Featured Quote

In 1913, Henry Ford wrote the following as the directors had been reaping the rewards of profits - "The wages we pay are too small in comparison with our profits. I think we should raise our minimum pay rate".

Friday, December 10, 2010

Filibuster! Against the Tax Deal

Sen. Bernard Sanders, I-VT - who started at 10:25am - is joined by Sen. Mary Landrieu, D-LA in a Filibuster of the Tax Deal.  Listening to them for a while - they are absolutely right to do it!  Some people in the Congress realize what is going on in this nation and the root causes of it.  Politifact says at least one of his points is True.

If at all possible, I will find a transcript? Yes, a Transcript! and post it here. (or you can now watch it all! or listen)

Some points - and I must paraphrase.

Thirty years ago, the average family with one income earner had more disposable income than the average family with two incomes does today.

During the Bush years, the 400 something top income earners saw their income double, even as their tax rate was cut in half - effectively sitting at 16% now.   At the same time, the average worker's income effectively dropped.  Middle class Men, lost 11% of their income, women lost 4%.

During Bush years, 8 million citizens slipped from the middle class to below the poverty line.

We don't need tax cuts for billionaires! We need to create jobs for the middle class and rebuild this economy.

During the 8 years of Bush, we lost 600,000 private sector jobs.  There was a Net Gain of 1 million jobs - all in the government sector.

In Education - out of 30 countries, the United States ranked 25th in math and 21st in science.

170,000 students who graduate high school and want to go to college, can not afford it.  We are not investing in our future, but we want to give tax breaks to the already rich.

75% of the youth who apply for the armed services do not qualify because of low mental capacity, prior criminal activity or obesity. 

We couldn't get one Republican vote to give a $250.00 check to people making $14,000 a year on social security or disability - but they want us to give thousands of dollars in tax breaks to people who are already rich and don't need them.

Capital Gains tax would continue at 15% - so people who make their living off their investments would pay less taxes than Firemen, Teachers and Policemen.

Some links to Estate tax issue that the Senator raised :

No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar's worth of service rendered – not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective – a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.  – Theodore Roosevelt, speech at Osawatomie, Kansas, "The New Nationalism" (August 31, 1910)

The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise. We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows. – Theodore Roosevelt, speech at Osawatomie, Kansas, "The New Nationalism" (August 31, 1910)

An oft-cited book he talked about was "Third World America" by Arianna Huffington.

Corporate America is already sitting on 2 Trillion dollars of cash on hand - I don't think that further tax breaks are going to make them create jobs.

An article demonstrating how this "Deal" was pretty one-sided and hurts low-income people while loading up the already rich. And an article covering the "Long Speech."

The Republicans are showing who they fight for - the top 2% and even more for the top .3% - the top one third of one percent!!

Links of Interest:
an article on the highlights - http://www.commondreams.org/view/2010/12/14-6

And for a foot note, a bumper sticker : "Sarah Palin 2012 - the world is going to end then anyway!"

Thursday, December 9, 2010

Who owes What in Taxes

100% of the population of the United States owes a share of the cost of running the government that benefits them.

Assuming a national population of 310,877,994, with 110,425,577 taxpayers and just above $13.8 trillion in debt, each taxpayer owes $125,255. Yes, we have 200,452,417 (64%) people who either do not work or make so little that they don't qualify to pay any taxes.  This includes children, stay-at-home parents and 15,206,013 officially unemployed (4.8% of total population, not workforce) - a total of 26,186,689 really unemployed (23% of total population who may want to work, but can't find a job they qualify for).

If we stopped spending right now and every taxpayer paid their $125,255.00, we would be out of debt.  However, only 17% make even close to that per year. Only 18,772,348 out of 110,425,577 make over $118,200 per year.  18 1/2  out of 110.  Only the top 5% of income takers (5,521,279) could possibly pay that bill and have some leftover. 5 1/2 out of 110.

