Your real-world examples were interesting and help to explain your perspective, but too often such limited examples (such as the hotel) may express the exception rather than the rule, or leave out details that would explain the anomaly of the unfilled jobs. You seem so focussed on the micro-economics of the individuals and seem to have no interest in the macro-economics that are a greater force in our fortunes.
Let me just leave saying that from my perspective, I am the one being practical proposing that spending/GDP, revenue/GDP, and taxation levels should probably be returned to levels that have actually sustained a working and prosperous economy, while those others (not you) on this thread who dream of eliminating half of government are the hopeless idealists.
Thanks for the conversation.
I have a college degree in economics. But good luck to you.
That sounded pompous :). What I mean is – I have certainly been talking in big picture economics. But the economy works on millions of small scale decisions. But keep lobbying for raising my taxes even more. Maybe at some point they will get high enough to where we will solve the nations debt crisis.
Since we still seem to be posting … What confuses me Peter, is that if you are aware of macro-economic measures, then why would you claim that we now have “some of the least centralized wealth in our history” when it is in fact more centralized than at any time in the last 80 years, and getting more so each year? This whole conversation has been largely about income and wealth disparity, but you still got the stat completely backwards!
Just saying its minor compared to early history although it has been rising of late. But not really the point. Not arguing that there isn’t a disparity. Just arguing the cause and the solution.
Just saying the wealth inequality is not minor at all, being twice its norm over most over the century (measured as % wealth of the 0.1%) and it is about the worst its ever been, matched only to 2 time periods when we also had economic crashes just preceding the Great Depression.
It has not been going up “a bit lately”. It has exploded.
It all depends on how you measure it. But I digress. Not interested in debating if it is a wide disparity since the whole point of this discussion assumes that it is.
Clarification: about the worst its ever been over the last century …
This left and right wing bullshit is what has to stop. We need completely bias government officials and CEO type figures so things can improve on both sides of the spectrum. I work for a fairly large corporation and I cant negotiate anything with them because I will be fired if I ask for anything. And definately no talk of unions here. My previous job was with Goodyear which was union, there were constantly lay offs because people could get away with murder there. We have a war between the rich and the poor and honestly it’s disgusting. But there are more poor than rich. If we were to take up arms against eachother it would not be much of a battle, the poor have been fighting their whole lives. If we really want to fix things we need to focus on the up and coming generations. I’m 21 years old and I know my generation will definately not step up.
Austin, you generation is definitely screwed. It is amazing that so many young people voted for Obama when the libertarian or tea party would be a better fit. SS is a democratic ponzi scheme used to buy votes with other peoples money. We/I will not get what will put in and you certainly won’t.
“But there are more poor than rich. If we were to take up arms against eachother it would not be much of a battle, the poor have been fighting their whole lives. ”
It wouldn’t happen that way. Just turn out the lights in the poor neighborhoods and watch them burn and loot in their own area.
Your right Peter N, but not before they come to your house, rape your wife and kids, and make you watch everything you love burn right? Don’t be so dramatic. You could say the same for the rich. You know, how they sit comfy in their homes watching kid porn meanwhile creating war to make more money. There are good and bad people on both sides of the economy. You just see more of the bad from the poor, because like I said, there is more of them. Also my generation is more the kind who just don’t vote at all because they are overwhelmed from the previous generation letting it get this bad. My generation is pissed off and is steering more towards revolution than anything. You can see it in anything modern that you watch or listen to.
Wow, you are scary.
Sure Allison, scary, especially since it’s reality. As long as many of the wealthy try to paint those who are not wealthy as lazy, stupid, whatever, basically lesser beings undeserving of a reasonable wage, it will get worse. Many comments on here show that many wealthy feel this way. They have theirs, they want more, and they don’t care if a few “lowly” people get trampled on to get it because it’s their own fault.
How am I scary haha? I wasn’t saying I would do those things, just pointing out reality and if it is shocking to you, then you really need to get out more. Scary is the thought that this guy was probably smiling thinking about the poor killing eachother off. It is terrifying to know that people like this want a holocaust of the poor, and even more so that it is already half way done they just need some death camps.
It is a shame when people characterize the “poor” as lazy uneducated or whatever. Sympathy, understanding and charity are always important traits to have. Of course characterizing the wealthy as greedy, insensitive or whatever is also unfair and counterproductive too.
Peter – I’m not saying they all are. I was pointing to the posts on here by those who claim to be wealthy. Many of them, in one way or another, claim the poor should just get educated and get a better job. Sounds simple, yes, but reality is there are other things holding them back also. It’s not simple stupidity or laziness. They use this as a reason that they don’t deserve reasonable pay, though they are performing a job the rest of us count on and many of us wouldn’t do. When the comments from the wealthy on here show a different attitude, I’ll change my opinion. Outside of here, I know many wealthy are very generous individuals and try to help the less fortunate and pay good wages for menial jobs. There are also many who feel otherwise and are quite vocal about it.
Austin, the arms that must be taken up are at the ballot box. There is currently a battle between those who are fighting for a productive, balanced society for all of us, and those who fight only for maximum profits for a few of us. We need to restore a balanced economy and society, and not continue this current trend of more rights for Corporations, and fewer rights for People. We can have prosperous business and prosperous society simultaneously — we have had it before. We need your generation to help fight against the leeching of the economy by the monopolies, the megaCorps, and the destructive factions of the investment class.
Austin, actually the fight is between those who would have you believe that our country is a primary source of evil in the world, as is capitalism, that ever-increasing leviathan government is a good idea, and that success is based on luck, having connections, backroom shady deals, paying off government officials to get laws stacked in your favor, and voting yourself pay raises at the ballot box because you will never be fairly compensated for your labor.
This, as opposed to those who believe that our country is a primary source of good in the world, that despite its flaws capitalism has provided the most wealth for the most people in the history of civilization, that while government serves some good and necessary purposes history has shown that it can also be tyrannical and so we must be vigilant about limiting (enumerating) its powers and protecting citizens from its excesses, and that success comes through education, hard work, providing goods and services that are in demand, and that those who successfully take calculated risks with their own time and money should be rewarded for it.
Well put.
Ken, you may be surprised to know that I agree with every word of your assessment of the great positive impact of capitalism and of this country. If you and I differ, it is in where we see the primary evils of the world. You are correct that governments can be tyrannical, but I would say that the primary mechanism for that tyranny is when they become the tool of centralized wealth and power, which is the real tyranny. This is where the wisdom of our founders saw benefit in giving government control to a voting public, where a minority should not be able to control the majority. The danger today is in unlimited corporate purchase and elite control of politics, such that the voting public are often deceived and voting against their own interests.
Centralized wealth and power always invite corruption and deceit. It can be in big government as you describe, or it can be in the external factions that desire a smaller more easily manipulated government that is too weak to respond to the will of the voters.
Yet we have some of the least centralized wealth in our history. Look closer at the early 20th century when John D Rockefeller himself was worth more than 10% of the country’s GDP.
Peter, the gilded age of Rockefeller is a indeed a good example of the type of economy to avoid: wealth barons grooming and choosing Presidents, and driving the lower class workers into extremes of poverty with their oppressive hours and pitifully low wages.
Yet it would be incorrect to say that we now have some of the least centralized wealth (or income) in our history. Indeed you have to go all the way back to 1929 just to find a time when it is MORE centralized. In 2013, the share of wealth of the 0.1% in USA crossed 20% for the first time since 1930. That stat spent most of post WW2 at about 10%, not rising above 15% until 2000, and now spiraling to levels seen only briefly in the last century, from 1913 to 1917, and from 1928 to 1930, which were also both times of great economic turmoil and instability.
http://economix.blogs.nytimes.com/2014/04/02/the-wealth-gap-is-growing-too/?_php=true&_type=blogs&_r=0
I agree completely. I am a pre-law student in a college where I actively try to get my peers involved. But to be honest, there needs to be some kind of new party or organization. We have things like occupy and that kind of stuff in our community, but they are not worth a damn, half of them are oblivious to what they are actually standing up for. I’m not really sure how to go about reaching out to people and getting them to do something about it in the right way.
Sorry, my previos comment was directed at Steve H.
Austin, I think you are correct about the need for a new party, a centrist party that moderates on both sides could support. I fear even the Democrats may be too dependent on the corporate and monied interests to be able to chart the proper course back to prosperity for the country.
There have been many parties, but none seem to be able to take a significant share from either major party. Up until recently, it didn’t matter so much. But, now, both parties are more polarized than ever and seem to consider any compromise as a loss. Another party could possibly bridge this great divide, but I don’t expect it to happen anytime soon.
JTM,
I see one faction of one party adamantly opposing any compromise as a loss, and it’s controlling the entire party leadership. I see the other party as not willing to give the opposition everything it demands without some compromise. It’s simply blind or intellectually lazy to equivocate.
SS isn’t mandated by the Constitution. If the gov’t wants to stop taking 6.2% out of my paycheck, I am OK with that. I would be one of the very few that would save the money and not spend it.
Sure, take money from the poor and retired folks and keep it for yourself. Typical plan of the well-to-do.
“Sure, take money from the poor and retired folks and keep it for yourself. Typical plan of the well-to-do.”
More liberal talk.
Does anybody here have a SS account with a positive balance? If no one has money in their SS account then how can any money be taken? Then money the poor get is other people’s money extorted by force if necessary.
It is obvious that Steven assumes that other peoples money belongs to the poor. There are no property rights. That is totally Marxist.
Peter N, you are an elitist with no social conscience, and no ability to see beyond your own wallet.
“We all need to pay more in taxes, ”
No, you need to pay more in taxes. It is your idea not mine.
“As long as the tax and business and labor and trade policy and excessive costs of education continue to drain the middle and working class, they cannot lift themselves up.”
The democrats had the majority from 2008 to 2010. Why didn’t they come up with a solution then? The answer is that there is no solution that will work. There will always be winners and losers. There will always be poor. There is nothing you can do about it.
“No one wants to pay more in taxes. But I see no other way out of the predicament.”
Spoken like a true tax and spend liberal. You want to tax but don’t have a solution on how best to spend the money that will eventually get wasted.
“The democrats had the majority from 2008 to 2010. Why didn’t they come up with a solution then?”
Actually, Dems had the majority from 2009 to 2011, and if a Senate minority of GOP had not been able to filibuster everything proposed for 3/4 of that time when the Dems were a few votes shy of supermajority, then more would have been done.
But more importantly, there was a little item taking some attention called “the great recession” which, being the biggest economic crisis in about 80 years, required a lot of effort just to get the country back on stable footing. Efforts that the GOP fought and continue to fight, not for the good of the country but for the good of their political contributors exclusively.
“The answer is that there is no solution that will work. There will always be winners and losers. There will always be poor. There is nothing you can do about it.”
Bullspit. Spoken like an aristocrat. You got yours, ant that’s all that matters.
“No, you need to pay more in taxes. It is your idea not mine.”
The wars that were unfunded and unnecessary were your party’s idea, not mine.
The tax cuts that drained the treasury were tour party’s idea, not mine.
The benefits of those tax cuts went mostly to you, not me.
You pay. Pay back what you stole.
Steven H – The partisan rhetoric you are feeding into is so disappointing and ,on a larger scale, responsible for the gridlock situation we are in. Read back your posts and ask yourself – why would someone try and negotiate or work out a solution with you? You are unreasonable, accusatory and don’t listen to the other side at all. Take a memo from Man of Reason – he is more or less “on your side” but is thoughtful and not nearly as condescending, idealistic and heartless as you have been. How old are you anyway? I’m curious.
Peter, you may have noticed I respond differently to different people and the thoughtfulness and respect of my reply is in line with the level of rhetoric in the particular post I reply to. Peter N has contributed very little of any intelligence or insight to the conversation and so I often grant him only the level of respect in my reply to him that he has granted me, which is about nil. Yet even there, when he posts a civil question, I post a civil response. In fact your description of “unreasonable, accusatory and don’t listen to the other side at all”, describes him much better than it does me. I apologize that I sometimes allow myself to sink to his level.
If you look over the totality of my posts, I think you will find I have listened to the other side quite a lot, and provided as much or more facts and substance to the conversation as any of the posters on the last 2 pages.. There has been a high level of animosity on both sides and I have generally toned mine down in the later posts (except in a couple of snarky shallow replies to snarky shallow posts … probably not constructive but hard to resist).
My primary theses remain. I have yet to hear any substantial rebuttal that does not either deny some obvious reality or somehow blame or punish the middle and working class for their decline in prosperity
Devoid of any judgment or moral arguments, here are the theses that have not been refuted in any factual way.
1) Taxes must be raised because revenue has been too low for decades to pay for expenses, and it is impractical to expect to cut expenses exclusively to fill the gap.
2) The current tax and business and labor policies, despite the recent tax increase, sustain a more pro-business, pro-wealth economy than has existed for most of the post WW2 era, and such policies have contributed to a shift of about 15% of all income from working/middle class to investor class.
3) If any tax increase occurs, it must primarily come from those fortunes that have increased, not those that have declined. That is just simple economics.
4) Any government programs cuts must not further the economic decline of the already struggling working and middle class.
I haven’t voted for a president that won since Reagan. I am more of a tea party/libertarian person.
“The tax cuts that drained the treasury were tour party’s idea, not mine.”
More leftist distortions. Think of a tank with a faucet on the top, filling, and the bottom, draining, the tank. If the tank has water in it will not be drained unless the faucet on the bottom is open ( spending )no matter how much water is is being added from the top ( taxes).
Can’t you see people? Steven is reading from the liberal play book that is full of distortions.
Tax cuts didn’t drain the treasury. Spending did.
Spending/GDP is within historical norms. Revenue has been too low since the Reagan/Bush/Bush tax cut mania.
Spending is within historical norms only if you think that $497 is the same as $18,195. Here are historical spending amounts in constant 2009 dollars, as per www. usgovernmentsending. com:
1910 $497
1920 $890
1930 $1014
1940 $1899
1950 $3378
1960 $4823
1970 $6942
1980 $9342
1990 $12,564
2000 $14,101
2010 $17,359
2014 $18,195
2015 (proj.) $18,605
2016 (proj.) $18,923
2019 (proj.) $20,315
These are per capita spending amounts in constant $2009 for each of the years listed.
FYI Ken’s numbers are per capita spending including state and local governments. It’s not solely federal spending. For example, federal spending for 2014 is $10593 vs $18,195 overall.
The evidence is staggering…..
Ken,
Just about every economist and country in the world prefers to evaluate spending and revenue of national economies in terms of percent GDP. Aren’t you being just a teensy bit dishonest by skewing the numbers with a different formula?
Post WW2 spending/GDP has stayed between 18 and 22% almost every year. It is now at 21%, well within the norm, and quite a bit lower than almost any other industrialized nation. It’s really hard to make a valid argument that our spending is out of control. Unless you skew to unconventional stats.
“Just about every economist evaluates spending as a percent of GDP. ”
Not true.
Actually, Steven H, I think it is you who are being a teensy bit dishonest by continually expressing spending as a percentage of GDP rather than expressing it in per capita constant dollars.
By your method, 22% of a $1 trillion is the same thing as 22% of $5 trillion, because they are both 22%. But they are not the same thing, as one number is five times larger than the other, doesn’t take into account the number of people over whom that number is spread (per capita), and doesn’t account for inflation ($2009 constant dollars).
The people who persistently refer to spending as a percent of GDP are, in my view, attempting to make the numbers say something other than what they really say by expressing spending only with reference to another variable (GDP), by not accouting for inflation, and by not accounting for the base over which that number is spread. Or, you might call it lying with statistics. Sorry to be so blunt, but that’s what I think it is.
So if you want to continue to make reference to spending only as a percent of GDP, that’s your choice, but we’ll have to agree to disagree that it is a useful or even honest one.
