Unemployment rate hits 5-month high by FellowTraveler

Keep the Shiny side up

Quote:
Originally posted by SoupCatcher:
And yet, if you look at my last post, you'll see that there has been no problem reducing the estate tax burden in eight of the last nine years.

But according to that logic, this year's bill to reduce estate tax should have passed as well. Were the people who voted it down opposed to the Minimum Tax provisions instead? I don't think that was their resoning.

Quote:
You're neglecting the part where you're aided in becoming successful by infrastructure (built or subsidized by taxpayer dollars), an educated workforce (mostly educated by taxpayer dollars), a safe and secure arena to operate in (protected through the spending of taxpayer dollars), incentives and loopholes (where the rest of the taxpayers pick up the slack), etc. How much more successful are you because of those investments made by taxpayers? Hard to say. Thirty percent? Maybe. Maybe more.

But everybody gets the advantages of infrastructure, etc. Does this mean that to be fair, everybody should pay estate tax? That'd be a hard sell. And don't forget that the folks who earn more money pay more taxes. The top 1% of taxpayers (taxable income over about $300,000.00) already pay 34% of all income taxes ($256 billion in 2003).
http://www.taxfoundation.org/news/show/250.html

"Keep the Shiny side up"

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Saturday, August 5, 2006 12:13 PM

Keep the Shiny side up

Quote:
Originally posted by SoupCatcher:
Quote:
Originally posted by Geezer:
If I thought that the Minimum wage could make it through as a stand-alone, I'd say do it. I don't think that will happen. The Dems must not either, or I suppose they'd propose it. I don't care one way or the other about the Estate tax. It'll never impact me. It just seemed there was a chance to make a deal to get a Minimim tax increased passed, and the Dems wouldn't compromise enough to get what they say they've wanted for years.

Do a google search for: minimum wage kennedy #### (where #### is any year from 1998 on). You'll see that Senator Kennedy has been trying to get a minimum wage increase for quite a long time using a number of different strategies. There has been an attempt at compromise. Every year there is an attempt to raise the minimum wage. And every year but one the estate tax burden has been lowered.

What was proposed by the Republicans was about as good a compromise as if Mexico told us, "We'll do something about our citizens migrating to your country if you drastically cut your border patrol budget." Would you complain that our government wasn't willing to compromise if it didn't take that deal?

So, Okay. We know the Minimum Wage bills don't make it through alone. The Estate tax bills do. There was a chance to finally, after 10 years, get the Minimum wage bill through on the coattails of an estate tax reduction that's probably going to happen pretty soon anyway. It didn't pass. The rich will probably get their tax cut any way in a while, based on the pattern of reductions you describe. The poor get nothing. This doesn't seem like a win for the poor. It could have been.

I don't particularly care if the rich pay estate tax or not. I do care about an increase in the Minimum wage. I think the Dems blew their best chance to get it passed for several years. That's my gripe.

"Keep the Shiny side up"

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Saturday, August 5, 2006 12:23 PM

GEEZER,

completely ignoring the other poison pill the Republicans snuck into the bill, which as I understand it would have mandated the 7 states with a minimum wage for service jobs to accept the federal minimum instead, effectively reducing the income of servers in those 7 states by about 400 dollars a month or more, for those working full time.

So uh...fuck them and their lame pretense at raising the minimum wage.

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Saturday, August 5, 2006 12:25 PM

SOUPCATCHER

Quote:
Originally posted by Geezer:
But according to that logic, this year's bill to reduce estate tax should have passed as well. Were the people who voted it down opposed to the Minimum Tax provisions instead? I don't think that was their resoning.

Because it was a massive roll-back of the estate tax. The Republicans were going for the whole enchilada.

Quote:
Originally posted by Geezer:
But everybody gets the advantages of infrastructure, etc. Does this mean that to be fair, everybody should pay estate tax? That'd be a hard sell. And don't forget that the folks who earn more money pay more taxes. The top 1% of taxpayers (taxable income over about $300,000.00) already pay 34% of all income taxes ($256 billion in 2003).
http://www.taxfoundation.org/news/show/250.html

Everybody gets the advantages and some get more out of it than others. If you have 5 employees you benefit from their education. If you have 10000 employess your benefit is substantially greater. If you operate in one city you benefit from that infrastructure. If you operate nationwide you benefit from substantially more infrastructure. And on and on. The logic is that those who benefit the most from taxpayer assistance should pay the most for that benefit. It's dues. If you just get the use of the washroom you pay one set of dues. If you get the use of the whole country club you pay another set of dues.

Quote:
Originally posted by Geezer:
So, Okay. We know the Minimum Wage bills don't make it through alone. The Estate tax bills do. There was a chance to finally, after 10 years, get the Minimum wage bill through on the coattails of an estate tax reduction that's probably going to happen pretty soon anyway. It didn't pass. The rich will probably get their tax cut any way in a while, based on the pattern of reductions you describe. The poor get nothing. This doesn't seem like a win for the poor. It could have been.

I don't particularly care if the rich pay estate tax or not. I do care about an increase in the Minimum wage. I think the Dems blew their best chance to get it passed for several years. That's my gripe.

It's not just that minimum wage bills don't make it through alone. When attached to a number of other bills they still don't make it through.

For what you are saying (that this was the best chance for Democrats) to stand up you have to assume that the Republicans will have this level of control of Congress for the foreseeable future. And while I'm quite pessimistic about the ability of Democrats to actually win elections (which is partly why, even though I have moved in that direction for the past few years, I have never registered as a Democrat), I think the country is slowly waking up to the fact that having the Republicans in control of everything has not resulted in good governance.

In other words, I see this as the Republicans thinking they might not get another chance at the estate tax and may be forced in the future to actually consider a fair minimum wage increase without the leverage they have now.

* edited to add: I should've said, I'm quite pessimistic that some Secretaries of State around the country will stop doing everything in their power to limit the number of people voting.

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Saturday, August 5, 2006 12:40 PM

Stupid statement that dems would propose a minimum wage billif they thought it would pass --- they don't get to propose legislation without permission. The only reason they got to propose a recent bill, which I think was a minimum wage increase actually, was if they accepted the provision that the senate needed to pass it by 2/3rds. By normal standards that bill would have passed, but you know, those republicans and their concern for "up or down votes"

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Saturday, August 5, 2006 4:53 PM

Keep the Shiny side up

Quote:
Originally posted by SoupCatcher:
Everybody gets the advantages and some get more out of it than others. If you have 5 employees you benefit from their education. If you have 10000 employess your benefit is substantially greater. If you operate in one city you benefit from that infrastructure. If you operate nationwide you benefit from substantially more infrastructure. And on and on. The logic is that those who benefit the most from taxpayer assistance should pay the most for that benefit. It's dues.

As noted in the Tax Foundation site I linked, the folks with more income already pay the most taxes. The top 5% in income pay around 21% of their taxable income in income tax. The bottom 50% pay 3%. So the tax rates are already pretty progressive. The rich pay more of their income as taxes, by quite a bit, than the middle class or the poor.

Quote:
For what you are saying (that this was the best chance for Democrats) to stand up you have to assume that the Republicans will have this level of control of Congress for the foreseeable future. And while I'm quite pessimistic about the ability of Democrats to actually win elections (which is partly why, even though I have moved in that direction for the past few years, I have never registered as a Democrat), I think the country is slowly waking up to the fact that having the Republicans in control of everything has not resulted in good governance.

