"The Great Wealth Transfer" (Paul Krugman, Rolling Stone)

http://www.rollingstone.com/politics/story/12699486/paul_krugman_on_the_great_wealth_transfer/print

Why doesn't Bush get credit for the strong economy?" That question has been asked over and over again in recent months by political pundits. After all, they point out, the gross domestic product is up; unemployment, at least according to official figures, is low by historical standards; and stocks have recovered much of the ground they lost in the early years of the decade, with the Dow surpassing 12,000 for the first time. Yet the public remains deeply unhappy with the state of the economy. In a recent poll, only a minority of Americans rated the economy as "excellent" or "good," while most consider it no better than "fair" or "poor."
Are people just ungrateful? Is the administration failing to get its message out? Are the news media, as conservatives darkly suggest, deliberately failing to report the good news?

None of the above. The reason most Americans think the economy is fair to poor is simple: For most Americans, it really is fair to poor. Wages have failed to keep up with rising prices. Even in 2005, a year in which the economy grew quite fast, the income of most non-elderly families lagged behind inflation. The number of Americans in poverty has risen even in the face of an official economic recovery, as has the number of Americans without health insurance. Most Americans are little, if any, better off than they were last year and definitely worse off than they were in 2000.

But how is this possible? The economic pie is getting bigger -- how can it be true that most Americans are getting smaller slices? The answer, of course, is that a few people are getting much, much bigger slices. Although wages have stagnated since Bush took office, corporate profits have doubled. The gap between the nation's CEOs and average workers is now ten times greater than it was a generation ago. And while Bush's tax cuts shaved only a few hundred dollars off the tax bills of most Americans, they saved the richest one percent more than $44,000 on average. In fact, once all of Bush's tax cuts take effect, it is estimated that those with incomes of more than $200,000 a year -- the richest five percent of the population -- will pocket almost half of the money. Those who make less than $75,000 a year -- eighty percent of America -- will receive barely a quarter of the cuts. In the Bush era, economic inequality is on the rise.

Rising inequality isn't new. The gap between rich and poor started growing before Ronald Reagan took office, and it continued to widen through the Clinton years. But what is happening under Bush is something entirely unprecedented: For the first time in our history, so much growth is being siphoned off to a small, wealthy minority that most Americans are failing to gain ground even during a time of economic growth -- and they know it.

. . . more

I've written my congressman and senators several times to stop being cowards and pissants and talk about the oil motive for the Iraq War since I never hear them talking about it in the news.

Someone I wouldn't even have bothered to ask would be Joe Biden, credit card company whore--but them I stumbled across an amendment to appropriations for Iraq he kept submitting that said the money couldn't be used to establish control of Iraq's oil. This was mentioned in one alternative press article, and never to my knowledge mentioned in the mainstream press.

Likewise, when Bush nominated Harriet Myers, Harry Reid went out of his way to call her a TRIAL LAWYER, one of the GOP's bete noirs, several times during a press conference about her. I heard it on Al Franken on the radio, but when I watched it on TV, the "trial lawyer" bit was cut out, even from the middle, to remove even the innuendo of poking the GOP.

I know at least Byron Dorgan is saying Krugman-like things. Those few who do are covered by the alternative press at most, and sometimes not even that if they don't know how to get the alt press's attention.

I always try to read Krugman's articles, and I currently am reading Dorgan's book, "Take This Job and Ship It: How Corporate Greed and Brain-Dead Politics Are Selling Out America"

& says she can't put it down. ~Gasp!!!

It is an excellent book & I highly recommend it for any right wingers who are not enjoying our booming economy.

between # 900 and 1,000 in Krugman's lineup of people by wealth. Asking them to do the right thing for everyone is much harder when they are negatively affected by it. Without campaign finance issues being resolved to get some of the money out of politics and the cost of running for a seat, how can we expect to elect anything besides millionaires?

to the guillotine. What we need is a good old-fashion French revolution.

Except I would strip them of their citizenships and put them on a boat.

Much rather them live and suffer.

"We are making a bundle in oil and munitions doing this dirty little war in Iraq. Too bad about your kids in uniform, and all that shit. Why don't you just shut up and sit down."

