It always amuses me when somebody is accused of “demonizing capitalism” because they have pointed out that some people are rich. So much is packed into that sentence. They would prefer, of course, if we pretended there are no rich, only upper upper middle class, and inequality is a small thing not to be discussed. Apologists for the rich know they are wrong, and they are ashamed, and they want us to shut up about the obvious.
That appears to be the word I am looking for, but have more than two tiers. Maybe that is the way it is - I mean, tax law be crazy yo.
The other idea was a “salary cap”. But then again, the richest people aren’t getting PAID by SALARIES, they are making money by INVESTMENTS.
Again, the problem I have is that the basic concepts are sound. Most of us have SOME investments, even if it is rather paltry. When I worked at Walmart at 16 I had a SMALL share of stock. But while I can sink in a few thousand a year, they can sink MILLIONS - and thus even if the returns are small percentage wise, they just stack up so fast.
So I guess my question is, with out going all French Revolution on them, what can be done? Just higher taxes, is that what the solution is?
Anyone who says that either lives in a black and white world or just doesn’t know WTF they are talking about. Capitalism by itself is a good system. But it requires rules and oversight, because people will use it to fuck over someone else. Every other system works in a similar way, it is just different people fucking over people in different ways.
This was Thomas Piketty’s main point as well… the ultra rich do not make money from labor anymore but basically make money from already having money. Which is why the repeal of the Estate Tax is more beneficial to billionaires than lowering the top marginal tax rate.
The graph was only showing the highest and lowest tiers, there are certainly more.
Notable, at least to me, is that the top tier is still ~$400,000 nearly 70 years later. $400,000 had the buying power of approximately $4,000,000 today.
Another idea that people struggle with in reference to marginal tax rates is how they are calculated. If I earn enough to qualify for the highest rate, not all of my income is taxed at that rate. Only the difference between the previous tier and the current tier is subject to that rate. This section details it better than I could:
But. . . if we start enacting laws to curtail this trend (increasing taxes on the wealthy, etc.) then I what about when I finally become one of the eight richest men in the world?
I am willing to bet that an economic system that prevents such excess accumulation in the first place would go a long way towards keeping profits circulating in local communities, an economic condition which tends to drive hunger down quite a bit.
Yeah, thing is, there are hundreds of millions of us who should be setting those priorities. This isn’t feudal europe. These individuals are not supposed to be setting our priorities. It’s simply undemocratic.
A Progressive Tax system has been the foundation of US Income Tax policy since its inception.
Another reason why the ‘Flat Taxers’ simply don’t understand basic mathematical principles.
Republicans want nothing more than to turn every progressive tax into regressive ones because it benefits the already wealthy far more than the low or middle income.
What I love about this graph is look at the highest marginal tax rates for certain periods of US History…
What happened in the late 1920’s & 30’s and where were the tax rates? Again for the 40’s thru 60’s (the supposed ‘Good Ole’ Days the GOP wants us to return to?).
Let’s also compare the recession years of the late 70’s, 80’s and 2008-2012 periods. Recall which party was in power during these times and what happened as the tax rates were lowered in each period?
How anyone can argue with a straight face that lower taxes on the rich (eg: trickle down theory) improves the economy is simply beyond me.
Which is why you want to tax capital (i.e. an asset tax) instead of labour (i.e. an income tax). Money made by virtue of already having money shouldn’t be taxed at a lower rate than money made by actually working.
Although linking max rates of pay to the minimum and median salaries of employees is also a good idea.
Estate taxes are basically the only barrier to having a permanent ruling class. Otherwise you get generations of people who are stinking rich because their grandfather had the good business sense to open a brothel during the Yukon gold rush or something.
that header photo is amazing. good find!
One billion dollars is one million a week for 20 years. Certainly enough for anyone to STOP MAKING MONEY and just live. The only reason to keep making money is if you think you’re in a fucking contest you want to win. Hoarding money is no different from hoarding fingernails or newspapers. Every billionaire is a sociopath.
People who stop making money are hoarding it. Most rich people invest their money instead of hoarding it. Scrooge McDuck’s money bin doesn’t exist in reality.
Investing, which is making money off of things like the stock market, which itself isn’t there to make anything useful for the world, only to make some people richer, can certainly be seen as a form of hoarding. It only means jobs for a already wealthy cross section of society.
I think I kind of disagree.
Businesses that want to do good and useful things may need capital to get started, and selling shares in their companies is one way that they can raise capital. Another is to sell bonds, which is not the stock market, but it’s still investing.
Almost any large-scale project requires quite a lot of investment - and those projects do create jobs for the people working on them. In the absence of a system like the stock market, wouldn’t you actually end up with more wealth concentration, as the only people who could do a large scale project would be the ones who are already fantastically rich?
Sure, but the stock market itself has just become a way to amass wealth for investors (not all of which are the ultra-wealthy, but I think we can say it’s dominated by these sorts of investors). The stock markets are where shares of companies are bought and sold in a market place, and exist outside of the need to capitalize businesses.
There are certainly other ways to raise capital for businesses outside of the stock market or venture capitalists.
I’m getting out of my depth a bit, econ-wise, but the ability to buy and sell shares in a market place is a big part of the reason why shares are considered valuable. If you bought a stock in a company that isn’t publicly traded, then the value of that stock can be difficult to liquidate when you need to cash out your investment.
Besides ultra-wealthy investors, retirement & pension funds also own a lot of stock. This chart puts them at 16%, which is lower than I expected, but not nothing.
I’m curious about what one would do to raise capital outside of the stock market or venture capitalists.