JTM — You’re right. I missed that when I created my chart. So I have recreated the spending chart including only federal spending. As you can see below, I think my original point remains. Per capita federal spending in constant 2009 dollars looked like this in the past:
1910 $156
1920 $533
1930 $336
1940 $936
1950 $2152
1960 $3101
1970 $4220
1980 $5872
1990 $7537
1992 $7671
2000 $7763
2004 $8791
2008 $9903
2009 $11,488
2010 $10,057
2011 $10,169
2012 $9714
2013 $10,226
2014 $10,594
These numbers show, for example, that the federal government is spending 40% more per person in FY 2014 ($10,594) than it did in FY 1990 ($7537). Similarly, the federal government is spending almost twice as much ($10,594 per person) as it did in 1980 ($5872), two and a half times as much as it did in 1970 ($4220), more than three times as much as it did in 1960 ($3101), and so on.
Ken – Thanks for the update. Since we were talking about Federal taxes I just wanted to make others aware.
What I find interesting in all of this, is Republicans are supposed to be the conservative ones yet spending increases since 1980 have generally come under Republican Presidencies. This, while trying to decrease taxes at the same time, thereby creating the debt problem we currently have and blaming it on the Democrats. I know there is more to it than who controls the presidency, but it’s interesting none the less. Even under Obama, the increase has been small compared to Bush.
GDP measures economic activity not the creation of wealth. The GDP goes up when person A flips burgers for person B to eat and Person be makes a coffee for person B to drink. Both are economic activity but none of these events create wealth. The coffee and burgers must be bought, power must be bought but in the end it is just consumed. Neither can keep up buying from each other even though economic activity goes up.
GDP goes up when there is a disaster because materials must be bought to replace the damage material. However, it is wrong to think wealth is created by a hurricane, earth quake or tornado even though the GDP will increase.
There needs to be a better index that measures wealth creation. There is a Wealth Creation Index for CEOs but there needs to be one for nations.
To all, find a better way to measure true prosperity than the GDP. It is flawed. In is only good for the gov because it taxes a portion of the GDP whether whether wealth is created or not.
“The tax cuts that drained the treasury were tour party’s idea, not mine.”
We’ve been through this. Taxes cuts don’t drain treasuries, spending does.
“You pay. Pay back what you stole.”
That is libel or defamation. I stole from whom? My company doesn’t even do business with the public. We do business with bigger businesses. Some are like GM, Honda, Dana, General Dynamics, FAA, Sandia Lab, Weyerhaeuser, Rockwell, Nucor, US Steel, Weatherford, Slumberger. You you call evil companies are my are my good customers. We help them become more efficient and produce more or better.
” I am merely saying that you should have no objections to paying off the expenses of our current government, because it is all Constitutionally sound. As is the intelligence of my response.”
Again, read this statement back. Again, I pay quite a bit of taxes. About 40% of my income to be exact. And somehow the solution to getting the middle class and/or bottom 20% involves me paying more? It doesn’t involve people getting qualified for better jobs, the government spending less money, or reform of the programs that make up the majority of the budget? Just involves me paying more because “I don’t need all this money”. This is uninformed at best and offensive and asinine at worst.
I second Peter’s comments.
Agree 100%.
I am quite agreeable to a multi-pronged approach to solve the nation’s fiscal problems. What riles me is the simplistic assertions by Peter N and his ilk, that you should either cancel or refuse to pay for all of the “general welfare” associated social programs because they are deemed somehow illegal, which really means: “they seem expensive, they don’t help me personally and so I just don’t like them”.
There are excellent societal reasons for every one of the safety net programs, as well as justifiable legal precedent based on the taxation and general welfare clause, and while reform and adjustment has occurred in the past and should occur in the future to keep them fiscally sound, it seems to me a fool’s errand to seek to either dismantle or refuse to pay for them.
As we have discussed and at least partially agreed before, the fastest and best way to resolve most of our fiscal and social crises, including debt (federal and personal), unemployment, and the long term viability of safety nets, is to improve the economy as a whole, and especially the economic viability of the average American. This does means something in the economy will need to change, possibly all off the items you listed in your post. We all need to pay more in taxes, we who are able, because the revenue has been too low for decades and we have to stop living off the national credit card. We can cut some spending, and reform some programs, but that alone won’t get us there. As for people qualifying for better jobs, people are doing their d@mdest every day to do just that. Families are practically going bankrupt sending their kids to college to become better educated, and yet the unemployment among college graduates has been higher than the general population. We need to do a lot more than blame the poor for being poor and then seek to punish them for their lot and remove what safety nets and ladders sustain them.
As long as the tax and business and labor and trade policy and excessive costs of education continue to drain the middle and working class, they cannot lift themselves up. They do not have the resources to do it. It is not a problem with people. We don’t have just an education problem or just a mismatch of jobs and skills or just a portion of the country that needs to try just a little bit harder. There has been no degradation or diminishment of the morals or abilities or work ethic of most Americans, and certainly not for Romney’s misjudged 47% nor for the 90% who have been getting no piece of the growing income and wealth in this country.
So you and I will probably need to pay more in taxes, maybe an extra 2 to 5% of income. It is probably feasible to place at least 2 more tax brackets in place, one at 1 million and one at 5 million, perhaps, with a bump up of 2% to 5% on tax brackets from $100K to $1mill, and 5% to 7% higher at each of the 2 new levels. That and some economic growth and a little spending reform should get us down the road to the next step, whatever that will be.
No one wants to pay more in taxes. But I see no other way out of the predicament. It is not the only part of the solution, but it seems one of the essential ones.
Paying more in taxes won’t make the gov’t any better. It probably makes them worse. As I have said, there is enough money to be saved in waste and fraud that is more than what the tax increase would bring in. There are plenty of programs and plenty of workers that can be cut, but it won’t happen. Once a gvo’t program starts, it is rarely killed.
JB, Fraud and waste should always be combatted, but I seriously doubt that there is a enough savings that can be ferreted out there to impact deficits. Do you have word of a study that details the economics and percentages of fraud and waste in the government?
The “plenty of programs and plenty of workers that can be cut” claim is vague and unsupported. Lots of programs and workers have already been cut, to the point that many essential regulatory agencies have insufficient funds and personnel to effectively do their job. They actually need to get bigger. Any agency you would cut has a large number of supporters in another political camp, and the programs they would cut are not what you would like.
And I agree, Social Security, Medicare, Medicaid, and the ACA are not likely to go away. They meet legitimate societal needs and are a political irritation to the philosophies of the right, but are not so burdensome as portrayed by that camp. We need to stop wasting time and effort fighting about dismantling them, and just work through the process of keeping them fiscally sound.
As for the assertion that “Paying more in taxes won’t make the gov’t any better. It probably makes them worse,” I really don’t fathom this argument. It’s as if you think the government is a pampered child and you are trying to take away its toys. We are not talking about making government “better” or “worse”. We are talking about paying the bills for programs that have been voted into existence by both parties over decades, that have been underfunded for decades, and that you already admitted are unlikely to go away.
We don’t pay off our VISA and MasterCard to improve their ethics. We pay them because we owe money. It’s time to start paying off the cards.
“Lots of programs and workers have already been cut, to the point that many essential regulatory agencies have insufficient funds and personnel to effectively do their job”
Such as? 100% Factually incorrect…. I work/live in the DC area and can only think of one agency where I have heard this. I can think of many where people say they have ‘more than they need’ though.
Once again….. I already pay more in taxes than I did last year. And more than the year before. When does it stop?
And if you are going to go with the ridiculous angle the tax increases should hit those that are most “able”, shouldn’t tax rates be tiered based on where you live? Someone making $200k in rural Tennessee is far more “able” than someone making $350k in Manhattan.
When does it stop? Well, how does it compare to 2000 (before Bush cuts) and the decades before? Personally, I feel the Bush cuts hurt much more than they potentially helped (especially because of how long they lasted). The cuts helped create the asset bubbles and inflate the federal debt.
You could also take the view that you are fortunate because taxes have decreased to the point where you are livid over the current rates. We still have historically low rates. When will you feel taxes have been cut enough for you? When does that stop?
Ultimately, no one likes to pay taxes, especially if they don’t feel the money is being spent well. But, our leaders have already spent the money, we owe it, we need to make good on it or suffer worse consequences. If these leaders would actually lead, maybe we can work our way out of the mess. Neither side truly seems focused on eliminating the deficit as both sides spend. As it is, they know they don’t have to as long as they keep most of us fighting each other instead of them.
Humans are the most intelligent species on the planet. So naturally one would think we should have a more intelligent way of thinking. Instead of behaving like the rest of the animal kingdom with the attitude of “everyone for themselves”. There is enough wealth and resources in the world for every single person to be living above middle class conditions. Do people work hard for their millions? Sure some do, and that would be fine if no one else in the world was struggling to survive. We are all human, we are all evolved, we all need a new way of thinking. 1% of the population should not have a hold of the fate of the other 99%. I know this way of life will never work, simply because every one would have to play their part in society and they won’t. But if we could pull something like this off and truly be united, think of the things humanity could do without the plague of poverty. Every mind not educated, every stomach not fed, could have been a modern Einstein.
I like your line of thinking, Austin S. Just omit the one sentence beginning with “I know …” and ending with “…they won’t”. Keep your hope alive.
All: Have you followed the Market Basket story?
http://www.cnn.com/2014/08/01/opinion/kohn-market-basket-protests/index.html?hpt=hp_t3
This story is interesting and illustrative of points discussed on this log in multiple ways:
– Workers in corporations are part of an income distribution system controlled more or less by the whims of management and CEO. Market forces allow a large range of pay options for workers. This counters Peter N assertion that pay is earned (deserved, set by market) not distributed (determined arbitrarily by management).
– Market Basket under previous CEO pays workers well above compensation and benefit rates of similar stores, while maintaining low prices and healthy profits in a low-margin business. What better example to prove that paying workers at higher wages is not as damaging to business as is often claimed?
– The Market Basket family feud over control is almost a cinematic quality story of Arthur T., a George Bailey CEO who loves people more than money (but still runs a profitable business) vs. Arthur S. his like named brother and CEO competitor, a Henry Potter type who wants to cut employee pay and benefits and funnel more of the profits to the top.
I don’t know how this will end, but I am rooting for Arthur T.
Part 4
As previously noted, market supply/demand is only one of the three primary forces that set wages or prices in a regulated free market. Negotiation and government “arbitration” or involvement in the business economy are the other two. The following items are a short list of major policies, rules or conditions that can impact the business economy, favoring one side or the other in the internal or external conflict negotiations. No doubt I have missed some important ones, but here goes, in no particular order:
Monopoly rules and enforcement
Unions
Labor laws and enforcement
Minimum wage
Federal Corporate tax policy
Federal Individual tax policy
State and Local tax policy
Unemployment rate (size of available workforce)
College graduation rate in specific fields (size of educated workforce)
Free trade labor rules (availability of foreign workforce)
Free trade import/export rules
Inflation
Available investment capital
Available customer market funds (disposable income)
There’s 14. For the average small or large business, it’s pretty easy to determine, which direction most of these factors is preferred: weak unions, weak labor laws, low minimum wage, low taxes all around, high unemployment rate, high college graduation rate, lenient Free Trade laws, low inflation, and lots of available investment capital and customer market funds. Monopoly laws impact small and large businesses differently. Strong restrictions on monopoly favor small business and hurt the large (monopolistic) businesses.
So my next questions are:
a) Where are we historically with regard to laws, rules or conditions that favor business? (Are we in a relatively business-favorable or business-restrictive time period? How many of the 14 impacts are business-favorable today?)
b) Which business-favorable laws, rules and conditions (in theory, not necessarily just those of the 14 listed that actually exist in question (a)) are in conflict with society, meaning the specific laws rules and conditions for which the majority population of society would prefer policies that are business-restrictive?
c) How do you best optimize and resolve the conflicts between Society and the Business Economy? (What metrics do you aim to optimize? What methods do you employ, if any? What needs to change, if anything?)
I’ll go and formulate my answers. I hope this spurs some discussion among the bloggers/posters here. Otherwise, if this is too boring, just ignore me and I’ll go away. 😉
One last post for the night, and I will attempt to explain why I am going on this long-winded posting spree. I was troubled when Peter indicated he could not really engage in discussion with me as long as I was simply seeming to advocate for taking his money and giving it to someone else. That was not how I saw my arguments, but it became clear that my approach to the discussion was just fomenting a defensive response. Discussions do not seem useful when they devolve into posts about how limiting how much people make is stealing liberty, or how any change in wages from the status quo is punishing the rich (or poor).
I don’t expect to come to full agreement with others here with whom I clearly have a differing perspective. But I would really, really like to find those underlying principles on which we CAN agree, and then be able to have actual points of disagreement on intellectual and economic issues — and not a spat over which end of the economic ladder is the most morally deficient.
All for now. Good night.
Part 3
Most businesses have inherent internal conflicts between two or three groups: management, workers, and (sometimes) investors or financiers who are not the managers. The conflict between these groups (wages, conditions, return on investment) are resolved with market principles of supply and demand and negotiation, but also with rules and regulations imposed by society via government.
Externally, businesses have “conflict” with customers and suppliers. These also are resolved with market principles of supply and demand and negotiation, but also with rules and regulations imposed by society via government.
The internals and externals of business — management, workers, financiers, customers, suppliers — all make up the business economy.
In addition to the economy, we have society. Society is how we live. How we raise and educate children, how we provide services like medical care. How we structure our cities and utilities and housing and the means to finance and pay for those things. These all have economic characteristics, but they are not part of the business economy. They do not automatically occur as a result of business. These societal things are planned and managed by people via various levels of government. Here the principles of Democratic-Republican government manage the process, along with negotiation.
To continue my quest for consensus, can we agree on the following:
4) Society determined by government – The rules of society determine how we live, and are generally set in the US by self-rule via Democratic-Republican government. In other words, the rules and structures of our society do not follow as a natural consequence of doing business, but are created under a separate process.
5) Society vs. Economy – There exists a natural conflict between Society and Economy. We would all like a utopian life of ease, but it has to be paid for. There is work to be done, food to be grown, houses to be built, products to create and market and distribute.
6) There are three sets of forces that resolve the many natural business conflicts (management vs. worker, management vs. investor, business vs customer, business vs. competitor, business vs. supplier, and society vs. economy). These 3 forces are (a) market supply/demand, (b) negotiation, and (c) government arbitration.
In #6, I mean that supply/demand only *approximates* a good solution for wages, prices, etc. The finer solution is produced through negotiation by competing interests within a practical range determined by markets. I may be offered a market wage for my skills of $120K annual. The market may determine that others with similar skill and experience are making $100K to $150K. If I negotiate a $140K salary, that wage is not strictly set by just the market, but also by my negotiation. And government “arbitrates” competing interests, which is a sort of negotiation. The difference is that government generally (or ideally) negotiates for the benefit of the societal and economic system, not strictly for one or the other competing interests.
( More to come … Next time I want to seek agreement on what sorts of forces CAN impact the strength of competing interests in the economic conflict negotiations, and which side becomes stronger via those forces.)
Part 2
In this post, I’d like to distinguish between two separate but related discussions that come up repeatedly.
1) A discussion of income distribution and disparity within society: its measurement, history, causes, impacts on society, whether there are optimum levels of disparity, whether we are within an optimum range, whether it can or should be adjusted, and how the disparity levels can be modified if we are out of range.
2) A discussion of how to succeed as an individual: methods and strategies for achieving success no matter what the income disparity is or what other social and economic hurdles exist.
They are both fine discussions, but you have to be able to distinguish them, and not try to use solutions for discussion number 2 to solve discussion number 1. The first discussion is akin to solving the problem of how to feed and shelter a community after a disaster. The second discussion is about how to get food and shelter for yourself, without regard for those who show up late to the food truck.
One can of course argue that the best way to feed and clothe and shelter everyone is to let them fend for themselves. In some sense, that is what laissez-faire or Ayn-Randian capitalism is all about. The other end of the spectrum would be an argument for a wholly-planned community, and this becomes either socialism or communism. But these professed utopias — whether capitalistic, socialistic, or communistic — are all ideals that neglect how the real world works. This country was founded on economic principles of regulated free markets, along with self-rule using principles of democratic republicanism, with local, state and federal levels of government that provide some social and business oversight. Not even the founders all agreed on the degree to which government would impose rules on society and business, but they all agreed on some level of control and they recognized the risks that lack of control, or imbalance of control (by “factions”) could cause.