- Commander AWOL

"All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
-- Adam Smith, Wealth of Nations

""We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.""
Louis D. Brandeis

quoted from Wealth and Democracy, a great read by Kevin Phillips. Also see David Cay Johnston's Perfectly Legal.

Krugman's economics is impeccable, and his conclusions bolstered very concretely with facts.

Many dangers still exist for America, even beyond the phony war and third-world corruption.

This is one of them. It is almsot a sociological axiom that an excess of inequality breeds unrest, oppression and ultimately, revolution.

And no one who truly believes in the System of Balances devised by the Founding Fathers can't want that.

Can be a royal, pain in the ass conservative. And even HE is fed up with what he has seen in terms of these f$%k Asses doing to our country by creating a system that disenfranchises the poor and the middle class. (Once a middle clss is gone for good- so is democracy.)

As far as Krugman, he is heads above any other economic meister alive and writing today about things in the USA.

speeches for Nixon. Yes, he's a smart man, and apparently, also an idiot.

There is another reason people think the economy is bad. I can't remember how many years, during contract negotiations, we are told that you can take it or leave it. If you don't accept our offer, we will close the plant and build in Mexico.

They would do it too.

If your living pay check to pay check, dump that checking account, your only giving your bank a false sense of security with your overdraft charges. That is all.

We are supposedly paid hourly but if we aren't face to face with a customer - we have to call it "break time". It's unpaid "break time" of course. I was given a chart at one time that showed how much "break" I should give back based on the number of customers. It went all the way up to 4 hours of the 8 hour day!

Oh....and if it's real busy...you don't get any "break" at all (except you might be told to pencil in one anyway - even though you never stopped frantically working)!

The time is: 1890.

krugman is awesome

Krugman kicks ass.

and some other stuff.

In the DU video forum:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x9877

happens when only a few own the assets of a country

He's too good not to be in a high office directing policy

Someone finally acknowledges that the figures may not actually be accurate

Krugman asks why Junior doesn't get credit for a strong economy, and he is correct to conclude that it is because the benefits are being gained only by the wealthy elite. While his focus is appropriately focused on income inequality, he does briefly touch on another important aspect:



The economy does look better today than it did three years ago. A common sleight of hand being used by the administration is to cherrypick by citing performance during timeframes that will make results seem more favorable. But The Decider hasn't been president for just one year. He has been in charge for six long years now.

Consider, for example, recent stock market performance that has been touted by Junior as proof the economy is "surging".

The S&P 500 reached its last all-time closing high of 1,527 on March 24, 2000 and has not since reached this benchmark. It was at 1,343 on January 22, 2001 when Bush II took office. It closed at 1,429 on yesterday – an annualized return of 1.1% so far during Junior's tenure. Going all the way back to Truman, this has been the worst performance of any president except Nixon's 0.6%. Clinton did the best at 17.4%.

http://www.forbes.com/strategies/2004/07/21/cx_da_0721presidents.html

The Dow Jones index of 30 industrial stocks is so narrowly focused that its performance is not an indicator of how the overall stock market is doing unless confirmed by other factors such as gains in the S&P 500. But since Republicans like to bring up the subject these days, let's take a look at how the Dow is actually doing.

The Dow Jones index of 30 industrial stocks is so narrowly focused that its performance is not an indicator of how the overall stock market is doing unless confirmed by other factors such as gains in the S&P 500. But since Republicans like to bring up the subject these days, let's take a look at how the Dow is actually doing.

The pre-Bush II all-time high was at 11,723 on January 14, 2000. It was at 10,578 when Bush took office. It didn't finally reach another all-time high until this year, when it closed at 11,727 on October 4. It closed on December 14 at 12,462, which is an annualized growth of 3.0% during the current administration.

Under Bill Clinton, it was 15.9 percent.

Bush's dad: 9.8 percent.

Ronald Reagan: 11.3 percent.

The average annual inflation rate for the years 2001 thru 2006 was 2.7%

http://www.minneapolisfed.org/Research/data/us/calc/hist1913.cfm

On any other issue such as job creation, deficits, gas prices, the number of Americans living in poverty the undistorted facts prove Junior is the worst president ever.

... I don't see where the politics of envy are any better than the politics of greed.

I was fascinated by this article; but the following quote bothered me:

"Not only has the Bush administration favored the interests of the wealthiest few Americans over those of the middle class, it has consistently shown a preference for people who get their income from dividends and capital gains, rather than those who work for a living."