In other words, I see this as the Republicans thinking they might not get another chance at the estate tax and may be forced in the future to actually consider a fair minimum wage increase without the leverage they have now.

I dunno. I think the Dems missed a sure chance at increasing the Minimum Wage now for the possibility that they might gain enough in the mid-term elections to get it later. If the Dems had any actual policy or platform, instead of just "We're not Them", I'd feel better about their chances.

If Frist offers the Minimum wage/estate tax bill again after summer recess, as he proposes, and the Dems block it again, I think they'll end up losing votes in November. You know the spinmeisters would play the Dems blocking a minimum wage increase (twice) for all it's worth. As BDN alluded to above, I don't think that the guy who sees his possible $2.10 an hour raise fly out the window is going to feel that it's worthwhile to lose that additional income just to make sure some rich dead guy's kids don't get an extra polo pony or two.

"Keep the Shiny side up"

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Saturday, August 5, 2006 5:40 PM

I have a vote and I'm not afraid to use it!

This is so cool. As long as I use the name Slick, I can say anything I want and he won't answer.

This will require some thought.

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Saturday, August 5, 2006 9:12 PM

I believe in solving problems, not sharing them.

Quote:
Only 38% of minimum-wagers work full-time. "Married, spouse present" makes up only 24% of the that and only 15% of the female minimum-wage population.-Signy
And increasing the minimum wage wouldn't help these people? Of course it's not going to help everyone equally, but I fail to see how increasing folks' pay is a bad thing.

As you may recall- since you wrote this yourself- the increase was going to help people afford health insurance (BTW I laughed out loud at that one) buy a house, and improve their lives. In other words, when you say "Its a fair deal" you're thinking unrealistically about at least ONE side of the deal, so how can you assess whether it's "fair" or even really helpful?

Quote:
I think I'd appreciate that extra $2.10 an hour more than seeing someone elses money disappear into the Treasury.

Unless of course you were facing a wage CUT from this bill. As Soup pointed out

Quote:
For many employees in seven states, H.R. 5970 means a wage cut/. Section 402 of the bill strikes down state laws that require employers to pay a full minimum wage without relying on tips from customers to reach the minimum level.1 States that have those laws will see the minimum wage for tipped employees fall as much as $5.50 per hour. (in) Seven states—Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington...tipped employees would be left without any minimum wage protection under state law.

Do you still think that's "fair"?

Quote:
If I thought that the Minimum wage could make it through as a stand-alone, I'd say do it. I don't think that will happen. The Dems must not either, or I suppose they'd propose it.

Hmmm, you must have taken your stupid pills today. This major faux pas has already been pointed out to you.

BTW, if I were a Dem strategist, being a Dem I would be unable to officially propose any meaningful minimum-wage legislation. What I WOULD do is take a proposal directly to the press- topping the Republican "offer" by a great deal and then making a point of saying that the Republicans won't consider it in Congress.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

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Sunday, August 6, 2006 6:01 AM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
As you may recall- since you wrote this yourself- the increase was going to help people afford health insurance ... buy a house, and improve their lives. In other words, when you say "Its a fair deal" you're thinking unrealistically about at least ONE side of the deal, so how can you assess whether it's "fair" or even really helpful?

I figure some people would buy health insurance with their extra $2.10/hr, and some would buy beer, and some better food for their kids, and some an iPod, and some start saving a bit, and some buy more Lotto tickets. It's their choice, but having more money to spend widens their available choices. I don't consider that "unrealistic".

Quote:
Unless of course you were facing a wage CUT from this bill. As Soup pointed out
Quote:
For many employees in seven states, H.R. 5970 means a wage cut/. Section 402 of the bill strikes down state laws that require employers to pay a full minimum wage without relying on tips from customers to reach the minimum level.
Do you still think that's "fair"?

Couple of things about this which would make the impact less than you might imagine. First, nothing says that businesses have to reduce wages of tipped employees. Some will, some won't. Second, there's not that many people in the group which would be impacted. There's only about 550,000 people in the entire country who claim tip income on their tax returns. http://www.irs.gov/pub/irs-soi/03indtr.pdf
Probably quite a bit less in just the seven effected states, and probably even less who are working for minimum plus tips.
Any way you look at it, it's not going to be fair all round. Just raising the minimum wage is going to cost some people jobs, when struggling businesses have to let someone go to afford the higher payroll per person. Does this mean we shouldn't raise the minimum wage?

Quote:
This (error about Dem's Minimum wage bills) has already been pointed out to you.

Yes it has. I respond here as I did then. Historically, stand-alone Minimum Wage bills don't pass, but stand-alone Estate Tax bills do. Why not get the minimum wage through?

"Keep the Shiny side up"

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Sunday, August 6, 2006 6:05 AM

Keep the Shiny side up

Quote:
Originally posted by rue:
This is so cool. As long as I use the name ..., I can say anything I want and he won't answer.

This will require some thought.

Or I might do as I've been doing with SignyM's posts; just edit out the insults, and respond to the real discussion, if any.

"Keep the Shiny side up"

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Sunday, August 6, 2006 10:22 AM

I have a vote and I'm not afraid to use it!

Quote:
just edit out the insults, and respond to the real discussion, if any

Slick
I doubt the 50,000 or so families affected each year by estate taxes can provide more political clout that the two million plus folks who'd profit from the increase in the minimum wage.

Rue
$ 1 = 1 vote

Rue
And the people who annually make $5M US or more? I can see they really NEEEED that tax break SOOOOooo badly. They're doing just awful compared to everyone else.

Rue
It's not about punishing the rich. It's about protecting the next generations from Bush's economic follies.

-------------------------------------------------
No insults. No reply either. No response to wealth = political clout, to why do rich people NEED to get even richer, or to if/ why are Bush's econoiic policies misguided.

--------------------------------------------------

So it's true. I really do get to make any claims I want and Slick won't reply.

--------------------------------------------------

According to Slick, there's no harm in in giving the super-rich (see 'football field') a tax break. That, despite the OMB's analysis that half the deficit comes from the existing tax break. And since, according to him, there's no harm, then why NOT couple it to the minimum wage? He portrays it as a win-win.

But that's not true. The tax break does reduce Federal income, driving the budget into deficit. By going into deficit, the government has to borrow. That has the immediate effect of raising interest rates for everyone, denying people the opportunity to buy a house, further their education, borrow for medical expenses, or start a business. China, which owns a large part of US debt, is actively leveraging it politically. Beyond immediate effect, that cost will be carried by the next generation(s), to the same effect.

A robust economy which WASN'T supposed to happen under Clinton - did. That despite the fact that the highest tax increase ever was passed early under his administration. And despite the fact that he raised the minimum wage by 25%. The stock market steadily climbed. http://www.itulip.com/realdow.htm Unemployment steadily dropped. ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt The government deficit turned around and was in a surplus.

Bush decided a healthy economy wasn't good enough. IMMEDIATELY after appointment, he started pushing for tax-breaks. The faltering economy he created only gave him the 'trickle-down' excuse to do what he wanted to do from the start. (Remember, he STARTED with the tax-break policy.)

