“Wait a minute!” I can hear you saying. “Cutting taxes on rich people makes them richer, but cutting taxes on working class people cuts their pay? WTF?!?”
Data from the genie co-efficient supports your conclusion that higher taxes result in a greater sharing of wealth of a nation. Under FDR and after wealth inequality continuously decreased then reversed to increase under Regan as the graft by Thomas Piketty shows.
Although Ricardo was a vastly limited thinker compared to the intellectually fertile Marx, it is true he did presage one important point in Marx's work. That point is this. The employee/worker does not control his own income, the employer does. At the same time, however, the employer controls his own income. No one else does.
Liberal thinkers point out that it is therefore up to government and unions to even out this disparity. I agree with them.
Tax cuts for the rich became such a campaign slogan since Reagan that I imagined a time would come that those of us in the not wealthy class would simply hand over our money directly to the morbidly rich. Maybe you could say we already are, I’m not an economist. The other way I see it is that there is a finite pie and a bigger piece keeps getting cut for the morbidly rich and we get left to fight over the crumbs. After all there are only so many resources and with their greedy little paws they grab it all. How really can a billionaire (and then some) actually look themselves in the mirror in a world where people starve while they greedily and even with pride hug and horde and show off their riches.
The pie is not as finite as you imagine. When your currency is the world standard for all exchanges, as is the dollar today, you can just make more when you want to and spend it any way you want, such as for military power or for influence. About 85% of dollars are not printed, but just invented in a bank account. If you have to accumulate some other country's money to buy things (like the rest of the world needs dollars) then your money is more finite. That is why the Chinese and Russians and others want to challenge the dollar supremacy with their own currencies, if they get a chance.
One very important point, that I did not see in this report, regarding the effects of higher taxes on the wealthy is that it has a strong motivating factor for them to keep their money invested, and working, in their business and the economy versus using it to live ever more lavishly and/or 'buying' political/economic favor, literally legalized bribery of politicians and judges as allowed under Citizens United. Tom has discussed the very corrupt Supreme Court decision to allow this bribery via their Citizens United decision previously and it cannot be understated the adverse impact this has had on both our political and judicial systems. The obscene amounts spent on 'influencing' decisionmakers in our political and judicial systems are bad enough but it goes way beyond this. Literally billions of dollars are spent annually to support a misinformation 'machine' that is both organized and widespread flooding Americans with falsehoods that cause them to support people and ideas that are definitely not in their best interest. This is polarizing Americans against one another ensuring a 'Divide and Conquer' control over the electorate and hence the levers of power (and economy). The end goal, minority rule by the wealthy, no limits on their exploitation of the U.S. economic engine, and a continual increase in their share of the wealth generated. The longer this goes on, the more entrenched their grip on power becomes e.g. Putin and his cronies ironfisted rule in Russia.
Mr. Haller, very good. Your phrase "falsehoods that cause them to support people and ideas that are definitely not in their own best interest." was given a name by Marx over a century ago: False Class Consciousness. You are running in good company.
The rich are investing all right! Overseas and in American real estate, now we have millions of homeless thanks to the billionaire autocrats investing in order to make more money for themselves. The billionaires do invest in manufacturing cheap labor over seas or next door on the other side of the border.
All of the money of the rich is spent buying themselves expensive toys and digs
Back in the early 1980’s the CEO of Boeing,T.A .Wilson lived in a modest three BR, 2 bath house, in Kent Washington if I recall correctly. He is an exception, compared say to Bill Gates
When it came times for meetings he would rent the Double Tree Inn near SeaTac Airport
The reason why I would be happy with a flat tax, is because at least the billionaires would be in the same tax bracket as a single childless worker. And if self-employed that person could pay about 42% on $90,000 a year, whereas the billionaires pay about four and a half percent now? The religious breeders expect single people to fund their lifestyle. You know, the ones who hate communism, and follow lying criminals to treason. Of course they will never admit they support slavery.
So true, Ms. Feiner. Anyone who can do arithmetic can easily see this. Or, anyone who understands Ricardo's "Iron law of wages" can also see it. Thank you for your clear explanation Mr. Hartman.
