While I've been meaning to read Noam Chomsky's: "Understanding Power" I ran across the documentary: "Requiem for the American Dream" over the weekend and this is clearly showcased within the first 5 minutes as he begins to describe "The 10 Principles of Concentration of Wealth & Power" and starts out with this infographic: http://imgur.com/QVcagot.
Quoting Chomsky from this portion of the film: "Concentration of wealth yields concentration of power. Particularly so as the cost of elections skyrockets which forces the parties into the pockets of major corporations. And this political power directly translates into legislation that increases the concentration of wealth. So fiscal policy like tax policy, deregulation, rules of corporate governance, and a whole variety of measures - political measures designed to increase the concentration of wealth and power, which in turn yields more political power to do the same thing."
The documentary has spurred me to start reading the book, but falls in line with what's coming to light in the mainstream media today unfortunately.
Edit: Honest question - why the downvote? Directly falls in line with the original post.
>Carter compared elections now-a-days to those when he was running for office, saying, “In those days when I ran against Gerald Ford, who was incumbent president or later Ronald Reagan, who challenged me, we didn’t raise a single penny to finance our campaign to run against each other. We just used the $1 per person checkoff that every taxpayer indicates at the end of his or her income tax return."
In Canada we used to have something called the "Per Vote Subsidy".
Every political party got $2 of taxpayer money per-vote, per year.
It was, sadly, killed by the Conservative government (along with corporate donors) to prioritize an individual-fundraising-oriented system like you have in the USA.
> In Canada we used to have something called the "Per Vote Subsidy". Every political party got $2 of taxpayer money per-vote, per year.
We have that in the US as well. It has existed since Watergate (1976). In 2008, Obama became the first candidate to opt out of the system, despite an earlier pledge to use them (McCain, his opponent, did not - he used public funds).
Amusingly, Romney said that he'd prefer to use public funds, but the reason that he did not (in 2012) is that Obama did not, and he believed he couldn't be competitive against an incumbent president who would potentially be spending three times as much as he would be legally permitted to[0][1][2].
The system still exists, for any candidate willing to use it. Though I would not be surprised if McCain became the last candidate to take advantage of it. After 2008, no candidate who wants to be competitive will take public funds if their opponent isn't as well, and that's unlikely to be the case for both candidates in a race simultaneously.
[0] Accepting public funds comes with limits on total spending
[2] And frankly, he was right - ultimately, he spent about the same amount as Obama did. If he'd been limited to the amounts that public financing would have restricted him to, he'd have lost in a landslide.
Is the money/opt-out party-wide or is it tied to a specific candidate for a specific office. When you say "Obama" and "Romney" are you talking about them in their role as leading the entire party in the election or just their individual presidential runs?
> Is the money/opt-out party-wide or is it tied to a specific candidate for a specific office. When you say "Obama" and "Romney" are you talking about them in their role as leading the entire party in the election or just their individual presidential runs?
It's for the candidate in the presidential race. Though that comparison makes less sense between the US and Canada, since the latter has a parliamentary system, which the US does not. Both the US and Canada have political parties, but the nature of the roles of political parties are very different, in terms of how they interact with the system.
If the US did what you're suggesting (provide money to parties, not to candidates from the two leading parties), it would have a very different effect. One could make the argument that it would be better, but it wouldn't really be the same as Canada doing it, because the political systems in which those policies exist are very different.
It's not enough to control the funding, you have to control the political speech. Basically, candidates would get fixed slots of tv and radio time to spread their message, and all other political speech would be forbidden. Otherwise money can dominate the conversation as it does with the pacs. However, such a thing could never be done in the US due to the core belief that free speech is a fundamental right that cannot be curtailed.
> It's not enough to control the funding, you have to control the political speech. Basically, candidates would get fixed slots of tv and radio time to spread their message, and all other political speech would be forbidden. Otherwise money can dominate the conversation as it does with the pacs.
So you would prevent candidates from tweeting, or posting on Reddit, or updating their personal blog?
It needs to be stopped not because it's a different party, but because of who is donating the money. In the Obama campaign his fundraising records were set by small, individual donors. The GOP on the other hand is using a few mega donors (along with candidates like Clinton). This kind of unlimited funding from a couple hundred people is what should scare every democracy-loving person.
Edit: I write this as a nominal Clinton supporter here, so I really feel my opinion is unbiassd here.
> It needs to be stopped not because it's a different party, but because of who is donating the money. In the Obama campaign his fundraising records were set by small, individual donors The GOP on the other hand is using a few mega donors (along with candidates like Clinton)
It's not so simple.
First of all, it's hard for us to accurately compare 2008 and 2016, because there's a lot of data about the 2016 race that won't be released for a while. On top of that, the way data is broken down has changed, so not all of the buckets are 1-1 comparable. That said, most (53%) of Obama's money came from donations of over $200, and almost a third (27%) came from donations of $2,300 or more.[0]. In January, 95% of Clinton's money came from donors under $100.
You can say that we need to look at PACs as well. But actually, most PACs are still limited in the amount of money they can accept per person as well. It's only independent-expenditure-only committees that can take unlimited contributions. Even then, you'd be surprised how little money they actually raise. For example, only 25% of pro-Clinton money went to PACs, and that's counting all PACs, including ones subject to contribution limits[2].
Also, I'm not sure what you mean by 'candidates like Clinton' - in the presidential race, there's only one candidate who's not in the GOP and not Clinton. Is that meant to be a comment about Sanders?
"It needs to be stopped not because it's a different party, but because of who is donating the money. In the Obama campaign his fundraising records were set by small, individual donors. The GOP on the other hand is using a few mega donors (along with candidates like Clinton)."
Hmm. Carter may be telling the truth as he knows it - but Robert Caro's biographies of LBJ make it quite clear that there has been enormous monetary corruption in US politics - going back to well before LBJ. See especially how his first senate race was financed in "The Path to Power"
Forget monetary corruption: it was flat out political corruption. If anything the insurgent candidacies of Sanders and Trump show that being able to get media attention, raise money directly from the people, and in the case of Cruz (who is by no means a party favorite), raising money through super pacs, etc. Are a de-corrupting influence by opening up options outside of the anointed choices.
You mean "Landslide Lyndon"? That was overt and egregious ballot box mismanagement. Common as dirt in Texas politics.
Political contributions work more like "rock and roll fantasy camps" than they buy access. Not always; sometimes they do, but the candidate will usually not have the bandwidth to give you their undivided attention.
It's worth reading the book. Ballot box mismanagement, especially on that scale isn't free - and it seems quite clear that he was not only receiving cash handouts for his own campaign, but he was also acting as a channel for money to other democrats campaigns - and this was what allowed him to gain the influence he held within the party and especially the senate.
We could certainly do even better nowadays. Rather than get campaign funds from taxpayers, we could have the state run a web service for candidates to debate, posit positions, etc. You would need to expand library computer access to let those without technology access the information, but the status quo is already bad enough its an improvement all around.
Then you abolish private campaign funding and advertising.
With the Citizens United decision, that's no longer possible without either a Constitutional Amendment or the Supreme Court overturning their own decision - neither one is very likely.
> With the Citizens United decision, that's no longer possible without either a Constitutional Amendment or the Supreme Court overturning their own decision - neither one is very likely.
Citizens United has implications for campaign finance, but the demise of publicly financed campaigns that GP is referring to began before that.