And under Bush, the trickle-down which is supposed to happen, hasn't. The stock market crashed after Bush's inaguration (not after 9/11, which was yet another one of Bush's lies). The investment community, which was stable and happy under Clinton didn't have the same confidence in Bush. It has struggled to regain lost ground since then. (That despite the fact that profits in certain sectors are at an all time high.) Since Bush, it has gone down, gone up, gone down, and up, then down, many, many times. And is now worse than flat due to inflation. http://www.itulip.com/realdow.htm Unemployment shot up, briefly improved, but is now headed the wrong way, again. More people are uninsured. Real wages have gone down. Inflation is up, interest rates are up. Japan and China own the US several times over. These are not the characteristics of a healthy economy.

Slick argues that tax breaks don't hurt, they help. Such is not the case.

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Sunday, August 6, 2006 11:20 AM

Keep the Shiny side up

Quote:
Originally posted by rue:
$ 1 = 1 vote

Then Bill Gates runs the country? But we talked about campaign finance reform in another thread, and were pretty much in agreement. That's the place to fix the problems with money buying legislators.

Quote:
And the people who annually make $5M US or more? I can see they really (need) that tax break ... badly.

Actually, the Estate Tax break applies to estates valued at between $1M and $5M, not annual earnings.

Quote:
It's not about punishing the rich. It's about protecting the next generations from Bush's economic (policies).

For me, it's about having blown the chance to raise the minimum wage, for the first time in ten years. Based on Soupcatcher's analysis of estate tax reductions during the Bush II administration, the estate tax stuff will probably get through anyway. I see no reason that the Minimum Wage shouldn't ride its coattails. At least get some benefit for the not-so-rich while the rich are getting theirs.

"Keep the Shiny side up"

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Sunday, August 6, 2006 5:51 PM

I believe in solving problems, not sharing them.

Geezer, if the Republicans thought they could get the inheritance tax through on an up-down vote, they prolly would. But they're politically vulnerable right now, and the outcry would be enormous. The best they can hope for is to gain some political leverage for the upcoming elections. So the linkage between minimum wage and tax breaks for the rich is just politics- dishonest politics- at its worst.

So you pose that it would be good for the Dems to vote for an increase in minimum wage. Do you mean at any cost? How about at the cost of starting global nuclear war? Nah... you'd prolly figure THAT cost is too high. Maybe the Dems should trade off the whole "equal rights" concept? Or giving up on abortion rights? How about increasing the deficit by $200 billion? Is THOSE costs too high? Yeah, maybe too high.

So, I assume that you don't mean at any cost, that there is some point at which you would tell the Dems "Nah it ain't worth it, you're getting humped in this deal." What would that point be?

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

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Monday, August 7, 2006 2:53 AM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
So you pose that it would be good for the Dems to vote for an increase in minimum wage. Do you mean at any cost? So, I assume ... that there is some point at which you would tell the Dems "Nah it ain't worth it..." What would that point be?

The recent bill is about as far as I'd be willing to go.

I'm not too sure that the Dems aren't cutting their own throats again in the mid-terms, with stuff like this Lieberman-Lamont primary. If we get the same thing in other states, with the Dem incumbents losing the primary and vowing to run as Independents, the liberal vote could split, handing the Repubs Congress once again. Then it's at least two more years until Minimum wage has a chance as a stand-alone.

"Keep the Shiny side up"

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Monday, August 7, 2006 3:32 AM

HERO

Quote:
Originally posted by Geezer:
Actually, the Estate Tax break applies to estates valued at between $1M and $5M, not annual earnings.

Its not hard to get a middle class estate to the million mark. Take a paid for house@$150-$200k add in other property and life insurence and even lower middle classers like my parents can make it.

H

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Monday, August 7, 2006 4:32 AM

Let's go with estates of 1 million or more for the sake of argument, and lets use your parents as an example.

How much money do you think you deserve to inherit? Sounds like the infrastructure your parents were able to provide you got you on your own two feet and you were able to make something of yourself, which is the way things should work.

There will still be over half of that money to go to you and your siblings --- an advantage that most people will not have.

Taking a portion of that and putting it into programs that help those that don't have any inheritance or family structure to speak of, so that they can get on their own two feet couldn't be a bad thing now, could it?

In a meritocracy, which is what we've always been taught our country is about, an estate tax is neccessary - consolidation of inherited and passed down wealth and land is no different from the system we thought we were bucking in England - why would we want to support a class of rich people that don't have to work for their money? Everybody should contribute, and its not like they, or even upper class families have not had a better shot at the American dream than the American majority.

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Monday, August 7, 2006 5:52 AM

HERO

Quote:
Originally posted by Righteous9:
How much money do you think you deserve to inherit?

Since they already taxed the property, the earnings, and everything else. I think that money has been taxed enough. So I deserve every cent...bad enough I have to share with my brother and sister.

I promise to use the money wisely. Paying off my student loans, for example, would free up a portion of my income for investment and spending (both taxable pursuits) rather then 20 more years of debt service (which is deductable). This is far more valuable to the country then the marginal benefit of yet another tax on a person who no longer has future tax potential (because they are dead).

How about a cow? You tax the feed, tax the cow, tax the land the cow's on, tax the income the cow produces, then the farmer dies and you tax it all again before allowing any use to be made. It is far better to, as the farmer lies dying, slaughter the cow and serve it at a the wake. That provides a limited immediate benefit of the farmer's labor to those surviving him. Would it not be better to create a system that rewards the farmer and society by passing on the cow and its income and allowing the state to continue its taxation of the long term benefits?

H

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Monday, August 7, 2006 6:43 AM

www.boston.com/news/globe/editorial_opinion/oped/articles/2006/08/05/t
ax_cuts_shameful_sham/
And

I believe in solving problems, not sharing them.

Trying to clear up some misinformation about estate tax (because we already looked into that due to our daughter's condition):

The GOP talking point is that MANY people will be affected by the estate tax. Nothing could be further from the truth. The estate tax applies to inheritance of over two million- not one million. In addition, it's possible for a spouse to use their partner's gift tax exclusion. Obviously, this means that lower-middle-class families are not affected by the estate tax at all. In fact, by the IRS' estimation, less than 2% of all households will be affected by estate tax.

http://moneycentral.msn.com/content/Retirementandwills/Planyourestate/
P52707.asp

So Hero, you, your parents, and your brother and sister can rest easy.

But the loss of Federal revenues is not $6 billion, as Geezer posted. It's as high as $61 billion. (I'm sure that was a mere mistake on Geezer's part.

)

Quote:
Once fully in effect, the measure would cost an estimated $61 billion a year in lost revenue.

Quote:
Making permanent the repeal of the estate tax after 2010 — as proposed by the President and as passed by the House last year — would add nearly $1 trillion to the deficit between fiscal years 2012 and 2021, the first ten years in which the full costs of extending repeal would be reflected in the budget. This cost includes $776 billion of lost revenues and $213 billion of higher interest payments on the national debt.

www.cbpp.org/6-5-06tax.htm
Also www.usatoday.com/news/opinion/editorials/2006-07-30-irs-ourview_x.htm

And since the bill would DECREASE minimum wage for tipped employees, which could be affect as many as 5 million workers, the overall benefit of increasing the minimum wage is not nearly as high as a back-of-the envelope calculation based on the number of minimum wage workers. BTW- that bak-evelope scribbling itself is poor estimate because it ASSUMES that everyone who works at minumum wage (a) works full time and (b) is subject to the Federal minimum wage. A closer estimate would be half or less, since more than half of minimum-wagers are part-time or exempt.