A closely related con is still promoted, in spite of its death in broad daylight at the hands of Elon Musk! We now have clear proof of a Great Lie that still serves as a cornerstone of conservative propaganda and economic policy:
"Taxing the wealthy harms the Job Creators and destroys jobs. Don’t tax the job creators!
Taxes on millionaires & billionaires destroy jobs." ... That’s not right at all.
Elon Musk, America’s all time wealthiest billionaire proves has proven this totally dead wrong.
With favorable tax loopholes and low tax rates, Musk has accumulated a massive fortune -- while our nation piled up the debt. A whopping $44 Billion of his spare wealth was used to purchase Twitter.
And immediately he killed 80% of the jobs at Twitter. Thousands were terminated.
Elon Musk is a Job Killer. A mass killer of jobs, and destroyer of employment.
He proves for All of Us that low taxes on the wealthy does not lead to job creation!
Low taxes on the wealthy Destroys Jobs.
The same principle applies to low taxes on corporations. They use their taxpayer supported windfalls for mergers and acquisitions (plus stock buy backs).
This is followed by huge worker layoffs. Low taxes on corporations destroys jobs.
The word "union" did not appear in this report. Unions were gradually decimated, further allowing automakers to stagnate wages; this occurred broadly over industries and contrasts with the notion of an"iron law" asserting lower salary growth with cut taxes on workers.
1. Increasing the deficit DOES NOT make the nation poorer. The deficit … like any accounting term … has 2 sides: in this case borrower & lender. For every dollar of deficit someone (most likely a US citizen US bank or US corporation) has a dollar of interest bearing assets. Every dollar of deficit reduction reduces asset holdings by a dollar. So reducing deficits is…oddly enough…a path to slower growth, lower incomes & fewer assets.
2. For 80% of Americans aged 24-65 payroll taxes are much bigger bite than income taxes. Cutting income tax might have the paradoxical effect you describe (tho Ricardo never ever ever encountered even the idea of income taxes … all taxes in 1800s England were excise taxes on a wide variety of goods) but cutting payroll taxes by — for example lifting the cap on income subject to Social Security—would allow a reduction in the SS tax rate which would be a direct increase in take home pay of +/- 80% of US labor force.
3. The function of the tax system in a nation that is fully sovereign in its own currency is NOT paying for things. It’s to limit income at the top & pump it up at the bottom to create greater income equality. Income inequality is a scourge on the nation … see Spirit Level, Wilkerson & Pickett. (Nutshell: more inequality causes more: drug abuse, teen pregnancies, incarcerations, premature deaths, HS drop outs. So we can either address each problem separately OR make income distribution less unequal).
4. Arguments for tax cuts conveniently leave out the fact that for 80% of Americans an income tax cut is so small as to be irrelevant … bc most Americans pay much more in property taxes, sales taxes & payroll taxes then they do in income taxes.
In my life we have had depressions in: 1960-61, 1969-70, 1973-75, 1980, 1981-82, 1990-91,
2001, 2007, 2009. One every 7.5 years on average.
Economists try to define these depressions out of existence by re-labelling them as "recession", "business downturn", "business cycle". But they are trying to churn butter from water. And purposely misleading the public.
I have much more original stuff to say about this. But I shall wait until another time and place.
Listen to Richard Woolf's presentations on line and read Stephanie Kelton's DEFICIT MYTH, published in 2001 for more explication.
I'll be darned! I guess you are well acquainted with this stuff. Sorry I misspelled Wolff's name. My dissertation Chair was a friend and advisor to Batista, Somoza and Marcos. But he was a nice guy and I liked him. Those dictators did not take him seriously. He was window dressing for them. He told me how he repeatedly advised them to institute quality, free public education. Spiting in the wind.