In fact, it began with Obama's first election (2008), in which McCain agreed to take public financing. Obama, on the other hand, broke his earlier promise to take public funds, becoming the first candidate in history to do so[0][1]. Because accepting public financing means limiting total spending, Obama vastly outspent McCain by November. Obama won the popular vote, spending $10.94/vote, whereas McCain spent only half as much total money (amounting to $5.97/vote in the end.)[2]
Regardless of the ideology of the court majority, they very rarely directly overturn previous decisions. It's not impossible (Brown vs. Board of Education) but it isn't just a matter of getting a challenge before a liberal court. The previous decision is binding, they would have to justify why they would be going against authority equal to their own.
I don't claim to understand SCOTUS - but they are extremely conservative institution. I mean dictionary definition of conservative - upholding the status quo. And they prefer to not get involved in the day to day affairs of the country.
So even a bad SCOTUS decision could stay on the books for a long time - just to save face and uphold the credibility of the institution.
They look to rock the boat the least. Even in their current hyperpartisan state.
With the Senate refusing to do its constitutional duty and confirm Obama's (very conservative) pick, it'll depend on who wins the presidential election. If it's Trump it'll probably be someone from left field completely unpredictable. With Hillary it'll probably be a middle of the road jurist not really willing to overturn things too much.
I don't imagine that the primary campaigns were funded by public money - and in the case of the presidency, they are just as important as the actual campaign.
Actually, many primary campaigns were funded by public money. There was an interesting episode of Planet Money recently [0] where they talked to Senator Fred Harris who got the US system started. A few years after getting it going, he used public funds to run against Jimmy Carter for the 1976 nomination by the Democrats. He lost to Carter and then Carter used public funds to run his presidential campaign against Ford. But Harris got ~$600,000.00 to run his nomination campaign.
It's really surprising how often something trends on HN and there's a relevant Planet Money episode from within the last few weeks. I wonder if that's because in some cases other news outlets are spurred into covering it because of Planet Money (it's reach is relatively small compared to the Guardian, so the Guardian covering the topic will be seen as new to most), or if there's some journalistic social network (in the traditional sense, not the Facebook sense) that some outlets are better are responding to quickly than others?
There's a point where the distinction between the state and the super-wealthy blurs or disappears entirely, and there are many cases where the super-wealthy dictate policy to the state rather than vice versa.
Which gets to the core of what libertarians really want: not to abolish the state per se -- but to winnow it down and neuter it to a point where it is more pliable to their interests.
I've been observing that crowd for a very long time.
And have prudently concluded that it's best to assess their ideology based on the actions they've chosen to take (specifically, the political alliances they have formed in the past 20 years, after it became manifestly clear to them that both their platform and their candidates were basically unelectable on their own) -- and the goals they can realistically hope to achieve through these actions -- rather than on the sentimental platitudes they pretend to believe in.
Would you mind clarifying a few points with examples:
* political alliances they have formed in the past 20 years
* sentimental platitudes they pretend to believe in
I generally agree with the sentiments that you've portrayed, but this is just way too vague to be useful. I don't put much stock in libertarians in the general sense since any given libertarian could idealize anarchy, socialism, communism, or capitalism.
In the early years, they could claim (with some basis) to be "neither left nor right", but somewhat off the generally conceived political grid altogether. Appealing equally to peaceniks and potheads as to entrepreneurs and laissez-faire economists, and all that.
But in recent decades they've basically thrown their lot (solidly) with the political far right in the U.S., both ideologically and strategically. This shift was already in place well before their paramount candidate actually chose to run under the GOP ticket (and libertarians started to register Republican en masse), but by now the tacit alliance is pretty obvious, and fundamental to their strategy.
As to sentimental platitudes I mean of course "the state is inherently corrupt" and all the other anti-state rhetoric. They can say that all they want, but when they go so far as to (overtly) align themselves with Republican Party and everything it stands for -- I just don't buy it.
I am not a libertarian, but I can tell you that you are confusing generic corporate capitalists with libertarians because they often sound the same. Real libertarians believe some junk about ideal world with minimal government. Corporate capitalists are sometimes libertarian but usually just spout libertarian stuff because it sells better than being honest about their power ambitions.
Basically, don't confuse corrupt power-mongers who use libertarian propaganda at times with actual libertarians.
It's a misunderstanding of the history of civilization. Civilizations always have the king balanced against the power of the rest of the aristocracy. A strong king is necesary to protect the peasants from feudal type slave lords. Likewise the absolute king must be balanced by the aristocracy, who today would just be called billionaires. Democracy adds more check and balances to the equation but humanity has not figured out a better system than a strong central government that follows the rule of law and has some accountability.
Regardless of political meaning, it's not the infographic, it's a sad excuse for a caricature. _Info_graphics are supposed to have much more actual information that that.
Sorry for the mixup of terminology. While I will agree it's not an infographic it's a representation of the ideas being explained in the context of that portion of the film. It's not a "cartoon" by any means and it does represent, at a very high level, the distinct notion of the original content of the thread. Money yields power and power yields legislation that yields money.
My point is that I found it interesting Chomsky has succinctly been defining these problems for quite some time.
It not a big deal. Calling something a political cartoon isn't an insult. Political cartoons are meant to illustrate a position, not support one. An infographic is a visual presentation of data that supports an argument. Political cartoons aren't bad, but they don't substitute for supporting evidence.
I suppose because these arguments always assume the premise - that money everywhere and always corrupts politics - that they then conclude. Chomsky's old enough to know better, too. All this being said, short of that, Chomsky's scholarship is otherwise impeccable and a great place to get a larger view of the vents of history. But even going back to Vietnam, accusing the US of imperialism just because of the French doesn't hold up very well. In the case of the Dulles Brothers' coups in South and Central America in the 1950s, the documentation that this was the case is intact; in Vietnam it simply isn't.
If it were well known that money always corrupts, then regulatory legislation would involve a debate on those costs rather than just going ahead with it. And what you'll find is that it nearly never does.
Chomsky and Howard Zinn are important to read, but please understand that nobody's able to empirically line up all the "facts" There's very thin slice of speculative fiction at the end of the derivation of those arguments.
Money corrupts more than you think. Just look at Ricky Hendon, for example. He contracts his "services" to mayoral candidates and charges a heavy, heavy penny. Hell, there's a conversation on facebook where he talks to Dock Walls and Willy Wilson in the same post about how he worked at getting Amara Enyia kicked out of the election. He did this after Enyia's team kicked him out of their offices because of his incredibly shady practices and stopped paying him. The inside folk I talked to at the time all agreed - he's a scumbag, ex Senator who should've been sent to jail for corruption charges. So, because of his selfish, monetary reasons, Chicago's candidate pool completely thinned.
You can make the argument, "Yeah, that's just one person.", sure. But that one person fucked Chicago's election.
Later on in that election, Bob Fioretti, who used Amara's campaign manager, dropped out of the race and gave his public support to Rahm - Because he received 50k to do so. Even though throughout that entire election, he was a hugely public critic of Rahm.
If anyone thinks that money doesn't corrupt, or that it doesn't have strong negative influence, they're a god damn naive fool. "It never does", my ass.
There's an old saw - "the plural of anecdote is not data." Those are extremely good examples but in the larger picture, the effects aren't nearly measurable.
