U.S. Distribution of Wealth Now Worse Than Banana Republics

[mentalfloss]

Some of the facets that led into the great depression are eerily similar...


Two economists of the 1920s, Waddill Catchings and William Trufant Foster, popularized a theory that influenced many policy makers, including Herbert Hoover, Henry A. Wallace, Paul Douglas, and Marriner Eccles. It held that the economy produced more than it consumed, because the consumers did not have enough income. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression.[17][18]

According to this view, wages increased at a rate lower than productivity increases. Most of the benefit of the increased productivity went into profits, which went into the stock market bubble rather than into consumer purchases. Say's law no longer operated in this model (an idea picked up by Keynes).

As long as corporations had continued to expand their capital facilities (their factories, warehouses, heavy equipment, and other investments), the economy had flourished. Under pressure from the Coolidge
According to this view, the root cause of the Great Depression was a global overinvestment in heavy industry capacity compared to wages and earnings from independent businesses, such as farms. The solution was the government must pump money into consumers' pockets.


Causes of the Great Depression - Wikipedia, the free encyclopedia

It is not the super rich who are holding up tax increases for more teachers, police firemen etc. it is the middle class who are done supporting the bulk of society.

Right now we know that the top 10% of the country posses 80% of its wealth. There is no way we can expect the middle class to support 'the bulk of society'. The rich would be able to live the same faux-dream they've always had, even if they gave away half of their assets to collectively boost the economy. It really is a win-win for everyone.

 

[Avro]

It is not the super rich who are holding up tax increases for more teachers, police firemen etc. it is the middle class who are done supporting the bulk of society. You could increase the taxes of the rich by 75% and still would not have enough to support the growing masses of poor. They are not the problem, just in the minds of the frustrated few who have to blame some class for their problems. Sound familiar.

The tax rate for the super rich under DDE was 91%.

With what you just said it will be interesting to see how the newly elected house finds billions of dollars without raising taxes and not cutting defence, medicade and socila security.

The current format of spending and tax cuts is usustainable.

Good luck.

 

[DaSleeper]

The way to do it is to find a way to get Companies and small business to hire mor people to increase the number of people that pay taxes.....taxing small business more will just keep them from hiring more people...

I think that this has been posted before.....

Tax System explained in beer.

Suppose that every day, ten men 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 men (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 man (the richest) would pay $59.

So, that's what they decided to do.

The ten men 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 men were unaffected. They would still drink for free. But what about the other six men? The paying customers?

How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, 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 men began to compare their savings.

'I only got a dollar out of the $ 20,' declared the sixth man. He pointed to the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a Dollar, too. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men 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, boys and girls, journalists and college professors, this 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.

 

[Avro]

Way to go Dasleeper.

Eveything was fine before the rich got a huge reduction in tax.

Now you're getting it.

FAIL!

 

[DaSleeper]

Everything was fine until they moved all the jobs out of country to get away from hightaxes...

I'd say you fail.....but I think you're just pretending not to get it.....If not....

You're either a "Smart*ss or a "D******"

 

[petros]

Reinvestment back into R&D has plummeted over the past years. We need more gadgets, Not just any gadets but ones that set the standard. Quality pays just as good as quantity.

 

[mentalfloss]

Way to go Dasleeper.

Eveything was fine before the rich got a huge reduction in tax.

Now you're getting it.

FAIL!

bu-bu-bu they got teh lowest percentage back! They should be getting moar!

ahem..

 

[captain morgan]

bu-bu-bu they got teh lowest percentage back! They should be getting moar!

ahem..

... They are getting more.. In the Caribbean, Cyprus, BVI and the Caymans.

Get it yet?

 

[DaSleeper]

And it's why we get this...............

 

[mentalfloss]

Switch to fair trade and you'll alleviate the dependency on outsourcing. In the meantime, create a fair profit and you'll pull back this unstable distribution of wealth.

 

[damngrumpy]

Of course there has to be profit or those who have ideas wouldn't come forward. I
even disagree with that. Inventors themselves are often not caught up in the profit
world, there's is a totally different world altogether. Bill Gates, is a prime example.
He spent his time inventing and improving and being the front man, the bean counters
did the business model details. Someone has brought up the point that the international
moguls don't pay their fair share of taxes and they have been getting the breaks.
Interesting, these international companies are playing games with governments all over
the world and they play one off against another. Governments must work together to
close the loopholes.
Business can't go about pressuring governments to reduce social services and cut taxes
and crying there is no free lunch while at the same time exempting themselves from paying
their fair share to ensure the society from which they derive their profit, stays healthy.
The fact is they can't have it both ways. Personally I believe we should all pay something
and yes that includes the poor. It would do two things. One it would establish that all are
participating in the financial obligation to the country.
I am not upset that business and others are getting tax breaks, I just believe we have now
moved the financial goal posts to far, and no one group should be given a massive tax
holiday, especially since much of the recent economic havoc was created by the very
business groups we are paying to clean up after.

 

[captain morgan]

Switch to fair trade and you'll alleviate the dependency on outsourcing. In the meantime, create a fair profit and you'll pull back this unstable distribution of wealth.

Which economy do you want to base the "fairness" on?

 

[DaSleeper]

Is MSNBC so disraught that it is condoning violence from the anti gun left because of the tea party win a few days ago?

YouTube - MSNBC's Dylan Ratigan: The Answer To America's Woes Is 'Obviously' Revolution


MSNBC’s Dylan Ratigan, Ted Rall call for violent revolution?