Susan: Your first point is just silly. You compare the government borrowing more money with the gov't borrowing less money and claim that since the public gets an interest bearing instrument in return, the deficit is good. First, 30% of lending to the government comes from abroad so you can't be so sanguine about some American holding the debt instrument. Second, almost all of the interest is paid to rich people, so the greater the borrowing from the public, the worse inequality becomes and inequality itself is toxic. Third, and most telling, you sugar coat the comparisons. The usual, and much more germane comparison, is between taxing the rich and borrowing from the rich. By taxing the rich, we get in money from them, give them nothing in return, do not have to pay it back, much less with interest, and reduce inequality which is a wonderful effect. By borrowing from the rich (which is the holy grail of the rich) they get richer and we get to live in a country with obscene fortunes, less democracy because the rich buy more politicians and thinktanks, and no money for social programs or infrastructure. So your comparison falls apart as mostly irrelevant.
Taxes, in a nation fully sovereign in its own currency (meaning that nation has a pure monopoly on the creation of its currency … unlike France or Italy which are not sovereign in their currency: the Euro is not the monopoly of any member) are not needed to pay for what the government buys.
Taxes are for creating or inducing greater equality. Borrowing from the rich, the corporations and the big banks need not make inequality worse. Just tax the filthy rich! And then tax them some more. However, the failure to tax the rich does not make the deficit an economic “bad.”
If the US were to substantially reduce the federal deficit the economy would go into a recession. Why? Because all the deficit really measures is how much government spending is needed to create enough demand to keep unemployment at acceptable levels. Of course it matters what governments buy with the deficit … and military spending is just about the worst use I can think of.
Taxing the rich is important & necessary in a decent society. Bc taxing the rich reduces inequality. The inequality resulting from payments to TBill holders is tiny compared to the inequality produced by failing to tax.
“ By taxing income in the very top brackets at a rate well above 50%, ideally the 74% rate we had before Reagan, we stabilize the economy, stop the relentless poaching of working peoples’ wages for the money bins of the rich, and begin restoring our middle class.”
Despite my advanced age, I have never heard this argument before.
I would love to see the promise that working hard is supposed to bring, ie upward mobility and a good life fulfilled. As it is now, the deck is so stacked against the working class that they will never break through.
And the morbidly rich (love that term and am using it early and often!) get richer.
Really, how many billions does one person really need? Looking at you MuskRat.
Two points:
1. The high income rate only refers to that portion of a person’s taxable income that is in the high income bracket.
For the current tax year, a single person with a taxable income of $11,000 would pay 10% or $1,100 in taxes.
A single person with a taxable income in the highest bracket of $578,126 or more would pay a total of $174,238 plus 37% of the amount over $578,125. But it is only the amount over that gets taxed at the 37% rate. The wealthy pay the same 10% tax on the first $11,000 taxable income as the low wage earners do. I realize most people reading Thom’s newsletter understand this. But I find that many people that I talk to, do not. They hear “tax rate 37%” and think it applies to them and all of their income, when it actually doesn’t.
2. If the members of Congress were to actually find their spines and grow some balls (“Balls”, said the Queen. “If I had them I’d be King”.) and actually raise taxes, the question is, what would be done with the extra revenue? Would it be used to invest in things that affect the average taxpayer and their families? Or would there be insistence on using it all to pay down the deficit? If the former, then the average worker would actually see their life getting better and fairly quickly. If the latter, tho it might benefit the economy over all, the effect on the worker would be less real and more hypothetical.
So any increased revenue from higher taxes needs to go at least in a large part, toward things that workers need and want and appreciate. And the entire thing would need to be talked about with facts (please god, the facts ma’am, nothing but the facts!) and examples so people are educated as to where the money is going.
I despair of this scenario ever happening in the current iteration of our society.
Maybe if there was some sickness that wiped out 90% of republicans* and 100% of the media** we would have a chance.
*in my opinion, anyone in this day and age who identifies as a member of the Republican (fascist) Party has sold their soul, is complicit in the lies and cruelty the RFP is raining down on us and is a part of the problem.
**media includes MSM and Fox and it’s ilk as well as X-Twitter and Facebook.
It does not include SubStack.
My post, my opinions. Others may think differently.
What is also not talked about is the reduction of federal support of college education when Reagan came in and slashed much of the middle class programs. ( closing and emptying out the mental health facilities is another. The increase in homelessness can be directly linked to this.) I submit that much of the fall of the middle class lifestyle can be traced to Reagan’s administration reducing the top tax rate to less than 30%.