So the first agreements that I’d like to propose, as principles that really should not be too controversial or partisan, are:
1) Micro vs Macro – Discussions about how to succeed as an individual are not the same as discussions about how to build a society where most people CAN succeed.
2) Regulated Capitalism – Our economy is one of regulated capitalism, which balances principles of business with needs of the society.
3) Government has a role – Our society is managed via a democratic-republican government that serves to provide and look after for the needs of society, as well as to regulate business. There are many valid disagreements about how MUCH of a role government ought to take in regulating business. But I think we can agree it has some role.
(cont)
There are some conversations on this thread that seem to hit a brick wall.
First, I have learned on this blog that businesspeople are really, really touchy about the slightest suggestion that anybody who is rich did not earn everything they receive. Obama also found out this truth with his “you didn’t build that” statement, and the outsized response to it. What surprises me is how this same basic idea can be presented with more diplomacy and respect (JTM is much better at this than I am), and it is at least partially accepted, but any hint of disrespect to high earners and the whole idea of imbalance in income distribution is rejected. I used to think that the idea of the rich people feeling like they were being “attacked” was ridiculous and insincere. How could someone making upwards of $500K a year feel attacked and why would they care? But the conversations here have convinced me that there is a real and sincere desire for the successful businessman to be given respect as well as a high income. Well, we are just people after all.
So this makes it difficult to discuss income disparity, because the basic principle and argument of income disparity is that people at the top are over-rewarded and the people at the bottom are under-rewarded. This whole idea immediately shuts the conversation down.
I think I understand why. Starting and running a business is hard work and risky. Many businesses do not succeed. When a businessman finally strikes gold, how could it not be deserved?
So the conversation about the economic instability of income disparity transforms into a defensive series of platitudes about “moochers trying to take what other people earn”, or “punishing success”.
Some of this is a natural response to the way that I, and others, have presented the impact of income disparity on the lower 20% or 50% or 90%. When the problem is described in terms of the rich taking from the poor, redistribution to the rich, greed ,and unearned bonuses, it is then natural for the ensuing defense of the upper earners to be stated in the same moralistic terms.
That’s when the discussion hits the brick wall, and no more progress in understanding the problem is achieved.
So, if I may, let me try another approach to get past the brick wall… (continued)
” but any hint of disrespect to high earners and the whole idea of imbalance in income distribution is rejected.”
Again you are wrong twice. Income is earned, not distributed. Also, it is clear that we all don’t earn the same income.
” rich taking from the poor, ”
Would you stop that. Except for scam artist this doesn’t happen. To paint all that do well with the same brush is wrong.
I don’t ever mean to say we all earn (deserve) or should earn (receive) the same income, but you are accurately, (and helpfully!) pointing out some semantics that also cause problems in the discussion.
I’ll have to agree that “Imbalance of income distribution” is not a great term, and is not much better than “income inequality” because they both imply that incomes should be equal, which is not at all the point or goal of the discussion. As an economic system metric , I like the term “income slope”, and when I am describing that metric being high, I will say “excessive income slope”, but I also use other more common terminology so people know what I mean. You have just convinced me to stay away from the common terms and to use “income slope” as the metric.
“Earn” is an interesting word. Webster has two primary definitions:
1) to receive as return for effort and especially for work done or services rendered
2) to come to be duly worthy of or entitled or suited to
I would like to not even use the term “earn” because of its moralistic implications in the second definition. But the use as a technical term for how we receive compensation for work is too prevalent for it to be easily replaced. We all receive money for our work, and technically we have “earned” it simply by virtue of receiving it. By this definition, a getaway driver “earned” his part of the bank robbery proceeds, yet few would say he was “duly worthy”. Morally, we have all seen situations where we feel someone was cheated in a negotiation and that payment in the transaction was not morally “earned”, because the recipient was not “duly worthy of” the funds received.
I think I will have to continue to use the terms “earn” and “wage-earners”, and “earned income”, in the first technical sense, recognizing that it is a separate and nearly impossible moralistic judgment to determine whether any one earns (is duly worthy of) what they earn (receive).
Your objection that “Income is earned, not distributed” seems to be inappropriately mixing the two definitions of earned, implying that everyone is “duly worthy” of their income merely by having received it. That is a judgment call. When a worker is a victim of wage theft, forced to clock out but persuaded to continue working to help clean the restaurant (for example), they have earned (worked for and are duly worthy of) more than they earned (received).
Income is most definitely “distributed” in any system where a manager sets worker compensation scales. To deny that what people earn (receive) is a part of an organized and controlled wage distribution system, where the portions of company revenue are allocated to workers both by category and individual assessment, is to deny reality. Markets and supply/demand only approximately determine appropriate wage scales. Most of the rest is negotiation, and the result of that negotiation, for any wage-earner, is a system of income distribution.
“rich taking from the poor” – You are obviously not reading the whole post or even the whole paragraph. I was just saying that was a volatile term I should not be using because it foments a defensive response. Please don’t argue with me on a point where I just agreed with you. I’m sure we have plenty of actual disagreements to discuss.
” but any hint of disrespect to high earners and the whole idea of imbalance in income distribution is rejected.”
Again you are wrong twice. Income is earned, not distributed. Also, it is clear that we all don’t earn the same income.
” rich taking from the poor, ”
Would you stop that. Except for scam artist this doesn’t happen. To paint all that do well with the same brush is wrong.
” I was troubled when Peter indicated he could not really engage in discussion with me as long as I was simply seeming to advocate for taking his money and giving it to someone else. That was not how I saw my arguments”
I with the original Peter on this. The fact you can see how flawed you point of view is is troubling.
Obama is going to make a big deal about income inequality to shift attention away from his failures. He talks about the rich not paying their fair share when they already pay most of the taxes directly or indirectly. Again, what is your fair share of other people’s money?
I don’t think the other Peter or others like us mind paying for government as specified in the Constitution but what we do mind is the government taking our money and giving it to someone else. What Obama is essentially doing is buying votes using other people’s tax money with opposing views. This is wrong.
“Obama is going to make a big deal about income inequality to shift attention away from his failures.”
That’s clearly just a political and partisan assertion. Excessive income slope IS a big deal. It, along with declined and declining median income are warning lights on the dashboard, indicating a broken economic engine that needs attention.
“I don’t think the other Peter or others like us mind paying for government as specified in the Constitution ”
Then you should have no problem with taxes and revenue being increased to pay for expenses. That is what the Constitution allows taxes for.
“what we do mind is the government taking our money and giving it to someone else”
I am presuming you mean that you object to programs and policies like social security, food stamps, earned income tax credits. Do you also object to veterans benefits, federal retirement funds, and the like? You can choose to look at some or all of these things as taking money from person B and giving it to person A. Or you can choose to look at the taxes as paying into a fund that is allocated for many purposes, some of which you agree with and some of which you don’t. “Raising extreme indigence towards a state of comfort” is a legitimate societal goal and I think it is counter-productive to any discussion and downright Scrooge-ian to imply that using taxes to balance the needs of society are “taking our money and giving it to someone else”.
“Then you should have no problem with taxes and revenue being increased to pay for expenses”
This might be the dumbest thing you have said so far. Just step back and think about this for a moment.
Are you implying that we have government that is NOT somehow specified in the Constitution? By whose judgment? The debates about big and small government are long-standing but the current form with all of its support for “the public welfare” are legal under Constitution as interpreted and upheld by the Supreme Court and and Congressional law, as signed into law by duly elected Presidents.
If you are willing to pay taxes to support your government and your nation and the programs duly passed as law, that is great. If you want to object and debate against and vote for representatives who oppose certain aspects of government that is your right.
But if you (Peter? or did you leave off the N again?) are in agreement with the Peter N statement “I don’t think the other Peter or others like us mind paying for government as specified in the Constitution ”, then I am merely saying that you should have no objections to paying off the expenses of our current government, because it is all Constitutionally sound. As is the intelligence of my response.
If you mean that you only want to pay for government as you personally interpret the Constitution to define it, then that is a different argument, a weak one in my opinion which can be further discussed, but one which is certainly not made plain in the original statement.
If you mean something else, then say so. By all logical measure, my response to the statement was suitable, unless you fathom, or intended (depending on who you really are) some other hidden meaning in the Peter N statement.
Last time I checked I pay a lot of taxes.
“Are you implying that we have government that is NOT somehow specified in the Constitution? By whose judgment?”
Read the 10th amendment.
“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.[2]”
Little of what the government does is delegated by the Constition. Where are any transfer or health care programs mentioned in the Constitution? These functions should be handled on the state level where people can vote for them or vote with their feet.
This is what worries me about the lefties that vote. They don’t read the Constitution. Obama flagrantly violates the Constitution when he overrides congress and doesn’t follow procedure.
Now if the current government were to slim down to what is delegated by the Constitution we would not have deficits and could even pay back some of the debt.
“If you mean that you only want to pay for government as you personally interpret the Constitution to define it,”
The Constitution is clear enough. Nowhere in it is there mention of transfer payments
” then that is a different argument, a weak one in my opinion”
What is wrong with the Constitution as written? Lefties seem to think that because something is available, like health care, it is their right to have it. Health care is a temporal thing. There wasn’t health care as we know it when the Constitution was written. What make you think it should be a right now?
Big government is just a power grab seeking to control people’s lives through force if necessary.
http://pjmedia.com/tatler/2014/08/01/homeland-security-seizes-womans-land-rover-and-even-they-dont-know-why/
This was clearly a violation of the woman’s Constitutional rights against search and seizure. Notice the force part. If you think our government is some benign entity you are wrong.
“What Obama is essentially doing is buying votes using other people’s tax money with opposing views. This is wrong.”
And when Republicans buy votes by drastically cutting taxes for their contributors (with vast majority going to high-earners who support Republicans) and increasing the debt which we all have to pay off, is that also wrong?
Everybody supports their base and programs that help their base. If such programs ultimately help society and/or the economy, I don’t consider them wrong just because they also garner votes. That basically IS politics. The problem I have is when politicians garner votes while simultaneously damaging the economy and or society, and pointedly neglect the public conversation or the majority opinion in order to cater to a select minority base of wealth and power.
Peter N: “Little of what the government does is delegated by the Constition. Where are any transfer or health care programs mentioned in the Constitution?”
“The Constitution is clear enough. Nowhere in it is there mention of transfer payments.”
There have been about 226 years of discussion and court rulings about the meaning of the Constitution since it was ratified, not to mention the decades of political writings of our forefathers before, during, and after it was written that explain the authoritative intent. Part of the ambiguity that remains in the Constitution is a result of the both the disputes that the authors themselves debated, and the flexibility they wished to bestow to future generations. If the legal intents, details and implications of the Constitution are all so crystal clear and indisputable to you, then all of that post-ratification discussion and court wrangling could have been dispensed with, as the courts could have just waited to consult you, who seem to know more than they do and have superior insight into the singular truths of the document.
Or perhaps you could instead accept the reality that you are not actually the foremost authority on Constitutional Law and inform yourself with some study of the Madison vs. Hamiltonian interpretations of the taxation and general welfare clause, as well as legal precedent established in the United States v. Butler. case, the Helvering v. Davis case, and the South Dakota v. Dole case.
You may recall there was also a recent Supreme Court case challenging the Constitutionality of the Affordable Care Act. You may remember that the court ruled it Constitutional. We operate under the Constitution. Just not your own personal version of its meaning.
This is what worries me about the radical right. They don’t study or understand history. They just take a few words they like from whatever authority sounds agreeable to them, and use these disjointed phrases to back up their pre-conceived, self-serving, mis-guided version of reality, with no interest or concern about facts, self-critique, or intellectual honesty.
I’m nowhere near the radical right. In fact, I detest the “radical right” philosophy about as much as any…. You just assume if someone disagrees with you they are part of some blinded political platform. Yet most of what you spit out is unsubstantiated idealistic nonsense that could easily be labeled as “radical left”. Why cant there be a civilized conversation about this without the insults, labels, or disrespect? You are making the problem worse (in a small, small way).
Peter, you are falling into the leftist word games. The ‘right’ is conservative. How can being conservative be radical? The lefties must always be challenge on this point and then use this point to show how they distort the truth and ruin their credibility. It is an up hill battle because the lefties have a big lead.
Peter N.: “Now if the current government were to slim down to what is delegated by the Constitution we would not have deficits and could even pay back some of the debt.”
1) All current federal programs are Constitutional or they would have already been struck down.
2) Good luck on getting the American people to give up Social Security or Medicare. They’d sooner give up their guns.
3) If we would raise taxes on those who have most benefited from decades of extraordinarily low taxation that depleted the Treasury, the deficits would rapidly decline.
4) If we just restore economic balance by rebuilding the middle class and establishing stronger labor and union laws, then everyone would be able to pay higher tax rates and there would be fewer transfer payments because there would be less poverty.
The safest way to wealth is choosing career that offers stability and reasonable income while living below one’s means………….as long as you are saving money, you don’t have to live below your means. If I can afford a $1M dollar house and save $20K a month, does it matter? If you only make $60K a year, you can’t afford a $1M dollar house, but you can spend a ton of money on unnecessary items.
Is saving money not the very definition of living below one’s means?!?!?
No, you can save $100 or $1,000. The percentage of your income you are saving would determine how far under your means you are living. Someone saving 10% isn’t living below as much as someone saving 35% if they had a similar income.
Sorry, I’m at a loss as to what you are trying to say/prove.
Yes, as you said, someone with who saves a higher percentage of a similar income is living FURTHER below their means than the other, but they are still both below their means.
But I don’t follow your statement “as long as you are saving money, you don’t have to live below your means”. How is being able to save money, not living below your means?
Having $1M in property with a $900K loan against it doesn’t make you a millionaire.
Yep, quite obvious.
I was merely pointing out how easy it is to have a million in assets. It doesn’t take huge earnings. Assets and earnings are not the same thing, they are not equal.
Also, while I may not have a million in equity, like most small businesses there is debt that will be paid off over years and eventually the equity will be present.
Not if they keep going into debt to expand. There are people that will stay leveraged in debt thinking it will get paid off someday. There are plenty of small businesses that will never have a million dollar asset on their books.
Yep, again quite obvious. What is your point?
today’s new rich are notable for their sense of economic fragility………what proof do you have? You are just pulling stuff out of your ass. What does that even mean?
Again, we have the richest poor people in the world. indoor plumbing, cable TV, most have a car…..they just need to learn a skill or get a GED for a better job.
Interesting article, part of which reads, “Fully 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America’s economy and politics. This little-known group may pose the biggest barrier to reducing the nation’s income inequality.
The growing numbers of the U.S. poor have been well documented, but survey data provided to The Associated Press detail the flip side of the record income gap – the rise of the “new rich.”
Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners…
In a country where poverty is at a record high, today’s new rich are notable for their sense of economic fragility. They’ve reached the top 2 percent, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged…
At the same time, an increasing polarization of low-wage work and high-skill jobs has left middle-income careers depleted.”
So where do these “new rich” come from and where do they go?
“Made up largely of older”
Yes, your income should go up as you gain experience
” professionals,”
Yes again, some jobs are worth more than others.
“working married couples”
Those with two good incomes obviously have a better chance of becoming rich.
“and more educated singles,”
and education helps too.
This is what separates them from joe 6 pack. It is obvious to me. So why do you think these are not paying their fair share? They have done everything right and deserve what they get.
“In a country where poverty is at a record high, ”
As the other Peter pointed out. The poverty you talk about is material poverty and the poverty line is pretty high. One can raise the poverty line higher to make your stats look even more drastic. If these people would spend their money and time on things that matter they would be better off.
The real poverty is the not what these people have but what they can or can’t do.
“At the same time, an increasing polarization of low-wage work and high-skill jobs has left middle-income careers depleted.”
So why don’t the low wage workers train for high-skill jobs and solve the problem?