Census says we have 242,168,000 citizens that have an income.   Around 72,833 make less than $9,350.00 so don't have to file or pay taxes (that number actually makes less than $10k, so the few who make between $9,350 and $10k do have to file, but most likely don't pay taxes after exemptions - base of $6,200.00).

My question is, who owes what?  Is it fair to say every citizen owes equally despite how much they benefit (or don't) from living in the US?  Is it more fair to say every taxpayer owes according to how much they benefit personally from our economy?  Well, fair or not, you are not going to get blood from a turnip, as the saying goes.  Those who barely make ends meet are not going to be able to come up with 'their share' of the bill - or much of anything.  So, then, how to most ethically share the tax burden?

The progressive tax tables seem good - but there are so many ways that the wealthy can wiggle out of their share.  Nothing will be "fair" until the loopholes are closed - which will also allow full funding of the government.  Spending needs to be greatly reduced, it is true (look for a upcoming post on that topic!).

I may add more to this, but don't know... lol!

Sources :
http://www.census.gov/hhes/www/cpstables/032010/perinc/new11_000.htm ( I combined totals for M & F using Excel )

The Economy and related schools of thought

I couldn't comment on the CNN blog post, but I found some comments to be interesting :

"How do they feel about their fellow GOPers willing to back the wealthy giving them tax cuts that raise the deficit? "
They are ardently mindless adherents to the economic ideology that posits the following:
"If you give the extremely wealthy even more money, then at some point their cups runneth over and rain wealth down upon the masses. They have no desire to horde and consolidate and amass more and more wealth beyond a certain [point]. We haven't reached that point yet. Ergo, we need to keep giving them more and more of the country's wealth and assets until we do."
Yeah. My guess is they fervently believe that the tax cuts for the wealthiest 2% will magically result in jobs and fix the economy, not to mention the deficit. After all, the extended version of the above insanity is that once you give the rich their the tax cuts that magically jobs, then more people are earning money and the government's tax revenue increases without having to raise taxes. It's like talking to people who believe in cartoon physics.
I corrected a hyper-typing spelling error in [italics].  The point is right on.  It does indeed seem as though the GOP and all those who blindly follow their economic thinking do believe that giving more money to the already rich will make jobs appear.  "Cartoon Economics" - I like the label for it!!
Cartoon Economics - the theory that wealthy people choose to hand out their money to people for no reason.
Orlando Patriot
How can you Democrats just not understand how an economy works? Have you EVER taken a simple college level Economics course? I guess not..... Let's simply state it in basic terms – if the cost of doing business goes up then the number of employees this business will hire goes down (refer to Marginal Revenue Product in your college Microeconomics book) and if the cost of doing business goes down then this same business will hire MORE workers. Secondly, if money is taken from the "wealthy" that will decrease Consumption (remember: GDP = C+I+G+NX) and Consumption is 70% of GDP. How will this occur? Because the Aggregate Demand curve will shift left (refer to your college level Macroeconomics textbook).
In other words: Anybody who thinks RAISING taxes on ANYBODY during the worst economic downturn since the early 70's [is a good idea] is simply a moron. You need to wake up and THINK about what you are saying. I don't know about you but I have NEVER been hired by a poor person!! I am NOT wealthy and this idea of "taxing the rich" would not directly affect me but quickly it will indirectly [affect] me when unemployment RISES because of the added cost of business. And what does that cause? Democrats wanting to extend unemployment insurance so a person does not HAVE to work for almost 3 years?!?! Remember: Economics is not the study of what people SHOULD do but rather what the[y] ACTUALLY do!! Raising taxes on ANYBODY in an economic downturn is the most stupid thing to do and EVERY Economics textbook will tell you the same thing!! (Refer to AS/AD chapter in Macroeconomics and/or Labor in any Microeconomic textbook). 
I added the [bold] to help Orlando be a bit more comprehensible.  Still, its seems that he has a "Cartoon Economics" tainted perception of MRPL (also see this - which shows real wages declined from 1976 to 1996).  Job loss will only occur if the profit from having the productivity of that worker drops below (or too close to) the cost of having that worker.  Also, his analysis of Aggregate Demand is flawed as well. He is assuming that a fractional drop in income will cause 2% of the population to suddenly stop purchasing products - and that would tank the GDP.

