Occupy Wallstreet.

[Dexter]

That's part of the problem. The policy has slowly drifted to the point where inequality sparks mass outrage. With mass outrage usually comes change in larger chunks, rather than a slow steady drift. I believe the highest bracket tax rate would be sustainable at 50%, perhaps more. Not as high as it had been earlier this century, but higher than it is now. But to jump to that percentage in a single shot would wreak havoc. We must drift towards the number, rather than jump towards it. The problem is, as soon as the drift reaches a certain point, the grassroots movement will die, and the plutocracy will once again have the upper hand to reverse the drift.

But inequality and tax rates are not the real problem, it's the crony capitalism. On that issue, I'm in agreement with the protesters. But many are just adding their pet projects to the cause, and have pretty naive views on what regulations can accomplish, and how many there already are. People want to give some committee power over billion dollar decisions, and then wonder how they get captured by corporations.

[DWill]

The increasing income inequality must be related to the steep drop in the marginal tax rates that the highest earners pay. I was amazed at the figures on the top marginal rates interbane cited from 70 years ago, but looking them up I see he is right. That represents quite a momentous change in govt. policy, and it would seem difficult to claim that with the top rate now at 35% (vs. the historical high of 94%), we've become much better at creating jobs, due to the ballyhooed trickle-down.

However I don't think much of Pres. Obama's leadership regarding the whole deficit/debt mess. Taxing "millionaires" (defined as those earning $250,000 or more) at even 50% of their income would cut into the debt by only about 10%. Another of Obama's talking points--the write-off for depreciation on corporate jets--is just kind of silly because it is a very minor amount. According to the Washington Post last week, the govt. took in last year just very slightly more than it gave out in the form of deductions and breaks. This largesse is spread all up and down the income ladder, with around 50% of all earners either paying no tax or coming out a little ahead. The majority of this percentage isn't the rich (http://www.csmonitor.com/Business/Donal ... income-tax.). So it seems we're in a "Pogo" situation that belies the simplistic thinking coming from the Wall Street protesters: "We have met the enemy and they are us."

I wish Obama would be more statesman-like and less political on this issue. He should ask that we all be willing to sacrifice. Income inequality should be a huge concern, but should it be addressed by sudden govt. fiat? I don't think so. I also think that nearly all Americans should pay some tax, which makes them more like stakeholders in the country.

[geo]

That is surprising—the 35% versus the historical high of 94%. I do agree that things are out of whack. Bush started two wars and didn't even want to raise taxes to pay for them. Where's the sense of sacrifice and national unity towards a common cause? The whole Fanny Mae and Freddie Mac fiasco was a failure of the whole government (as much as each side tries to blame the other).

As for increasing the taxes for the highest earners, again I think that will only help matters to a degree. Interbane is right that we've been going off course slowly for such a long time that a large steering correction is now required, but I think it's something much bigger than raising taxes. Our entire political process seems rather tainted, but there's no dialogue to fix anything, only this pointless and bitter partisan bickering. Eventually things will get so bad that one side or another—for some reason, I always think it's going to be the ultra right wing—will use military force and take over. As Ben Franklin said, "we must hang together, or we will be pretty sure to hang separately."

[Interbane]

The tax rate on the highest earners is the tip of the iceberg. Below, out of sight, there are a ton of loopholes, which likely amount to more than what would be gained from raising income tax to 50%. But the tip of the iceberg is an easily visible marker for how far taxation has drifted to favoring the rich. It's not that it's necessarily the "rich", because many of these loopholes are available to anyone. But not everyone has the money to hire a full time tax agent(or 20) to maximize loophole usage.

There is also the problem of campaign funding. Money wins campaigns. It's turned into a Manchurian Democracy, where the need to raise money puts politicians in the debt of private interests. Grassroots campaigns like Obama's was good, but he still relied heavily on larger donations. If the politician turns a cold shoulder to his largest contributors after he's won the election, lobbyists will make sure he doesn't win another election. This is because the lobbyists are organized and work together, representing multiple corporations. Offending one corporation is the same as offending a dozen, due to whatever lobbyists they have in common.

[Chris OConnor]

Some quick thoughts...