Come on, admit it. Because not everyone is capable or wants to make the sacrifice. Admit it, people aren’t equal but you seem to think there should be one big middle class where everyone is approximately equal. Why do you worry about things you can’t control let alone have no answer for. The the individuals can decide to make the effort to better themselves. You can’t simply take money from one group and give to another group unless that group is capable of taking advantage of what they have been given. LBJ’s war on poverty is how old now? You need to improve the people.
“You can’t simply take money from one group and give to another group” Where was that even said/implied in the article? It was talking about how our economy is turning more into a dumbbell shape with a large group of haves and an even larger group of have nots.
I believe the point being made is that we are losing the middle rungs of the ladder. Many believe (myself included) without a healthy, robust middle class, we all lose economically and it makes it harder to make it to the upper classes. The wealthy are generally better off with a healthy middle class. We cannot all be educated to PhD level and then have that worth anything, and the jobs below will still remain, they need to be done even if by a PhD. Unless you want to move back to where we have a ruling class and surfs (no substantial middle class), people need to be paid a reasonable wage no matter the job. Of course, then the argument is what is a reasonable wage.
“So where do these “new rich” come from and where do they go?”
Many only make these types of earnings for a short time for different reasons:
They retire shortly after they reach this level
They had a large bonus for one year
They are in sales and based commission and have a good year every so often
They were very successful for a few years, then business changes
They win the lottery
etc etc etc
Yea, what I was getting at is they they come from and return to the middle class. The ‘new rich’ don’t simply appear and disappear.
” Many believe (myself included) without a healthy, robust middle class, we all lose economically and it makes it harder to make it to the upper classes. ”
There will always be a few good people that make it. Talented people will always shine or stand out.
“The wealthy are generally better off with a healthy middle class.”
I agree if the people are middle class quality compared to the rest of the world.
No one has suggested how to bring the bottom people up, just how to bring the top down. I am all in favor of bringing the bottom people up but obviously not all of them will make it.
There is so much good info available out there so people can learn on their own if they want to but they don’t and yet they blame others.
Actually, the point was the explanation of why we have so much opposition to public programs which help the poorest Americans. “In a country where poverty is at a record high, today’s new rich are notable for their sense of economic fragility. They’ve reached the top 2 percent, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged…”
It also explains some of the shrinking of the middle class by saying, “At the same time, an increasing polarization of low-wage work and high-skill jobs has left middle-income careers depleted.” Americans have noticed this and will increasingly ask, “Why?” The easy and most obvious answer is that the wealthiest have taken more of the pie and left less for everyone else. Is it more complicated than that, or just that simple?
Much more complicated. Nothing I am doing as part of the 1% is taking from the middle class. In fact I’m employing quite a bit of that group, which is was unable to do when I wasn’t in the 1%. Not a zero sum game
how about no minimum wage, no snap, and no fed income tax. problem solved.
How about no laws at all. We can strap on guns and make our own. Yeah, that’s the ticket!
Not sure what problem that “solves”. That solution will certainly create many more problems than it solves.
The same percentage of those that make it to the top in legal or accounting or medicine are the same percentage of small business owners. YOu have to have certain characteristics to run a business. It isn’t easy. You can’t just start a business and make money. You need capital to expand and many get in too deep.
I think this article missed the biggest group of people who make $400,000 or more per year… Small Business Owners. No doubt most don’t make that amount, but most of the people who make that amount are indeed self-employed.
If you want to truly make “what you deserve” then start your own business. You’ll either do very well or you won’t. Either way, you’ll be “fairly” compensated.
It is very difficult – near impossible – to get wealthy primarily from a traditional job. Sure there are some doctors and lawyers. With a CEO, in many cases they are paid heavily on incentives or bonuses, and in most cases are an owner (either the founder with most smaller private firms, or owner through stock with larger public firms). Even with the doctors and lawyers, many of them are self-employed in their own practice, or a partner at a practice, etc.
Self employed people make up less than 20% of workers in the US, but account for more than 2/3 of the millionaires in the country. The tradeoff is that there are also a lot of self employed people who fail or are really struggling since there is no guaranteed pay.
As a business owner you have unlimited upside, but you have to be willing to accept the risk and the lack of a floor. You aren’t guaranteed anything.
Not interested? No problem. But just understand that higher rewards are associated with higher risks. Even with the doctor and lawyer exceptions there is lots of risk – education debt, delaying the start of their career due to additional schooling.
So my point here is that the most likely way to earn a very substantial income is to work for yourself and be your own boss. Granted, there is substantial risk and a big list of cons too. The choice is yours.
Totally agree. If you want to be fairly compensated, be your own boss – start your own business. Don’t like the bureaucracy of the corporate world? Don’t get a job in it. It takes a unique individual to start their own business and take all of that risk….and most who do really, really struggle at first. I know personally I barely made enough to survive for about 5 years before “hitting my stride” and having some success. I could have taken a job making twice (or more) what I was making but believed in – and badly wanted – the upside that the ultimate success of my business would bring.
Small business owners are still only 3% of the 1%, most small business owners take home earnings are much less, and many of those in the 1% are more likely to be contractors with few if any employees and a small number of customers. Many are millionaires because of business assets, not by having lots of cash in the bank, which makes it hard to access when you need it. It’s easy to have a million in assets even if your business is small, most farmers and industrial companies easily have it. I personally own over a million in rental property and other assets though my income is modest and may never break the 100k barrier.
The safest way to wealth is choosing career that offers stability and reasonable income while living below one’s means. For every small business owner, there are 32 others who are working for someone else and earning enough to be in the 1%. As for becoming a millionaire, living below one’s means and investing has the biggest effect, being in the 1% of earnings means little if you spend everything.
Steven H
I’m not an accountant, but here is what I’m told.
The exemption is only to see if you must pay, not an exemption as in regular system. You get to write off ONLY first mortgage and charity (limits apply). Then you pay $0.26 per dollar for every dollar starting at zero. For regular system u pay nothing for first $10k (these double for married filing jointly), 10% over $10k to next bracket, then each goes up. Meanwhile AMT is paying 26 cents on EVERY dollar and 28 cents for higher amounts, I believe $1 million. So you pay a flat rate all the way up from dollar zero and marginal tax rates are meaningless. Again, NO change in this for Bush tax cuts. It’s more, but simpler. I’d like to see all taxes paid this way, with less write offs and flatter rates.
But all those jobs at H&R Block and Jackson Hewitt would go away….we paid AMT a few years ago when we paid our property taxes in January and December trying to get a break. It didn’t happen. Won’t be doing it again.
Pay AMT every single year….but evidently still not paying enough according to some. (haha)
I have a good one for you. We used to get hit with AMT every year but now we make too much. Yes, that’s right. We are above the AMT amounts because we have so few write offs, we can’t even get many deductions, contrary to what most people think. I am guessing since you are a financial planner and have your own business, you get to write off more of your expenses. We can write off virtually nothing. We are all on salary and bonus.
Actually have minimal writeoffs. Work for myself but as part of a major corporation.
Peter, Can the larger corporation ever decide your contribution to their bottom line either isn’t necessary, or they could increase profits without you?
MOR – I suppose they could but people like me are bringing in signicant revenue. We would just go to another company (they are constantly calling trying to recruit us with gigantic signing bonuses). And what message would that send to the other big revenue generators. Sure, my number is minuscule to the larger company bottom line but collectively the top 500 advisors numbers are significant.
There are plenty of companies that won’t allow up to 25% of your pay to go into a 401K plan. I have worked at a few of them.
The IRS doesn’t care how you get to $17,500, but a company shouldn’t put barriers up either, Even a job making $100K wouldn’t be able to max out and that is easy making $100K.
http://www.foxbusiness.com/industries/2014/07/01/lockheed-martin-to-freeze-us-pension-plan/?intcmp=obinsite
Here is my main issue with this. Lockheed should allow up to 50% of a person’s salary to be put into the 401K. 10% is too low for someone that has the ability to max out. You would have to make 170K to max out at 10%. My wife makes enough more than me that I did this at a previous company. I put 25% of my salary into our 401K so I could max out. One of my other companies maxed it out at 15% so I was not able to max out my 401K. If the gov’t wants people to maximize their savings, there should be a standard for companies. Most over 50 won’t be able to save 23.5K even if they wanted to due to a company restriction. What does the company care? It isn’t their money.
Agreed – and this is a company decision. IRS allows $17,500 with no percentage limits.
Actually just reread the article….looks like they are matching 10% of employee deferrals. So you can still put in 25% or more (maxed at $17,500) but only get 10% matched. Great deal actually.
Both my gf and I earn well over 400k each. Moral of the story is this. Go to school, major in a marketable skill, start your own business.
Good for you. Don’t get married. Your taxes will jump a huge amount. But you probably already knew that.
There wereany deductions and shelters (legal) in 1960’s. still about 2/3rds of “1%” pay alt min tax. It has not been changed in a very long time, only it’s lower limit changed by inflation. NO Bush tax cut for us.
Just a question. I postulate that the Fed keeping rates low is HURTING jobs by not giving Boomers who want to retire enough fixed income return to be confident in long term returns. Thus they keep jobs and clog up advancement for the younger. Also, as I sated before, the government competes with small business for loans due though borrowing rates. Thoughts?
As someone who works in the investment world, I can say that the last paragraph couldn’t be further from the truth. Lower interest rates are actually good for the economy. First, they help economic growth as borrowing is so cheap – this helps expansion, hiring and general business development while higher interest rates constrain it. Secondly, low interest rates boost risky returns like stock performance as more money flows into these assets. This actually helps retirees as their assets grow at a much higher percentage.
Also, remember that interest rates are only as high or low as they relate to inflation. With low interest rates, we have low inflation which helps consumers afford to live.
Most retirees who are still working and can’t afford a comfortable retirement are in this situation because of a lack of long-term planning. The American way of life is one of instant gratification and short-term consumption. A huge percentage of our working population doesn’t contribute to their company’s 401k plans – even though the company matches their contributions (i.e. doubles). Others are still working because people are healthier and still feel quite vital in their 60’s and don’t want to quit working at that point. I don’t think interest rates being low has anything to do with it – certainly not in the negative.
Stevendad, Roughly how does the alt min tax work these days? My understanding is that it is about 26% on the first 180K and 28% on amounts above that. But there is also an exemption amount of about 52K for individual or 81K for married filing jointly. (Figures are rounded.) But how does that exemption work? Does that effectively mean 0% on 1st $52K (single) and then 26% on the next $180K?
(I also understand that both regular and alt tax methods must be calculated and the higher is paid.)
NY Times recently fired their editor because she wished to tell the truth about their sex discrimination. They are blind to any faults if Obama. I watch them all, msnbc to fox.
I actually try to watch none of them. Most news is info-tainment rather than informative. Think it’s part of why we are so divisive and some (not all) people have such uninformed opinions on here and believe it so deeply to be true.
I agree, these shows are all divisive and often their “facts” are anything but. They don’t talk about real solutions, they push idealized ideologies that won’t work in the real world and try to rally the troops against the “other” side. What they don’t get, is there is no other side, we are in this together. Often the best results and ideas come through discussion of opposing views and compromise, not pushing some ideology for ideology’s sake.
Try PBS.
Interesting information.
There has been a lot of talk about tax rates on the “1%” but also assertions that the lowest threshold levels of the 1% are not really rich, as their incomes are “only” at the $390K level. I finally looked up some info on the effective tax rates of the upper 0.1% (bottom threshold of $1.9M in 2012) and how that group’s tax rates have changed over time. This report is from 2010 and uses data up to about 2007-2008. It’s the comparison to 50 years back that is interesting.
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Between 1960 to 2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one thousand — have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent.
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In 2007, if the top 0.1 percent of taxpayers — Americans with incomes that averaged $7,126,395 — had paid total federal taxes at the same rate as the top 0.1 percent paid these taxes in 1960, the federal treasury would have collected an additional $281.2 billion in revenue.
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Tax cuts for the wealthy between 2001-2008 cost the U.S. Treasury $700 billion, with all of these billions added directly to the national debt. Retaining these tax cuts will cost $826 billion over the next decade.
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In 1960, the middle 20 percent of U.S. taxpayers paid 15.9 percent of their incomes in total federal taxes. That total included not just income taxes, but payroll and other federal taxes as well. These same Americans, according to the most recent figures, are now paying 16.1 percent of their incomes in total federal taxes.
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Federal taxes, even after three decades of tax cuts for America’s most affluent, remain somewhat progressive. The higher the income, the higher the tax rate. But state and local taxes remain decidedly regressive. This offsets, to a significant extent, our residual federal tax progressivity. Taxpayers in America’s middle fifth paid 9.4 percent of their 2007 incomes in total state and local taxes. Top 1 percent taxpayers that year saw only 5.2 percent of their incomes go to state and local taxes.
http://biz570.com/economy/economy/poll-majority-favors-increased-taxes-on-wealthy-americans-1.720387/effective-federal-tax-rate-for-median-and-top-400-family-1955-2007-1.720389
And your point is?
I have heard the claim that “no one actually paid those high marginal rates” in the pre-80’s. This article claims that upper 0.1% paid effective rate of 60%, and I had not looked up that info, nor seen it mentioned here. It was during a time period when the economy was thriving and the rich were still prosperous. So this is just information for the conversation.
I know you have said that you are less concerned with the past, and more interested in the future and where we go from here. But it is also important to know what has worked in the past and what has not. “Those who do not know history are doomed to repeat it.” Too much rhetoric has been in the conversation that is either overly idealistic (“Tax cuts pay for themselves!”) or fear-mongering (“Raising taxes will destroy business!”). In fact, when reasonable tax increases are put in place, as Clinton did, as Obama just did, as California did, debts are reduced and economies improve. As Kansas has learned, cutting taxes drastically just for idealistic or political reasons, without an actual plan, doesn’t improve the economy. It just bankrupts the government.
We need to plan for the future based on a knowledge of history, and what is practical for the future, and we need to get away from the idealistic hard lines, the propaganda, and the fear-mongering that our country has been obsessed with.
As long as you continue to think that the solution is to take more of my earnings either because “I have enough” or “I don’t deserve it” or “it is just bonus income”, it’s hard for me to engage with you.
German society worked pretty well in the 1930’s and 40’s as well and was wildly productive and innovative. That doesn’t mean that is a model that we should aspire to.
Plus if you believe that economies improve with reasonable tax increases, then isn’t that what we just did? Isn’t that enough? What will you do if that doesn’t solve the problem…
A couple of points that deserve thought. At the heart of your presumption that you have all the rights to whatever you earn is the implication that wealth is infinite. On any given day wealth on one level, and income on the other is finite. By definition, if one is to receive more, another must receive less. If you receive more, someone, somewhere is either losing or being prevented from maintaining their ability to grow proportionately. This is the foundation of the current debate regarding income distribution.
As noted by “Common Dreams,” the richest quintile of Americans owns 93% of non-home wealth. For Americans with incomes over $10 million, nearly half of their income comes from capital gains and dividends, on most of which they pay only a 15% tax. From 2002 to 2007, two-thirds of all income went to the richest 1%. Then, in the first year after the recession, a startling 93% of all new income went to the richest 1%.
These data support the claim that in a growing economy, those who reaped the most gains, did so at the expense of 80% of the rest of America through income stagnation.
http://acivilamericandebate.com/2011/04/10/the-30-year-growth-of-income-inequality/
http://www.commondreams.org/views/2012/12/03/five-facts-about-americas-pathological-wealth-distribution
I could liken the argument supporting the status quo is as egregious as climate change denial. Everyone thinks they are right to the exclusion of weighing the consequences if proven wrong.
“At the heart of your presumption that you have all the rights to whatever you earn is the implication that wealth is infinite”
Wealth is not infinite but it can be created or destroyed.
“By definition, if one is to receive more, another must receive less.”
This is false because wealth can be created. This is a hard concept for lefties that think wealth is fixed and can only be re-distributed.
“if you receive more, someone, somewhere is either losing or being prevented from maintaining their ability to grow proportionately.”
no, take a look around. Look at where we are now relative the the 1950s or even the 1900s. Wealth is being created. No one back then had what we take for granted now.
“As noted by “Common Dreams,” ….”
a rehash of old data. We have been through this before.
