Muddling For Solutions

[26 Inf]

The people that are upset about the haves and have nots are mad because the group of people that benefited the most from unions and social programs are the same people that say no one else can have the same things.

Folks rarely see themselves in that context.

For instance, I generally don't comment too much about pensions, because I'm drawing .mil retirement which I sure as shit didn't pay anything into.

[Evel Baldgui]

There are several differences between then and now. First, they didn’t measure success and financial well being by whether they had a new car in the garage Of their McMansion. They didn’t even have a garage. They had a crappy little clapboard house that was the equivalent of today’s two bedroom apartment. They didn’t have a 65” tv with 120 channels. They had a radio and they were lucky of they received more than one channel. They didn’t have a cell phone and internet. If they had a phone at all it was a party line.

Success for them was a roof over their heads, food in their bellies, heat in the winter and warm clothes. Luxury was a swamp cooler for the unbearable summer days and new shoes for the school year.

Today what we have is an ENTIRE industry devoted to selling misery. It tells you that you’re unhappy if you don’t have a half dozen schwoopy shoes in the closet. It tells you that a $5 coffee from a luxury shoppe every morning is a necessity. It tells you that unless you have 300 channels with nothing on and a personal assistant disc on the coffee table to cater to your every whim, you’re missing out on life. Same same for the robotic vacuum your cat can ride while you schedule it’s rounds from your $1,000 cell phone while you’re on the toilet. You no longer have to save half a year to order something nice out of the Sears catalog that will arrive in 4-6 weeks. You press a few buttons and presto, your trinkets will arrive by delivery drone in a couple of hours (not available in all areas, yet).

How we measure success these days is quite frankly, indulgent. If you turn off all the noise and programming, you can get back to happy if you have a roof over your head, food in your belly and clothes on your back. People just need to reprogram what they require to acquire happiness.

There is a tremendous difference between living and living well. Food in the belly can be McDonald's or Filet mignon, clothes can be Walmart brand X or Hugo Boss, roof over your head...clapboard house in ____ with 94 Corolla versus luxury waterfront condo with an S class Mercedes. Happiness is 'relative'. Some may be quite content with a timex, for others it's an Audemars Piguet. Jus' sayin'.

[26 Inf]

Fun facts:

In the U.S., executive compensation has increased, on average, by nine hundred and forty per cent since 1978, according to one estimate; during the same period, worker pay has risen twelve per cent. Income inequality hasn’t been this extreme since the nineteen-twenties.

A recent study by the economists Emmanuel Saez and Gabriel Zucman found that, as a result of cuts to estate and corporate taxes, as well as the 2017 G.O.P. tax bill, the four hundred richest Americans pay a lower over-all tax rate than any other group in the country.

[6933]

the four hundred richest Americans pay a lower over-all tax rate than any other group in the country.

The wealthy don't make most of their yearly income from a salary. It is from Capital Gains; which are taxed at a lower rate than salary. Anyone can enjoy this benefit.

[jsbhike]

Fun facts:

In the U.S., executive compensation has increased, on average, by nine hundred and forty per cent since 1978, according to one estimate; during the same period, worker pay has risen twelve per cent. Income inequality hasn’t been this extreme since the nineteen-twenties.

A recent study by the economists Emmanuel Saez and Gabriel Zucman found that, as a result of cuts to estate and corporate taxes, as well as the 2017 G.O.P. tax bill, the four hundred richest Americans pay a lower over-all tax rate than any other group in the country.

Lest anyone think that is always for a job well done (at least in the classic sense), a couple of years before the 2008 meltdown it was reported the best paid 27 or so Japanese auto executives (their cars were selling well) had a combined salary equal to the top 8 or 9 US auto executives (their cars weren't selling well.) And of course post 2008, companies that couldn't make ends meet were using tax dollars to pay bonuses to the elites in their companies.

[THCDDM4]

Fun facts:

In the U.S., executive compensation has increased, on average, by nine hundred and forty per cent since 1978, according to one estimate; during the same period, worker pay has risen twelve per cent. Income inequality hasn’t been this extreme since the nineteen-twenties.

A recent study by the economists Emmanuel Saez and Gabriel Zucman found that, as a result of cuts to estate and corporate taxes, as well as the 2017 G.O.P. tax bill, the four hundred richest Americans pay a lower over-all tax rate than any other group in the country.

A few questions:

1) Why? What is driving this?

Is it really a case of evil execs just stealing all the wealth and buying tax laws in their favor, or is it the result and reality of exporting all those jobs overseas and managing them here with domestic executives?

There are more variables than just _% growth for them vs _% growth for them.

I’m truly curious as to what you feel is the root cause.