I think something is drastically wrong with how a government is spending tax revenue if any income bracket is taxed above 35%.

Then again it is thoroughly disgusting to see people earning hundreds of millions per year while the majority of people in the USA are struggling to make ends meet.

I don't consider a family earning $250,000 per year to be automatically classified as wealthy. If a husband and wife have a combined income of $250,000 they aren't necessarily rich. There simply are too many other factors involved for us to judge so quickly.

A husband and wife could earn $250,000 per year but have $300,000 in college loans to repay for their medical degrees. They could earn $250,000 per year yet have $110,000 in annual medical malpractice insurance.

A husband and wife that own a small company that brings in $350,000 in annual revenue could be struggling every week to put food on their families table. There are other variables in the equation that have to be considered such as gross vs. net revenue. How much of the $350k are they taking out of the business as income? What is the profit margin?

A final thought. On the surface I want to say that everyone should be taxed at a flat rate and that rate should be about 18% of gross income. I know this isn't feasible. I'm aware that people at the lower end of the income spectrum cannot afford to pay a damn penny, while an 18% tax rate would simply not generate enough total tax revenue. But on the surface it does seem fair that everyone pays the same rate. It just can't happen and never will.

[DWill]

There are many inputs to this crisis (too strong a word?) of income inequality, a main one being the increasing poverty rate. The lowest income sector is getting larger at the same time that wealth is concentrating at the very top. A second-tier Republican candidate, Rick Santorum, said something sensible about this from the social perspective. He cited the evidence that children raised by a single parent have a far greater chance of living below the poverty line than do kids with two parents. Single parent families increased markedly beginning in the 1970s. It does seem to reflect common sense that income insecurity would be greater in one-parent homes.

Although it seems straightforward enough, the link between poverty and family structure quickly gets caught in the political buzzsaw. Some women become defensive about the presumed superiority of married couples in raising children; minority spokesmen object to blaming blacks for so much of this problem; and gay rights groups complain that family values is a veiled, or not-so-veiled, attack on gay marriage.

Solutions to the problem reflect our polarization, with the liberal side wanting government to foster family-friendliness through regulation and tax policy, and the conservatives wanting us to simply get back to moral basics and look out for one another.

[Chris OConnor]

DWill, I love the quote in your signature.

[President Camacho]

Everyone paying the same percentage of taxes would be awesome if it were that simple. All I'd need to do in order to gain an advantage would be to have the government subsidize my business so that not only would I be paying 0 taxes but I'd be making money from the government. So while in theory we'd all be paying the same percentage - we wouldn't. I'd be raping the country under the idea of protecting jobs and trickling down wealth. An equal percentage is great if all else is fair and equitable.

"liberal side wanting government to foster family-friendliness through regulation and tax policy, and the conservatives wanting us to simply get back to moral basics and look out for one another."

Great post but went a little far with the 'look out for one another' part of that in my opinion.

Campaign reform, lobbyists, and earmarks are all topics that flare up occasionally from fed up Americans and are quickly extinguished when they begin to become popular. As the Roman Republic used to do prior to the Caesars when the populace was close to achieving agrarian reform, they'd send them all to war. Just so, our politicians will bring up other emotionally charged issues to distract and divide a people. These are the woes of a Representative Democracy, a country filled with career politicians who are isolated and insulated from the common American. A Republic such as ours doesn't allow us a direct vote in government, nor does it even allow us to decide what we should all be voting on. I feel these three problems (campaign reform, lobbyists, and earmarks) could very well be decided within a month by the American people.

As far as campaign money goes? Maybe the limit should be $100 per person. That way money does have some say in who gets elected but it's not the be all and end all. That way PEOPLE will have more of a vote than MONEY. Today, what has more 'voting' power? Maybe that's our problem. We've been looking at it wrong all along. The system is fine, it's us that need changing. Instead of being human we need to try and become dollar bills... that way we can have a say in our own government.

From Washington Post:
In an exclusive interview with The Post, members of the vaunted Triple O, Obama's online operation, broke down the numbers: 3 million donors made a total of 6.5 million donations online adding up to more than $500 million. Of those 6.5 million donations, 6 million were in increments of $100 or less. The average online donation was $80, and the average Obama donor gave more than once.