“These data support the claim that in a growing economy, those who reaped the most gains, did so at the expense of 80% of the rest of America through income stagnation.”
This is pure leftist crap. You confuse is cause and effect. That fact that others made more didn’t mean 80% made less. Just relatively less because now they must compete with third world counties and automation.
By today’s standards almost everyone would have been in poverty in the year 1900.
Random thoughts.
The NY Times is no longer credible. They are too liberal to see the world as it is.
Unions have in some ways destroyed themselves with greed. Ok for them to be greedy I guess. My very left leaning friend (Obama donor) stopped using them. Here’s why: they were getting a delivery on a $3 million project he was working on. There was a rake one the road, origin unknown. The driver would not pick up as not in his union contract. After several more union employees refused, an engineer finally picked it up. One hour times several thousand dollars an hour wasted for NOTHING.
Remember Steven H, your point of view is backed up with financial ruin, bullets and jail time. Who’s bullying who?
There is abuse in centralization of power. No denying that. Some unions abused their power and set unreasonable work rules. Monopolies abuse power. Large political donors abuse power. Big money and centralized power are magnets for corruption, always.
But more good was done than ill by unions. 40 hour work weeks were a big win. And unions have been the only practical way for workers to negotiate with management of big companies. The theory of markets setting proper worker value falls apart when company managers have all of the negotiating power. The decline of strong unions is one big reason (though not the only reason) why most Americans wages have been stagnant or declining for last 30 years just as companies and wealthiest have prospered at accelerated rate.
“The NY Times is no longer credible. They are too liberal to see the world as it is.”
In what way?
What news source do you consider most credible? I like CNN and BBC. Al Jazeera America is pretty good, too, oddly enough.
So let me say, I am “forced” to contribute to my pension, if I didn’t have the pension, would most still contribute to the 401K at 6% or more? What is the difference? Well, I don’t control the fund or what is invested in the pension. I would have more control over investments in my 401K. Which is better? It depends if you have the knowledge or the ability to want to monitor the investments. Many county employees are going to be just depending on their pensions.
this CEO improved Burger King from the brink.
finance.yahoo.com/news/burger-kings-33-old-ceo-185556018.html
We’ve talked almost exclusively in these threads about the private sector and its alleged failings . For a moment I’d like to talk about the public sector, and in particular about public sector pensions.
Per the link below (among other sources), less than 50% of private sector large companies with 500+ employees offer traditional pensions anymore. Only about 8% of small businesses do. Yet every employee in federal, state and local government will have a pension when they retire, as long as they stay long enough to qualify.
http://money.usnews.com/money/blogs/planning-to-retire/2012/10/26/top-companies-continue-to-drop-pensions
So I have two questions: 1) Is is “fair” that public sector employees will have pensions, when half of us in the private sector who are paying for those pensions won’t? 2) Since I pay the taxes that pay those salaries and pensions, what is my “fair share” of those salaries and pensions?
I will say as a public sector employee, in general, public sector employees are paid less than the equivalent private sector job and the carrot is the pensions. I started my public job late in life so I won’t have 30 years built up. But I won’t really need the pension, it will be bonus, but there are people around here that can’t conceive of leaving due to the great pension they will get when they retire.
We don’t get bonuses, or 401K match or automatic COLA raises. The froze many things around here during the recession and things have bounced back. I only can hope for a raise every 4 years or so and I will say our “CFO” has tried to offer a competitive wage to attract better people to gov’t service. My pension will guarantee a 7% return and I think I get a 225% match once I am eligible for retirement so if I have $100,000 in the pension (not likely) then the state puts in or has a calculation that makes it worth $325,000….
Now, there are pros and cons. I can say, Texas is a very fiscally conservative state and I am 99% sure my pension will be there unlike Detroit. The cons are no matter how well the market does, I get 7%. That is why I also contribute to my 457 plan. There are people around here that won’t get fired and they are milking their job until retirement age. I doubt I last here past the age of 60. I have things to do and places to see. My boss is retiring in 17 months and he will be 70.
While you seem to make less as a county (local) public employee, JB, most federal public sector employees are compensated better than their private sector counterparts.
http://finance.townhall.com/columnists/politicalcalculations/2013/07/29/total-compensation-us-government-employees-vs-the-private-sector-n1651097
Which is why the Feds are 17T in debt and our county will be debt free, pay as you go in about 5 years. There is more waste and fraud on the National level.
More waste and fraud than what? And how do you know and measure that?
The reports come out almost every day about money being sent to the wrong people, the military not knowing where their equipment is, people using the “corporate” credit card to throw large, unnecessary parties, travel first class, on and on. The money is our taxpayer money, not a company like Apple where they actually have to have budgets and tell the shareholders how they spend the money. The US gov’t has ZERO accountability to US Citizens.
http://www.heritage.org/research/reports/2005/04/top-10-examples-of-government-waste
http://wastefraudandabuse.org/
http://www.theepochtimes.com/n2/business/tracking-government-waste-fraud-and-abuse-52147.html
Do I need to go on?
When I was in my early twenties, the organization I worked for agreed to improve pension benefits so that employees got a little more when they retired. I went bullshit and complained bitterly because it meant taking an additional 2% out of my paycheck when I was just getting by as it was. I couldn’t even envision retiring, nor did I care. Over the next few years, however, I saw first hand how people who’d just retired, even at that higher level, were getting destroyed by the high inflation of the 70’s. Retirement considerations suddenly became much more important to me and I got involved.
Since then, I’ve negotiated labor contracts on both sides of the table, and one of the provisions I succeeded to include in one So. Cal. fire department contract was a provision for the city to match up to 5% of contributions to their 457 plan (like a 401k) in addition to their Cal PERS defined benefit plan. You see, 401k’s or 457’s were never supposed to be primary retirements, but only supplementary. In this case the need was to protect against inflation which is still a real threat.
The participation went from just a few firefighters participating, to all of the putting in 5%. They actually gave up a pay raise, but those in leadership within their association saw that they needed such a carrot to provide protection. In essence, it was forced contribution to their retirement since others would label them idiotic for not taking advantage of it. Of course, just like me, the newer guys bitched about not receiving their full raise, but over time, changed their tunes.
When I go back to California and run into these same once young guys, they thank me profusely, some having accumulated over a million dollars in addition to their CalPERS pension before retiring. Are you even more jealous now?
There are estimates made by various partisan players, but CBO admits it can’t begin to get a handle on exact percentages of waste. However, the government does identify areas of highest risk, and rewarding corporate political donars with favorable tax treatment or no-bid contracts apprears to be most agregious. One site says, “The High-Risk List names 30 government areas that are vulnerable to waste, fraud, and abuse. Six areas, including Medicare, Department of Defense (DOD) Weapon System Acquisition, and Enforcement of Tax Laws have been designated high-risk areas since 1990.”
I wonder what level of waste and fraud would exist if we took away the incentive for politicians to reward political donations. Corporations in the U.S. pay the highest corporate tax rate in the world, unless of course, they legally bribe politicians with lobbying and campaign donations. That would take reenactment of campaign finance laws and the lowering of the corporate tax rate while eliminating loopholes. The politicians would never go for that, regardless of party. What a country!
I agree that fraud and abuse is a continuing problem and point to the current VA fiasco as evidence of that fact. It is just the other fact that two out of the three links you provided are all Koch backed echo chambers and questionable sources at best. I am a former mayor of a municipality and one thing about governmental accounting, excepting the federal of course, is that current expenditures can not exceed current revenues. Deficit spending at that level is an extraordinary and rare occurrence. Where most county and municipalities go wrong is with the ownership of water and sewerage utilities along with the maintenance of roads and byways not under federal responsibility. To use Detroit as an example of a worst case scenario, it was the implosion and contraction of the tax base that took them into the abyss. That coupled with the relative incompetence of the elected bodies of the past two decades. Try as they might, they were not up to the challenge. To assert that the majority of waste and fraud is at the federal level is not entirely accurate considering the recent revelations at the governor and city levels.
“To use Detroit as an example of a worst case scenario, it was the implosion and contraction of the tax base that took them into the abyss.”
That is because those that could voted with their feet.
“That coupled with the relative incompetence of the elected bodies of the past two decades.”
Those left behind voted for and got the government they deserved. I do feel sorry for those that didn’t vote the the incompetent mayors.
If you follow the links to the actual CBO study, it’s really not so apparent the federal employees make more. Yes, when they compare the like educational levels as a total group, salaries are about the same, but benefits are greater chiefly due to defined benefit pension plans which so many corporations have abandoned for 401k’s. At the lower end the scale, high school grads, federal employees make more all around, while at the higher end requiring doctorates, they make less.
But even then, the CBO study admits that the comparisons are very difficult, especially the reasons why this occurs (aside from the fact that pensions have been reduced). It in no way can say that the federal employees wouldn’t make more in the private sector on average. Many positions, especially requiring only HS diplomas, are tested positions which means that only the top in those skills, abilities and potential get hired and the rest go back to the private sector. That makes a comparison more like apples and oranges, regardless of their attempts to even it out.
“That is because those that could voted with their feet.”
That is the most oversimplified observation of this situation I have ever seen. They didn’t vote, they were forced in moving because of a lack of work, not dissatisfaction with a political process. The underlying stereotype implied is unsavory.
“Those left behind voted for and got the government they deserved. I do feel sorry for those that didn’t vote the the incompetent mayors.”
What is it about this government that generates such venom?
Having said that, I would think it is not good business practice to not reward your employees at least enough to keep up with inflation… assuming they are performing their jobs appropriately. Loyalty works in both directions… or it should.
My point in the previous post was to say that we often contribute a sizeable amount to our own situations with our own choices and actions. But when making an argument that we want to sound compelling, we either don’t realize we have made a substantial contribution to the present situation, or we judiciously leave that part out to make ourselves appear more like a virtuous victim.
Very true. I made the career choices (sacrifices) I made early so that I would never be in that situation – with my pay or job role at the mercy of someone else.
That said, I totally agree with Ken. I have seen my income go up 4x in the last few years and I have certainly made sure that all of my employees have enjoyed handsome raises. But this made me think of an example…..
Lets use a (sort of) hypothetical – In 5 years, my pay jumped from $150k to $750k due to a rapidly expanding business. My two main support people were making $45k and $80k. Now with bonuses and raises they are making $75k and $125k and extremely happy. In fact the one making $125k is the highest paid support person in my entire office.
Yet Steven H and others might be quick to point out that my pay is up 400% and my assistants pay is up only 67%. Thus widening the income gap. Is this fair? Should I have done something different? Should my assistants be making $250k – twice as much as any support people in the industry?
you have all the risk of the company. If revenues fall, whose pay will be cut first? If the company closes, everyone loses.
It is up to you to determine how much your support people are essential to your business and whether they “earn” more or less. Looking at other market salaries is a guide, but in next year’s business assessment, when you are evaluating the state of the previous years growth and assessing prospects for the next year, I would think you have to ask: Did your employees contribute proportionally to the business growth and profits? Did you? If you grew 10%, will everyone get a 10% raise? Will salaries be determined by value of the work to your company, or just by the minimums permitted by the market range observed external to your company?
I am honestly curious about the process you might use, and while I don’t really expect you to share intimate details of your business, I would be interested to know the guidelines you generally use (or think should be used) to determine raises of workers.
“Will salaries be determined by value of the work to your company, or just by the minimums permitted by the market range observed external to your company?”
With this comment – we have isolated your main mistake. The business marketplace doesn’t pay people based on subjective measures. How is it even possible to determine the “value of their work”? If my revenues double, how much is attributable to each employee? How can you possibly answer that? All parts are certainly a part of the success, but to what proportion?
Employees are paid based on the marketplace. It is objective, not subjective. It is REAL, not idealized. I want to accomplish two goals when I give my employees a raise – 1) to reward them for their hard work and contribution and 2) to keep them here. If I don’t raise their pay enough, I will lose them.
But in no way shape or form do I think there is a “right” answer. I do not owe them a certain dollar figure empirically and it is not morally wrong for me to “only” give them 10% raises when I make 50% more.
Being in the gov’t sector (County) our salaries are mainly determined by the amount of taxes that come in. Many people haven’t received a raise in 4 years due to the budget. Our CFO doesn’t like across the board raises in general for a few reason, but allows the department heads to reward those that are productive. Now, in many jobs, it is hard to quantify productivity. I am basically an admin, but I can find ways to save the tax payers money by suggesting and implementing more efficient ways to accomplish our jobs. So if I were to find a process or piece of technology that saves the County taxpayers $500,000 a year, do I deserve part of that savings or am I doing my job?
I think go’vt gets bogged down in many things, but if you have the lower paid workers and they just do their job and don’t do anything to help, they might not get good raises. But as a Boss, I would want the ability to reward workers that come up with money saving ideas or processes with bonuses in checks. If our AP person puts 500 new vendors on ACH payment instead of writing a check, I should be able to reward that person since EFT payments are much cheaper than checks. They could have just kept cutting checks and not cared, but if I knew they came up with the implementation, they should be rewarded.
Some companies own the intellectual property a scientist invents and he doesn’t monetary benefit directly, but the guy that invented Post It notes should have gotten a huge raise, not necessarily ongoing royalties.
The purpose of this rant is that if you think you deserve a raise, what did you did you do to increase productivity/sales or decrease expenses to justify your raise? Again, not everyone is able to do this.
“Since this is an era when many people are concerned about ‘fairness’ and ‘social justice,’ what is your ‘fair share’ of what someone else has worked for?”
Thomas Sowell
What is your fair share to pay for what our government leaders have already promised to pay?
Taxes are not all about give and take, redistribution. To paint it as such is just silly. When you talk about actual welfare, you should not include social security or medicaid, as these are transfers from wealthy to poor. The link below shows all expenditures for 2014, you can see that all welfare (395B welfare + 308B medicaid) is $703B while defense and SS+Medicare are both much higher an growing fast. Only by eliminating all forms of welfare can we balance the budget, of course that would hurt a lot of families and many large corporations who depend on their spending.
The real problem is not welfare (though there is no arguing it could be reformed to work better), it’s our retirement programs people from all walks of life have been promised and paid into their whole lives, defense, and interest payments. Those are the real growth areas for expenses and they have nothing to do with redistribution of wealth. Defense can (and I believe should) be cut, we don’t need to continue to cowboy around the world. SS and medicare need to be somehow reigned in, but they realistically cannot be eliminated. Interest expense could have been avoided (less spending by liberals, less tax cuts in order to “starve the beast” by conservatives)
http://www.usgovernmentspending.com/us_welfare_spending_40.html
My boss thinks his fair share of my labor is 64% of the profit for his company which I account for. I used to get 75% of the net, but I have no input into what I think my share should be. It’s “either accept it, or there’s the door.” Employment in my specialty is difficult and quitting would most likely mean relocating for another like position, but I’m almost 50 with kids in High School and a wife well entrenched in her profession. He once made twice what I did, but now makes quintuple my wage plus tremendous appreciation of capital while my income hasn’t kept up with inflation. He says that because he’s worked hard and taken risks (he inherited the business from his father), he therefore believes that that’s his “fair share” of my labor or, “what I’ve worked for”.
Was that what Sowell was describing?
So let me paraphrase….. Your boss’ father took risks, put in boatloads of time and effort to make the business viable, and passed the benefits of that risk taking and work on to his son. And because of other life choices that you have made — wife, wife’s job, kids in high school, etc. — you’re unwilling to take the same risks or put that kind of time in yourself so that you can be the boss. Yet you protest that someone else is telling you how much you’re worth in compensation.
I do feel for you Aspiekid. Have many good friends in these situations and understand how frustrating it is….
Actually, I do, too, Aspikid. I also have friends and family who have not had raises in many years. It’s horrible.
With the weakening of unions, fewer workers have a voice into fair compensation and owners of companies or stockholders and company executives can and do take a bigger piece of the pie for themselves. Because of my situation, I must work harder and longer hours than my boss in order to make ends meet and save for the kids’ college expenses coming up. Although this isn’t a union shop, nor is my occupation a union position, higher union wages lifted all boats to compete, even mine.