Given all that, it's entirely possible that there would be almost NO overall net wage increase.

So Geezer, since you just said that the bill was about as far as you would go, based on an estimated cost of $6 billion (your figure, not mine) in revenues and an estimated benefit of about $6 billion when the increase is fully in effect, but on closer examination the cost is higher by a factor of 3 to 10 and the benefits are lower by about a fact of 2... would you w/draw your support of this bill?

BTW- I doubt it.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

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Monday, August 7, 2006 6:45 AM

Keep the Shiny side up

Quote:
Originally posted by Righteous9:
How much money do you think you deserve to inherit?

Lets ask this same question another way.

How much of the inheritance you worked all your life to provide your children do you think the Government deserves to get?

Consider that:

1)If you're in the income bracket to pay Estate Tax, that money has already been taxed when you earned it, at rates higher than 95% of the population pays.

2) You know that the money the Government gets isn't likely to go to "...help those that don't have any inheritance or family structure to speak of, so that they can get on their own two feet...", but instead will end up paying for some porkbarrel project.

If you want some of your wealth to help the less fortunate, set up a foundation, like Bill Gates or Warren Buffet. Why let the government decide how to spend your money? Do you think they'd do a good job?

"Keep the Shiny side up"

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Monday, August 7, 2006 6:50 AM

I believe in solving problems, not sharing them.

Quote:
How much of the inheritance you worked all your life to provide your children do you think the Government deserves to get?

Ah...Geezer, so it really IS as I said! Nice to know that I'm not reading you wrong.

The repeal of the estate tax is near and dear to your heart. It has nothing to do with the minimum wage, does it?

Now I gotta go live my real life.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

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Monday, August 7, 2006 7:09 AM

Thanks to Sygm, for posting the details of the estate tax...I was looking them over myself before following up.

Sharing is a despicable obligation, I agree. Sorry you got stuck with a brother and a sister.

I thought that was the system in place...there are insentives and tax breaks in the estate tax system I believe, that eases the burden on those who inherited small businesses and wish to keep them in the family, rather than selling them. Yeah, just found them, enacted in 1998.

What would your solution be to curbing a decadent defacto regal class in this country?

Don't think that exists? Look at what we elected. Now how the fuck did he get there? HOw many businesses has he been allowed to run into the ground? How many times do you get to fail as a rich person and still be grossly rich?

Jesus, and you guys call things like welfare and affirmative action 'entitlement programs?'

"Why should somebody else get my daddy's money...I"m the one who deserves it."

How about because your daddy was able to earn that money because of the american infrastructure, not in-spite of it. How about because other people deserve that opportunity as well...

and don't give me that two-faced line about that tax money not going to good causes, while you go ahead and vote for motherfuckers that have every intention of undermining said cuases. You are enabling the misuse of that money and then saying it doesn't work - pathetic.

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Monday, August 7, 2006 10:37 AM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
Trying to clear up some misinformation about estate tax.
...the loss of Federal revenues is not $6 billion, as Geezer posted. It's as high as $61 billion. www.boston.com/news/globe/editorial_opinion/oped/articles/2006/08/05/t
ax_cuts_shameful_sham/

And
Quote:
Making permanent the repeal of the estate tax after 2010 — as proposed by the President and as passed by the House last year — would add nearly $1 trillion to the deficit between fiscal years 2012 and 2021, the first ten years in which the full costs of extending repeal would be reflected in the budget. This cost includes $776 billion of lost revenues and $213 billion of higher interest payments on the national debt.
www.cbpp.org/6-5-06tax.htm
Also www.usatoday.com/news/opinion/editorials/2006-07-30-irs-ourview_x.htm

I tend to get my information from sources a little less partisan than editorials, so it's not surprising they are different.

IRS SOI reports show that the total Estate Tax assessed for 2004 (last year I can find figures) is just $21.5 billion. You can find a spreadsheet of Estimated Tax info here. http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96442,00.html

The JCT's breakdown of revenue impact of HR 5970 is here. http://www.house.gov/jct/x-34-06.pdf
Be aware that this estimate is based on the difference between the new bill and revenues if the current estate tax cuts were allowed to expire when the estate tax provision of the EGTRRA of 2001 sunsets in 2009. That's not likely to happen, so the impact would probably be quite a bit less.

Quote:
And since the bill would DECREASE minimum wage for tipped employees, which could affect as many as 5 million workers, the overall benefit of increasing the minimum wage is not nearly as high as a back-of-the envelope calculation based on the number of minimum wage workers.

Haven't found a government source for the number of tipped workers, but the anti-bill editorials tend to put it at 5 million nationwide. Since the "Tipped Wage Fairness" provison only impacts the seven states where tips are not included in minimum wage calculations, the 5 mil is somewhat exaggerated.

Also, it seems that there is some confusion about the provision (Sect.402, at the bottom of the bill) since its language is typically lawyerish. http://www.theorator.com/bills109/hr5970.html Needless to say, the editorials take the worst interpretation. Apparently, the bill's authors were willing to clarify.
Quote:
So Geezer, since you just said that the bill was about as far as you would go, based on an estimated cost of $6 billion (your figure, not mine) in revenues and an estimated benefit of about $6 billion when the increase is fully in effect, but on closer examination the cost is higher by a factor of 3 to 10 and the benefits are lower by about a fact of 2... would you w/draw your support of this bill?

Actually, I don't think I ever estimated the total benefits, just examples for individuals. Maybe I did. But lets do it (perhaps again). Your Boston Globe article cites 13 million as the number of "hard-working Americans" who would be helped by a minimum wage increase. Lets say that on the average, these people work six months of the year (1000 hrs), and already make $6.20/hr, half way between the old and new minimums. So 16 million folk x 1000 hrs x $1.05/hr increase = $13.65 billion. Even using what I think are pretty conservative figures, that's a pretty good benefit ($1,050.00 per person avg.) for that 13 million folks.

And the thing is, it's not just a comparison of dollars anyway. I believe that money going directly to the people, in the form of increased wages, provides more benefit than money going into the government's coffers.

"Keep the Shiny side up"

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Monday, August 7, 2006 10:53 AM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
The repeal of the estate tax is near and dear to your heart. It has nothing to do with the minimum wage, does it?

Not really. I haven't got near enough money to worry about having to pay it. I just don't take it as a personal affront that rich people are rich. That seems to be a motif of this thread, that the rich are guilty of something just by being rich, and should pay some sort of extra penalty for their good fortune. I figure that if they earned it they should get to keep it (after income tax, of course) just like everyone else.

On the other hand, I'd really like to see the minimum wage go up and boost the income of some of my relations.

"Keep the Shiny side up"

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Monday, August 7, 2006 11:41 AM

I believe in solving problems, not sharing them.

Geezer-

Quote:
I tend to get my information from sources a little less partisan than editorials.

Just because it's an edtorial doesn't mean it's inaccurate. But whether you credit my sources or not, you dismiss YOUR OWN sources out-of-hand when they don't fit your argument. (see below)

Quote:
The JCT's breakdown of revenue impact of HR 5970 is here. http://www.house.gov/jct/x-34-06.pdf
Be aware that this estimate is based on the difference between the new bill and revenues if the current estate tax cuts were allowed to expire when the estate tax provision of the EGTRRA of 2001 sunsets in 2009. That's not likely to happen so the impact would probably be quite a bit less.