Money is accumulated work. When someone with venture capital invests, that one man contributes more labor than anyone on the production line.

I also don't understand estate taxes. I mean, the money has already been taxed once; why tax a non-productive transfer from father to son? Because it's there? What moral justification is that? "You have a lot, so I'm going to take some," doesn't sound like a high moral plane to me.

I am one of the poorer Americans. I make a bit more than the hypothetical Wal-Mart employee in the article. I am not financially secure. But I don't want to improve my lot by taking what belongs to someone else, just because it's there.

Why not a flat tax, starting at the poverty line? I know it's not progressive; but maybe what it lacks in progressiveness it makes up for in simplicity. What a relief it would be to know just how much of what I make is really mine.

The idea behind all the taxes is to keep money in the economy CIRCULATING. The rich desire to gain as much money as they can, in fact most people if not all people desire the same thing. However, when they accumulate this wealth they tend to stash it away in self circulating economies that only benefit themselves so that they can acquire MORE money by strategically squeezing everyone else. You say, "But I don't want to improve my lot by taking what belongs to someone else, just because it's there." Well guess what, the reverse is NOT true. The 'rich' could care less who they screw over. After all, if they completly destroy the economy they will still have a massive pile of wealth to draw down upon and protect themselves. What a truly functional economy needs is flow, if all the wealth is sitting at the top doing effectivly nothing but buying CEO's and telling them to squeeze more money out however they can, well then that's not really helpful. So you redistribute that wealth so that the economy can finally start moving again. Because ultimately, poor people are stupid, and buy useless shit like spinners for their car and video games and giant 60" HDTV's. However creating these items creates a demand for labor, as does selling them, thus causing the entire economy to circulate. However if you have a group of people who are trying to accumulate more wealth by destroying the purchasing power of the other classes, they will destroy the economy. And then we will need another FDR and another massive public works project and a massive shift in real wages helped along by unionization and government regulation. Either that or we can try going the route of Nazi Germany, spurred on by a massive world wide resource shortfall and massive debt load.

As for flat tax. If you make 20k a year and pay 20% that's 4k leaving you with 16k for purchases versus 100k at 20% for 20k leaving 80k left for purchases. The person making 80k isn't going to be hurting, the person making 16k probably will be hurting, especially if it's a cold winter and energy prices spike, or there is a emergency such as major car repair cost or a signifigant illness (for which they are also likey uninsured to cover). The less you make the more you scrimp on things you hope you won't need, like insurance. The simple answer is to tier the flat tax system. Charge 40% on 100k and 20% on 20k. Well in that case lets just make a table. Well lets cut these taxes cause they're kind of high, but lets do it by simply adjusting people's gross incomes downwards rather than refiguring the scale, then everyone pays less. And lets make home buying more desirable by allowing people to write off interest on home mortgages. And lets discourage excessive income from capital gains by taxing that on a differant level. And now you're at our tax system again.

I am married and our combined income we make less than the maximum for 1040EZ. I add our incomes together, subtract the married deduction, look at the chart, figure out how much I owe and compare it to how much I paid, and either recieve or pay the differance. It takes me at most 20 minutes once a year to do. Tax reform I will agree is needed, but only to close all the loopholes that the rich have managed to burn into the tax code with lawyers and lobbyists. Loopholes which primarily benefit themselves AND make everything more complicated and daunting for everyone else.

Ultimately it depends on your view of government. My view is that government should actually GOVERN and guide the country, not just let it meander down the street to run into a brick wall and break into a million pieces. It shouldn't just sit there and maintain a military to guard the country and then let it completely unravel from within. In this case, yes it might not be fair, but it needs to be done or they'll simply take their wealth and use it to squeeze even harder until finally something breaks.

Sirveri,

"The idea behind all the taxes is to keep money in the economy CIRCULATING."

This is a new idea to me. I have always thought the idea behind taxes was to fund governmental operations. Are you saying that mere circulation is its object, or do you mean redistribution?

Should anyone who saves money be taxed, for keeping money out of circulation?

Oh! (light bulb goes on) Are you against the accumulation of capital?

"Well guess what, the reverse is NOT true. The 'rich' could care less who they screw over."