And yes Ken, I have never been able to take the risks associated with starting a company on my own. When I graduated from a top private college magna cum laude, life looked very bright, except that I had large debt from student loans and couldn’t afford to default. Therefore, I couldn’t raise and risk the capital needed for a startup and had to work for someone else. By the time I paid it all off, I was 33, and married with one child. Risk is for childless people who don’t have family expenses and have little to lose. (Jobs and Gates come to mind.)
We’ve made “union” and “labor” dirty words now through deliberate campaigns of negative propaganda by the “job creators”, the wealthy families who want more. The bottom 90% of wage earners lose, but the top 1% get more of the pie, especially the top .01%. The propaganda has even convinced most of the 90% that unions are bad un-American Commie institutions. Without negotiating leverage, my employer can increase his cut of what I earn for him from 25% to 64% and even reduce his hours while I must increase mine to make the same. Look around you. Corporations are making record profits while wages stagnate or even decrease in real dollar terms.
Aspiekid, I totally agree with your defense of unions. The decline of strong unions has been a big contributor to the decline of wages for most Americans.
Thanks Steven H. You are absolutely correct.
The pay for rare skills: music, acting or CEO (not surgeons) have gone way up over the past several years and those with common skills down. This is AGAIN due to globalization, automation and immigration combined with an ” I’m too good to do that” mentality have led to this. Home builders in my area can’t find American born to do roofing and framing despite reasonable pay rates. That would require working outside and hard.
Re: luck, work, contacts. They all affect success and you must do / have some of all. Michael Jordan never becomes great without a lot of work. He benefitted a lot from talent and some from others. Likely 60/30/10 from what I understand. His high school and college coaches largely held him back. He combatted this with hard work. There is pure luck, like a lottery winner. There is no pure talent or pure work. There is rare pure connections, ie trust babies. Working hard and making connections in your areas of talent are what you CAN control. It will require investment of time and often (deferred) money are required.
Very true Stevendad. My example above about the hotel business is more anecdotal evidence of this. It’s hard to think that people can’t have upward mobility when opportunities are going untaken.
I’m still not sure how anyone can support subsidizing Wal mart, McDonald’s, etc by freely giving benefits to employees. I propose they rebate dollar for dollar the net paid into Federal and state subsidies this allows lower min wage for students and workers who only work for extra cash, but encourages better pay for those who have family. Not perfect in all situations, but better. And FAIRER. Eventually, we will need less welfare and wealthfare as interest (to rich people and foreign interests) increasingly eats up the budget.
Oh and I should clarify….. I don’t complain about taxes because the money is not well spent. I complain about the money not being well spent. Taxes – and even levied on a progressive scale such as what we have – are necessary. You won’t find me on here complaining about my taxes – but I will be offended and defend myself when I’m told I am “not paying my fair share” or that my income is just “bonus or surplus income” that I am somehow morally required to return.
I would agree with your statements, though there are many wealthy for whom it is only about their personal tax rates, there are more who feel as you. The problem is, those spending money are generally putting it towards tax reduction. Taxes are necessary to maintain society as we know it, the questions are what are necessary expenses and appropriate tax rates. We currently don’t pay enough taxes to cover expenses and that has been brought on by the ineffectiveness of both parties. I don’t feel we can grow our way out of this, we all need to pay in some way (reduced benefits, higher taxes) before things get even worse.
It’s been decades in evolving, but I feel the Bush tax cuts along with the welfare changes that increased spending (we can leave whether we should have had a trillion dollar war out of the discussion) have greatly put us in a very bad position. Clinton had a lot of help from tech boom, no wars, etc but the parties still negotiated at that time and I would consider that a huge help. Obama’s policies since Bush have done nothing to correct the poor choices during Bush and have only added to the deficits. I feel the current all or nothing stances of both parties are what is standing in the way of full economic recovery.
” but I will be offended and defend myself when I’m told I am “not paying my fair share” or that my income is just “bonus or surplus income” that I am somehow morally required to return.” – That is a fair enough statement. What is a fair share varies on who you talk to, everyone has an opinion, though I think it’s hard to argue that a progressive system of some sort isn’t required. As to income, I think people should be able to earn what they can, though CEO compensation seems to be out of control. CEOs have more control over their compensation than they are willing to admit and many use it as a badge of honor. As an investor, I really don’t like this.
Well said. Completely agree with your thoughts here.
Again, agree 100%.
Question, since many of the wealthy complain that the reason they complain about taxes is that they don’t feel the money is well spent. Why does so much money from the wealthy get spent on trying to change tax policy and reduce tax rates instead of trying to direct where the money gets spent?
Because nobody can control the waste and fraud that goes through the system. How does anyone tell the IRS to tighten up controls? They only do it once it gets out the same person got 12 checks. Or the Pentagon has “misplaced” a few tanks. The GAO is so far behind, once they find a problem, the person that was in charge is probably gone.
I can only speak from personal experience but I don’t spend a penny of my money trying to change tax policy OR trying to direct where the money gets spent. Personally I think the whole political game is @#^&%@! and try to use my dollars to impact lives on a more immediate, personal and direct level rather than leave it in hands of politicians.
Realize that IRS, like other government regulatory agencies get their funding cut even as US populations and job complexity increases. IRS staffing has been cut 11% since 2010, and their funding adjusted for inflation (but not adjusted for US population) has been cut over 14%.
http://www.cbpp.org/cms/?fa=view&id=4156
By the way, the big IRS hiring increase for ObamaCare enforcement that the GOP wags were warning about? That was a complete canard and never happened.
Another example….
My father has been a hotel manager all of his life. Hotel and restaurant management are an interesting microcosm of our economy as they have the typical structure of upper management, department heads, and unskilled laborers. Even with unemployment upwards of 6% (and closer to 9% just a few years ago), my father continuously has “help wanted” signs and ads up in his hotel for jobs. Sure, these jobs are things like maids, busboys, bellhops, etc. but nobody wants them.
He has so many stories though of people that have taken these jobs, shown initiative and worked very hard – and quickly advanced up the ladder. The head of his housekeeping department was a maid in the beginning. The hotel’s lead engineer (who makes $100k) was a simple laborer. The food & beverage director was a former busboy, waiter and maitre’d.
The irony is – for years the hotel he ran was adjacent to a very poor neighborhood. Every day my father would drive through this neighborhood on his way home and see all of the people just sitting outside – many out of work – and have to ask himself why he can’t fill these jobs?
I get where someone might not take a job making minimum wage when they can get another job making more. But why is not having a job at all preferrable to making minimum wage?
The other point in this story (and in my first one) is that there are many paths to success that are out there. These are only two examples but I could add dozens more stories from friends and colleagues that have found that path to better their situation. The American dream still exists – I truly believe that there has been a culture shift in recent years where patience, long-term goal planning and work ethic has been replaced with instant gratification, bitterness and entitlement. Steven H’s (and others) perspective on income disparity and the like may have some validity, but it is bathed in this bitterness and entitlement epidemic.
Interesting stories, Peter. I agree with you 100%.
Thanks Allison! Note that the opposition (Steven H for example) didn’t have anything to say about these examples.
Thought I would digress and share a few real world examples…..
I am in the financial planning industry – this is an industry where you are basically a small-business owner and are forced to build your client base from the ground up. Literally one in about fifteen who try succeed as it is very difficult and does require quite a bit of hard work, good fortune and “who you know”. Those who succeed find themselves in the top half of the 1% income-wise.
Anyway, there is a bit of a crisis in our industry as many of the top advisors are aging and looking towards retirement. Many are looking for younger people to hire to train and mentor to transition their business. I go to meetings every year with the top advisors and hear the stories over and over again about how hard it is to find these people.
Now keep in mind, this is a job that could easily put you in the 1% income bracket. Plus, by coming in as a junior partner to an existing practice, you don’t have to go through the true hard part of this job which is finding clients (where the hard work, luck and who you know come into play). The client book is already established – you just have to work and service those people.
Why can’t we find anyone to take over our businesses? It is a combination of factors:
1) It’s hard to find someone who has the patience and long-term vision to make a lower income number (still far more than a WalMart cashier) for a number of years while the business transitions.
2) It’s hard to find someone who wants to work for someone else and do things the way they want them done.
3) It’s hard to find people who are qualified to do our jobs. If everyone could do it – the industry wouldn’t even exist as people would just manage their own money. The combination of people skills, work ethic, organizational habits and general knowledge and expertise is hard to find.
At least in my industry, there is a wide-open door to going from working in retail to being one of the .5% – without any reliance whatsoever on luck or personal contacts. Yet we can’t find anyone to walk through it.
Your hiring dilemma is rather astounding. The likely young candidates for your company are probably seeking jobs on Wall Street or even at law offices (I imagine lawyers would also be qualified to learn financial planning skills) and those careers also typically have lower pay and long hours at the career start. Your company sounds like it has more career opportunity and quicker capacity for income growth. I am only speculating, but could it be that your starting offer is just a little lower than the levels at these other opportunities?
I have heard complaints from job-seekers that the relatively new internet-resume trend encouragers hirers to collect and review a larger set of resumes in order to find the perfectly-qualified (on paper) candidate, but then the hirer wants to pay an average or bargain basement starting salary to that candidate. I am in no position to know your actual situation, but this is just something to consider.
Law firms are a totally unrelated career path to the financial planning industry. But they do require long hours but normally that career path is better defined. The last paragraph is really off base …. Couldn’t be further from the truth in my real world example.
What I’m talking about is a problem across my industry – not specific to one persons (or firms) particular offer being too low. It’s not like there is a line of interested and qualified applicants. That’s the real problem. Or, a qualified candidate realizes they can make 20% more with a safer job without the upside.
This is the real world…..as is my example below.
Good thing LeBron got lucky and was born tall.
LOL – and one of the big misconceptions of athletes is that hard work doesn’t play a role. There are an awful lot of people born tall!
Exactly. Being tall didn’t work out for Manute Bol or Chuck Nevitt. Role players at best. The NBA is chock full of tall dudes that thought just being tall was enough to succeed.
And many, many more who don’t make the NBA.
Yep!
Sam Walton should have just stayed in Bentonville and never opened another store. But someone else would have done it.
Reagan shouldn’t have gutted rules on monopolies, and maybe the Wal-Marts of the world wouldn’t be so destructive to the economy.
Again JTM, stop with the “right place, right time”. Many people don’t make it 24 years in the Big 4 firms without the skills needed. She is smart and talented and probably still underpaid. Next time go to H&R Block to have your taxes done and tell me how it works out for you if you have a complicated tax return. It wasn’t “luck” she passed the CPA exam. It wasn’t “knowing the right person” when Arthur Andersen spent their time recruiting at University of Houston. So STFU with all your assumptions of how people get jobs and that there is luck involved. Now I am wholly in favor of people networking and knowing people at companies, because that is a legitimate way to get a foot inside the door, but guess what, if you don’t perform, you get let go. having a Harvard degree gets you the contacts, but you still have to be able to do the work. Having a degree from SW Podunk U won’t stop you from becoming a CEO if that is your goal and you have the skills. Your 3rd job out of college, nobody cares where you got your degree. I guarantee your 401K you can’t do what my wife does. It does take a very technical person with skills to do the analytic work she does.
CEO’s don’t just appear from the mail room. it is a quaint idea that happens to 1 in 24,000,000 people. I do find it a tad hypocritical if Microsoft demands a college degree to work there when Mr. Gates never finished college, but guess what, he owns the company and he can set the rules. Follow them or fall behind. (experience should count for something).
A bit testy aren’t we? You don’t know my qualifications. I don’t have her experience, but I have little doubt I could do your wife’s job if I had chosen to continue down that path, I was near the top of my class for my accounting degree and received scholarships because of that. I decided that I preferred computer programming more. It’s hard to deny that getting a position like that, since there are so few of them, is partially about “right place, right time”. I mean no offense to your wife, she’s obviously qualified, but what if the person in that position was similar in age and would have stayed in the position until retirement? Would she have held out in hope they retire early, were fired for some failure, or would she have moved on somewhere else for a chance to move up at one of the other few positions? Even if you have the skills, you are not guaranteed to get the position you want.
But you didn’t do all those things.
And there are no guarantees we even wake up tomorrow – JB isn’t saying that. Frankly, manual laborers also benefit from the “right place right time” thing as well. To think luck plays such a huge role in one’s success is a cheap shot which is meant to belittle the accomplishments of the wealthy.
I don’t think luck plays a huge role. Though it does have a role. I also believe people “create their own luck”. JB is the one putting my position as she was lucky, I am not. If I want to move up currently, I would need to take a different job as the position above me will be taken for years to come. I choose to stay where I’m at.
My point about JBs wife, is that the positions for her job are very limited, there is a need to be positioned properly when those positions become available to get them. Also, the pay rate of a position is also determined by its hierarchical position within a company and a companies peers, most positions at the same level pay similar it’s not just about scarcity of qualified applicants.
My philosophy:
Life is 1/3 hard work, 1/3 reliance on other people, and 1/3 luck.
Work hard to be ready when the luck comes along.
Always be grateful to the people you helped you get where you are. (Teachers, parents, mentors, bosses, friends.)
Always be appreciative of and generous to the people you rely on to keep you where you are and make your day more pleasant (employees, co-workers, bosses, associates, janitors, waiters and waitresses, hotel employees, anybody you meet).
Don’t judge people whose luck ran worse than yours did.
Correction: “people WHO helped you get where you are …”
Totally agree with all of that except the ratio of 1/3 luck, work and reliance. Wouldn’t dare try to quantify that as each persons experience is different.
In my experience, defeatism, negativity and entitlement attitudes are associated with poor long-term outcomes, and the most important determinants of how your life turns out, in the long run, are personal attitudes and behaviors.
If you believe that you can, or if you believe that you can’t, in either case, you’re right.
I can’t argue with you there, but I do have to have a little sympathy for the person who learned their negative attitude in difficult situations.
There is always hard work involved in getting and keeping a good job, but you should never discount the role of luck in anyone’s good fortune. Luck in developing a skill that matches a job that pays well. Luck that such a job and market persists long enough to maintain a career. Luck in encountering the right teachers and mentors to inspire you. Luck to not be struck down or suppressed with any number of accidents, maladies and illnesses. Even such basic luck as being born in a prosperous country in a prosperous century and to parents who provided DNA sufficient to enable an average or more capable than average brain.
There is always luck involved. To deny that is to assume that anybody can just “work harder” to pull themselves out of any situation. Which is a nice platitude but not always correct. Bad luck also serves to quash the success of very many who have worked diligently to achieve success but failed; very often due to circumstances well beyond their control.
“Making your own luck” just means to work hard to be ready if good luck comes your way. It does not really make luck, but just improves the odds.
Never be too proud of being lucky and never be too harsh on those who have had less luck. Don’t just make your own luck. Make somebody else’s too.
If luck was such a giant part of success then we are wasting our time with this debate. Just hope that the lottery wheel of good fortune spins onto you and be ready to seize the opportunity. Seems like a good plan.
I never said wait. I said work hard and be ready. My attitude about luck is just prevent myself from being arrogant about my fortunate position in life. Many other people are just as hard-working and deserving but have had less luck and opportunity.
Of course…
I am tired of this discussion. Go start your own company and pay people $100 an hour for answering the phone and see how long your business lasts.
LOL. Totally agree JB. It’s the whole perspective of living in idealistic thought vs reality. And they have every right to be upset about their own reality and perspective. I do respect that. But I don’t think shutting down WalMart, giving the bottom 20% pay raises or raising taxes on the rich are going to make this group happy.
Fact is in just the last decade we have repeatedly raised minimum wage, lowered taxes for 98% of Americans and raised taxes significantly on the wealthy. We have marginal and progressive tax rates. We have rules on monopolies. We have welfare, social security and now a national health care plan. But for the ideologue or victim it will never be enough. They will always find something to blame their circumstances on.
Fact is, tax rates are still lower for virtually everyone since 2000, they are not significantly higher for anyone. Fact is, tax rates are still lower for 99.9% than a decade ago (2004) after the majority of the Bush (unpaid for) tax cuts. Fact is, tax rates are historically low for the wealthy and ultra wealthy while they are earning and holding an ever increasing share of the pie. I guess the wealthy will always find something to cry about in hopes to make congress feel sorry for them for a tax break.
