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Over the last year, one phrase has continually popped up to justify a lack of investment to help create jobs and grow the US economy – “economic certainty.” This phrase was used to justify and praise the extension of the Bush/Obama tax cuts in December. It was used for the Debt Ceiling increase. It is being used to justify the Super Committee efforts and the push for another tax holiday for corporations on their overseas profits.
Another buzz phrase we keep hearing suggests we need to keep cutting taxes for those with the top 1% to 5% of income, as they are the “risk takers.”A companion talking point is how 50 percent of the people don’t pay [income] taxes at all, which ignores payroll taxes, excise taxes, local taxes, property taxes, etc.
Mr. and Ms. Investor? May I take this time to point out to you and your acolytes that if you are expecting “economic certainty” before you are willing to invest, you probably shouldn’t be called a “risk taker.” In fact, if you have a need for certainty in your investments, then you are about as far from being a risk taker as it is possible to be.
Should investors take the time to determine the level of risk with which they are comfortable? Of course. They should check business plans. They should try to mitigate the risks involved with their investments and have a plan that allows them to address the risks. But if you are an investor looking for certainty before investing, then you probably should keep your money in risk-free investments, if not under a mattress.
You should also quit whining about the prospects for increasing your taxes. Raising them in the near term would not hurt the economy as much as cutting spending on the social safety net. So if raising your taxes is a concern, then you should be more concerned about what some in Washington are planing for cutting Social Security, Medicare and Medicaid benefits.
And the video is because I can.
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And it all applies to businesses as well – they are not risk takers if they need the economic certainty before making business and hiring decisions…
Huh? WTF does that have to do with the economy and why buy into the false framing with such a headline.
The top 5% of the income distribution are not “risk takers.” they are parasitic rentiers sucking the life blood out of the economy and actively gaming the system to ensure that they not only take no risks, but stack the deck to make it difficult for them to lose anythyng.
I took this as an attack on that framing and the notion that you cannot raise taxes on the rich to finance economic recovery.
I don’t understand your comment either.
Top 5%“?
Not to take issue with your obviously intended broader point, but you might want to review the income distribution data.
Top 0.5% perhaps.
My wife and I are both salaried white collar workers. Workers, not “parasitic rentiers” by a long shot, notwithstanding that our combined household income puts us perhaps in the nominal “top 3%” or so.
It’s the triumph of moral hazard. The investors are minimizing risk by unloading it on the government (meaning, the taxpayers). The bankers won the 90′s laws repealing Glass-Steagall and prohibiting derivatives regulation by saying “Set us free, don’t help us if we fall.” Then they fell, and extorted limitless help from the government (TARP, AIG bailout, TALF, etc, etc). Investors took note. Get big, and you get that government guarantee. Succeed, you profit. Fail, the government loses. They’ve bought the government, hired away the regulators, and want to re-write the laws (tax code included) to maximize profits. It’s what the capitalist enterprise does.
While they are concentrated in the top 1%, a large portion of those in the top 5% are rentiers who derive most of their income from investments.
http://www.youtube.com/watch?v=qOP2V_np2c0
Bullshit.
That has nothing to do with capitalism. Moral hazard is an integral part of every economic system, bc in all of them, the economic & govt PTB are joined at the hip.
Don’t let the PTB divide the 5%ers from the 98%ers. It’s yet another part of their divide & conquer.
Perhaps a better framing might be those, regardless of income/wealth, who realize that the concentration of power/wealth leads to the destruction of the system and those who don’t realize it.
If they wanted “economic certainty” they would not have renewed the Bush/Obama tax cuts. Then they would know the cuts are gone, now they are uncertain if they will be renewed.
http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2009_5YR_G00_S1901&-ds_name=ACS_2009_5YR_G00_
We have a household income (gross income) right at ~ the “$200k or more” margin (~”top 4%” stratum). Salaried workers. Hardly Parasitically Living Large off unearned income at the expense of society.
Fucking bullshit.
Hola folks.
Vegas,
Anecdotal evidence is not evidence. The ACS does not disaggregate income into earned and unearned income. I’ll take your word for it, you and your wife are worker bees in the top 5%, and I say good on ya both.
If you want the income sources disaggregated you have to get access to the IRS’s data.
My point exactly. I was a Wall St. economist in the upper x% (not gonna reveal it). Wh is why I suggested an alternative. Not the income divide (though that’s not irrelevant) but more important which side of the class war are you fighting on.