Mainstreet media has a tremendous affect on us which is scuttle and effective. Sunday Mornings yesterday main theme was "Nation Divided" which makes it sound like it is 50/50 which it is not. Repugs and Reaganomics are the minority. The Portland news is depressing as there is always reports we don't have enough money for schools/parks or homelessness. But then we are told the kicker will give us a refund next year????????????? The richer might receive close to $10,000 WTF but we are too poor to put a new field in Grant Park???????????????? or..................................... BS! TAX the F**king rich.
When it comes to paying their fair share, we know who the free-loaders are---they have tax lawyers, congressional members, and Supreme Court Justices at their service.
Republican brains do not do nuance; they do not WANT to do nuance. They learn when the problem lands on THEIR doorstep. Well, land it did, in the form of the pandemic. I think some are beginning to understand who does all the work in this nation. I sure hope they can understand why wages suffer because of tax cuts and greedy employers.
Another point to make is that no one escapes PAYING; there's property tax (even if you rent), sales tax, and gas taxes. This is where all the working poor have the most skin in the game, and they can barely afford H & R Block much less a tax lawyer.
Check out Professor Jon Taplin's work on tech platforms and inequality, if you haven't yet.
His new forthcoming book is : The End of Reality - How Four Billionaires are Selling a Fantasy Future of the Metaverse, Mars, and Crypto
I highly recommend his lecture from some years ago, all of it very telling of our current dilemma of several billionaires owning a tech-based economy very intertwined with our govt. His lecture "sleeping through a revolution" is available online.
I can just hear all these millionaires and billionaires clamoring about losing money to taxation for the benefit of anyone , other than themselves.
They have been given a free ride for so long, they truly believe taxes are punishment.
The arrogance they display is because they are quite comfortable with no wealth for anyone but themselves.
These greedy obsessive narcissists think they deserve more than we do . This is a perversion of what this Country was founded on.
The fact that they are ok with only the children of wealthy individuals being educated, tells us what we need to know.
The lies and deceit that they have been programmed to, by Republican BS over the years has told them , they are better than the rest
of us and therefore are ‘entitled ‘ to more and more , and well, if others
don’t like it, tough.
This will be reversed only with sane leadership , something sorely missing in political leaders these days.
The fact that they are also destroying our world with careless , ruthless chemicals that are poisoning the planet.
Perhaps thats where they should start being responsible for damage they create in their industries.
There's 25 million millionaires - more in number than total residents of either ny or Florida.
In nyc another word for millionaire is homeowner.
https://www.bizjournals.com/newyork/news/2023/04/21/millionaire-report-nyc.html
Data from the genie co-efficient supports your conclusion that higher taxes result in a greater sharing of wealth of a nation. Under FDR and after wealth inequality continuously decreased then reversed to increase under Regan as the graft by Thomas Piketty shows.
ttp://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTables.pdf
I would prefer the rich be taxed by over 95% of their income over a flat tax. But I seldom ever get what I want.
In FDRs final State of Union address he proposed a 95% income tax on highest earners.
Although Ricardo was a vastly limited thinker compared to the intellectually fertile Marx, it is true he did presage one important point in Marx's work. That point is this. The employee/worker does not control his own income, the employer does. At the same time, however, the employer controls his own income. No one else does.
Liberal thinkers point out that it is therefore up to government and unions to even out this disparity. I agree with them.
Tax cuts for the rich became such a campaign slogan since Reagan that I imagined a time would come that those of us in the not wealthy class would simply hand over our money directly to the morbidly rich. Maybe you could say we already are, I’m not an economist. The other way I see it is that there is a finite pie and a bigger piece keeps getting cut for the morbidly rich and we get left to fight over the crumbs. After all there are only so many resources and with their greedy little paws they grab it all. How really can a billionaire (and then some) actually look themselves in the mirror in a world where people starve while they greedily and even with pride hug and horde and show off their riches.