I really don't care what they want or don't want, unless it impacts me. Wal-Mart is a good example, I think, of the trend being discussed here. If we really hated Wal-Mart (and we probably should), and if we acted in concert with our principles, we (a) wouldn't shop there, and (b) wouldn't work there. Trying to legislate or litigate them into proper behavior is actually a less principled approach; it's lazy and hypocritical. Legislation and litigation are end-runs around dealing with them as equals in dignity, which is one of the fundamental principles of our society.

"What a truly functional economy needs is flow, if all the wealth is sitting at the top doing effectivly nothing but buying CEO's and telling them to squeeze more money out however they can, well then that's not really helpful."

I thought wealth was something created, not fixed in quantity. The rich can hoard all they want; we'll just make more. If we have stopped creating it, it's because we've stopped believing in ourselves, not because it can't be done.

"So you redistribute that wealth so that the economy can finally start moving again."

OK, I thought this is where you might be coming from.

"Because ultimately, poor people are stupid, and buy useless shit like spinners for their car and video games and giant 60" HDTV's."

Shouldn't people be responsible for themselves? Something that it took me a very long time to realize is that freedom and responsibility go hand-in-hand. If you take away one, you inevitably take away the other. The people whose sole purpose in life is a 60" television and a bottomless well of beer will sell themselves to the government to get it; and government will buy, because government loves power -- any kind of power. It's a kind of institutionalized co-dependence, paid for in the end with our freedom.

A good example of this is our health care system. Health care is now paid for by insurers, and we have lost a lot of the freedom we once had to make health care choices. So have our doctors. How we are cared for by our primary care physicians is now dictated by actuarial tables; they are required to follow certain protocols to stay within the system, even if they think they're wasting their time.

Our health care system is in sorry shape, and I'm afraid it's going to get a lot sorrier. I'm convinced we will eventually have a wholly government-funded health care system; it's just a matter of time. The pattern of separating the benefit from the responsibility to pay for it is now well-established; and we can no longer return to patient-funded health care without a lot of pain and suffering. We lack the political will to do this, which means our course can only end in socialized medicine. I'm afraid it will bankrupt us as a nation. Health care, even more so than education, is one of those bottomless pits for money. The fight against disease and death is a never-ending one that we must eventually lose; that, in itself, demonstrates the folly of a socialized health care system. You think we're throwing money away in Iraq? Wait until we have National Health. Iraq will look like a walk in the park, by comparison.

I like a flat tax because it's simple, but even more because it's fair. Reward should be commensurate with risk or effort. With a flat tax, I know I am keeping 75 cents or 80 cents out of every dollar I make -- whether it be my first dollar or my millionth.

You say that the rich hoard their wealth. Do they? When times are good, I think that most people, including the rich, spend money freely; they know they will be making more. When times are bad is when people hoard. If the rich are hoarding, isn't it because they are unsure when or whether they'll be able to make more? This is one of the consequences of a punitive, unfair or capricious tax system or government. When you can no longer predict the future with any confidence, short-term thinking is the thinking that counts.

"Ultimately it depends on your view of government. My view is that government should actually GOVERN and guide the country, not just let it meander down the street to run into a brick wall and break into a million pieces."

Maybe that's what it comes down to. What you're seeing as "letting it meander down the street" I tend to see as "leaving people to do what they want with what is theirs." I can't see any moral justification for government interfering. To do that, you have to abandon the idea that people are free and equal in dignity -- and I really think that's where the disagreement lies. I think perhaps you've lost faith in your fellow man -- not just in the will and capacity for charity in the rich, but also the will and capacity of the poor to improve their lot. I don't doubt your generosity of spirit or the goodness of your intentions; but I think that the end of freedom is implicit in your approach. We will become subjects, a people ruled by a governmental class.

Unfortunately, I think that's likely in any case. And you know what's next, once enough people have had their fill of being constrained for their own good ... violence, and on a large scale.

But I love talking economics so I'll keep going on this thread.

This is a new idea to me. I have always thought the idea behind taxes was to fund governmental operations. Are you saying that mere circulation is its object, or do you mean redistribution?