This could be nothing more than a lack of reporting. But social scientists have never been able to thoroughly prove that money matters in significant ways. And I never said "it never does." That'd be foolish. My point is more subtle - we don't much know. Actual stories of corruption are rare enough to be noteworthy.
I'm not sure why you wouldn't consider this noteworthy.
No, the effects aren't directly measurable. But why does this necessarily need to be an academic persuit? Trust me, I completely understand why purity of information/data/research is needed, but there's a certain point where "Yep, this signed document shows they're gaming the system for money" is all that should be enough. My "anecdata" is a clear example where money and collusion directly affects the lives of 2.6 million people. When four out of five candidates are swayed by money - directly or indirectly - in a way that effects that many people, it's significant!! Yes, thinning the candidate pool is god damn significant.
Mind you, this isn't something that I saw or heard in the news. This was told to me out of the horse's mouth while sitting in Fioretti's office with his campaign manager and Amara's old campaign manager. This meeting was done about a week after two of my FOIA requests proved exactly what Hendon said over Facebook.
Want to know why you don't see anything about this in the media? They never report it since they're dumbfoundedly not interested in any of it. Chicago's newspapers are the most disinterest group of asshats I've ever had the pleasure of talking to. Of course you're not going to hear anything from them. I know you love anecdata, but I'm going to give you an example of more, anyway. After the Chicago Tribune published an article that made national news on how they were simply suing the mayor for his mail/texting records, I called them and said I was suing for mayor's phone records. The journalist who wrote the article had zero care for his own article and basically said, "I'm just doing my job" and sent me to the person who did the research. I never heard a single thing from him. If these guys are supposed to be renowned journalists and this is the shit we get, of course you're not going to get anything that's researchable.
Use your bayesian reasoning skills instead of naively throwing away "anecdata". Christ.
I do consider it noteworthy. I hadn't heard it, and I appreciate the info very much. It is utterly shocking. I apologize; I didn't mean to come off as dismissive. And rereading, I did. It kind of didn't sink in properly.
And the "meh" you've run into ( dude, you filed FOIAs - holy schnikies! ) is also rather appalling. Including mine.
These guys are doing this out in the open? Damn. You'd think they'd be open for predation after something like that.
FOIA's pretty interesting. You should seriously use it to look into things that interest you. I've learned more from it than any newspaper, magazine or website, and that's considering I'm not even trying to be involved that much. If you want to see what kind of things you can do with it, check these out:
The city's legally obligated to fulfill [0] after a phone call tomorrow where they're going to try to simmer down the request.. They forgot to respond initially, so they're no longer allowed to use "unduly burdensome" as a rejection reason.
[0] "Please provide any and all information, log files, log backups, documentation, code, reports and data that used for or by the City of Chicago, third parties, or any affiliates for the the use or analysis of CANVAS, its logs, log files, documentation, code, log backups, and all data since Jan 1, 2009 (excluding the data from my previous request)."
The FOIA officer I'm working with is pretty great, too:
"Great. (And I can neither confirm nor deny whether I’ll be filtering the “editorializing” from the people who were helping me understand your request.)"
I know that "1%" has a nice ring to it, but articles like this that mention "billionaires," "David Cameron," and the "Koch Brothers" aren't talking about 1-in-100, they're talking about 1-in-100,000 or more. The 1% are your small town local doctor and lawyer, and they're not tax dodging on their (nonexistent) huge hordes of cash by moving them out of the country.
In the UK, a one percenter earns £160k or above [1]. That's above the salary of any kind of doctor or consultant in the NHS, though they may earn more privately[2]. Very few doctors of any kind are likely to exceed this salary.
Lawyers potentially could earn far in excess of £160k, though the vast majority would not.[3]
I would guess that working in finance is the single mostly likely way of earning over £160k.
I appreciate this may well be different in the US.
OP is probably referring to US, where doctors are paid a lot more than most places and "laywers" in this context has the connotation of a partner at a law firm, not just some random person working in the law field who passed the bar exam. Partners in law firms are easily and often bringing in 500k+ every year. And doctors in the US are generally making a minimum of 200k, with the average being closer to 300-350 if I remember the stats I saw recently correctly.
"Lawyers earned a median salary of $114,970 in 2014, according to the BLS. The best-paid lawyers earned more than $187,199, while the lowest-paid made less than $55,400"
No idea whether everyone equates "lawyer" to "partner" in the US - certainly not the case in the UK where most qualified lawyers are not partners (except in very small firms).
I am not sure why you just quoted stats for average lawyer salaries immediately after I just said the average lawyer is not what the OP is referring to.
Lawyers does not automatically mean "partner" in the US, hence why I said "in this context". The OP is saying the majority of the 1% of income earners are things like doctors and lawyers. Not that "lawyers in general" are 1%ers.
I believe you are mischaracterising what the OP said. Take a look at what was written:
> The 1% are your small town local doctor and lawyer
Which is, I believe, demonstrably untrue. "Small town" [x] will earn less than "big city" [x] in general, and there are few elite medical facilities or high powered law firms in small towns.
This may seem like pedantry, but it's important to watch for this kind of language: the talking point that "small town doctors" are in the 1% is a powerful tool in trying to convince people that "the 1%" are just plain 'ol folk. You wouldn't want to tax good 'ol Atticus Finch, would you? I mean, he's barely getting by as it is!
If OP had said "high performing doctors and lawyers" rather than "small town doctors and lawyers," that would be a much more accurate statement which would carry a very different connotation.
it is the lowest part of the income distribution who benefited the most, seeing their wages doubling. The very much upper end too. But not the middle class.
Depending on how you look at it, it can be used as an argument both ways. Which is why I hate when people reduce something as complex as a distribution into one number. It's too easy to lie with statistics.
Imgur is blocked at the office but I'd like to add there must be a very strong effect of the personal allowance (you don't pay any tax up to 11k) increase when comparing changes over the last decade.
There are exception if your income is in the top bracket.
From ~1932 to 1987, the top tax rate wasn't less than 50%. For more than 10 years it was above 90%. Basically it was a way to keep a handful of people from getting all of the marbles. If you don't like how the government spends money, grow a business or start a business, those expenses are all tax deductible. The idea is to keep money moving.
And this perfect system culminated with the UK going nearly bust. And if Thatcher didn't end that, you just need to look at the other side of the Channel to see what the UK would have become.
I'm looking at the U.S. and it thrived and built major infrastructure because it could afford to.
A country could tax the crap out of the rich and misspend. No matter what, we should expect and insist on competency. Not this Reaganesque idea that the government is shit no matter what.
I am interested here in the relative income growth between percentiles, so the inflation applies in the same way to all revenues (the value of the same £1 goes down, irrespective of how many £ you have). So as a %, you would have to shave the cumulative inflation between 1999-2013, but that's subtracting a flat line, it doesn't affect the shape of the % change curve.
The point is not so much that low incomes did 200%, it is that low income did much better than the rest of the distribution (relatively).
Interestingly, this is less likely to be the case in wealth terms; many people globally with a lot of wealth (e.g. in agricultural land) have relatively low incomes, and the opposite is also true.
Measuring wealth without adjusting for lifecycle effects (which is how it's usually done) is a meaningless exercise. A doctor four years into his or her career almost certainly has negative wealth, while any retiree not solely depending on a government pension presumably has some reasonable wealth.
Which misses the point. Being a 1%er isn't about some income, it's about economic agency.