The pie is not as finite as you imagine. When your currency is the world standard for all exchanges, as is the dollar today, you can just make more when you want to and spend it any way you want, such as for military power or for influence. About 85% of dollars are not printed, but just invented in a bank account. If you have to accumulate some other country's money to buy things (like the rest of the world needs dollars) then your money is more finite. That is why the Chinese and Russians and others want to challenge the dollar supremacy with their own currencies, if they get a chance.
One very important point, that I did not see in this report, regarding the effects of higher taxes on the wealthy is that it has a strong motivating factor for them to keep their money invested, and working, in their business and the economy versus using it to live ever more lavishly and/or 'buying' political/economic favor, literally legalized bribery of politicians and judges as allowed under Citizens United. Tom has discussed the very corrupt Supreme Court decision to allow this bribery via their Citizens United decision previously and it cannot be understated the adverse impact this has had on both our political and judicial systems. The obscene amounts spent on 'influencing' decisionmakers in our political and judicial systems are bad enough but it goes way beyond this. Literally billions of dollars are spent annually to support a misinformation 'machine' that is both organized and widespread flooding Americans with falsehoods that cause them to support people and ideas that are definitely not in their best interest. This is polarizing Americans against one another ensuring a 'Divide and Conquer' control over the electorate and hence the levers of power (and economy). The end goal, minority rule by the wealthy, no limits on their exploitation of the U.S. economic engine, and a continual increase in their share of the wealth generated. The longer this goes on, the more entrenched their grip on power becomes e.g. Putin and his cronies ironfisted rule in Russia.
Mr. Haller, very good. Your phrase "falsehoods that cause them to support people and ideas that are definitely not in their own best interest." was given a name by Marx over a century ago: False Class Consciousness. You are running in good company.
The rich are investing all right! Overseas and in American real estate, now we have millions of homeless thanks to the billionaire autocrats investing in order to make more money for themselves. The billionaires do invest in manufacturing cheap labor over seas or next door on the other side of the border.
All of the money of the rich is spent buying themselves expensive toys and digs
Back in the early 1980’s the CEO of Boeing,T.A .Wilson lived in a modest three BR, 2 bath house, in Kent Washington if I recall correctly. He is an exception, compared say to Bill Gates
When it came times for meetings he would rent the Double Tree Inn near SeaTac Airport
Yachts owned by the rich https://www.boatinternational.com/luxury-yacht-life/owners-experiences/yachts-owned-by-celebrities--28323
Super yachts owned by the super rich, mostly Russian Oligarchs and Arabs. https://www.marineinsight.com/boating-yachting/top-10-most-expensive-private-yachts-in-the-world/
15 Luxury Jets https://robbreport.com/motors/aviation/celebrities-most-expensive-private-planes-1234860914/
Mansions of the rich: https://lifebeyondsportmedia.com/the-most-expensive-homes
Yachts and Jets owned by celebrities https://www.gosocial.co/the-incredible-private-jets-yachts-that-your-favorite-celebrities-own/12/
Tom Cruise’s super yacht https://www.thegentlemansjournal.com/article/step-aboard-the-superyacht-tom-cruise-has-chartered-for-summer/
Cruise also owns a stable of planes, including a P51 and a Gulfsteam IV, G4 jet
According to Belfast Telegraph, Travolta has at least seven jets in his collection. His private stable is home to a Bombardier Challenger 601, Boeing 727, Eclipse 500, Dassault Falcon 900, and three Gulfstream jets. https://simpleflying.com/john-travolta-jet-collection/#:~:text=Travolta%20owns%20at%20least%20seven%20jets&text=According%20to%20Belfast%20Telegraph%2C%20Travolta,900%2C%20and%20three%20Gulfstream%20jets.
And then there is Jay Leno’s garage. https://www.youtube.com/channel/UCQMELFlXQL38KPm8kM-4Adg
Of course not all of the above are owned by Americans
Just think, how many children could be educated and given a lunch, by just selling one of them.
How many toys does one person need? Admittedly most of it is to impress their "peers" and maintain their social status.
Sheesh! Depressing.