You can look for yourself:
http://www.moneychimp.com/features/tax_brackets.htm
Hold on. I have to call you on some false arguments:
— “Fact is in just the last decade we have repeatedly raised minimum wage.”
No, it is now 20% lower in “real” adjusted dollars than when I started as a cashier in 1976.
— “lowered taxes for 98% of Americans”, but lowered wages and income shares even more for most of those Americans, and the vast majority of the tax cuts went to the fortunate few.
— “raised taxes significantly on the wealthy” — Effective tax rates on 1% in 1979: 35% ; 2003 to 2010: 30%. In 2013, after the tax increase, the effective rate on the 1% is estimated at 33.6%, still less than 1979.
— “We have marginal and progressive tax rates.”, but not nearly as progressive as we had in better, more prosperous decades. We have gotten LESS progressive.
— “We have rules on monopolies.” — which have been gutted in implementation since the mid-80’s. See my last article link to the Salon article near the bottom of the previous page of this blog. I would link again, but sometimes that blocks the post.
— “We have welfare, social security and now a national health care plan.” Yes we do. And all of it will be at risk if GOP gets back in control.
So, at the risk of being rude, let me restate your paragraph more accurately.
Fact is in just the last decade we have effectively lowered minimum wage, given huge tax cuts to the wealthiest Americans, and fought hard to keep taxes significantly lower on the wealthy. We have cut the progressivity of tax rates. We have gutted rules on monopolies. We have welfare, social security and now a national health care plan, but are working hard to eliminate those. But for the ideologue or victim it will never be enough. Despite outrageous good fortune, the rich will always find something to blame on everybody else.
Correction: My paragraph should start “Fact is, in the last 3 and a half decades” …
This doesn’t even deserve a response there is so much rhetoric and spin in here.
And please don’t forget – I’m not the one complaining. I do not have a major problem with the supposed income disparity situation – or at the very least do not think the government needs to (or can) fix it. I don’t think there is any evidence anywhere in my posts of blaming anything on anyone else.
Peter,
— As if your paragraph didn’t have spin. Almost every “fact” you stated was incorrect or selectively spun. And now you say “I don’t think there is any evidence anywhere in my posts of blaming anything on anyone else.” when you had JUST finished saying “for the ideologue or victim it will never be enough. They [the poor] will always find something to blame their circumstances on.” If that’s not blame what the heck is it?
You are blaming people for making excuses when they have supposedly gotten all these advantages you list — when in fact those very same advantages — effectively LOWER minimum wage, LOWER taxes, LESS progressively in taxes, LOWER wage scales for most workers, LESS restrictions on monopolies — have actually been going to YOU and the people in your economic tier and YOU are the one blaming and complaining!
The duplicity is absolutely staggering!
These are facts:
Fact is in just the last decade we have repeatedly raised minimum wage, lowered taxes for 98% of Americans and raised taxes significantly on the wealthy. We have marginal and progressive tax rates. We have rules on monopolies. We have welfare, social security and now a national health care plan.
Not everyone in the country will be educated. We can’t make every single person literate. You are right, even if everyone in the country could work, there aren’t enough jobs so those low paying jobs would go to those willing to do the work. Companies need to make a profit. Do you know the profit margins at every single WalMart? Some have gone out of business. Kmart went out of business. Circuit City went out of business and they weren’t paying $20 an hour. Again for the billionith time, your pay is determined by your skills. If WM got rid of all cashiers and went to automated kiosks, people wouldn’t like it, but I bet prices would get cheaper. Be careful what you wish for. Raising prices will cause companies to seek out alternatives. I don’t need a cashier at Burger King, I need someone to make the food. Even that can be automated. You cannot automate a plumber or electrician.
WM and others have been trying automated kiosks for at least 15 years (I tried one of the first back in 1999). Many stores brought them in thinking they would be a huge hit. A good percentage have taken them back out or limited their use. They are very convenient when they work, but there are still many problems, easier theft being one. As for cost savings, I’m sure some store see some but others not so much, you still need a cashier to monitor them and there is maintenance. You’re not going to replace all tellers anytime soon, there are too many variables, people have questions, machines have problems, and most importantly people enjoy having interaction with others.
I am tired of the term “livable wage”. What expenese should be included after food, rent and water/electricity. Are cell phones part of a livable wage? Does the person have to drive a car older than 7 years old? Do we limit how many times they go out to eat? If you don’t have a good income, you can’t expect to have the same stuff that people that make more money have. Again, if you have minimum skills, you don’t deserve a livable wage. Improve your life first.
And I’m tired of people saying others don’t deserve a livable wage because they didn’t go to college or tech school or something like that. Not all jobs require any of the sort, yet they are required for our society to run well for the rest of us. These jobs should pay a reasonable wage. Many of these people work very hard, harder than many with an education, they have to. Who will do these jobs once everyone is educated? What will other jobs pay once everyone is educated? Why shouldn’t employers pay a wage that doesn’t force a large share of their employees onto welfare? Why should we subsidize WM for Billions every year?
I get the whole self responsibility thing, but to belittle their work just feels like an attempt to be self important. Ultimately, these are jobs that need to be done and these are people working a job instead of trying to suck off the government teat or doing something illegal to earn a living.
How do you define “hard work”. People that are doing manual labor “work hard”. Anyone else with an 8 to 5 job working inside have a different standard. Your skills at your job determine hard work. Brain surgery is skilled work. Hard as well. Being a cashier or AP clerk isn’t “hard”. It might suck being on your feel all day, but I have been a cashier in High School. Guess what, that wasn’t going to be my career. Again, if 1,000,000 people can do your job, the pay is going to be low. That is life and there is no real definition of a livable wage because it depends on where you live. A CEO might not be digging ditches, but the stress is higher than the janitor. Again, my wife has a highly skilled stressful job and is paid well for it. But less than 100 people in the country are doing what she does. Is $500 a month for rent enough or do people “deserve” to live in an apartment with granite counter tops for $1,000 a month?
This is the welfare queen argument. You have no real basis for believing that poor people are living high on the hog at government expense, but you believe it to be the case anyway. Few if any people live the way you fantasize on poverty wages and government assistance. Poverty is hard and improving your life while being assaulted on all sides by the challenges of poverty are even harder. Yes, being a cashier/stocker can be hard if you are given only part-time jobs at 3 different companies at irregular hours and are trying to raise a family as well. Not to mention trying to get additional education to improve your lot.
You stick hard about the term livable wage and continue the trope that people who do these jobs don’t really work hard and just need education. I agree pay will be low, the question is how low is appropriate. One could argue the stress on the janitor is just as high, the difference is whom you are visible to, the janitor to the CEO and CEO is to the world. And yes, there might be 100 or less people in your wife’s position, but that doesn’t mean there aren’t others who could do her job.
Yet you ignore my questions:
Who will do these low level jobs once everyone is educated? What will high level jobs pay once everyone is educated? Why shouldn’t employers pay a wage that doesn’t force a large share of their employees onto welfare? Why should we subsidize WM for Billions every year?
No, that is the point. If everyone can be a doctor, the wages for doctors are lower. Supply and Demand determine salaries. If WM puts out an ad and says they are paying $2 an hour to be a cashier and 1,000 people line up, the salary is in line with what people expect. If they put out the job is paying $7 an hour and nobody shows up, they will have to raise the salary in order to attract applicants. There are thousands of accountants in the world and the fact that there aren’t thousands that do what my wife does makes her more valuable, thus she is paid more. There are only 32 NFL football coaches and thousands of HS and college coaches. They aren’t all capable of being an NFL coach. But hey, why aren’t you a 2nd basemen for the Yankees making $15M a year? You must be able to hit a ball and throw to first base.
“If WM puts out an ad and says they are paying $2 an hour to be a cashier and 1,000 people line up, the salary is in line with what people expect.” That’s true if there are other jobs to compete against, there is a shortage of jobs and some will work for any amount just to have a job, yet people like you consider them worthless because they would rather work than find a way to get on welfare. Just because you can find someone to do the job for a certain wage doesn’t mean it is morally right to pay that wage. There are still people who would prefer slavery, of course there are others who prefer the current system because it’s better than slavery because there is even less accountability for the worker. Ultimately, we all pay for this through higher government expenditures on welfare to make up the difference.
Your wife’s position is very limited and she obviously has the right skills, but that doesn’t mean others couldn’t do her job, some of what got her the position was being in the right place at the right time to be noticed and possibly knowing the right person. There was a time she wouldn’t have even been considered just because she’s a woman. Part of what determines her pay though is its hierarchical level within the company, others in other departments at similar levels will also be at a similar pay level though the amount of work or level of qualifications may be different.
Likewise, being CEO doesn’t mean that person is the smartest or hardest working person in the company. Though, once one has had the title, they are part of a club that the members prefer to keep as limited as possible. There is a reason they call it the good old boys club, they want job security. Also, once one has had the title, people assume certain qualifications (true or not) and that person is more likely to find another CEO position even over someone who is otherwise better qualified.
I agree with JTM here. There is a point where supply and demand does not accurately reflect either value or just reward. If we, as a society, require a certain number of hotel rooms, and therefore a certain number of hotel maids, the value of that work to the hotel or hotel patron does not decline infinitely just because there are more people seeking the job. If society need people to do certain jobs, then society should pay at least some minimum level at a wage and condition that allows someone to house and feed herself.
Any person, I repeat, any person who works 40 hours a week and 52 weeks a year should be able to afford a roof over their heads, food in their stomachs, and the ability to get to and from their jobs without any government assistance such as welfare, medicare, or food stamps. That is the definition of a “livable wage!”
Workers need the ability to organize to be able to negotiate wages and benefits without recrimination.
If you want a current study in contrasts between the two economic business models that have been discussed on this topic, just look at what is happening at Market Basket:
http://www.cnn.com/2014/08/01/opinion/kohn-market-basket-protests/index.html?hpt=hp_t3
Amen JB. And I actually agree with some of JTMs point of view here as well. It is all about scarcity – economics 101. This is why LeBron, brain surgeons, and sales people make so much money. Not many people can do their job. Almost anyone can be a toll booth collector or pick up trash. Nobody is saying that this isn’t “hard work” but when everyone can do it – it is going to be easy to find someone to do it for minimum wage. It is so insulting and belittling to tell a CEO making $20million that they aren’t working as hard as a construction worker. In case you haven’t noticed, jobs don’t pay on a scale related to how much you are on your feet or how tired it makes you. Jobs pay based on scarcity…..plain and simple.
And another thing…..whether we want to believe in welfare queens or a struggling underclass, the fact is indisputable that our poor live a far better lifestyle in America vs the rest of the world. http://www.forbes.com/sites/timworstall/2013/06/01/astonishing-numbers-americas-poor-still-live-better-than-most-of-the-rest-of-humanity/
Nobody owes you squat. Not your community, not your parents, not the government, not the rich. If you operate under that life philosophy and quit whining about everyone else and their situation you will find happiness much quicker. Not trying to convert anyone but I think this is a much better way to live life and I feel for those that are so enraptured and enraged by the perspective that the world is so “stacked against them”.
“It is so insulting and belittling to tell a CEO making $20million that they aren’t working as hard as a construction worker.”
Sure, you can say that, but the reverse is true also. CEOs are not the gods they think they are and play each other up to be. They depend on everyone below them to do their job and do it well. Yes, not everyone can be a CEO, but there are plenty of them that don’t do their job well and could easily be replaced with someone better. They don’t all deserve their position through skills alone (I’ll omit CEOs who actually built the business they are running, they are a different class).
Sure, nobody owes me or anyone else squat, but the world is a better place when people treat others like people and not just some cog in a machine. Many wealthy complain about those in the lower classes feeling entitled, while they themselves show over and over they feel even more entitled because they supposedly create all the jobs and wealth(simply not true). Those at the top need to start thinking about about not just their company and it’s next quarter numbers. If they would, they would understand that we are all dependent on the lower classes being able to spend. Their companies will not survive if the money is cut too much at the lower levels, it all works its way up, always, trickle down is fools gold. The middle class entrepreneurs create huge numbers of jobs (not just the huge corps) and are generally dependent on the middle and lower classes, if these businesses do not have customers the larger companies eventually will not either.
This is not about jealousy or haves and have-nots, it’s simple economics, wealth is not created by building something everyone wants, it’s created by having customers that can actually purchase whatever you are selling at a price over your cost to create. No matter how good the product, if not enough people can afford your product, you will not make money.
I actually agree with everything you are saying here. Literally every word.
Only thing I’d add is that while I can certainly accept that CEO’s are not the “gods they think they are”, nor is construction work or labor any more an “honest wage” or “hard day’s work” than a corporate executive, sales person or basketball player. Both sides play up their own position to be the ‘salt of the earth’ yet both are needed in a society.
Peter – Whole-heartedly agreed.
I agree with you here Peter, and JTM as well. I am particularly grateful to JTM for saying many of the things I have tried to say, but for saying them better.
Very, very well-said. Kudos!
To all.
My issue with Walmart is that we subsidize them to the tune of $8.6 billion last numbers I saw. This is half of their profits. This is through benefits to employees paid by government programs. The same may go to Mom and Pop stores, but I’m not aware if the numbers. Regardless, it is unfair and a waste of valuable dollars. Of course, this does not include the support of the prices and revenues to the whole industry via SNAP. This is not a bad program, but it seems excessive that 1 in 7 people are on it. SNAP drives up prices for all of us, just as student loans feed tuition inflation. Simple economics, more money chasing limited goods. The really chilling aspect is the assault on freedoms that is being proposed in SNAP, that is controlling what we eat. The same us true if school lunches. I’m not sure how many million pounds if broccoli are thrown away because kids get it on their plates my daughter says no one eats it (and similar) in her 5th grade class.
so if all those employees had jobs scattered across target, big lots, etc, being paid the same wage, they would still get gov’t help. it isn’t WM that is the issue, it is the fact they are cashiers or stockers and those aren’t high paying jobs. Again, Costco is a different model. Inventory is much smaller, the demographics of the buyer are different. Compare WM to Target for an apples to apples comparison. Not many bash Target, but I bet they are pretty similar in employee pay. A cashier isn’t worth being paid $20 an hour. The $9.00-$11.00 range is about what the Market deems to be an acceptable pay scale.
Costco is a different model, a model that values employees and is willing to pay $20/hr to a cashier in order to keep turnover low. It’s not just about who their customers are. WM on the other hand prefers high turnover to keep wages even lower. But, Costco isn’t the size of employer that WM is. When WM comes in to town, they are a standard bearer, they set prices/wages that the competition feels they must try to meet to survive. They drive down wages not just for their own employees, but for other local businesses causing more people to be pushed onto public support.
I’m not arguing all cashiers should be paid $20/hr, but the wage should be livable. Our government expenses for public support would go down if WM paid a reasonable wage instead of depending on government to make up the difference for them.
It is largely because of Wal-Mart that cashiers are paid so little. As the country’s largest employer, they set the standard. That and the minimum wage setting, which is about 20% lower in real dollars than it was 40 years ago.
Stevendad, you are on the right track. What sense does it make to subsidize a near-monopoly with government funds because the business pays only poverty wages? This is unsustainable and unfair to other businesses as well as to the employees. The fastest way to reduce the cost of the SNAP program is to compel a minimum wage and close the 30 hour benefit loophole. (A 20 hour part time worker should get half the benefits of a 40 hour full time worker.)
Peter and JB have never answered your basic common-sense point.
I haven’t even been on here until about 10 minutes ago And you never addressed my very direct and succinct analogy about basketball player wages and my general point about you judging what is “too much income”.
What question did I duck?
OK, Peter, that’s a bit unfair of me, I don’t think you were asked directly, and it may have come up earlier before you joined the verbal mosh-pit on the previous page.