Doctors in the UK are well-paid professionals, but - like scientists, artists, academics, engineers, writers and other members of the middle class - their influence on policy is essentially zero.
The biggest political change of the last few decades in the UK has been the absurd concentration of political power in the hands of speculators, bankers, property developers, creators of sweatshop industries, and a tiny number of "consultancies" that are hired to provide public services that used to be publicly owned.
A few of the biggest IT corps - most obviously Google and MS - are on that privileged access list.
No one else gets a say in policy. Voting is a sideshow.
Policy is set in secret meetings which are unminuted and off-the-record even if they take place in government offices.
The real meaning of "1%er" is anyone who can buy access to ministers - because it's been proven time and again that access is for sale - and influence policy for their own benefit.
I know less about the US, but so far as I can tell the setup is very similar, but perhaps less indirect. You pay for your senator or congressman or president on the way up, and then they do what you want, more or less, while they're in power.
There's a lot of show about caucuses and candidates and voting and flags are waved while pundits punditise. But the real decisions happen with money - euphemistically known as "favours" - on the table, and most voters are excluded from that process because they don't have the organisation, the social links, or - obviously - the money to take part.
If you are not playing at that level you are not a 1%er. Having a six figure salary does nothing to change that, because ultimately your income stream is just as susceptible to the whims of the people who do play at that level as everyone else's.
Can we just admit that we all know what the term 1% is intended to mean in context and not have this silly semantic argument again? There are real, important issues here and being pedantic distracts from the discussion.
No. I am sick of politicians vilyfing the 1% ... in Canada, that means a family income of around 180K. Taxes get raised, benefits get cut etc. on people who have to pay 8-12 times their income to afford houses in major cities and have massive student loan debts to service (where professional jobs are anyways). Having a tax system that is blind to local income/cost of living differences is stupid. The 1% rhetoric really needs to end. I am in the 1% and I am fucked. I'm in my late 30s .. I have no house and can barely afford one. Sorry if this sounds like whining but this system of screwing people who actually do work and generate income needs to end. Here's an idea ... lets stop taxing income and start taxing assets.
You're not in the 1% as it is popularly used. 1% applies to wealth, not income. I hear you on the difficulty of receiving a high wage yet finding it difficult to get a foothold established.
In my city's case, there are extreme amounts of outside capital flowing into Austin to try to take advantage of the hype pumped out by all the various vacuous media channels in this country.
All that wealth sitting out there, being used to drive up property prices so that average working folks can't afford to live in the city they supposedly live in.
You're not in the 1% as it is popularly used. 1% applies to wealth, not income.
This is historically inaccurate, at least for American politics. There, the use of the phrase "top 1%" goes back at least as far as debates over then-Governor George W. Bush's income tax plan in the 2000 election[1]. Gore frequently used it as 'wealthiest 1%', but he was clearly citing studies based on the income breakdown[2].
If you want somebody who will fight for you and who will fight to have middle-class tax cuts, then I am your man. I want to be. Now, I doubt anybody here makes more than $330,000 a year. I won't ask you, but if you do, you're in the top 1%.
Yeah... And he explained. Also with student debt it actually makes a lot of sense. Many doctors have hundreds of thousands in debt. Some people need their high salaries.
It's not "hard", it's just more complicated. And sharing the wealth is harder still. I say that based on observation; I doubt I'll ever be a 1%-er. Maybe a 10%-er, but probably not.
Letting this misconception continue is also potentially (although unlikely) dangerous to all of us who worked our way into the 1%. If there ever is any large scale social movement "against the 1%" the population involved in that movement is apparently not going to distinguish between us and the billionaires with inherited wealth.
Where in canada do you live? Is there anything specific location wise that keeps you to a certain location? You probably could afford a house in alberta or quebec for example. But toronto and especially vancouver are economic bad ideas. Could you get a job in the USA too? The price/income ratios there tend to be much better.
When houses start at over 1 million even the bottom of the 1% can have trouble buying. Houses are going up 24% year over year which is much higher then you can save money. Condo prices prices are not going up as quickly so they don't work as a good stepping stone. Out in the burbs if you want to be near transit will still be 600-800 for something livable, actually there doesn't seem to be a difference in price between a tear down and something you could live in.
Might be a bit bias as I was out looking at houses on the weekend.
When I bought my house in Toronto 20 years ago it was 3.5 times my annual salary. Now it is valued at more than 7 times my current salary (doing the same type of work).
I disagree. A lot of people railing against the so called 1% are in fact 1% themselves on a global basis (e.g much of the Guardian readership). They tend to be very keen for people richer than themselves to share their wealth, but despite in fact being richer than most people on earth tend not to be so keen to share their own wealth.
> I pay a far higher percentage of my income as tax to the society I live in than the people in the panama papers.
Well you absolutely don't know that. And whilst no doubt some people _are_ avoiding tax, many are not. And btw overall the rich pay a far higher portion of their income in tax than the poor. In the UK for example the top 1% of earners account for 30% of the total tax take (up from 20% 10 years ago). The top 3,000 pay more than the 9m bottom.
We absolutely do know that. Even without any aggressive tax avoidance schemes, if you have a significant investment income, you probably pay an effective ~15% tax rate [1] [2]. I can pretty much guarantee you that most of the people named are in this bucket.
If you earn a salary that puts you in the literal 1%, you probably pay an effective tax rate of 30-50%. I don't know how low your income needs to get to reach a 15% tax rate on income, but it's really low.
Since I graduated college my income has increased from ~$28k to over $100k. My effective tax rate has only increased. When I was earning in the mid $30k's it was about 4%. Last year was 12%.
> I don't know how low your income needs to get to reach a 15% tax rate on income, but it's really low.
I was below 15% in the low $70k range for sure. We'll see what it is this year.
That's wrong. The top 1% pay 30% of income tax. But this is only about a third of UK tax revenues. There is then NI, council taxes, property taxes, business taxes, VAT and duties.
The poorly paid actually spend a much higher % of there income in tax than the top 1%. And their contribution has been rising as the income and wealth based taxes are cut and the consumption based taxes have risen.
I don't blame you for thinking that is the case though as this canard has been pushed heavily by the UK press.
The top 3000 also benefit from a much greater percentage of the assets of the national economy than the millions at the bottom, so that seems entirely fair.
Some people are so rich they don't even appear on the rich lists. I don't know how much tax they pay, but I suspect it isn't much.
Generally, if you can literally fit the people who own most of the economic assets of a country into a small hall, you have a serious democratic deficit.
How does that work? What assets are they benefiting from more than others?
If you're in the top 3000 people by income in the UK, you get to ride the same crappy trains as everyone else, drive the same crappy roads (unless you try go everywhere by helicopter - hardly practical), get the same government services, have access to the same markets and the same products in those markets; how many companies produce luxury goods these days? Unless you're an idiot and buy diamond encrusted iPhones, the stuff in your house is going to be similar to other people's. You'll be eating similar meat, drinking the same water. You could collect rare art or something, but that's hardly a meaningful part of the national economy.
The top 3000 get pretty similar benefits from the economy as everyone else, they just pay a lot more in absolute terms for the privilege.
> How does that work? What assets are they benefiting from more than others?
Um you're confusing equal access with equal benefit...