THE VERY LINK THAT YOU POSTED SHOWS a revenue loss steadily increasing from 2007 up to a $62 billion revenue loss in 2016, and a CUMULATIVE loss of $310 billion over 9 years. You wave your wand and say "that's not likely to happen" and dimiss it from your estimates. WTF??? What moist orifice did you pull THAT out of???

Quote:
Actually, I don't think I ever estimated the total benefits

Okay Geezer, since you seem to be having difficulty scrolling up a little to find what you said, it was

Quote:
Now figure the tax benefits (not to mention the social benefits) of having two million people earning an extra $2.10 and hour ($80.40 a week, $4,000.00 a year). Seems like a fair tradeoff to me.

Hmmm, let's see... can I calculate a total benefit from that info? $4000/year X 2 milllion people= $8 billion TOTAL BENEFIT. YEP! Math works!

But now you're changing your assumptions:

Quote:
So 16 million folk x 1000 hrs x $1.05/hr increase = $13.65 billion. Even using what I think are pretty conservative figures, that's a pretty good benefit ($1,050.00 per person avg.) for that 13 million folks.

Less, let's see...tipped workers in seven states Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington includes the big tourist states of CA and NV- could lose as much as $5/hour. Let's say that these seven states account for about 1/5 of the tipped workers and that the average loss is about $3/hour and that these workers work half-time (1000 hours/ year). I think these are pretty minimal figures. That means a total minimum LOSS of $3 billion. Oh yeah, that's a good deal!!!

And now we come to the nub of our disagreement-

Quote:
The repeal of the estate tax is near and dear to your heart. It has nothing to do with the minimum wage, does it?-Signy
Not really. I haven't got near enough money to worry about having to pay it.- Geezer

I didnt' say that you would personally benefit from it. I'm just saying you have an ideological bent against estate taxes in ANY amount because the gummint can't be trusted with money. Which kind of indicates that you don't think ANY taxes should be paid either...

Quote:
I just don't take it as a personal affront that rich people are rich. That seems to be a motif of this thread, that the rich are guilty of something just by being rich, and should pay some sort of extra penalty for their good fortune.

No, they should pay extra into the system to the economy from collapsing. Progressive tax and social security and unemployment came into being as a result of the Great Depression. It does seem strange that on the one hand you keep talking about how the government ("the system") works and on the other hand that it can't be trusted with money. Which makes me wonder what your REAL agenda is vis a vis the role of government in the economy. Are you a "starve the beast" kind of guy? Or just an anti-Democrat kind of guy?

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Monday, August 7, 2006 12:25 PM

SOUPCATCHER

Real world got in my way and probably will for the next couple of days (nothing serious, just busy) so I haven't responded. And the conversation has moved on quite a bit. But I wanted to address a few points.

Oh, and, where the hell did all the crazy come from? (wrt to the thread explosion in RWED)

Quote:
Originally posted by Geezer:
As noted in the Tax Foundation site I linked, the folks with more income already pay the most taxes. The top 5% in income pay around 21% of their taxable income in income tax. The bottom 50% pay 3%. So the tax rates are already pretty progressive. The rich pay more of their income as taxes, by quite a bit, than the middle class or the poor.

Well, this is definitely an area where we're going to disagree. The top 1% have a third of the wealth (from 2001) so I don't see a problem with the top 1% shouldering up to a third of the income tax burden. Next 4% control another quarter of the wealth in the US. And so on down the line.

It's really simplistic but it's the point where I would be starting from. Those who benefit the most and have the most pay back to the system the most.

While I'm on the topic of revamping the tax system I'd also try to use tax policy to stimulate recruitment in various professions. Work as a nurse? No taxes for you. Work for the fire department? No taxes for you either. Some way to acknowledge that there are certain professions that provide above-and-beyond-the-call-of-duty value to the country as a whole.

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Monday, August 7, 2006 12:46 PM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
Just because it's an edtorial doesn't mean it's inaccurate.

Doesn't mean it is either. I prefer to use sources which provide hard data rather than those which throw around numbers with no explanation of how they're developed. I could probably have gone to some site with a conservative bent and found figures that support my points better, but I'd rather have objective information. How 'bout you?

Quote:
But whether you credit my sources or not, you dismiss YOUR OWN sources out-of-hand when they don't fit your argument.

Hardly. I'm familiar enough with the JCT costing procedure to know how it works. Estimates are always made based on the assumption that any related laws which have sunset provisions would be allowed to sunset if the legislation in question were not passed. The number of times these related laws actually are allowed to sunset can be counted on the fingers of one foot. Hence, the impact is pretty much always less than the estimate.

Quote:
And now we come to the nub of our disagreement-
Quote:
... That seems to be a motif of this thread, that the rich are guilty of something just by being rich, and should pay some sort of extra penalty for their good fortune.
No, they should pay extra into the system to (keep?) the economy from collapsing.

Why just the rich? Shouldn't everyone be responsible for keeping the economy from collapsing? The rich already pay a larger percent of their income as income taxes.

No. I stand by my premise that you think the rich owe something extra over their fair share just because they have more money than you, whereas I think they should pay their income tax like everyone else and leave it at that.

If you want to propose a change in the tax rates to get more money to save the economy from collapsing, be my guest. Just keep it sort of fair.

"Keep the Shiny side up"

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Monday, August 7, 2006 1:01 PM

Keep the Shiny side up

dbl.

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Monday, August 7, 2006 1:08 PM

Keep the Shiny side up

Quote:
Originally posted by SoupCatcher:
Well, this is definitely an area where we're going to disagree. The top 1% have a third of the wealth (from 2001) so I don't see a problem with the top 1% shouldering up to a third of the income tax burden. Next 4% control another quarter of the wealth in the US. And so on down the line.

You'll be pretty happy then. The top 1% pay 34.27% of the tax, and the 2 thru 5% pay 20.09%. At least in 2003.

http://www.taxfoundation.org/news/show/250.html

Quote:
t's really simplistic but it's the point where I would be starting from. Those who benefit the most and have the most pay back to the system the most.

They do.

Quote:
While I'm on the topic of revamping the tax system I'd also try to use tax policy to stimulate recruitment in various professions. Work as a nurse? No taxes for you. Work for the fire department? No taxes for you either. Some way to acknowledge that there are certain professions that provide above-and-beyond-the-call-of-duty value to the country as a whole.

Ineresting concept. Gotta go eat. More on this later?

"Keep the Shiny side up"

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Monday, August 7, 2006 3:43 PM

I believe in solving problems, not sharing them.

Geezer, the reason why I (and others) think you have some hidden agenda is because your arguments are NEVER straightforward. They're self-contradictory at best. For example, on the one hand you say the system "works!". On the other, you think it can't be trusted with money. That's a little like introducing your nephew as a GREAT guy, hardworking, keeps at it... and then sotto voce adding "Don't loan him money". You're fine with paying income taxes (altho you don't think the gummint can be trusted with money) but NOT OK with paying estate taxes. You think that minimum-wagers should get an increase, but don't seem too concerned that SOME are going to get CUT, and can't spare a moment's thought about the cost to social programs and the deficit. You distrust when people editorialize, but then you do it yourself (And *poof*! The deficit is gone!)