The reason why I would be happy with a flat tax, is because at least the billionaires would be in the same tax bracket as a single childless worker. And if self-employed that person could pay about 42% on $90,000 a year, whereas the billionaires pay about four and a half percent now? The religious breeders expect single people to fund their lifestyle. You know, the ones who hate communism, and follow lying criminals to treason. Of course they will never admit they support slavery.
Flat tax is a terrible terrible terrible idea. It will slam low income & middle income households, have minimal impact on morbidly rich …
So true, Ms. Feiner. Anyone who can do arithmetic can easily see this. Or, anyone who understands Ricardo's "Iron law of wages" can also see it. Thank you for your clear explanation Mr. Hartman.
Being treated equally it's just horrible isn't it? Probably being discriminated against, it was even worse!
Try being discriminated against. NOT, probably. They don't even sound the same?
A-MEN.
Anyone and everyone who still has the stomach for social media should be sharing this piece like seeds to the wind.
Financial gluttony rots at the base of our crumbling society.
A closely related con is still promoted, in spite of its death in broad daylight at the hands of Elon Musk! We now have clear proof of a Great Lie that still serves as a cornerstone of conservative propaganda and economic policy:
"Taxing the wealthy harms the Job Creators and destroys jobs. Don’t tax the job creators!
Taxes on millionaires & billionaires destroy jobs." ... That’s not right at all.
Elon Musk, America’s all time wealthiest billionaire proves has proven this totally dead wrong.
With favorable tax loopholes and low tax rates, Musk has accumulated a massive fortune -- while our nation piled up the debt. A whopping $44 Billion of his spare wealth was used to purchase Twitter.
And immediately he killed 80% of the jobs at Twitter. Thousands were terminated.
Elon Musk is a Job Killer. A mass killer of jobs, and destroyer of employment.
He proves for All of Us that low taxes on the wealthy does not lead to job creation!
Low taxes on the wealthy Destroys Jobs.
The same principle applies to low taxes on corporations. They use their taxpayer supported windfalls for mergers and acquisitions (plus stock buy backs).
This is followed by huge worker layoffs. Low taxes on corporations destroys jobs.
The word "union" did not appear in this report. Unions were gradually decimated, further allowing automakers to stagnate wages; this occurred broadly over industries and contrasts with the notion of an"iron law" asserting lower salary growth with cut taxes on workers.
1. Increasing the deficit DOES NOT make the nation poorer. The deficit … like any accounting term … has 2 sides: in this case borrower & lender. For every dollar of deficit someone (most likely a US citizen US bank or US corporation) has a dollar of interest bearing assets. Every dollar of deficit reduction reduces asset holdings by a dollar. So reducing deficits is…oddly enough…a path to slower growth, lower incomes & fewer assets.
2. For 80% of Americans aged 24-65 payroll taxes are much bigger bite than income taxes. Cutting income tax might have the paradoxical effect you describe (tho Ricardo never ever ever encountered even the idea of income taxes … all taxes in 1800s England were excise taxes on a wide variety of goods) but cutting payroll taxes by — for example lifting the cap on income subject to Social Security—would allow a reduction in the SS tax rate which would be a direct increase in take home pay of +/- 80% of US labor force.
3. The function of the tax system in a nation that is fully sovereign in its own currency is NOT paying for things. It’s to limit income at the top & pump it up at the bottom to create greater income equality. Income inequality is a scourge on the nation … see Spirit Level, Wilkerson & Pickett. (Nutshell: more inequality causes more: drug abuse, teen pregnancies, incarcerations, premature deaths, HS drop outs. So we can either address each problem separately OR make income distribution less unequal).
4. Arguments for tax cuts conveniently leave out the fact that for 80% of Americans an income tax cut is so small as to be irrelevant … bc most Americans pay much more in property taxes, sales taxes & payroll taxes then they do in income taxes.
Very well said Ms. Feiner. Attempts by the government to increase a budget surplus and reduce the deficit are always followed by a depression.
years when debt. percent decline year depression
was paid down in debt began
1817-1821 29% 1819
1823-1836 100% 1837.........worst depression up until then
1852-1857 59% 1857
1867-1873 27% 1873
1880-1893 57% 1893
1920-1930 36% 1929.....worst depression --"Great Depression"
In my life we have had depressions in: 1960-61, 1969-70, 1973-75, 1980, 1981-82, 1990-91,
2001, 2007, 2009. One every 7.5 years on average.