Well taxes are a good source of funding for needed government projects, however they are also a usefull tool for social engineering. Taxes and fines are great for discouraging behaviour, what would be the point of making more than one million dollars per year if the government took 99% of every dollar beyond that point? So instead of the super rich basically sucking all that money out of the company they could put it back into the company in the form of pay raises for the lower eschelons, better health insurance, retirement plans, or even making the company as a whole more competitive by simply cutting prices and letting the consumers benefit. The rich CEO would still be making 1 million per year, which is still more than enough to be very comfortable living on. It would also stop other predatory practices such as purchasing large numbers of houses so as to raise overall real estate prices and discourage home ownership by shifting the percentage of housing the was for sale versus for rent.

Should anyone who saves money be taxed, for keeping money out of circulation? Are you against the accumulation of capital?

Saving money provides capital for banks to reinvest into the community and is generally used to support housing and auto loans as well as other financial growth. In addition certain accounts don't make more money than the rate of inflation. Earning at 2% when inflation is at 3.75% is a losing battle, however it IS useful when you require liquidity of assets. But either way the profit from that interest IS taxed. As for accumulation of capital, I have no issue with people earning wealth and acquiring capital. I myself am trying to do the same thing. The problem I have is with excessive accumulation to the DETRIMENT of society as a whole.

Wal-Mart is a good example, I think, of the trend being discussed here. If we really hated Wal-Mart (and we probably should), and if we acted in concert with our principles, we (a) wouldn't shop there, and (b) wouldn't work there. Trying to legislate or litigate them into proper behavior is actually a less principled approach; it's lazy and hypocritical. Legislation and litigation are end-runs around dealing with them as equals in dignity, which is one of the fundamental principles of our society.

Well I for one do not shop at Walmart and am actively boycotting them. I however have no issue seeking employment from them, that just sucks more money out of the beast. However in the case of Walmart we are faced with a company that routinely breaks the law and isn't called on for it, such as locking workers into stores (and not paying them), not paying overtime, using illegal laborers, under paying said illegal laborers, firing any employee who mentions unionization, etc etc etc... All of these are already illegal. Workers have the right to unionize to protect themselves from predation by employers, yet walmart would just as soon close the store than allow unionization. How do we fight that, we use the legal system, that is why it is there, to amicably resolve disputes and protect the public from predation.

I thought wealth was something created, not fixed in quantity. The rich can hoard all they want; we'll just make more. If we have stopped creating it, it's because we've stopped believing in ourselves, not because it can't be done.

Wealth is created through labor, labor takes energy, energy ultimately comes from one single source, the sun. The planet only traps so much energy from that source, therefore the total possible ammount of wealth to generate is capped. If the wealthy hoard faster than we can create it then we're basically screwed. There is also stored energy in the form of oil, however that is simply trapped solar energy trapped by previous generations which we have liberated and redistributed. The problem comes when the artificial influx of energy into the wealth system runs dry, because then all the hoarded wealth becomes static and effectivly worthless as it takes energy to produce the products that would be created if that wealth was redistrubuted and the energy to transfer that wealth will no longer be available.

In addition, what is the point in creating something if nobody will purchase it? In a society where the divide grows to vast the poor only have money for essentials, while the rich can buy what they desire, if they only account for 1% of the population then there is no real incentive to produce signifigant quantities of products for those markets. In addition the price of those commodities increases due to economies of scale, this time working in reverse, thus further placing items out of reach for the majority of the poverty class. Also, with less products produced there is less demand for labor, causing unemployment to rise and further impacting consumer spending. This can all be fixed by simply taking this now stratified wealth and simply using it to perform massive public works projects which produces quality high paying jobs with good benefits for a large segment of society and in turn leads to better infastructure making production of goods cheaper and expanding the consumer base thereby spuring job creation by increasing demand for product.

If this all sounds familiar it is probably because I base my economic desires off of New Deal FDR era principles. They make sense, and they work, even better when some two bit dictator starts a war so that you can start selling guns and oil to everyone.

Shouldn't people be responsible for themselves? Something that it took me a very long time to realize is that freedom and responsibility go hand-in-hand. If you take away one, you inevitably take away the other.