2) what do you want to do about it?

Would you prefer to just create legislation that narrows the gap artificially?
What is the solution for what you believe the root cause to be?

3) “Tax rate”. Well- 1% of $1Billion is a much, much larger SUM than 75% of $100K.

It’s a bit misleading and disengenuous to play the rate game and not discuss the actual sums of money being paid for proper context.

So what “rate” do you think is right, for whom and why?


I believe I’m seeing this all from a. Different angle and focusing on different details than you are.

Executives here in the US are managing a work force that has been sold off to other countries. Workers here are kept as needed to keep the machine functioning.

I see the root of the problem as trade deals that suck for us and suck us dry.

Licensing and regulation that is so stringent and ridiculous that anyone who wants to run a business in The USA pays more to the .gov, in many ways- not just taxes that it becomes less expensive to set up shop in China, manufacture an item and ship it half way across the planet than it does to do it in a factory down the street from your home... it’s insane!

Add in technology replacing the work force, still need administrative and executive level decision makers, but not so much need for workers.

Add in chronie capitalism bullshit. “Too big to fail”. Etc.

And perhaps the biggest elephant in the room... illegal immigrants who will do it shittier and for less and get a bunch of salmonella in it...

The problems I see are seemingly much different than what you see?

I call it- “focusing on all the wrong details”.

Or is it really just evil white rich dudes screwing over the poor workers?

[26 Inf]

A few questions:

1) Why? What is driving this?

Is it really a case of evil execs just stealing all the wealth and buying tax laws in their favor, or is it the result and reality of exporting all those jobs overseas and managing them here with domestic executives?

There are more variables than just _% growth for them vs _% growth for them.

I’m truly curious as to what you feel is the root cause.

I truly believe it is the way our system has evolved to give those lucky enough to have jobs that 1) have benefits and/or 2) made enough to put invest some on their own, the opportunity to own shares of stock in a wide variety of companies, thus reducing risk - in simplest terms - funds.

All those shares of stocks get voted, almost all of them by proxy, this gives the folks heading those funds a tremendous amount of power in that respect. As a result corporations are ran to deliver shareholder dividends in the present, rather than in the future. One of the easiest ways to ensure profitability, and thus dividends, is to manage labor costs.

So that, IMO, damaged the relationship between employer and employee, employees are thought of resources/costs to be controlled for maximum profit. When you combine that with the fact that the big corporate CEO's salary is set by a board that, while stockholders, view the CEO's salary in the context of all expenses, and are perfectly willing to use what amounts to OPM to fund lavish salaries.

I just read an article that referred to the salary of Walt Disney's CEO, at the time referenced, his salary was $66,000,000. Consider that this guy neither started or owns Disney. He has worked for them since 1996, been CEO since September 2005. Do you think he brings $66 million worth of new ideas to Disney each year? What is the actual contribution he makes? Sure he has contacts, but in reality much of a CEO's job is simply giving approval to implement ideas that other people have developed. Even 'steering' the company is, in many cases, not seat of the pants, but rather a calculated decision in which many people have participated.

Another example, when you look at not-for-profit hospitals, you often find obscenely high executive compensation, largely because since these organizations are not-for-profit, all they have to spend money on are new buildings and compensation.

2) what do you want to do about it?

Would you prefer to just create legislation that narrows the gap artificially?

What is the solution for what you believe the root cause to be?

To answer these questions:

I don't really know what the best response would be. I am a believer in Keynes theory of a gentle regulatory hand on the economy, but I think capping executive compensation is a bridge too far.

Likewise methods to address the inequality by increasing minimum wages too much, will be met by an increase in cost in order to maintain shareholder dividends and executive compensation.

Furthermore, while I don't believe in supply side economics for even a moment, increasing taxes on the wealthy to pass the monies into social programs is not the answer, either.

Maybe the best we can hope for is an increased sense of altruism among the ranks of the super compensated.

3) “Tax rate”. Well- 1% of $1Billion is a much, much larger SUM than 75% of $100K.

It’s a bit misleading and disengenuous to play the rate game and not discuss the actual sums of money being paid for proper context.

So what “rate” do you think is right, for whom and why?

While 1% of one billion dollars (10,000,000) is indeed a greater amount than 75% of one hundred thousand dollars (75,000), lets look at it another way: if I tax one billion at 75%, the taxpayer still has $250,000,000 to play with, compared to the $25,000 dollars of the other guy. Pretty sure I could live on the former amount, not the latter. It is all somewhat relative.

If I'm pressed, even though I'm not fond of our current progressive tax rate, I can come up with a credible defense of it: corporations, and those who make higher annual salaries make more use of what the tax dollars pay for (infrastructure, defense, regulatory agencies, etc.) than those who make lesser amounts.