Economists try to define these depressions out of existence by re-labelling them as "recession", "business downturn", "business cycle". But they are trying to churn butter from water. And purposely misleading the public.
I have much more original stuff to say about this. But I shall wait until another time and place.
Listen to Richard Woolf's presentations on line and read Stephanie Kelton's DEFICIT MYTH, published in 2001 for more explication.
Rick Wolff was on my dissertation committee!
I'll be darned! I guess you are well acquainted with this stuff. Sorry I misspelled Wolff's name. My dissertation Chair was a friend and advisor to Batista, Somoza and Marcos. But he was a nice guy and I liked him. Those dictators did not take him seriously. He was window dressing for them. He told me how he repeatedly advised them to institute quality, free public education. Spiting in the wind.
Dissertation advisor was advisor to a bunch of dictators? Yikes!
Ms. Feiner. Sorry, but when I posted my response to you, the program scrambled my table of numbers. There should be three separate vertical columns:
column for reduction date...column for % reduction...column for depression date.
Ms. Feiner unscrambled table
year when debt.......% decline in debt.........years. of depression
was paid down................................................................................
1817-1821..............29%...............................1819............................
1823-1836.............100%.............................1837..worst until then
1852-1857...............59%..............................1857...........................
1867-1873...............27%..............................1873...........................
1880-1893...............57%..............................1893..........................
1920-1930...............36%..............................1929..........................
This table by F. Taylor, Univ. Pittsburg
Susan: Your first point is just silly. You compare the government borrowing more money with the gov't borrowing less money and claim that since the public gets an interest bearing instrument in return, the deficit is good. First, 30% of lending to the government comes from abroad so you can't be so sanguine about some American holding the debt instrument. Second, almost all of the interest is paid to rich people, so the greater the borrowing from the public, the worse inequality becomes and inequality itself is toxic. Third, and most telling, you sugar coat the comparisons. The usual, and much more germane comparison, is between taxing the rich and borrowing from the rich. By taxing the rich, we get in money from them, give them nothing in return, do not have to pay it back, much less with interest, and reduce inequality which is a wonderful effect. By borrowing from the rich (which is the holy grail of the rich) they get richer and we get to live in a country with obscene fortunes, less democracy because the rich buy more politicians and thinktanks, and no money for social programs or infrastructure. So your comparison falls apart as mostly irrelevant.
Paul, I am 100% in favor of taxing the morbidly rich. But that doesn’t mean federal deficits are in any way “bad.” Read The Deficit Myth. https://blogs.lse.ac.uk/lsereviewofbooks/2020/06/22/book-review-the-deficit-myth-modern-monetary-theory-and-the-birth-of-the-peoples-economy-by-stephanie-kelton/
Taxes, in a nation fully sovereign in its own currency (meaning that nation has a pure monopoly on the creation of its currency … unlike France or Italy which are not sovereign in their currency: the Euro is not the monopoly of any member) are not needed to pay for what the government buys.
Taxes are for creating or inducing greater equality. Borrowing from the rich, the corporations and the big banks need not make inequality worse. Just tax the filthy rich! And then tax them some more. However, the failure to tax the rich does not make the deficit an economic “bad.”
If the US were to substantially reduce the federal deficit the economy would go into a recession. Why? Because all the deficit really measures is how much government spending is needed to create enough demand to keep unemployment at acceptable levels. Of course it matters what governments buy with the deficit … and military spending is just about the worst use I can think of.
Taxing the rich is important & necessary in a decent society. Bc taxing the rich reduces inequality. The inequality resulting from payments to TBill holders is tiny compared to the inequality produced by failing to tax.
The politicians never want to cut the taxes on the single people, but always want to cut their food stamps and any other benefits.
“ By taxing income in the very top brackets at a rate well above 50%, ideally the 74% rate we had before Reagan, we stabilize the economy, stop the relentless poaching of working peoples’ wages for the money bins of the rich, and begin restoring our middle class.”