I think I read a stat (don’t count on my memory) that in 2010, the only income category that experienced an increase in income were those with incomes exceeding $52 million/year. Now, anyone needing to pick a fight with those with incomes exceeding $200,000/year need a wake-up call if my memory is anywhere near correct. In fact, the successful attempt of PTB to demagogue the $hundred-thousand per year, as I was trying to point out, is taking the blame off of those where it belongs: the super super wealthy.
There’s also the issue of yearly income +/- mobility. Three years ago my wife and I were both laid off. We were in a far lower stratum at that time.
Moreover, there’s the separate issue of “wealth distribution,” and its relative mobility over time. Shall I recount the hits our house and IRA values have taken since 2008 or so?
That’s, uh, pretty much it. We had to sell off our stock portfolio while both laid off.
We’re hardly unique.
Parasitic Rentiers, my ass.
Precisely.
Anyone recall any happy news since the first moon landing? Anymore it’s all fear porn all the time. These PTB’s may have all the money in the world but they have no guidelines for their present moment in the sun. They’re also paralyzed by fear — of the unknown — despite or because of their usual confidence in controlling outcomes if not events themselves. They tossed a pair of shoes up in the air and only one has come back down.
You could take 100% of the income of everyone who earns $1,000,000 per year or more and you would still only erase 1/3 of the current deficit, of course if you did that you would also lose the concurrent tax on what they might have purchased or invested.
Still, I will admit I am starting to see the light on the tyranny being practiced by the large banks. The HAMP program horror stories are starting to spread.
I’m thinking that the “class warfare” meme might be well embraced by the left, but haven’t thought it thru carefully. My knee jerk reaction is that it could easily be stolen from the Rs, who have demagogued it, to be a rallying cry for the 98%ers. What’s the downside?
OK, I’ll bite.
What is, say, the ~median (before-tax) return of late on unearned income? Can we find any illustrative anecdotes of peeps in the $250k or so gross income range livin’ parasitically large on it, assuming they just sat around clipping coupons 52 wks a year in lieu of shlepping to the office?
I know…..imagine someone just simply pointing out that we’re back in middle school and the nerds/goths/outsiders/wannabes are going to finally take the jocks& cheerleaders to the woodshed. I’m so game!
First moon landing was 1969 iirc. 1970s (thanks to my new bff Zinn) involved women’s movement, Indian movement, black power, immigration reform (in a non-cynical way). It was Carter, elected 1977, who signaled the end of all that. To be sure Nixon-Ford tried hard, but as usual only a D could decisively hide & accomplish the end of a progressive era.
Okay, so what are we discussing? Is the question, “Are there any worker bees in the top 5% of the income distribution?” The answer to that question is rather obviously, “Yes.” I didn’t need you to speak up to know that.
Or is the question, “Are there any rentiers (whether parasitic or not) in the 95th to 99th percentiles of the income distribution?” You’ve produced no evidence (as in zero, zip, nada, zilch) to support your claim that most (or even many) of the members of that part of the income distribution are not rentiers.
Or is the question, “What has the Bush-created economic crisis done to the economy as you’ve experienced it?” If you’re like most of us, you’ve been screwed. But you don’t need me to tell you that.
If we are going to give a break on either labor or capital, I say the break should go to labor rather to capital. Labor is created by our time, and we have a limited amount of that in our lives. Capital has an indefinite lifetime, and large concentrations of capital are pretty clearly injurious to our society.
But we do it the other way: we give the break to capital. So I’d settle for a moderately progressive tax code that taxes all income equally regardless of source.
That doesn’t answer the question, because it includes several million people who made $10 on a passbook savings account.
To answer the question, you need the unearned income distribution classified by overall income.
Careful Dearie. I was school mascot. So don’t demagogue cheerleaders on my watch. I’m looking for a way of expressing which side one is on without pissing off peeps who would otherwise support us.
Not only was I school mascot & loved our sports teams, I was a great supporter of our HS cheerleaders. I could never be one (not conformist nor pretty enough but athletic enough to do a few gymnastics in a full tiger costume).
Since then, I have found team sports to be one of the more boring aspects of life, but have to allow for diff strokes…
Before Zinn’s take came Hunter S. Thompson’s. (You left out Tom Jones)
You definitely do not want to tax all income equally regardless of source. You want a progressive tax structure on ability to pay categorization. The former buys into Peterson flat tax which would kill middle class and poor and which is wet dream of rich.