Posted at 9:30 am on November 9, 2010 by Ed Morrissey
Yesterday, I was traveling to Washington DC, where I’ll speak at the Heritage Foundation about the impact and future of the Tea Party movement this morning. While waiting for my flight, a woman conducted a rather loud cell-phone conversation with a friend (where’s Amy Alkon when you need her?) in which she discussed her frustrations with having to deal with “fascist morons” from the Tea Party. We hear a lot from the Left about supposedly violent and fascist grassroots activists for, er, limited government, and perhaps no more so than on MSNBC, which has made hyperventilation an art form.
That’s what makes this clip from Dylan Ratigan’s MSNBC show even more interesting. Ratigan gives six minutes of air time to Ted Rall, the cartoonist last seen shark-jumping by insulting the late Pat Tillman for dying in service to the country. Now Rall has a new idea for improving the country, and Ratigan seems very interested the the proposal

The rest of the story


And some people demonize Fox

 

[Tonington]

Everything was fine until they moved all the jobs out of country to get away from hightaxes...

The corporation I work for is headquartered in Switzerland, but every country is it's own separate business entity. The Canadian business pays taxes to the Canadian Government, and get loads of tax credits for investing in R&D. We have to report monthly on what kinds of work our time was used up on, and the company submits this stuff at the end of the fiscal year. We save loads of money on taxes.

Cutting corporate taxes is not the same thing as cutting taxes on the rich. Cutting corporate taxes will mean more investment in the economy.

The real reason jobs left is because when trade is made more free, the costs of labour are more important because there is not as much protectionist policy to hide the cost of production...there are people in this world who will work for far less than an American or Canadian will for the same job. Manufacturing centers are being built in places other than China now because the cost of labour is cheaper. Vietnam is benefitting from the increasing cost of manufacturing in China.

Yet taxes are higher in places like Germany, with a top marginal tax rate of 45% which compares to 35% in America, and they have a successful manufacturing economy with high paid workers, and the world's second largest exporting economy. Obviously the personal income tax rate is not the most important factor.

 

[El Barto]

I think we are putting big corporation and the personally wealth in the same basket here.

 

[DaSleeper]

How big does a business have to be to make incorporation worthwhile????

 

[Tonington]

There's plenty of small corporations. For one, since a corporation is a legal entity, you as the owner of Ontario Shrimp Farm Limited would not lose your personal assets if someone sued the corporation and won. The decision to incorporate or whether to remain as a sole proprietor/partnership has to consider lots of things.

 

[Trotz]

The corporation I work for is headquartered in Switzerland, but every country is it's own separate business entity. The Canadian business pays taxes to the Canadian Government, and get loads of tax credits for investing in R&D. We have to report monthly on what kinds of work our time was used up on, and the company submits this stuff at the end of the fiscal year. We save loads of money on taxes.

Cutting corporate taxes is not the same thing as cutting taxes on the rich. Cutting corporate taxes will mean more investment in the economy.

The real reason jobs left is because when trade is made more free, the costs of labour are more important because there is not as much protectionist policy to hide the cost of production...there are people in this world who will work for far less than an American or Canadian will for the same job. Manufacturing centers are being built in places other than China now because the cost of labour is cheaper. Vietnam is benefitting from the increasing cost of manufacturing in China.

Yet taxes are higher in places like Germany, with a top marginal tax rate of 45% which compares to 35% in America, and they have a successful manufacturing economy with high paid workers, and the world's second largest exporting economy. Obviously the personal income tax rate is not the most important factor.

Academically speaking, I am more inclined into the Canadian staples thesis (i.e. Innis and his successors) in that Canada shouldn't have an industrial-manufactoring company. Branch plant economics, back in the 1960s, often meant Canadians were paying more for identical goods produced in the United States and those branch plant industries were sending all their revenue and R&D funds back to the United States. Trudeau was overall a huge idiot.

Canada has a small population, a huge territory and abundant resources, we have always been best suited for a staples based economy of agriculture, forestry, fishing, et al. The reason we survived the finanacial crisis wasn't because of our regulated banking system (although that did help) but its because we still have a resource export economy that will continue to function as long as there are buyers (last I check China has been buying everything resource-related and there's always Europe / Germany).


The United States on the other hand can't support its own population, especially with their industrial base leaving for China and 1/3 of the country is on some form of entitlement.
Socialism is a fine principle but it doesn't amount to much when your country is running huge deficits and last I check social workers don't work for free.

 

[damngrumpy]

Socialism has trouble dealing with good times as well for main reasons.
First, there are many who want to make more for their efforts than the system
might allow, Second there are all kinds of people who will let others do the work
because they would make the same money anyway.
Social Democracy does work if the goals are kept in balance. Profit, and the
concept of individual effort, yes, but keep in mind that in order to derive that
profit, and receive the tax breaks required to compete, in turn the company or
the investors have to be responsible to the community they serve.
I support the concept of social democracy however i also support government
that have as a base fiscal conservatism. For example it is great to bring in a
social advancement to say the elderly or children's dental care. The problem is,
we have to determine how the program is going to be funded down the long road
to the future. starting something is one thing paying for it is something else again.
Where does the money come from, who pays and how much?
Taxes should be fair, but not overburdening for poor or rich alike. Creating a
balance is the key and we have not done that in our society and the reasoning for
that is our businesses have moved their operations off shore. At the same time
our governments must demonstrate, they are in charge or surrender to the
corporate world.

 

[Avro]

Regulated capitalism with aspects of socialism.

Socialism in that no person in a rich country should go to bed hungry, every child has access to education that gives them the best chance to succeed, no one should have to choose between finances and health care, the government invests in infastruture, puts out fires, arrests criminals and protects the environment.

Don't buy into that line if you tax the rich more they will flee or set up offshore accounts because it's fear mongering hyperbole at the very least. If you taxed a zillionaire 1 dollar they would try and hide it from the tax man yet projected revenues from said tax increeases take greed into account.

Public employees do the same thing most people do with their paychecks....they spend it in their local economy.