The issue is, as stevendad describes above, whether it makes sense to significantly raise wages at employers like Wal-Mart via a higher minimum wage, because in general, their employees are paid so little (and given minimal hours to avoid benefits) that they are eligible for, and really require, SNAP (food stamps) to feed their families. Stevendad’s argument, which I agree with, is that SNAP is basically a subsidy to Wal-Mart and employer’s like them. People would demand a higher wage from their employer, but they know they can get by with government assistance, so the employer gets workers on the cheap.
This is unfair to everybody except Wal-Mart.
— Workers are denied a fair wage and benefits
— Other businesses are disadvantaged because Wal-Mart employees are getting a government subsidy
— Taxpayers are left with the bill to subsidize Wal-Mart.
Proposed solutions:
Mine: Higher minimum wage, and fractional benefits (not zero benefits) for part-time workers to avoid he 30 hour loophole.
Srevendads: Fine Wal-Mart and those like them to recoup SNAP payments to their workers who are underpaid.
Agreement? Comments?
I don’t agree at all. I’m ok with the fractional benefits to part time workers you propose. But don’t agree with stevendad or think that higher minimum wage will necessary be the solution.
I thought I covered the basketball question, but probably not completely, so I will do so here. You have been kind in answering my questions (despite our disagreements) so I should answer yours.
======
Peter: Should LeBron James give back all that “bonus” income that he is making? He will make about $21 million from playing basketball next season. For “historical” perspective, at the same age and point in his career Magic Johnson made about $2 milion. Clearly, in your philosophy LeBron is being overpaid.
Steve: No, he should not give it back. However, marginal tax rates should increase into higher incomes as they did in the 1960’s. Tax rates on such income might be quite high, 60% or so. However, high incomes that are not expected to continue for a lifetime (sports players especially, but anyone really) should be eligible to set aside money for later years to avoid taxation on full income. This is better tax policy and compels better personal finance policy for the players.
Peter: To play out your CEO hypothetical…. What if the Cleveland Cavaliers came to LeBron and said that they have decided to pay the “underpaid” vendors, ticket takers, and various other laborers that clean the arena a higher wage. They will be cutting a portion of his excess salary which he clearly doesn’t need to remain ‘rich’ and paying the workers a wage that reflects a more equal increase in pay to the days of Magic Johnson. What do you think LeBron would do? Wouldn’t he just go play for the Lakers where he can make $21 million? If the whole league adopted this philosophy, wouldn’t all the great players leave?
Steve:
1) Where would they go? Another country? Does anyone else pay like US does? They won’t for long if all US leagues cut salaries.
2) And other countries already have higher income tax rates, so raising taxes won’t compel them to go anywhere either.
3) And just for arguments’ sake, let’s say all of the current players in the league got disgusted and left. Don’t you think you could find a crop of new young basketball players to play for $500,000 a year instead of $21 million. I bet you could.
Your answer for different tax rates for athlete income is idealistic. Will never happen – just creates too much more gray area and loopholes that the “wealthy” you so abhor could expose.
To the second section…. This is the key point. They would go overseas where they initially would make less money. And yes, the current NBA could then happily find people to play for less money than LeBron. But the NBA would then see a significant downturn in business and the overseas leagues would see an uptick since they now have a better product. You could actually make the argument that the star athletes of today are UNDERPAID when it comes to the revenue that their professions generate and the reliance on them to provide a good product. I for one don’t feel comfortable undermining CEOs or sales people or whomever in the same way without understanding their specific impact on their businesses. And I’m sorry but the CEOs, athletes and sales people have an infinitely greater impact on the success of a company than the people that answer the phones or empty the trash cans.
To carry over to WalMart, Target, Costco, etc – this is a slightly different model. If Walmart underpays their cashiers and other workers, then they will go to other companies. This will create a better shopping experience than Walmart and people will be left with a) higher prices but better service, cleaner stores, etc vs b) lower prices and a lesser buying and shopping experience. We have this in all sorts of industries already.
But nobody should tell the NBA what they should pay LeBron James nor should anyone tell WalMart what they should pay a cashier.
Peter,
Perhaps I was not clear. I was not advocating a special tax rate or tax code for athletes. I was advocating a highly progressive set of tax tables such as existed in the 60’s for everybody. And the rules to shield income until retirement or other non-income years would also be for everybody.
My solution allows any company or league to pay their players whatever they want. But very high incomes that are not shielded as retirement or similar income would be taxed at higher rates, just as they were in the 50’s, 60’s and early 70’s when we had a better economy, a stronger middle class, and a debt/GDP ratio that declined almost every year.
Repeat: I do not want to control people’s salaries. I want the economy to have a stable income slope curve. Those are different goals.
Move to France
http://www.forbes.com/sites/robertwood/2013/12/30/top-french-court-upholds-75-tax-while-footballers-eye-exit/
What you don’t understand is that you are still limiting what a successful person can take home or keep. What give you or anybody the right?
Why don’t the liberals improve the lower 50% so they are worth more instead of trying to bring the successful down. You now they have been trying since LBJ and haven’t got anywhere. If you subsidize failure you will get more of it.
@Peter N – At what point does a successful person stop needing and then is just taking? Is it just because they are successful, that they feel entitled to get more, and more, and more? In order for society to function well there has to be boundaries of many kinds. Does one person define those boundaries, or are they better defined and, therefore owned, but many? When does one person’s ego progress from reasonable to unreasonable? These are all real world questions that need to be explored and we need to have the hard conversation to define a mutually agreeable landscape. If that is considered a fools errand, then the person that makes that conclusion deserves whatever shame and ridicule others feel is justifiable. I’m not in the top .1%, or 1%, or 10%. I am currently in the top 20%, but nothing is guaranteed. I’ve had good times (right now I consider myself very lucky) and bad. Fortunately I picked a profession that continues to grow and change, and I’ve had to change with it. But my experiences have taught me that intelligence, training, talent, and even knowing the right people is not always the ticket for success. Luck is a fickle partner and I worry about where we are going and why we are faltering. Make no mistake about it, one or two may enjoy tremendous riches from hard work and dedication, but forgetting your roots and the struggles experienced while climbing the ladder should engender respect for all who choose to make the climb. And I firmly believe that unrealistic expectations of those who feel entitled to hoard riches to the exclusion of the majority of their fellow citizens is strangling our economy by keeping too much of the wealth out of the engine that makes the economy run. The very thing that supports businesses and trades making success possible for more. If you are comfortable with the concept that some people deserve that extra dollar more that they don’t need to the detriment of your fellow citizens, then we have a basis for some violent disagreement.
“At what point does a successful person stop needing and then is just taking?”
This is what earns my contempt for liberals and it is easy to tell one from just the way they ask the question. It is flagrant in the media.
WTF is taking?
I don’t feel entitled. I earned what I got. It is all those social deficits that think they are entitled.
“When does one person’s ego progress from reasonable to unreasonable? ”
What makes you think this is an ego problem. I don’t live in a fancy place nor does Warren Buffet. I don’t drive a fancy car. It cost about 20K 10 years ago.
“who feel entitled to hoard riches to the exclusion of the majority of their fellow citizens is strangling our economy by keeping too much of the wealth out of the engine that makes the economy run”
You must think the rich hide their money under the mattress. Be real.
However, they ARE entitled to hoard, invest,spend their riches as they see fit. I think investing is the wisest choice. That does put capital back into the system. You are just to liberal to see it. So does spending it.
I own a business, having “hoarded” money came in handy during the recession. That “hoarded” money was necessary because it was difficult to get a loan and we want to continue to build our new building. Because of my “hoarded” money I was able to keep the construction crew working until we finally got a loan. The fact that I had already spent so much of my own “hoarded” money meant we already had over 25% invest so the bank was willing to come up with the other 75%.
The construction crew had a happy 2008 Christmas and New Year.
“If you are comfortable with the concept that some people deserve that extra dollar more that they don’t need to the detriment of your fellow citizens”
It is deserved if it is negotiated and earned.
You look at this as if it is a zero sum situation. Get this, some people create wealth. It is the liberals that just want to spread it around after the liberal bureaucracy takes its cut.
When you can only answer thoughtful questions with sterotypes and indignance, what is one supposed to think. I’ve not been disrespectful, but somehow that pushes your buttons to the point of resentment. That is the definition of entitlement and ego. That kind of thinking is exactly why we can’t have intelligent conversations and arrive at mutually beneficial solutions. The result of ideology trumping rational thought to the point of becoming dogma. Everyone deserves what they earn up until a point. This is a concept that founded our country, and periodically has to reassert itself due to the runaway greed of a few misguided people. I’m an independent with libertarian leanings while being a fiscal conservative and a social progressive. Pretty much middle of the road. But the extremists on both sides will label me as their nemesis. I will continue to repeat the wise words of Theodore Roosevelt “The welfare of each of us is dependent fundamentally upon the welfare of all of us, and therefore in public life that man is the best representative of each of us who seeks to do good to each by doing good to all; in other words, whose endeavor it is not to represent any special class and promote merely that class’s selfish interests, but to represent all true and honest men of all sections and all classes and to work for their interests by working for our common country.” A Square Deal, Speech to farmers at the New York State Agricultural Association, Syracuse, New York (7 September 1903)
Normal Joe, people like you and Steven H want to impose on someone else’s freedom. That is what makes you evil. Since you can’t do it yourself you want a liberal party to fraud its way into power ( don’t argue with this statement. Remember you can keep your doctor? ) and then impose its will on everyone.
“That kind of thinking is exactly why we can’t have intelligent conversations and arrive at mutually beneficial solutions”
There aren’t any as long as you think others don’t deserve what they have earned and that they should forced to give up a lot of their money to others that don’t deserve it. It is that simple. The problem is yours.
Try to find a solution that doesn’t impose your will on me or restrict my freedom. Then we can talk.
That’s a personal attack N, and undeserving I might add. Nobody’s taking away your liberty. Most all here are trying to figure out what’s best for this country and ALL Americans generally by looking at the successes and failures of the past. People who disagree with your world view are nor automatically “evil”.
Try here: http://www.nytimes.com/2014/07/25/opinion/paul-krugman-california-tax-left-coast-rising.html?hp&action=click&pgtype=Homepage&module=c-column-top-span-region®ion=c-column-top-span-region&WT.nav=c-column-top-span-region&_r=1
He isn’t wording things very nicely but I think he echoes the offensiveness of someone telling him he has “more than he needs” and he is somehow “hurting the majority” by “hoarding his wealth”. This is really, really stupid – and very inflammatory.
If my kids open a lemonade stand and sell 100 cups of lemonade, should I then show up and tell them they have to stop or keep selling and give the money to the other kids in the neighborhood? Should I tell them that they have enough already and now they are just being greedy? The American way is one of free enterprise and if you can sell more than everyone else, invent something, or perfect a special talent you should be compensated for it. I think it is just as much a detriment to society to limit this. But that’s just my worldview and it clearly differs from many others.
I haven’t attacked anybody. It is I and others like me that have been attacked or do you liberals have short term memories? I am not trying to raise your taxes like you HAVE DONE to me.
N,
Inflamitory statements such as “…impose on someone else’s freedom”, “…makes you evil”, “…liberal party to fraud its way into power”, “…kind of thinking is exactly why we can’t have intelligent conversations”, “forced to give up… money to others that don’t deserve it”‘ “…restrict my freedom.”
These are emotionally charged OPINIONS, not facts.
“N,
Inflamitory statements such as “…impose on someone else’s freedom”, “…makes you evil”,
That is the problem, you don’t see it. You think you are do great things but you can’t do any of them without first taking from others. If I resist what then? Do you think they won’t come after me with guns?
“…liberal party to fraud its way into power”, “…kind of thinking is exactly why we can’t have intelligent conversations”
Obama did fraud his way to power. What is wrong with you? Can’t you remember if you like your doctor you can keep him if you like your health insurance you can keep it? I know I could’t keep our company health insurance because of Obama care.
How about the Bengazhi coverup?
How about buying votes with tax payer money when GM got bailed out. That cost about $50,000 per job. Buying votes with the taxes from libertarian or republican taxes is not right but that is exactly what happened.
, “forced to give up… money to others that don’t deserve it”‘ “…restrict my freedom.”
I am forced to play an extra 3.8% Obama care tax even though I supply health insurance to my employees too.
What is wrong with you guys? You ignore anything that doesn’t agree with your liberal views. You guys have refuted anything yet.
It is clear that some people just don’t seem get it that what they appear to believe and support just seems to be terribly short sighted, selfish, and offensive to many other people, but are offended when it is pointed out. They don’t even recognize their own indignant behavior when driving their heels in the ground and whining that they are the hated and oppressed. It is almost like watching two year old children in a sand box grabbing toys while uttering “Mine!” What we have is an ideological divide that may well take another depression, a real depression where everyone from top to bottom feels the pain followed by a global war demanding the blood, sweat, and tears of the entire country to resolve so that we can return to a society that recognized that every person’s contribution, regardless of how one values it, is worthy of support through poverty preventing wages, and embraces the betterment of all instead of “Me, Mine!”
Peter N – You don’t see it either. You choose to ignore the evidence that you are also wrong. There needs to be balance, and sorry, if you take a longer view than the past decade, your taxes have NOT raised. We have simply moved from a point of historically low tax rates to back to where they were previously. Your view of calling people “social deficits” is quite derogatory and unnecessary, it shows your extreme bias. It’s a bit disgusting if you ask me. It also shows how entitled you feel, yes, wealthy people can feel just as, if not more, entitled than poor and it’s not any better. If you stop belittling others, maybe you would feel less attacked.
Liberal is no more a bad word than conservative. Communism is no more a bad word than capitalism. Just because you fear something or it represents a view opposite of yours doesn’t mean it is bad or wrong. Communism is an idea that is almost impossible to implement because there are always some people feel they deserve more. Pure capitalism without boundaries fails for the same reason. We need balance, we need opposing ideas, so that we can come up with the best solutions, solutions that work for more than just the top or bottom of society.
Why do some people dislike wealthy? Because some wealthy people belittle everyone else and call them lazy or stupid often while making their living off the backs of their labor or selling products to them. They don’t treat them as a human being. Many on here feel you have personally attacked others, but you for some reason can’t see it. This shows your arrogance and disregard for others thoughts. Sorry, you are no more right than those you oppose and your blatant dismissal of their ideas is the reason for their ire. BOTH of our political parties taking stances like yours, where there is no real discussion, just pushing of some silly, ideological extreme and then blaming everything on the other, is why we are where we are. Again, we need balance and discussion, and you are offering none, you prefer to name call instead. Others, with an opposing view on here, are no more bending in their ideology, but at least they don’t name call and offer up backing evidence and try to explain their point. What evidence do you have to back your views? Is there more to your argument other than people deserve whatever they can get for themselves and if you don’t have enough you are lazy?
Come on man.
You should direct your disdain toward the government, not the business that Sam Walton created.
Yes, SNAP drives up prices for all of us…but that isn’t WalMart’s fault. It is our government’s fault.
Student Loans are now a government program. They used to be bank programs.
Yes…again. School lunches are government programs. Yes, it is stupid to force people to eat broccoli if they don’t want it.
That is why WalMart doesn’t dedicate 25% of their shelf space to broccoli.
WalMart = smart = free enterprise (mostly)
US Government = dumb = wasteful central planning
Don’t take issue with WalMart….take issue with the US Federal Government. We subsidize the Federal Government to the tune of 100%!!!!!!!
Don’t take issue with WalMart….take issue with the US Federal Government. We subsidize the Federal Government to the tune of 100%!!!!!!!
Good one Al.
In Steve’s view it is always the business at fault. Steve over looks the fact that Walmart keeps prices relatively low so people can afford more or spend less, their choice.
Al – Sorry, it’s both. Walmart is only smart because they’ve figured out that if they pay crappie wages and accept SNAP they’ll have a built-in base of customers just form their employees. This, of course requires the rest of us to pay higher taxes to make up for the poor wages and the “low low prices” don’t necessarily make up the difference. If Walmart treated their employees proper and paid a reasonable wage, a wage that didn’t require SNAP benefits and the like, their costs would actually go up a small percent, they could still be competitive due to their size and be highly profitable. Those who use the service (customers) would pay for it. I’d rather see fewer people on public aid and pay higher prices on where I control what I buy, than more taxes.
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