Yes, but while people should be responsible enough to learn how to swim before jumping into the pool, we should also help them by making sure the pool is clear of sharks, or at the very least posting a sign or two. One good example is payday loans and title lenders, predatory practices that charge 300-1000% interest rate on their loans. If you jump into a pool and don't know how to swim very well and find yourself floundering you might think these places are a good deal, so you swim over and the sharks bite you and drown you and kill you. How can one be responsible if one is not educated enough to recognize potential threats? And then once someone goes that route and gets sunk 10k into debt on a 500$ loan, how can they possibly be free?

There needs to be a balance. We can't teach everyone how to swim, but we can at least station a lifeguard and keep sharks out of the pool. All it takes is regulation, the government is the perfect tool to help us regulate ourselves so that everyone gets a chance to succeed. How can the poor succeed if they aren't given access to education? EQUAL access to equal quality education. How can you ask a person who has been hit by outsourcing to retrain if there is nothing to retrain to, or if no programs exist to assist in that transition.

One thing I have seen on both the left and the right is a natural distrust and distaste of government. I find this amusing since these people are suppossed to represent us and our interests, if one does not trust them to do that, then why are we bothering to elect them at all. Why not simply throw the whole bunch out and start over again, maybe change the rules to make it better. I'm sure there are plenty on both sides who would love to see it happen.

Wealth is created through labor, labor takes energy, energy ultimately comes from one single source, the sun. The planet only traps so much energy from that source, therefore the total possible ammount of wealth to generate is capped.

I don't think we're anywhere close to that point, do you? In addition to fossil fuels, there's fission, fusion, seven other planets, many thousands of asteroids ... and, when it comes to it, other suns, as well. By the time we're approaching using everything the sun bestows on us, I fancy we'll have begun spreading to other worlds.

At the moment, I think our own lack of initiative, drive and imagination limit us far more than any unavailability of resources.

Well taxes are a good source of funding for needed government projects, however they are also a usefull tool for social engineering.

That's a hard one for me. When it comes right down to it, "government" is not a corporeal entity; it's a class populated by people, no better than you or me. What gives them the right to engineer me?

I didn't mean that Wal-Mart shouldn't be taken to court for breaking the law. Of course they should be. It's using the courts to gain an unequal bargaining position that I object to. It's as wrong for us as it is for them. Two wrongs don't make a right.

Yes, but while people should be responsible enough to learn how to swim before jumping into the pool, we should also help them by making sure the pool is clear of sharks, or at the very least posting a sign or two.

I don't think I disagree. But there is a difference between legitimate protection and enabling co-dependent behavior; and government has no business crossing that line.

I see, so Paris Hilton and her lifelong accumulated work, the compounding years of her laboring so desperately to yank up the straps of her ragged boots, should be treated with great lament should she have to pay more into the society that allowed her to be such a parasitic, worthless cancer.

Gotcha. Thanks for that.

... but somebody who loved her did, paid taxes on it, and gave her the rest.

Even if Paris didn't work for it, it still represents the work of someone. If that person wanted to give it to the United Way, Red Cross or pay down the national debt, would you complain? But when they give it to a worthless socialite whose brains are in her bloomers, you object. Why? Didn't he earn it? Isn't it his right to give it to whomever he wishes ... or burn it in the backyard, for that matter, if that's what he wants?

I agree that watching someone like Paris Hilton dispose as she does of the fruits of someone's labor grates on the soul ... but if you're going to say that the one who gave it to her can't do so, you need a reason other than, "I don't approve." Practically everything is disapproved of by someone. Why is your opinion worth more than anyone else's?

their children would receive no inheritance whatsoever and be forced to work to pay for the access they take for granted.

The assumption is that wealth exists in a vaccuum. The truth is, wealth is part of the commons and no one should be allowed to accumulate a disproportionate amount. That is the point. Old money should be stripped away and redistributed. It was gained through theft, bloodshed, slavery and genocide. New wealth should be taxed heavily and put back into the community. Without the basic social and economic infrastructure that we the people own, these people would have nothing. I won't be happy until their tax rates are back above 50-60%.

"Behind every great fortune, there is a great crime."

..isn't the "politics of envy" (Nice Rush Limbaugh talking point, though...).

It is to keep massive, nay Royal, fortunes from accumulating. Such huge amounts of wealth in the hands of an elite few is a one-way ticket to tyranny.

Stop supporting policies and people that screw you.

Your ideology is predicated on a conservative/libertarian fantasy that some day you too, if you just work hard enough and "play by the rules" will be one of the wealthy elite.