Roar! And I do hear you. I have never figured out why Dems can’t rally the troops…..which is most of us. I know that many Americans are magical thinkers who suspect that if they just smile nice that they will eventually get rich….but, folks, it isn’t working! The fact that we don’t have everyone in the streets against the top dogs is just boggling.
Hey AitchD, I’m not writing a PhD, nor even a Master’s thesis, with every comment, so gimme a break. *g*
And since Peterson’s name came up again, I want to reiterate that he has a most despicable grandson…..the arrogant PC from that rich NYC reality show. “Money can’t buy you class” a la’ Countess de l’Sepps … or however she spells her former title.
Oy, I do so need to finish my Zinn diary.
Short version: very little works to empower the people, but my bullet (heh) point list of tactics that PTB use to manipulate the 99%ers numbers 34, and they don’t even need that many bc they already have all the money & all the power.
I didn’t say nuthin’ about a flat tax, eCAHN. I know better than that. I said a moderately progressive tax that taxes all income sources equally.
Part of that is fairly high zero bracket, or fairly large personal exemption and credit for payroll taxes paid by the worker bee.
Oh, Dearie, I’m completely ignorant of that so perhaps you could provide a link. (Not that I’d avail myself of it, but others might.)
Go for it, Girllllfriend. (Oh, god, I’m sorry…..I saw a bit of Suze CrazyLady this weekend and kinda lost my way.)
But, really, I’d be interested in seeing your bullets.
evening, firegods
Sometimes when I’m playing at the Lake, I let some reality TV run in the background just so I can be reminded of how low we can go. Housewives of NY. A bunch of social climbing former mean girls. Do NOT google. And I would never link to it. Some people do pr0n…….I watch trash TV.
Just saying that the phrase “taxing all income at the same rate” can be easily misinterpreted. Did not mean to accuse.
Back in the dark ages, when economics discussions had a modicum of intelligence, I used to raise a similar Q. In my vocabulary back then: if the “market” works (heh), why does tax policy need to advantage one form of income over another. That framing allows for progressive taxes, as does historic evidence that taxing marginal income at 90% (Ike) did not impede growth at all, while demolishing the shibboleth that low tax rates on unearned (heh) income ‘creates’ jobz.
“If we are going to give a break on either labor or capital, I say the break should go to labor rather to capital. Labor is created by our time, and we have a limited amount of that in our lives”
___
I fail to see what we are arguing about. I could not agree more.
“You’ve produced no evidence (as in zero, zip, nada, zilch) to support your claim that most (or even many) of the members of that part of the income distribution are not rentiers.”
___
And, you could?
I wanna see it. Point me to the salient substrata.
I find it amusing that the granularity of income distribution strata always stops at ~$100k (individuals) – $200k (households)
“and above.”
That was my only original point.
Oh, maybe you were mildly curious about Pete Peterson’s abhorrent grandson? I cannot remember the name of the slime=fest, but it was about rich kids in NYC. PC (Peter C Peterson) was a boy of 17/18 who grew up rich. I’m surprised his grandfather didn’t buy him off from appearing in this disgustinggate. Really smarmy. I wouldn’t link to it, either. Trust me.
“So I’d settle for a moderately progressive tax code that taxes all income equally regardless of source.”
___
I’ve been arguing for that for more than 30 years.
I’m a statistician, but my expertise lies in survey methods and analysis and experimental design. I’m not sure what’s available from the IRS, but that is the source that would have to be consulted.
I do know that some social scientists are able to get access to the IRS data centers.
According to Joe Hyams’s biography of Humphrey Bogart, that’s what Bogart (whose mother was a New York Humphrey) told Jack Warner.
Preview for purposes of feedback & criticism before I publish. Categories are overlapping, and disorganized, but I hope to have them more coherent by the time I publish.
• Propaganda
• Control of media
• Mythmaking
• Patriotism/jingoism
• Resentment creation
• Blame the victim
• Fear
• Backlash
• Secrecy/classification
• Scapegoating
• Culturcide
• Genocide
• Surveillance
• Verbal intimidation
• Physical intimidation
• Racism
• Disenfranchisement
• Stalling
• Spying
• Physical violence or force, including murder
• Shaming
• Divide and conquer
• Religion
• Values
• Economic confiscation
• Intimidation
• Redirecting anger/rage from PTB toward other blameless classes
• Individualism
• Torture
• Invasion of the person
• Rules/laws, which exist only for the 98%ers
• Tokenism
• Infiltration
• Invisibilitation (think women)
• Destruction of communal spirit
Yo, I apologize for being so pissy tonight. I blame it in part on my new 2x upped neurontin dose (a generic, to boot).