> you get to ride the same crappy trains as everyone else, drive the same crappy roads (unless you try go everywhere by helicopter - hardly practical), get the same government services, have access to the same markets and the same products in those markets
Yea, except by being the super rich, you're benefiting far more from all those same crappy assets. Think about a rich person in retail.... their millions/billions depend on the existence of all those crappy roads to bring them customers and products to sell them. When said roads disappear, you both lose access to them, but the rich person loses far more as his access to customers also depends on those roads.
Equal access and equal benefit are vastly different things. The rich benefit more from infrastructure than the poor because their businesses are built upon and depend upon them.
How much of the total income do the top 1% of earners account for? And when you say 30% of total taxes, is that all taxes or just some subset? In the US, it's extremely common to make such comments which only refer to income taxes, ignoring payroll and sales taxes which are regressive. I don't know if it's similar for UK figures, but it has left me wary.
UK figures get kind of messed up by NI (National Insurance). It's basically income tax + pension payments + etc. rolled up into one, but billed separately from "income tax". For most people it's around 8-12%.
since people can't be straightforward about the envy driving their political beliefs we have to put up with lazy emotional hand-wringing in place of a manipulate examination. Is it your contention that this lazy hand-wringing should go unchallenged because it aligns with your personal envies?
And I bet like Tony Benn they also have parents who changed there wills to manage in heritance tax and have ISA's with more in then David Cameron's tiny little offshore holding.
You know when your grown up when you have a discussion with your parents about their wills and inheritance tax.
But that's a meaningless metric. How is it comforting to know that 99% of people in India or Ethiopia have no voice in US (or UK, in this case) politics either?
That summary jumps seamlessly from a literal use of "the richest 1%" to "A global network of tax havens" without any indication that they've suddenly begun talking about a much smaller set of people.
Or browse articles about the 1% on occupy.com or Huffington Post:
Both sometimes use "1%" to refer to literally the top 1% wealthiest people, and sometimes to refer to the ultra rich. You can jump from a numbers-based article about where the 1% earn their money to a screed about how "the one percent" are putting out expensive videos downplaying the plight of minimum-wage workers.
It's a rare political term that actually has a pretty clear meaning. It's a bit vague in that it could refer to income or net worth, and nationally or worldwide, but it's way better than stuff like "liberal" or "conservative" or "terrorist." Using such a precise term as a lazy synonym for "the ultra rich" is ridiculous.
> That summary jumps seamlessly from a literal use of "the richest 1%" to "A global network of tax havens" without any indication that they've suddenly begun talking about a much smaller set of people.
Hint: It's because they haven't suddenly begun talking about a much smaller set of people.
None of the links you posted are talking about the literal 1% as the problem. They'll reference statistics about the literal 1%, but only because the literal 1% includes the figurative 1%.
> It's a rare political term that actually has a pretty clear meaning. It's a bit vague in that it could refer to income or net worth, and nationally or worldwide, but it's way better than stuff like "liberal" or "conservative" or "terrorist." Using such a precise term as a lazy synonym for "the ultra rich" is ridiculous.
I totally agree with you, and personally I try not to use the term because I think using it shows poor communication skills: I think it's exemplary of everything that made the occupy movement largely unsuccessful. But it also shows poor communication skills to derail a discussion just to enforce the usage of your terminology, even if your terminology is more accurate.
There is no movement to overthrow doctors. Stop defending people who aren't under attack.
The people who continue to use the inexact figure is who. Why was 1% chosen and not 10% or 0.01% for that matter? And "railing against" != confusion. If enough people believe something, certain people in that group can do some pretty messed up shit without exactly "railing" first.
Confusion might not be the best word, but we should avoid perpetuating the notion that the entire 1% is to blame for average people not getting ahead.
> Why was 1% chosen and not 10% or 0.01% for that matter?
Because it's a simple number to write.
Lay-people using this term have no idea that the 1% includes doctors and lawyers, they just assume it's ultra-rich bankers, executives, and hedge fund managers. Yes, that means that if you're incapable of understanding context it might sound like they're talking down on doctors and lawyers. But I assure you they're not.
> And "railing against" != confusion. If enough people believe something, certain people in that group can do some pretty messed up shit without exactly "railing" first.
I always assumed it meant the 70 million richest people on the planet, you know those rich people with college degrees who have time to hang out in parks and complain about how the world no longer treats them any better than anyone else.
It seems they want their taxes increased and that money sent to Bangladesh to make for less income inequality.
Despite their college degrees I suspect they are innumerate and have a difficult time understanding meanings of words that don't favor their privileged position in the world.
Depends on the country. In many developed counties with social assistance, you will see hordes of unemployed people at the malls and at parks. Doing .. nothing. I'm all for social assistance but we are destroying the middle class.
I'd rather give $100 billion to 2 million people and have 1 million of them do nothing than give $100 billion to 1 person and have 1 million people starve.
Social assistance programs are so meager and inexpensive compared to the cut we give to the finance industry. It's ridiculous to begrudge social assistance to people who need it just because some people who receive it don't.
Frankly, I'm just not offended that some people don't work. There aren't useful things for a lot of people to do. I'm much more offended that some people are rewarded incomprehensible amounts of money which no human can possibly be worth, often for activities that are actively harmful.
you will see hordes of unemployed people at the malls and at parks. Doing .. nothing
That's odd. I mostly see employed people at malls and in parks. How do you tell them apart? Or do you just assume that they're unemployed, because they're in a park, doing nothing?
As far as I'm aware there are 7 billion people on the planet...
Yes, the middle class in America is losing people to the upper class at a 2:1 ratio to the lower class, if this continues 66% of people will be in the upper classes in the next few generations.
You can be in any situation and still live in a shitty situation.
That's why many philosophies boil down to: you're going to be dead soon, you might as well start enjoying it, and if you're not... well... you know what to do.
Only in America would people who borrowed money to take a 4 year sabbatical be complaining about being poor.
If Bangladesh wants to become part of one of these countries and follow all of their laws and regulations, then sure your argument could make some sense. Whats happening here is people railing against inequality inside of their own political systems.
A few years back Cameron was condemning comedian Jimmy Carr and others for using Isle of Man tax structures. A big part of the Rangers football club collapse was their use of tax-avoidance structures to pay players that were ruled unlawful, and their subsequent inability to pay back taxes. Another part of the MPs' expenses scandal was abuse of the "primary residence" CGT exemption. Tax avoidance of varying levels and quasi-legitimacy seems to be quite widespread.
Doctors and lawyers aren't doing as well as they used to, qv the junior doctors' strike. The real money in the UK is finance and property.
Because it's the Guardian and this is how they gin up controversy ignore real solutions to societal problems.
You wouldn't know it by reading articles like this, and certainly things can be a lot better and fairer, but over the last 50 years, every single ethnic group in this country is better off when you look at this Census report on median household income: https://www.census.gov/content/dam/Census/library/publicatio.... Welfare programs have only expanded, and necessities like food and clothing have only gotten cheaper.
I admit it isn't staggering advancement, but 50 years is a blip on the grand scheme of things. At the same time we might have just been lucky. But things aren't dire and many in the 1% have contributed in ways that have made us all better off.
Real solutions to the tax dodging problem don't come by slinging emotionally charged statements like this around:
"In so doing, you rob your own society of cash for hospitals, schools, roads…"
Real solutions start by asking why wealthy people don't see value in publicly-financed goods and services, and if these people would have created more or fewer jobs under a more progressive tax regime, and if we want more jobs or more/better social services, and if we want new people in the top 1% every year. These are real tradeoffs that go beyond just negatively impacting the top 1%.