Sorry; not going to happen.

It's time to wake up and smell the Right-wing bullshit, friend.

The money I earned this year was wealth that was transferred to me. I paid taxes on it. When you inherit wealth, you (or to be more precise, the executor of the will) should pay taxes. But the fact is, almost no one pays inheritance taxes. A surviving spouse can receive the entire estate of his or her deceased spouse, regardless of its size, without paying any estate tax. And in 2006, non-spousal individuals receive a $2 million exemption from the estate tax and couples receive a $4 million exemption.

As a result 99.7 percent of all people who die in the U.S. this year will be able to pass on 100 percent of their assets free of any estate tax. This means that only the wealthiest three tenths of one percent of all estates will be subject to the estate tax this year.

Abolishing the estate tax altogether would cost about $1 trillion over the first decade starting in 2012. If you think it's that important to help the wealthy elite maintain dynasties, then please let me know what spending we should eliminate to make up for that lost revenue. I guess we could cut back on food stamps some more. Would you consider that a high moral plane?

Members of a handful of super-wealthy families have quietly helped finance and coordinate a
massive campaign to repeal the estate tax, and you have been taken in by their propaganda. Estate taxes are quite appropriate, and more fair than some other forms of taxation.

http://www.citizen.org/documents/EstateTaxFinal.pdf

I am taking your word for the figures you quote.

My problem with inheritance taxes is one of principle. St. Paul once asked the question, "Shall we do evil that grace may abound?" which is another way of asking, "Does the end justify the means?" His answer was No, and I agree with him. So, to me, it doesn't matter what the result is; if I have to break a few eggs to make an omelet, I won't make the omelet.

If we lose a trillion dollars in tax revenue by doing the right thing, we should still do the right thing -- and whether taxing inheritances is right or not is not a matter of how much we get if we do or lose if we don't, or so it seems to me.

We're talking about money that has already been taxed, too. If it can be taxed again, why stop at twice? Why not tax it every year that it stays unspent? If what we want, as Sirveri says, is to circulate that money, then every year it sits around is a slap in the face of the public good. Tax it annually. If not, why not?

I just need a principle that justifies taking something that belongs to one person and giving it to someone else -- something other than, "I'm government, so I can get away with it." This is a problem I have with most taxation; but especially with income that has already been taxed.

What sense does it mean to say that when you inherit money, the money has already been taxed? Whenever someone gets money, it's from someone else, so it's already been taxed. What is so special about inheritance money that it alone should not be taxed? The only significant difference that I see is that inheritance money isn't earned by the person who gets it.

I am not an economist, so I could easily be wrong about this.

Gifts are not taxed, so long as they stay below a certain threshold. I think it's $11,000. I can give you $11,000, and nobody pays income tax on it.

So, when you're talking about income or sales, I don't think it's the transfer that's being taxed. I suspect it's the exchange. When you get paid for labor, that's an exchange; and when you pay money for goods or services, that's an exchange. But gifts are given for nothing.

What justification might there be for taxing an exchange, as opposed to a gift? An exchange is theoretically in the best interest of both parties, and is made for that reason. Perhaps the state has a legitimate protective function in any exchange, e.g., making sure it's freely made; and the tax on the exchange is for that purpose.

How might this apply to inheritance? You might say that the state is protecting the integrity of the transfer; but this is pretty thin. It looks a lot more like a gift than an exchange.

Republicans like to whine and complain about taxes, complaining that it is "their money", so the state has no right to tax it. But the state provides numerous needed services for its citizens, and that's why they have the right to tax people.

You claim a big difference between an "exchange" and a "gift", trying to justify that it is morally acceptable to tax the former and not morally acceptable to tax the latter. I see no moral difference between the two whatsoever.

The state doesn't justify taxing "exchanges" because they are theoretically in the interest of both parties. The justification is that the person has received money and the state (i.e., we the people) needs it to provide services to the people.

But this is after all the internet and you know very little about me. Please note, I furnished a link in my prior message. There, if you wish, you can find the figures justified - hopefully to your satisfaction.

I'm afraid I didn't do a very good job of communicating my point to you, but I see Time for change picked up on it here in this thread and articulated it perhaps more clearly. I hope you stick around DU. Debate is useful, if fairly conducted.