So you're either either a supply sider, a "starve the beast" anti-gummint guy, a Republican hack, or you're really, really, really confused. Prolly a Republican hack.

Quote:
Why just the rich? Shouldn't everyone be responsible for keeping the economy from collapsing? The rich already pay a larger percent of their income as income taxes.

No. I stand by my premise that you think the rich owe something extra over their fair share just because they have more money than you, whereas I think they should pay their income tax like everyone else and leave it at that.

No, it's not that the rich "owe" more. And it's not to keep "the system" from collapsing, it's to keep the ECONOMY from collapsing. But the poor can't keep the economy from collapsing BECAUSE THEY DON'T HAVE THE MONEY.

Can I give you a little lesson in economics?

The economy works when money flows. Nothing happens if everyone's got their cash tied up in a mattress. But money doesn't diffuse. It behaves in a very strange way: money, like power, concentrates over time.

What happens when the top 0.1% control 90% of the money? Who do they sell to? The abysmally poor? By eliminating most people from consumption, you have just caused the economy to grind to a halt. that's what happened in the many depressions before the Great Depression, and in the Great Depression itself.

Ever since then, people have been aware (except Reagan, Bush, and Bush) that geeting money back into the hands of the majority is the only way to keep the economy going. Business isn't going to do that... it's antithetical to their purpose of maximum profit. So it falls the the government to do what business CAN'T do.

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Monday, August 7, 2006 3:58 PM

KANEMAN

Quote:
Originally posted by SignyM:
Geezer, the reason why I (and others) think you have some hidden agenda is because your arguments are NEVER straightforward. They're self-contradictory at best. For example, on the one hand you say the system "works!". On the other, you think it can't be trusted with money. That's a little like introducing your nephew as a GREAT guy, hardworking, keeps at it... and then sotto voce adding "Don't loan him money". You're fine with paying income taxes (altho you don't think the gummint can be trusted with money) but NOT OK with paying estate taxes. You think that minimum-wagers should get an increase, but don't seem too concerned that SOME are going to get CUT, and can't spare a moment's thought about the cost to social programs and the deficit. You distrust when people editorialize, but then you do it yourself (And *poof*! The deficit is gone!)

So you're either either a supply sider, a "starve the beast" anti-gummint guy, a Republican hack, or you're really, really, really confused. Prolly a Republican hack.
Quote:
Why just the rich? Shouldn't everyone be responsible for keeping the economy from collapsing? The rich already pay a larger percent of their income as income taxes.

No. I stand by my premise that you think the rich owe something extra over their fair share just because they have more money than you, whereas I think they should pay their income tax like everyone else and leave it at that.
No, it's not that the rich "owe" more. And it's not to keep "the system" from collapsing, it's to keep the ECONOMY from collapsing. But the poor can't keep the economy from collapsing BECAUSE THEY DON'T HAVE THE MONEY.

Can I give you a little lesson in economics?

The economy works when money flows. Nothing happens if everyone's got their cash tied up in a mattress. But money doesn't diffuse. It behaves in a very strange way: money, like power, concentrates over time.

What happens when the top 0.1% control 90% of the money? Who do they sell to? The abysmally poor? By eliminating most people from consumption, you have just caused the economy to grind to a halt. that's what happened in the many depressions before the Great Depression, and in the Great Depression itself.

Ever since then, people have been aware (except Reagan, Bush, and Bush) that geeting money back into the hands of the majority is the only way to keep the economy going. Business isn't going to do that... it's antithetical to their purpose of maximum profit. So it falls the the government to do what business CAN'T do.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

Go to BLS.gov..........Bureau of Labor stats.......Stop all this nonsense. Numbers speak louder than the words of idiots. Tracked since 1948 looks pretty damn good right now. Where were your posts in 2000? 4.0

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Monday, August 7, 2006 5:20 PM

I believe in solving problems, not sharing them.

WHAT "looks pretty good right now"? Purchasing power? Income distribution? Employment? Hours worked per week?

Kaneman, yours is one of those inscrutible posts that don't further the discussion.

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Reality sucks. Especially when it contradicts our cherished ideas.

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Monday, August 7, 2006 6:49 PM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
What happens when the top 0.1% control 90% of the money?

Gotta call BS on this. The top 1% earn 16% of the Adjusted Gross Income ($1.05 trillion of $6.28 trillion. 2003 figures), and per Soup's figures, control 33% of the wealth. They pay 34% of income taxes.
http://www.taxfoundation.org/news/show/250.html

Quote:
Ever since then, people have been aware that geeting (sic) money back into the hands of the majority is the only way to keep the economy going. Business isn't going to do that... it's antithetical to their purpose of maximum profit. So it falls the the government to do what business CAN'T do.

Hence, since the top 1% of income earners are already paying 34% of the income tax (on only 16% of the income(BTW, top 5% pay 54% of total income tax on 31% of income)), let's go ahead and give them the Estate tax break and get more money in the hands of the people with the Minimum Tax increase. Do you really think that rich people paying more tax equals more money to spend in poor peoples' pockets, absent some so far non-existent legislation to give it to them?

"Keep the Shiny side up"

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Monday, August 7, 2006 7:11 PM

KANEMAN

Quote:
Originally posted by SignyM:
WHAT "looks pretty good right now"? Purchasing power? Income distribution? Employment? Hours worked per week?

Kaneman, yours is one of those inscrutible posts that don't further the discussion.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

My post was aimed at the subject of the thread "unemployment rate". Ended all "discussion" on topic with a simple look at the facts from BLS web site. If you want a thread about purchasing power start one. I'm sure to end that quick without much "discussion". After reading your top .1% making 90% of the money post. Inscrutable? you must be fu*king joking.

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Monday, August 7, 2006 9:07 PM

GEEZER

Yes, when taxes are used right they benefit communities and do exactly those things you say they don't. Programs like head start, social security, pell grants...etc. Taxes can go to helping people live a fulfilled life as Americans.

If you are saying on the other hand,

"if you really think any of that tax money is going to go to the poor, think again, because we will always be fighting you tooth and nail to prevent any benefits from OUR money being used for those dregs,"

then maybe you have a point - but a sick one.
..........................................

if you really feel the minimum wage increase is a good thing, then convince me why the party you have no strong words for would intentionally package it with this other bill. We are thankfully on the same page. A mininum wage increase would be good. Why then did the republicans intentionally sink it? Why was a quid-pro-quo neccesary?

To clarify, do you really diverge with the Republican party in the matter of minimum wage increase? Because they have clearly shown that they are not for it. If you feel like that would be the best way to get money into the hands of the people who need it, then why would the republicans keep it out of their hands unless the democrats scratched the back of their lobbyists? It couldn't be that said lobbies have a disproportionate amount of sway, could it? It couldn't be that these politicians aren't actually acting in the interest of the American People, right?

I just wonder why you would try to make rational an argument that says 'dems had their chance to give the poor a minimum wage increase but they didn't do it because of a silly little estate tax cut.'

When you should be asking(as a fellow supporter of a minimum wage hike- wink wink) 'how dare the republicans play politics with a bill that they should be supporting anyway. Why should there even be a need to reach across the aisle by either party on this one? How sick is it that they have leveraged something that the people need, and inso doing, have withheld it from the people?'

A minimum wage increase by itself would have been a done deal,

and both you and I would have been happy, assuming that you weren't pulling our legs about being for such legislation. I for one trust your sincerity. You must be really bugged with your party right now.