" don't see value in publicly-financed goods and services"
That is not the reason they dodge taxes.
Also, tax funded infrastructure and general stability are major factors in why any business is able to thrive but that success is assumed to be wholly owned.
> Also, tax funded infrastructure and general stability are major factors in why any business is able to thrive but that success is assumed to be wholly owned.
Just like politicians taking credit and blame for economic conditions. Is your argument that they dodge because think taxation is theft? Fine, figure out a way to get them to pay for the government goods and services they use. If they don't pay, they don't get to use them!
Your argument boils down to the Republican sound-bite (referring to the poor): "But... but... they have refrigerators and air conditioners now!"
Which is totally irrelevant to the main point being debated: it's not about wealth relative to the past, but about wealth relative to everyone else in the present. The reasons are simple: wealth buys political power, and political power is inevitably used to further concentrate wealth in the hands of those who have a lot of it.
Who cares who can use my argument? Is it not true?
> it's not about wealth relative to the past, but about wealth relative to everyone else in the present.
Who is debating that, exactly? I said things can be a lot better and fairer. But steady improvement over 50 years is nothing to be scoffed at and needs to be recognized and analyzed if we want to preserve those gains for those most marginalized.
> wealth buys political power.... is inevitably used to further concentrate wealth
What if this was shown not to be the case? Would you still be okay with the inequality? And if it is the case, how does this make you and me worse off in the absolute sense?
steady improvement over 50 years is nothing to be scoffed at
But there hasn't been a steady improvement over 50 years. Here's what the OECD says [1]: "According to the OECD income distribution database, income inequality among total population in the United States has steady increased from 1974 to 2010."
And here's what the US Census Bureau says about poverty in the United States [2]: "In the late 1950s, the poverty rate was approximately 22 percent, with just shy of 40 million Americans living in poverty. The rate declined steadily, reaching a low of 11.1 percent in 1973 and rising to a high of nearly 15 percent three times – in 1983, 1993 and 2011. However, the 46.2 million Americans in poverty in 2011 is the most ever recorded."
Why do you bring in the unequal distribution of newly created wealth when I'm talking about average people being better off decade over decade? Seriously, if I have a glass of water in front of me and you are thirsty, do you lament this unequal distribution of water? No, you ask your waiter, find a drinking fountain, or obtain water some way somehow. The people on the way to the top, and the ones there actually providing a net benefit to society, just figured out a way to create an unequal benefit for themselves and whomever was without whatever they were offering. They didn't look at any charts that told them their net wealth vs others was too high. If someone uses "free" public services to generate some of their wealth, then we should charge for those services and subsidize those who can't afford them. We can afford Subsidies because wealth is not a fixed pie! Let entrepreneurs create wealth and tax them in a way that promotes more wealth creation.
>>What if this was shown not to be the case? Would you still be okay with the inequality?
I would be okay with it, yes.
But since we have mountains upon mountains of evidence to the contrary (i.e. the wealthy corrupt the political system and make it serve their own ends at the expense of others), your hypothetical is rather meaningless.
>>And if it is the case, how does this make you and me worse off in the absolute sense?
Because it goes against the "one person, one vote" principle of democracy.
> we have mountains upon mountains of evidence to the contrary
Do you mean the mountains of insinuation and innuendo in that article? Just because the Koch brothers want lower taxes and the people who engaged in these tax avoidance schemes do too, doesn't necessarily mean they are colluding to buy elections.
You might as well claim that Apple and Google are buying political power because of the billions they keep offshore, too. They buy power alright, just like all corporations that want to snuff out competition by influencing the laws in their favor. That also keeps the rich rich. But you don't hear of anybody attacking lobbyists, do you?
Not only were they not, the reports in the U.S. is that they've kept their money on the sidelines in the current U.S. Presidential contest (to date). I think this is part of the reason why claims of bias in reporting are legitimate.
The Guardian has an editorial perspective and that doesn't get left behind on opinion pages. Why not implicate the Kochs in a story like this if you already have a set of opinions about them which would have them fit nicely here? You achieve guilt by association and you reinforce the notion that they are part of this evil cabal that you desire to lump them in with anyway... and you're more agreeable readers will cheer simply cheer you, rather than ask about any pesky facts that really tie them in with subject at hand.
"The political network overseen by the conservative billionaires Charles G. and David H. Koch plans to spend close to $900 million on the 2016 campaign, an unparalleled effort by coordinated outside groups to shape a presidential election that is already on track to be the most expensive in history."
"In 2012, the Kochs’ network spent just under $400 million, an astonishing sum at the time. The $889 million spending goal for 2016 would put it on track to spend nearly as much as the campaigns of each party’s presidential nominee."
Budget was revised downwards in October 2015, likely due to the unpredictable nature of the GOP nomination and the Trump "phenomenon":
"Billionaire Republican Charles Koch said the Koch-backed network of political network of donors will spend $750 million on politics over two years, a significant amount less than the nearly $900 million expected."
"He chalked it up to people not contributing the way they expected."
> the reports in the U.S. is that they've kept their money on the sidelines in the current U.S. Presidential contest (to date).
They haven't endorsed a specific candidate yet, but they spent something like $400 million in 2015 and are planning on spending another $900 million this year. I'd say that's not exactly money on the sidelines.
I never said they don't spend and I do expect them to spend... but the context of the statement matters and until they do spend... they haven't. Moreover, political spending, even by the rich isn't necessarily bad (and I don't think it should be legally curtailed, even when it is). It all depends on what they are supporting. I suspect that I support what the Kochs will say with their money (note this is a highly qualified endorsement and may change depending on the specifics).
For example, I wonder if Soros, a 1%er that is also known for dedicating some degree of his wealth to political advocacy last I heard. I suspect that the Guardian largely agrees with his advocacy and thus would never appear in an article like this. Their goal in suggesting wasn't to point out the likelihood of spending as a fact, but rather to suggest they would use their spending for nefarious purposes... without even the benefit of my kind of qualification: they suggest a foregone conclusion. That's not factual reporting, that's opinion making.
And while some folks might disagree with the Koch's philosophy, they haven't done anything quite as evil as has George Soros:
In 1992, George Soros brought the Bank of England to its knees. In the process, he pocketed over a billion dollars. Making a billion dollars is by all accounts pretty cool. But demolishing the monetary system of Great Britain in a single day with an elegantly constructed bet against its currency? That’s the stuff of legends.
-- http://priceonomics.com/the-trade-of-the-century-when-george...
Many people would disagree with that statement since trading against currency manipulation on a free market is arguably much more benign than running a massive polluting enterprise for decades and funding much of the bad science behind climate denial... (aside from the evidence that the elder Koch built and ran refineries for the Nazis and the Soviets.)
Um, there's nothing remotely evil about that trade and trying to paint Soros as a bad guy in the same vein as the Koch's is rather disgusting; they aren't in the same league. Soros was doing something good there, he stopped the bank of England from manipulating their currency and forced them to accept the markets opinion of the value of it. The Koch's are literal villans, Soros is not.
This is kind of funny. You're saying that Soros should be heralded for forcing market rates, but that the Kochs are evil, because, umm, they're champions of the free market?