We tax income when it is received and spendable. Thus, income taxes, sales taxes, capital gains taxes, etc. Estates are unearned income to the recipients.

I pay to buy something out of my already taxed income, I pay sales taxes on it, the person'company who receives it pays income taxes on it, they pay some of it to their employees who pay income taxes on it, etc.

What a fallacy:"When someone with venture capital invests, that one man contributes more labor than anyone on the production line." That man is contributing the profit from someone else's work, not his own.

No wealth is created without work. None! Never! Until somebody does some work, nothing happens. You can have all the wealth you want but you'll starve unless somebody does some work.

have always been the available options. For much of history the aristocracy has chosen the fighting option. They were also subject to various means of organized banditry.

People without means have no problem killing those who display an excess. This has always been the case. The easiest way of defering bandits is encouraging a general prosperity. Why risk your life when a moderate amount of work will keep you comfortable? When that is no longer the case people arm themselves and seek to equalize the economy.

Paying higher wages and restraining the wealthy is always cheaper. Bill Gates is currently spending vast sums to keep his family off the death squad list; it might even work.

... then anyone who seeks to better himself is a fool. If the mob is going to attack me and take what I've earned, why earn it in the first place?

Your point is moot unless you are part of the 2% of humanity that owns over 50% of the collective wealth.

Who decides how much is too much for someone else to have? By what right do they decide this?

My point is not moot, because right and wrong apply to everyone. Unless you don't believe in right and wrong.

Many don't. Few admit it.

in just a few hands at an alarming pace. That is wrong. This isn't a question or issue of regular person accumulating some degree of wealth. This is extremely wealthy persons gaming the system to give themselves a most unfair advantage to earn and retain their wealth. This is class warfare.

And, my friend, right and wrong, like beauty is often in the eye of the beholder. You paint with a broad brush.

"Who decides how much is too much for someone else to have?"

The People do. This is a democracy, remember? ;)



"By what right do they decide this?"

By the consent of the governed.



"My point is not moot, because right and wrong apply to everyone."

Yes they do. But who defines what "right and wrong" is?

Both terms are completely subjective when you are truly honest.

You mix a strange sort of idealistic-moralizing argumentation with an underlying pragmatic suggestion that "old money" automatically engages in venture captial and IPO start up investment.

Even were that suggestion logically legitimate (as such an argument can be applied to all taxation-not merely on the transferal of estates on the ultra-wealthy) the fact of the matter is most forms of investment that occur within that sector are safe investments in existing companies and technology.

If you look at the selling of stock only the most minute percentage actually invests in "creating wealth." The money paid for most stocks is second hand. When you buy General Motors, GE, Ford, or Coca Cola the money you pay never really goes to those corporations to create or research new products or methods of production. Instead it creates an interest in increasing quarterly rate of return on investment. This mentality demands that you must appease these new investors who are, as often as not, in it for the short term.

The idea of venture capital is risk and opportunity, most of the older estates do not need nor want this risk and manage to stay in the relatively stable markets of Real Estate, Government and municipal bonds, and the aforementioned 'negative investment' managed by brokerage houses that tend to give such fortunes preferential treatment.

There is no evidence that reducing taxes on super rich has any appreciable benefit to society. The "trickle-down" theory has been discredited by most people that study economics and only pundints, Amway salesmen, and politico's still give it any validity.

Why should we consider Estate income to be superior to any other income? Certainly the degree of wealth should play some role in determining how moral its maintenance is? Is there not a degree of wealth that becomes absurd or unneeded?

How much should we worry and legislate to protect the wealth of the top 99.5% bracket?

You are among friends.

And it has become increasingly unequal since 1970



From : http://en.wikipedia.org/wiki/Gini_coefficient

and I make $25,000. In the Bush world, Bill Gates and I have an annual average income of $500 million. Wow, can I go buy a yacht and a private jet?

The Economics and Economics are designed to turn the U.S. into a Banana Republic i.e., an oligarchy, rule by the wealthy - strong military, discourage education, the more poor,the more recruits for a bigger military, centralized authoritarian government (with Bush as the dictator). It's as simple as that.

I suspect that many of the voters in the last election finally got it--that despite the blather of GOP "fibbertarians," the incumbent administration has been waging class warfare from the top DOWN.