I fail to see how Orlando and others can believe that 2% of the population can cause a serious drop in consumption.  Raising taxes slightly on that 2% may cause a drop in their savings, but it will not likely touch their spending habits.  A more likely scenario that would affect GDP is 98% of the population having decreased purchasing power, therefore spending less.  That scenario is playing out right now.

"I have never been hired by a poor person" - he says.  I've been hired by plenty of people who fall below the $250,000 per year taxable income level and many more that fall well below the $1 million mark.  I have even been hired by people living below the poverty level.  Why?  There was a demand for my services.  Demand is the only thing that can create a job.  If there is not a need to be filled, there will be no job created. If there is a need, the "cost of doing business" becomes entirely irrelevant and that need will be met.

Just a side note here.  I know that an income "Tax Cut" is allowing people to keep more of what they earn, so it not technically 'giving' them money.  However, given that all citizens have a civic responsibility to share in the funding of our government, allowing someone to evade a bigger share of that responsibility is in effect giving back that portion of their tax duty to them.

Giving money back to people who put it directly into savings - which is what "the rich" do and it is partly responsible for their remaining 'the rich' - will never, ever, create a single job.  Jobs are created when the 98% of people have something they want and are willing to give their money to someone else to provide that thing for them.  The more people willing to spend money - and who have the money to spend - the more jobs are created to meet the demand.  The wealth level of the person supplying the production is totally irrelevant.

When working Citizens see smaller paychecks, that is when jobs are lost due to dropping demand.  "The Wealthy" have money and have not been hurt much by this recession.  They recovered more quickly, businesses have cash on hand - but, contrary to Orlando and his cohorts in wealth worship, no jobs are being created.  Bigger paychecks and bonuses to CEOs equal job losses.... or job cuts equal bigger paychecks and bonuses to CEOs.  Bigger paychecks to more workers equals more buying power, which equals more demand, which equals more jobs created.

2% having more buying power equals 2% more demand - which won't create anything.  98% having more buying power - now that will create some demand!

Wednesday, December 8, 2010

Loosing Hope

Hope! Change! Transparency! Yes, we Can! and Yes, We did!!  That is what I voted for - as much as I voted against "My Friends" McCain and Scary Sarah.

The latest "deal" - more accurately yet another cave in - has erased all I had left for Obama.  I'm all out of, "he's got a strategy..." and any other excuses.  I mean, really, if he is not willing to fight for us, then what use is he?  Yeah, he has accomplished some pretty good things - health care reform, pulling the economy out of a nose dive and into recovery.  But he is not fighting to maintain those accomplishments.  He is not fighting the lies from the Right - he is caving in to everything.

The Republicans are fighting to get all the breaks, benefits and bonuses for the top .10% (tenth of a percent) of our Citizens - while kicking 98% of us in the teeth - and they are winning.  Who has the guts and fortitude to stand up for the 98% of the Citizens??

Maybe I am just not hearing it or reading it.  The Republicans say that the rich create jobs - a lie.  They say the tax rates going back up will hurt small businesses - a lie.  They say they want to cut the deficit - obviously a lie.  So far, we, as a nation, are still coddling the rich and kicking the middle class in the stomach.

Don't get me wrong - personally I am happy that I would be getting a bit more back on my tax return this year and that I would be getting a bit more in my paycheck thanks to the drop in social security tax rate packaged in the deal.  But I'd prefer to not get any of that, to have my tax rate go back up to Clinton-era tax rates, than to have this treachery of a deal.

I suppose that I will have to console myself with the idea that this deal will make the heads of all Tea Party people explode in anger - $1 trillion dollars of un-paid for tax cuts hyper-inflating the deficit....  wait, no... all they care about is paying less taxes and to heck with the deficit.  Oh, well...