In any case, the information I have doesn't paint the picture the same way you do. Drawing from the same link I posted above [1]:
each country set their currency’s value in Deutschmarks. They agreed to maintain the exchange rate between their currency and the Deutschmark within an acceptable band of plus or minus 6% of the agreed upon rate. ... The British government was obligated to keep the exchange rate within 2.78 DM to 3.13 DM. ... while the people of Great Britain dealt with a recession, the government’s hands were tied; they’d just have to ride it out.
You'll note the word "obligated" there. By 1992, it wasn't their right to decide whether to follow the market or not. They were bound by international agreements to maintain the exchange rate to the Deutschmark.
Soros retorted with a different strategy: “Go for the jugular.”
If Schlesinger’s quote could be used as the catalyst for the pound to devalue, why shouldn’t today be the day it happened? Instead of slowly building up a short position against the sterling, [Soros's] Quantum Fund could short sell sterling on an unprecedented scale today. Doing so would not only help hasten the tumble of the sterling, but also increase the fund’s profit.
It was this decision to “go for the jugular” that netted Soros’s firm over a billion dollars, toppled the Bank of England’s currency regime, and ultimately led to the disgrace of the Prime Minister. It also cost the British taxpayers billions.
...
As Europe slept, Soros borrowed and sold pounds from anyone that he could. The Quantum Fund’s position exceeded $10 billion shorting the pound. Other hedge funds got wind of the the trade and the report from the Bundesbank and started following suit, also borrowing and selling pounds.
By the time London markets opened for business and British treasury officials started their day, tens of billions of pounds had been sold and the the pound was dangerously close to trading below the levels mandated by the ERM.
The Bank of England was about to have a very shitty day.
...
At 7:30 PM that night, Lamont held a news conference to announce that Britain would be exiting the ERM and floating its currency on the market. Soros and the speculators won.
So this wasn't some inevitable disaster. Soros largely caused the problem, manipulating the market by shorting 15 Billion GBP. In a market that was already shaky, Soros was the one to kick the animal spirits (to steal a Keynes meme) into action. It was likely that something would have happened, but Soros maximized the damage for his own profit.
No he didn't, Soros exposed the problem of pegging a currency to an exchange rate they couldn't hold; a problem created by the Bank of England. You seem to think quoting an article you just read is educating me, it isn't; I'm a trader, Soros billion dollar trade is legendary among traders, I've known about it for years and you're clearly not educated in what he did or what it means. The problem here was the Bank of England pegging the currency, not Soros profiting from their inability to maintain that peg. The bad guy here is the Bank of England, not Soros.
And no, the Koch's are evil because they actively spend enormous amounts of money doing everything they can to destroy the political process and suppress votes, destroy the planet and deny climate change, and just generally prove themselves to be utterly disgusting and repugnant human beings who only care about maintaining their own power. They are the literal personification of the evils of excessive wealth.
Nor are the Koch's by any standard champions of the free market. The Koch's are crony capitalists eager to spend their billions messing with the political process to gain favor and legal protections for their businesses. This isn't championing a free market by any stretch of the imagination.
You won't find Soros doing that shit. Shit you're trying to sell his trading as being bad precisely because you can't find much else to call him bad for despite the fact that his billion dollar trade is in no way him being bad.
I'm not accusing the person you responded to of it since he clearly doesn't know that much about the history of trading, but there was certainly a whole lot of "evil Jew broke the bank" innuendo around Soros's trade as well. Soros couldn't have broke the bank by himself, there were billions of additional dollars pouring into the short since it was long clear that the BoE couldn't maintain the peg, but only Soros is singled out.
Yea, people are just ignorant of the details and think "billion dollar trade" sounds bad. As if one guy could bring down a whole country because he just wanted to.
You seem to think quoting an article you just read is educating me
It's true that my knowledge of trading is from my personal experience in my own investments.
However, you're exhibiting precisely the same kind of blinders about the Kochs. It's clear that you don't understand their political positions, or exactly what they've done, you're just jumping on the partisan bandwagon.
while the economy was melting down and U.S. banks were going broke, Koch Industries was moving corporate money out of the country and into the Luxembourg jurisdiction in order to dodge taxes and move nearly $1 billion around a Byzantine maze in order to ultimately cancel the debt and not impact balance sheets
Public documents available on the Luxembourg government website, Legilux.lu, reveal that Koch operates a complex system of offshore companies and accounts in order to avoid paying US taxes on huge sums of corporate profits. Out of his Kansas office, Global Tax Director for Koch Industries, Craig M. Munson, manages these offshore corporations with the assistance of a shady Luxembourg company, ATOZ s.a., whose partners are primarily former Arthur Anderson staffers – the tax advisory giant that ceased to exist as a result of their felony conviction in the Enron “off-shore and off-balance sheet” debt scandal of 2002.
Moreover, I'm pretty sure that the Kochs despise Trump. So why did the OP stuff them into the article? And why does the left side of the political spectrum vilify the Kochs, while still seeing nasty people like George Soros [1] as philanthropes.
I doubt very seriously t least Charles would even consider this. He's too big a target.
Those guys are , if anything, living with the ghost of their father. Charles comes off like The Big Lebowski ( wheelchair Jeff ) only much more for real. My parents are Silent Generation and that's how they thought.
The "Koch" tropes in media are largely fabricated. I'm not a fan, just disappointed in the reporting.
Eventually, the punishments meted out to the 1% creep down brackets to the middle class. My dad was furious when he was subjected to the amt the first time, "I worked hard all my life for this??"
Additionally, much of the middle class would be surprised by just how close to that "1%" they actually are. Especially when the discussion swings between net worth, gross income, and net income.
The one percent in the US have a household income of at least $400,000. At this level of income it's not at all unusual to take advantage of tax minimizing strategies, which can include stashing money offshore.
I agree that that billionaires are in a different class from the lawyer and surgeon. But then again, the difference between billionaires and centibillionaires is also immense, and we have to draw the line somewhere.
A household income of $400k split for the sake of argument is $200k per person. You'd have a W-2 with something around 30%-ish withheld directly from your paycheck. Then, at tax time, you are smack in the middle of the AMT (Alternative Minimum Tax), basically only allowing you to deduct mortgage interest. It is way more realistic to discuss this stuff in terms of self-employed/small-business owners vs. regular workers. A "regular" US household income of $400k has virtually no chance of leading to that household becoming masters of the tax universe and stashing wealth offshore in numbered accounts like a James Bond villain.
Don't conflate lifetime wealth with one time annual income. Many more than 1% of the population earns top 1% income in some year. And don't conflate wage income, which is taxed at (marginal) 40+% right off the top, with investment income, which is low or never taxed due to scheming.
A substantial majority of economists agree that capital gains should have a lower tax rate than wage income. There are lots of good reasons for this (fake gains due to inflation, the fact that gains come over multiple years, interactions between corporate taxes and cap gains). It really doesn't have anything to do with scheming.
Does not change that the product of lower capital gains tax rates than income tax means those who earn absolutely less in a given year are paying a higher percentage of their income in tax than those who make absolutely (much) more.
I think the fundamental problem is everyone talks about capital gains as some flat thing. It needs to be progressive like income tax (or at least in the US, way more progressive than current income tax) to have the positive effects economists want so long as the gains are distributed across many people than centralized in the hands of few.