And the soldier? I know there are many who think like him who are not soldiers but I've been through the military and they brainwash you to make the ultimate sacrifice for pennies. You're forced to acknowledge that one class of men are superior to another and you must salute them. You witness 45 year old Master Sergeants saluting 20 some odd year lieutenants straight out of college. You get paid minimum, get fed great, housed like a slave, and given plenty of alcohol and distraction. This guy's mind is still in the military. Give him a couple years and he'll figure it out on his own accord when he wonders why is hard work hasn't benefited him as much as it deserves. Working smarter and not harder is the key. There is no shame in using YOUR advantage... businesses do it all the time and most of the time unethical means are employed to secure it. What people want is something closer to fair. Don't expect anyone to give fair. People have died for just a semblance of it. The only way is to re-educate (as in the case of our soldier) and give them the power to decide. After all, if G.I. Joe there was given the option for a raise when he had 2 kids, a wife, and a modest mortgage... I'd bet he'd take it. (70 hour work week gimme a f*cking break.)






"One person might like living in a small apartment with no lawn maintenance and just enough money to go out and see a movie on the weekend. Someone else might want to live in a fancy house, big yard, a boat, nice cars, etc."

Kidding me, right?

[Avid Reader]

As far as campaign money goes? Maybe the limit should be $100 per person.

"I'd go along with that so long as it applies to all possible donors: corporations, banks non-profits, and unions included. If the people involved in, or employed by, these entities want to contribute, let them do so individually; the entity itself should be counted as one donor.

[realiz]

Give him a couple years and he'll figure it out on his own accord when he wonders why is hard work hasn't benefited him as much as it deserves. Working smarter and not harder is the key. There is no shame in using YOUR advantage... businesses do it all the time and most of the time unethical means are employed to secure it.

In my life experience, I'd say that I have observed that hard work does usually pay off. Also, working smarter does not mean being unethical and I do not believe that 'most' businesses are unethical anymore than 'most' people being unethical.

"One person might like living in a small apartment with no lawn maintenance and just enough money to go out and see a movie on the weekend. Someone else might want to live in a fancy house, big yard, a boat, nice cars, etc."

Kidding me, right?

Not my comment, but I agree with it. We all make choices and we weigh the output with the reward. Some people are willing to work very hard to have the fancy house etc., some people would rather work less and have less. This does not mean that if they could have the best of both worlds, they would not take advantage of it, which is big part of the problem today.

I do think it rather ironic that protesters in the United States are crying about the unfairness of life and distribution of wealth. I would say that the whole western world lives in the top 5%, which means in order to make life fair we all have to give up a whole lot. It does seem to be a big contradiction to be living in one of the most advantaged countries in the world and also complain about the unfairness of the distribution of wealth.

I looked up the 53% reference in the letter and found it here, with the argument that the 'occupy wall street movement' is a bunch of spongers and losers, while the 53% are those who pay tax. This is a really complicated argument. Growth requires competition, but stability requires cooperation. It is a dialectic.

I agree. It is a very complicated argument. While I believe that life, wealth, and advantage can never be equal or fair, we should not give trying to make it more so. How do to so, is the big question.

I do think the wealthy can pay a higher share of taxes in America, but I also think such tax increases can only go so far before the law of unintended consequences kicks. Corporations and businesses actually creates wealth and if the government intrudes too much in our system of free enterprise it stifles the economy and everyone loses.

Corporations and businesses certainly create jobs. I think that we have to separate high tax rates for the rich with high tax rates for business which it seems that many people do not understand. The two are totally different. Corporations are entities and their income belongs to no individual as long as it is kept within the business. Keeping tax rates low for corporations is important for attracting investment, keeping jobs in your country, and giving the corporation/business money to expand.

I am not familiar with U.S. tax rates and tax laws, but in Canada a corporation pays a certain tax rate (depending on size and type) and then any dividends paid are taxed again at the individual shareholder level. This is something that many people do not understand and so they are misled by cries about the low tax rates paid by 'rich corporations'.