My first preference would be for a federal sales tax. The thought being that with excise and other taxes removed from the cost of producing goods, prices would drop. Additionally, the federal sales tax would target all money spent, even unreported criminal earnings. The reality is, though, that prices are elastic up and sticky down, so the cost of goods would not drop the full amount of the tax reduction.

In view of that, I feel a flat tax is the best option. Unlike most proponents of the flat tax I would tax dividends, capital gains and other distributions. I would also think a certain amount of income, say $25,000, should be tax free.

I believe I’m seeing this all from a. Different angle and focusing on different details than you are.

Executives here in the US are managing a work force that has been sold off to other countries. Workers here are kept as needed to keep the machine functioning.

Assuming you are correct, why does that work to justify the exorbitant income disparity? Going further, I believe if you check, while many jobs did go overseas, even more have been lost due to automation and other advances in technology.

I see the root of the problem as trade deals that suck for us and suck us dry.

Licensing and regulation that is so stringent and ridiculous that anyone who wants to run a business in The USA pays more to the .gov, in many ways- not just taxes that it becomes less expensive to set up shop in China, manufacture an item and ship it half way across the planet than it does to do it in a factory down the street from your home... it’s insane!

Don't really know what to believe on that aspect. I do know that most of the farmers I talk with are of the opinion that the Trump Administration's back and forth with China has hurt them.

Add in technology replacing the work force, still need administrative and executive level decision makers, but not so much need for workers.

Add in chronie capitalism bullshit. “Too big to fail”. Etc.

And perhaps the biggest elephant in the room... illegal immigrants who will do it shittier and for less and get a bunch of salmonella in it...

Addressing your first point, if automation has displaced workers, as I already mentioned, why aren't the salaries of the remaining workers increased out of the savings?

I agreed with the bailouts, what I didn't agree with was allowing the folks who caused it to escape virtually scot-free.

As far as the illegals, they are here largely because corporate America wants them. And in terms of doing it shittier, I'm not sure of that any longer. Around here Hispanics make up the brunt of construction jobs, whether it be concrete, framing, dry-walling, masonry, or erection. I have a friend (maybe had a friend, he has early onset dementia, I believe from boxing, and is in a home) who owned a pipeline construction company. He employed around 200 folks, most of them Hispanic, because, as he put it, 'a lot of white boys don't want to work that hard.'

And, yes, it is also true that illegals are taking jobs Americans want: https://issuesinsights.com/2019/12/3...rican-workers/

The problems I see are seemingly much different than what you see?

Or is it really just evil white rich dudes screwing over the poor workers?

I really don't think we are seeing different things, maybe different solutions.

And I think the rich dudes, for the most part, are not saying to themselves 'eff 'em' they just have no real idea.

JMO

[AKDoug]

In view of that, I feel a flat tax is the best option. Unlike most proponents of the flat tax I would tax dividends, capital gains and other distributions. I would also think a certain amount of income, say $25,000, should be tax free.

We were discussing this today when we were doing year end office work at our business. One of my lower level employees asked a pretty good question. "What happens to all those employed in the tax business?" I quickly Googled up that there are about 1.3 million people involved in that service industry. I also support the idea of a flat tax, but this question has me thinking of a solution that I can't wrap my head around. The only thing I know is that if the flat tax idea didn't put more money back in the hands of the job makers, there is no way to re-train that workforce into something else.

[26 Inf]

We were discussing this today when we were doing year end office work at our business. One of my lower level employees asked a pretty good question. "What happens to all those employed in the tax business?" I quickly Googled up that there are about 1.3 million people involved in that service industry. I also support the idea of a flat tax, but this question has me thinking of a solution that I can't wrap my head around. The only thing I know is that if the flat tax idea didn't put more money back in the hands of the job makers, there is no way to re-train that workforce into something else.

I think a lot of those folks are seasonal and part-time workers, plus there will still be a need for CPA's and accounting firms.

If you look at it, computers replaced a lot of book keepers, digital medical records replaced a lot of medical records folks (I know a couple of folks who were displaced) and cellular phones have all but eliminated telephone operators.

I agree, creating jobs to keep workers employed is important. As we automate further it is going to be increasingly difficult.

[26 Inf]

The only thing I know is that if the flat tax idea didn't put more money back in the hands of the job makers, there is no way to re-train that workforce into something else.

An additional observation: I think the idea that higher taxation stifles creativity and the drive to grow companies is overblown. Yes, at some tax rate capital will not be available to expand, but history indicates that through out America's golden age of economic growth, tax rates on the wealthiest American's were much higher.