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Tuesday, August 8, 2006 1:22 AM

I believe in solving problems, not sharing them.

Kaneman, Geezer:
Perhaps you mised the part of the sentence that began "What happens when...". Did I say that this WAS the current situation? No. Do you understand hypothetical sentences??? Apparently not!

Quote:
Hence, since the top 1% of income earners are already paying 34% of the income tax (on only 16% of the income(BTW, top 5% pay 54% of total income tax on 31% of income))

Yeah, we don't have a flat tax. Did you JUST notice that? It's been that way for decades! And you know what? It was done on purpose.

Quote:
let's go ahead and give them the Estate tax break and get more money in the hands of the people with the Minimum Tax increase.

What are you talking about??? "Let's go ahead and give them" (Who "them"- the very wealthy?) "the estate tax break and get more money in the hands of the people" (are these the same people who got the Estate Tax break?) "with the Minimum Tax (sic) increase" Straighten out that sentence, okay? I THINK I know what you're saying but I'm not going to type a big misdirected answer.

Quote:
Do you really think that rich people paying more tax equals more money to spend in poor peoples' pockets, absent some so far non-existent legislation to give it to them?

First of all, the projected deficit ($310 billion cumulative over 9 years ) threatens programs already in existance. So I don't need to presuppose theoretical legislation I just need to consider the ones already in place.

And since the government that you alternately say works and doesn't work already put all kinds of programs into existance the major ones being Social Security (which you're prolly against), Medicare (ditto), unemployment, welfare, NIH, and minor ones (in terms of funding ) like WIC, Head Start, education etc. So why would you be so entirely pessimistic THIS time except in a backhanded recognition of the fact that the current GOP crop is entirely beholden to the wealthy?

BTW- When I said that money concentrates, the Estate Tax break is an exact example of how that happens. Aside from the normal accumulation of profit through monopolization, there is a political aspect in which the wealthy bend laws to favor accumulation of more wealth. Immediately preceeding the Great Depression, the President and Congress engineered a heretofore unseen tax break for the rich, and income and assets distribution polarized to about the same extent that we see today. History... you should try it some time.

Kaneman: I certainly would appreciate a link. This article en.wikipedia.org/wiki/Unemployment shows unemployment as high as 24.9 in 1933 and as low as 1.2% in 1944. I suspect you picked 1948 as a "base" year because it had relatively HIGH post-war unemployment.

But we also need to discuss the measure and definition of "unemployment". If the definition changes over years... for example, if housewives were or were not included as "labor force" pre and post WWII... then we get anomalous changes in the trend. It's a problem with ALL long-term measurements, even something supposedly as quantifiable as "sulfur dioxide in ambient air".

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Reality sucks. Especially when it contradicts our cherished ideas.

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Tuesday, August 8, 2006 4:34 AM

Keep the Shiny side up

Quote:
Originally posted by SignyM:

Quote:
let's go ahead and give them the Estate tax break and get more money in the hands of the people with the Minimum Tax increase.
What are you talking about?

To clarify.

Lets go ahead and give the heirs of reasonably large estates an Estate Tax break on their inheritances, and get more money in the hands of minimum wage workers with a Minimum Wage increase. The deal proposed in HR 5970 seemed reasonable to me. I would like some clarification on Sect. 402, the Tipped Wage Fairness provision.

Now, please explain where you got the "0.1% control 90% of the wealth" figure. A link to the source would be OK.

"Keep the Shiny side up"

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Tuesday, August 8, 2006 7:53 AM

I believe in solving problems, not sharing them.

Quote:
...please explain where you got the "0.1% control 90% of the wealth" figure. A link to the source would be OK.

It was hypothetical. I picked the numbers to force people to consider what happens at the end-state of capital concentration. Does that concentration occur? Here is an illustrative quote

Quote:
Ours is a world of extremes. The poorest 40 per cent of the world population – the 2.5 billion people who live on less than $2 a day – account for five per cent of global income, while the richest 10 per cent account for 54 per cent

http://www.globalpolicy.org/socecon/inequal/2006/0707disparities.htm

A measure of INCOME disparity (which is not the same as wealth disparity) is the Gini Index. You can find an explanation here. http://en.wikipedia.org/wiki/Gini_coefficient

BTW, it is a known (but not common) statistic to look at the top 1% and top 0.1% (top decile) income. The more normally-used divisions (top 10% and top 20%) obscure the most interesting data.

Here is a large set of data showing income distribution in the USA since 1900. If you look at the top 0.01% (for example) you will see that the current distribution is approaching levels not seen since 1928. http://www.nber.org/data-appendix/w8467/w8467-app.pdf

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Reality sucks. Especially when it contradicts our cherished ideas.

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Tuesday, August 8, 2006 9:00 AM

I believe in solving problems, not sharing them.

And here is a whole site dedicated to exploring income inequality. I found this article especially interesting. What I gather from this article is that the overall history of the United States from its agragrian roots was that of relative income EQUALITY up until 1916.

Quote:
Last year Kopczuk and Saez published estimates of top wealth shares in the U.S. from 1916 to 2000, making inferences from estate tax data. They found that levels of inequality were highest from 1916 to about 1930, that they fell during the depression and the Second World War, and that they'd remained fairly stable at the lower level since the end of the World War.

The most plausible explanations for the facts are perhaps the development of progressive income and estate taxation which has dramatically impaired the ability of large wealth holders to maintain their fortunes, and the democratization of stock ownership which now spreads stock market gains and losses much more widely than in the past.

(Wojciech Kopczuk and Emmanuel Saez, "Top Wealth Shares in the United States, 1916-2000: Evidence from Estate Tax Returns" NBER Working Paper 10399, March 2004).

Now Rosenbloom and Stutes have pushed back a little further - to 1870 - using data on property ownership from the 1870 Census. They find evidence that overall wealth inequality in 1870 was similar to, and maybe somewhat higher than, the post-World War II distribution. Rosenbloom and Stutes conclude:

Compared to estimates for the early twentieth century, the distribution of wealth at the national level... was relatively equal. In 1870 the top 1 percent of wealth holders owned 27.9 percent of all property, about one-third less than was the case in 1916. Thus, wealth inequality increased substantially during the period of rapid American industrialization in the late nineteenth and early twentieth centuries....For the most part more rural and agricultural states enjoyed a higher level of equality.The exception to this rule was, of course, the South, which remained in 1870 highly rural and agricultural {but also had a } ...legacy of slavery, which ... inequality managed to survive after the Civil War

http://benmuse.typepad.com/ben_muse/income_wealth_distribution/index.h
tml

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Reality sucks. Especially when it contradicts our cherished ideas.

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Tuesday, August 8, 2006 12:09 PM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
Quote:
...please explain where you got the "0.1% control 90% of the wealth" figure. A link to the source would be OK.
It was hypothetical. I picked the numbers to force people to consider what happens at the end-state of capital concentration.

So you lied. Okay.

"Keep the Shiny side up"

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Tuesday, August 8, 2006 12:27 PM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
And here is a whole site dedicated to exploring income inequality. I found this article especially interesting. What I gather from this article is that the overall history of the United States from its agragrian roots was that of relative wealth EQUALITY up until 1916. http://benmuse.typepad.com/ben_muse/income_wealth_distribution/index.h
tml

Hmm. I got a whole 'nother take from it. Looking at the charts in the 'Trends in Wealth Distribution' and 'Being Rich Isn't What It Once Was' articles, I see that the top 1% held 28% of the wealth in 1869, there was an increase to almost 40% during the 1920s, and a decline to slightly above 20% where we are now.