Somewhere, somehow, I am still clinging to hope.  Maybe he has a big gun coming up!  Maybe, just maybe, my expectations were too high. Maybe this deal was the best we could get.  Maybe he is playing to win and we just can't see his cards.  But it sure would have made me feel better if there was at least some show of a political fight for what would have been best for the country as a whole.  Still...  he is probably doing what is really best and possible.  He is the kind of President that we need - now we just need the kind of Congress that compliments him.

Tuesday, December 7, 2010

The Rich get Richer....

We have a lot of this phrase going around - "The Rich get richer and... " with lots of different endings.

the Poor Poorer ; the Young Go Into Deep Debt ; you know the rest ; the rest get less ; As The Income Inequality Gap Explodes and a bonus article of How the rich get richer.

For each dollar earned by the average worker, the average CEO earns $475...  nobody 'earns' that.  Its a give-away, handouts by the rich to the already rich.

We have to get back to a more sustainable economic system.  Its not an matter of 'envy' on my part that others who supposedly worked harder than me (false!) have gotten ahead.  It is a matter of clearly unsustainable practices that are leading - once again - to a total economic collapse.  The "free market" has failed - only because the corrupt have taken control of it.

The complete and utter idiots that claim this as 'sour grapes' and 'entitlement thinking' are either part of the elite power schemes or mentally enslaved by them.  If anything, the obscene amounts of income handed out to managers and CEOs are the result of 'entitlement' thinking.  Its the whip-cracker taking credit for the work of the slaves.  I am entitled to the fruits of my labor and it is a travesty of justice for anyone else to feel entitled to a larger share of my productivity than I am.  I am going to make that line of thinking another post entirely... stay tuned.

Again I will pitch the need for an Ethical Economic structure.  We need to pay a fair wage for a fair amount of work.  I begrudge no one a reasonable profit for their ideas, their work and efforts or their investment.  When one is reaping an outrageous profit, then they must seriously look at the ethical points of their business structure.  Our problem stems from the fact that people in positions of power in business are rarely ethical.  Even more, people in positions of political power are also rarely ethical.

Monday, December 6, 2010

Kick out the Millionaires

Millionaires count as 5% of the population of the United States.  They make up about 50% of the members of congress.  The disparity becomes even sharper if you count only real people as citizen millionaires - it goes down to 1%.  Why does congress want tax cuts for the rich so bad?  Because they are the rich.  Nobody is really fighting for letting the top $250,000 + rates go back up.

Just want to point out that its not a rich vs. middle tax idea here.  The income tax is based on tiers of income.  So, the 'tax cuts' apply by income tier.  It also changes according to filing status... so...
To let the cuts expire for those making over $200,000 per year, would really create a new entry on the table there. $171,850 to $200,000 and then $200,001 to $373,650.  Effectively, everyone still benefits from the same low rates on income under $200,000.  For example, you make $260,000 per year.  All income up to $200,000 remains taxed the same - 10% of the first $8,375 ; 15% of the amount between $8,375 and $34,000 ($25,625) and so on till you get up to $200,000.  I do wonder if they would keep the table at $171,850 to $200,000 - a mere $28,150 taxed at 33% and then from $200,000 to $373,650 taxed at the old 36% rate up to $373,650 or would they raise the lower 28% limit up from $171,850 to $200,000...
Either way, the rich still keep most of the tax cuts - just not the rates on the highest income levels.
The President wants it to look like (first % is current, second is proposed) :
So there would be an additional tax cut in there between $172,800 and $192,000!

Back to Congress! The 2010 salary for the rank and file congress was $174,000 per year.  The median income for the average Citizen Household was $52,029 (2008).  Why do we pay our "representatives" over triple (3.345x) what our national median income is?  They should make only what the median - the average - citizen makes.

I propose an Initiative - in the states that support it - to only allow congressional representatives to draw salary equal to the median income of the citizens.  I'd like to see this for States and for the National "representatives" as well.  The question is, with the corruption prevalent in government, how can we manage that?