Despite my advanced age, I have never heard this argument before.
I would love to see the promise that working hard is supposed to bring, ie upward mobility and a good life fulfilled. As it is now, the deck is so stacked against the working class that they will never break through.
And the morbidly rich (love that term and am using it early and often!) get richer.
Really, how many billions does one person really need? Looking at you MuskRat.
Two points:
1. The high income rate only refers to that portion of a person’s taxable income that is in the high income bracket.
For the current tax year, a single person with a taxable income of $11,000 would pay 10% or $1,100 in taxes.
A single person with a taxable income in the highest bracket of $578,126 or more would pay a total of $174,238 plus 37% of the amount over $578,125. But it is only the amount over that gets taxed at the 37% rate. The wealthy pay the same 10% tax on the first $11,000 taxable income as the low wage earners do. I realize most people reading Thom’s newsletter understand this. But I find that many people that I talk to, do not. They hear “tax rate 37%” and think it applies to them and all of their income, when it actually doesn’t.
2. If the members of Congress were to actually find their spines and grow some balls (“Balls”, said the Queen. “If I had them I’d be King”.) and actually raise taxes, the question is, what would be done with the extra revenue? Would it be used to invest in things that affect the average taxpayer and their families? Or would there be insistence on using it all to pay down the deficit? If the former, then the average worker would actually see their life getting better and fairly quickly. If the latter, tho it might benefit the economy over all, the effect on the worker would be less real and more hypothetical.
So any increased revenue from higher taxes needs to go at least in a large part, toward things that workers need and want and appreciate. And the entire thing would need to be talked about with facts (please god, the facts ma’am, nothing but the facts!) and examples so people are educated as to where the money is going.
I despair of this scenario ever happening in the current iteration of our society.
Maybe if there was some sickness that wiped out 90% of republicans* and 100% of the media** we would have a chance.
*in my opinion, anyone in this day and age who identifies as a member of the Republican (fascist) Party has sold their soul, is complicit in the lies and cruelty the RFP is raining down on us and is a part of the problem.
**media includes MSM and Fox and it’s ilk as well as X-Twitter and Facebook.
It does not include SubStack.
My post, my opinions. Others may think differently.
What is also not talked about is the reduction of federal support of college education when Reagan came in and slashed much of the middle class programs. ( closing and emptying out the mental health facilities is another. The increase in homelessness can be directly linked to this.) I submit that much of the fall of the middle class lifestyle can be traced to Reagan’s administration reducing the top tax rate to less than 30%.
Mainstreet media has a tremendous affect on us which is scuttle and effective. Sunday Mornings yesterday main theme was "Nation Divided" which makes it sound like it is 50/50 which it is not. Repugs and Reaganomics are the minority. The Portland news is depressing as there is always reports we don't have enough money for schools/parks or homelessness. But then we are told the kicker will give us a refund next year????????????? The richer might receive close to $10,000 WTF but we are too poor to put a new field in Grant Park???????????????? or..................................... BS! TAX the F**king rich.
When it comes to paying their fair share, we know who the free-loaders are---they have tax lawyers, congressional members, and Supreme Court Justices at their service.
Republican brains do not do nuance; they do not WANT to do nuance. They learn when the problem lands on THEIR doorstep. Well, land it did, in the form of the pandemic. I think some are beginning to understand who does all the work in this nation. I sure hope they can understand why wages suffer because of tax cuts and greedy employers.
Another point to make is that no one escapes PAYING; there's property tax (even if you rent), sales tax, and gas taxes. This is where all the working poor have the most skin in the game, and they can barely afford H & R Block much less a tax lawyer.
Check out Professor Jon Taplin's work on tech platforms and inequality, if you haven't yet.
His new forthcoming book is : The End of Reality - How Four Billionaires are Selling a Fantasy Future of the Metaverse, Mars, and Crypto
I highly recommend his lecture from some years ago, all of it very telling of our current dilemma of several billionaires owning a tech-based economy very intertwined with our govt. His lecture "sleeping through a revolution" is available online.
https://www.jontaplin.com/sleeping-through-the-revolution