"Keep the Shiny side up"

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Tuesday, August 8, 2006 12:34 PM

I believe in solving problems, not sharing them.

Quote:
It was hypothetical. I picked the numbers to force people to consider what happens at the end-state of capital concentration- Signy

So you lied. Okay.-Geezer

No, I very clearly said "What happens when..." without ever implying that any economy achieved that state. I also said in several following posts that it was HYPOTHETICAL. I'm beginning to wonder if you know what "hypothetical" means. It's a thought experiment. And sometimes the best way to figure out what happens next is to think about a process at the extreme. That's what I did.
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Economics is never simple. It's always mixed with politics.

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Tuesday, August 8, 2006 12:41 PM

I believe in solving problems, not sharing them.

Quote:
Hmm. I got a whole 'nother take from it. Looking at the charts in the 'Trends in Wealth Distribution' and 'Being Rich Isn't What It Once Was' articles, I see that the top 1% held 28% of the wealth in 1869, there was an increase to almost 40% during the 1920s, and a decline to slightly above 20% where we are now.

The chart you're referring to is "wealth", not "income", and it seems like it should be referring to the same thing but it isn't. It's part of a larger discussion about the shift at the top from assest ownership to "income". That is reflected by a shift to multi-hundred-million-dollar salaries and bonuses.

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Reality sucks. Especially when it contradicts our cherished ideas.

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Tuesday, August 8, 2006 1:34 PM

I have a vote and I'm not afraid to use it!

Slick,

You seem to think the estate tax is going to cut into 'everyman's' inheritance. There are many mechanisms for wealth-transfer (including trust funds), inheritance is only one of them.

When it comes to estate tax, looking through your table, estates worth 1 - 2.5M (within range of the well-to-do middle class) had total assets of ~70M and total deductions of ~87M. I can see they are HARD hit by the estate tax.

So, assuming that hardworking people who've managed to accummulate an ~2.5M estate will owe no tax:

WHAT WERE YOUR OBJECTIONS AGAIN?

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Tuesday, August 8, 2006 1:44 PM

I have a vote and I'm not afraid to use it!

Slick,

http://www.chicagofed.org/publications/workingpapers/wp2005_10.pdf

This reference shows that 1% of the US holds 1/3 of US wealth AS OF 2001. Since then, wealth disparity has grown.

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Tuesday, August 8, 2006 1:55 PM

Keep the Shiny side up

Quote:
Originally posted by SignyM:
No, I very clearly said "What happens when..." without ever implying that any economy achieved that state.

"What happens when the top 0.1% control 90% of the money? Who do they sell to? The abysmally poor? By eliminating most people from consumption, you have just caused the economy to grind to a halt. that's what happened in the many depressions before the Great Depression, and in the Great Depression itself.

You used the ".1% controls 90%" as an example of what causes depressions. You obviously had the correct figures, based on the links you provided, and could have used them. Instead, you made something up and represented it as the case which caused depressions in the past.

Call it a lie, call it spin, call it propaganda; You knowingly provided invalid information to support your argument. Now that I'm aware that you do this, I'll just have to be more thorough in checking your claims.

"Keep the Shiny side up"

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Tuesday, August 8, 2006 1:59 PM

Keep the Shiny side up

Quote:
Originally posted by rue:
http://www.chicagofed.org/publications/workingpapers/wp2005_10.pdf

This reference shows that 1% of the US holds 1/3 of US wealth AS OF 2001. Since then, wealth disparity has grown.

Hmm. It disagrees a bit with some of the sources whaich SignyM provided. Perhaps different models provide different results. So we have a range between 22% and 33%. Rich people have more money. I know this. What's your point?

"Keep the Shiny side up"

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Tuesday, August 8, 2006 2:15 PM

I believe in solving problems, not sharing them.

Quote:
What happens when the top 0.1% control 90% of the money? Who do they sell to? The abysmally poor? By eliminating most people from consumption, you have just caused the economy to grind to a halt. that's what happened in the many depressions before the Great Depression, and in the Great Depression itself

Oh- I see. That was badly written on my part. The first part of the para was meant as a thought experiment on what happens when money is concentrated... basically reduction of purchasing power. The second part of the para is an application of that concept to the cause of depressions. I wasn't trying to tie the two parts together in a quantitative way... what I should have said was What happens when the top 0.1% control 90% of the money? Who do they sell to? The abysmally poor? By eliminating most people from consumption, you have just caused the economy to grind to a halt. Without reaching those extremes of inequality that's what happened in the many depressions before the Great Depression, and in the Great Depression itself. I didn't put that separator in. Wasn't my intention to mislead.

But the interesting thing is my misphrasing sort of shot my case in the foot and your correction bolstered my point by making it obvious that depressions are triggered even under more "normal" circumstances. So, thanks for catching that poor wording.

Quote:
Hmm. It disagrees a bit with some of the sources whaich SignyM provided. Perhaps different models provide different results. So we have a range between 22% and 33%. Rich people have more money. I know this. What's your point?

I think it goes back to MY point that monetary (wealth or income... it's been variously argued) inequality stagnates the economy.

And that's why I keep going back to what the different portions of that bill are "worth" and what their probable effect might be. Because it does no good (economically-speaking) equalizing the economy on the one hand if on the other you make it even more disparate. Back of the envelope calcuations seem to indicate that about $390 billion will go to wealthier people and create an equivalent deficit because it comes out of Federal moneys. This does several things:

It sequesters about $270 billion (if I recall correctly) with the wealthy, who generally do not add as much to aggregate demand.

It creates a deficit, which has the effect of raising interest rates, which makes money less vailable to the people who need to borrow to purchase homes, cars etc. (And if you think rising interest rates can't shake an economy, just keep an eye out over the next couple of years.)

It may cause various welfare programs (transfers of money to the less wealthy) to be cut.

OTOH, let's look at the opposite side of the bill- the increase in minimum wage. My best estimate is that is will increase aggregate purchasing power by about $100 billion over ten years.

That will increase Federal income by some amount... but not enough to offset the estate tax loss.

It will also reduce the demand for money and reduce interest rate pressure- but again, not as much as the projected deficit.

So in the end I'm not sure that the increasing the minimum wage is "worth" losing the estate tax, economically speaking.

---------------------------------
Reality sucks. Especially when it contradicts our cherished ideas.

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Tuesday, August 8, 2006 3:10 PM

I have a vote and I'm not afraid to use it!

Slick,

Quote:
Rue
This reference shows that 1% of the US holds 1/3 of US wealth AS OF 2001.
Slick
Rich people have more money. I know this. What's your point?

It seemed to be an issue for you as you brought it up here with (nearly) the same figures:

Quote:
Slick
And don't forget that the folks who earn more money pay more taxes. The top 1% of taxpayers (taxable income over about $300,000.00) already pay 34% of all income taxes ($256 billion in 2003).
http://www.taxfoundation.org/news/show/250.html

But in general, my points are that the rich don't need the tax break.
It's not just a 'little' federal income lost.
And it's not an even trade like you keep saying.

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Wednesday, August 9, 2006 9:41 AM