I’ve never had a problem with “class” in the sense of fitting in (upper and lower, domestic and international) but have always had a problem with class in terms of how real people are treated by the chosen few.
No worries.
I hope the neurontin is helping whatever it’s supposed to help.
that’s quite a list, eCAHN — where will you publish when it’s done?
and flat out lying, of course! Crap, after reading that list, I’m surprised any of us lefties are still functioning at all. How is it the PTB aren’t taxing us for oxygen use already?
Organizational suggestion:
Group similar items (Propaganda, Media Centralization/Control, etc. and Personal Attacks, Group Attacks) together and discuss them together.
No, it sux. I’m callin’ the doc tomorrow.
Been having a swell tour of the health care “system” this year (all the more irritating given that I work within it).
I’d never ask you this at your published diary: Had you read Zinn early on instead of so much later, would you still have sought out the career you had?
Because they haven’t figured out how to do it. Yet. But they’re working on it.
Yes, that’s one of the many tough editorial and time-consuming tasks to make the diary a learning doc to me. What you read is stream of conscious and that is not good enough.
Yuck. Good luck.
I did a sabbatical about six years ago working in the health care ‘system’ on the uninsured issue. I learned an important lesson. No matter how messed up you think our health care chaos is, it’s worse than that.
Anyone else noticing the price of basic groceries skyrocketing? If they can’t charge us for the air we breathe, they can charge us for the food we eat. And, damn, we didn’t get any real summer down here on the south central coast, so I couldn’t have grown tomatoes even if I tried.
Hey, this is upsetting… but who cares…
SNL relies on class consciousness more than on humor, about in the same proportion as US income & wealth distribution. It’s a complicated but not arcane issue.
Sure. I always knew that the power structure favored corps at the expense of labor. And wrote about it frequently. To no avail of course.
This is NOT about me, but to make it so for a moment, my job allowed me to opine about structure of economy without fear of retribution (my downfall was internal political battle which I lost bigtime).
Well, I’m off to bed.
Good night, folks.
hiya CE
I haven’t noticed any spike or increase at Trader Joe’s since they opened here four years ago.
What I have noticed is saturation information about rising food prices, which is a PR gimmick to mandate an inevitability that ‘everyone’ accepts like it’s weather.
Been watching the slow-mo suicide of the U.S. economy owing to medical (legal & higher ed) cost inflation sine 1991. And since I was a macroeconomist, to get on my screen in 1991, the problem had to exist for 2 decades or more before that.
I can think of a NYC mayor or three you could have beaten in an election if you had the backing.
Flattered but couldn’t think of a worse personal outcome.
Well, lucky you! My Trader Joe’s is a bit of a drive. My local supermarket has had increases in prices of eggs, milk, butter…. I can still find paper products on sale. Vegetables and fruits rise and fall….and are often on sale. Meat can be bought at discount as it ages out. The cost of bread is shocking…..$4.59 for a loaf of good bread, for example. I don’t think it’s a PR gimick…..I feel it in the pocketbook, as they say. Or I do without. Who needs bread anyway, right?
Let them eat cake.
The 1987 crash tumbled the house of cards. The Internet and cable TV were like IV tubes in the ICU after.
Night all. I’m crashing bigtime. Be well. & type with you in the morning.
Dearie, there’s a local bakery in Charlotte (still in business!) that wholesales to the largest grocery chain (Harris Teeter). It’s 1.5 lb. loaf of organic 100% whole wheat sourdough bread is $2.79.
The Panasonic bread maker would make you happy and keep you healthy. Going on two years and I haven’t had a failed loaf yet. (Have had bread machines since 1988; they have improved, following Moore’s Law.)
“Economic certainty” is code for the need of our largest corporations to have more monopolistic leverage in markets, and more subsidies and guarantees from the government.
More to the point. There is no such thing as “economic certainty.” The problem at the moment may have more to do with regulatory uncertainty, as there are hundreds of new rules being written (with unknown consequences) for just health care and banking.
This discussion has only focused on income inequality, but has left out wealth inequality, which is much greater, and might explain why the super-rich and upper-income workers might be found in the same INCOME tax bracket. So how about a “use it or lose it” tax on wealth – say, 1% of net worth each year – plus a transaction tax on stock sales and purchases?
If you think that’s overly confiscatory, take a look at Norway, which has one of the highest entrepreneurial business start-up rates in the world: http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html