I'd say the same with waged income. In a theoretical better society we would even be taking income up to the happiness threshold and would progressively tax to an absolute income limit beyond that. And that is not just for bitternesses, sake, the problem we are going to face is that automation and the private ownership of automated production will produce literal money machines, where no human labor is required but goods are made and then sold which transfers money to you, that you then never spend back out again so long as you can own the whole supply chain. That situation is not sustainable - it is money flowing uni-directionally - and the consequences of uncapped income have precipitated how in the past five years we went from a little over 300 billionaires having more wealth than half the human population on Earth to just over 50 today.
The problem with thinking of capital gains as "income" is that you end up with a tax system that punishes people for deferring consumption (aka saving). Or put another way, if I earn some money and don't spend it immediately, I end up paying more of it in taxes than if I do spend it immediately. Only taxing above-inflation capital gains would help some; only taxing capital gains above some discount rate (which one, though?) would help more.
The ideal thing here would probably be a progressive consumption tax, but implementing that in practice is rather difficul, unfortunately.
Oh, and there is no happiness threshold. Or more precisely, more money doesn't necessarily buy more happiness, but it does tend to buy less unhappiness (which is not the same thing!), albeit not linearly.
Hence the idea of progressive capital gains. In the same way you would not tax normal income up to an approximation of the happiness threshold you would do the same with capital gains.
Progressive consumption taxes do nothing to ablate the central problem of the argument, the centralization of wealth as a means to distort society to your whims. The wealthier you are the less you spend on goods and services as a percentage of income and the more you save. Eventually most of your income just goes back into reinvestment to make you more money. The current model basically lets anyone business savvy enough just make perpetually more money, increasing their wealth... just for the sake of having more wealth. The majority of billionaires are not rich with a purpose of how they want to use that money, they just control incredible amounts of capital for the purposes of accumulating more. The Bill Gates are the exception, not the rule, and even then while Bill spends tremendous amounts of money for good he only spends money he is already making off a considerable fortune to begin with.
And those kinds of fortunes are what I am talking about.
> Oh, and there is no happiness threshold. Or more precisely, more money doesn't necessarily buy more happiness, but it does tend to buy less unhappiness (which is not the same thing!), albeit not linearly.
More money buys less unhappiness up to a limit[1]. It is simply the fulfillment of base needs in Maslow's heirarchy, and once you have enough not to worry about starving, homelessness, or sickness ruining you, you have a much better quality of life, less stress, and more importantly, peak productivity.
My argument is not that everyone has the same limit, or that it is constant regardless of inflation - it is of course a function of the real cost of needs, and varies from place to place. But that is why I argue to start taxation at a normalized threshold like this, to potentially extract the most revenue in the least harmful way possible.
The study you cite conflates happiness and unhappiness.
More money can buy less unhappiness to a _very_ large limit, much larger than $75K in the US. Most simply, any serious medical treatment you have to go through will quickly blow past the $75k number.
And of course even in this study the magic number is very much location-dependent, which makes it even harder to craft policy around it....
> which is taxed at (marginal) 40+% right off the top, with investment income, which is low or never taxed due to scheming.
If you think this is true then clearly you've never tried seriously investing money. It gets taxed on its way to becoming cash (capital gains taxes if you simply sold at a gain). Then local state income tax. Then taxed again once spent (sales tax). Not to mention fees.
Even if your money is offshore -- which isn't illegal -- the IRS simply has to ask you about offshore accounts. You'd be smart not to lie to them.
And in turn, if you think that is true, then clearly you've never tried investing serious money.
It doesn't get taxed when sold at a gain (because it's exchanged per 1031 or similar tax code provisions). If it does, it's often subject to super-advantaged treatment over and above long-term capital gains (think Qualified Small Business Stock or the like).
But it's often not sold at a gain and sometimes never will be; see various carveouts allowing for basis step-ups upon certain transfers (which might be within a family or a network).
But why even bother selling at a gain and paying even those favorable cap gains rates? Much more favorable to take out a loan against the asset for some spendable cash. You can even deduct the interest payments.
None of what I've described even requires an offshore vehicle, which parent rightly describes as usually perfectly legal -- although if you do have the right kind of setup you can keep deferring taxes for, practically speaking, forever. (It does require that there be enough money in play to make the significant overhead worth it, of course.)
"[L]ocal state income tax"? Not if you live in WA and a good number of other places.
And you really, really can't count sales tax as part of the taxes on investment income. Not least because the stuff one typically "spends" the bulk of investment returns on is, in turn, other investments, which are not taxed as sales items.
I think the idea is that investment income has much more wiggle room, which can be taken to extremes, particularly by people at the top with lots of it. Local/state tax can be avoided by officially residing in a state/municipality with low/no taxes on investment income. This works if your only income is investment and you don't need to live near a wage source. Or if you can afford to 'live' there officially without actually being present, and stay wherever you actually choose to spend your time.
Throwing in sales tax seems disingenuous, as that is applied the same regardless of your source of income.
> If you think this is true then clearly you've never tried seriously investing money. It gets taxed on its way to becoming cash (capital gains taxes if you simply sold at a gain). Then local state income tax. Then taxed again once spent (sales tax). Not to mention fees.
So does income, so you're quite literally making no point. His point is that income is taxed far higher, you can't disagree with him and not address that fact.
> At this level of income it's not at all unusual to take advantage of tax minimizing strategies, which can include stashing money offshore.
What evidence do you have for this statement? It does not at all conform to my experience in the world. I live in NYC where it's not all that uncommon for a couple where both partners work to earn that kind of money and I've never once heard of someone avoiding taxes with any kind of offshoring.
Or in the Bay Area, where you can earn a combined income of over $400k and still be living in an apartment because you can't afford to buy a house. I find it silly that folks like these will be offshoring funds and doing other shenanigans. Some places are just expensive to live in.
Let's be clear: at any level of income, people pursue different tax minimizing strategies. At the lower end, you're looking at things like EITC. At the upper end, you get into capital gains, tax-loss harvesting, etc.
Separately, and at every income level, there are tax evasion strategies—like stashing money offshore and under-reporting your earnings, or taking all your tips in cash and "neglecting" to tell the IRS.
Tax evasion is illegal, tax minimization is logical. (If you want to argue about the complexity and bias of the U.S. tax code, that's a different topic.) In of itself, an offshore bank account is perfectly legal.
You're conflating income with illegal activities, and suggesting it's "common" for high-income or high-net-worth to be, effectively, criminals.
Yes, the cut has to be somewhere, but this may not be it. Some at those income levels, in those professions are still paying a lot for things like malpractice insurance and student loans – becoming a lawyer or doctor (and, in some cases staying one) can be incredibly expensive.
There has to be a notion of net income after employment costs (including applicable student loans) – that might get you closer to those who have the means and motivation to hide their incomes.
There are only 536 billionaires in the USA (according to Forbes). That would make it 1 in 230,000 households. For the UK (53 billionaires) this number is 1 in 500,000 households.
edit: The only reason for defensiveness about this on HN is that plenty of people here are in the 1% (I'm certainly in the 5%), and many of their friends and family.
The reason doctors in the US make multiples of the income of doctors anywhere else in the world is because of high-dollar lobbying (for their own sake), and payoffs from pharma and medical device companies in return for support. If doctors in the US were reduced to the salaries of doctors in the UK, the bottom would fall out of the yacht business.
The non-profit hospital racket is one of the most lucrative tax avoidance schemes in the US right now. Two thirds of US hospitals are "non-profit", and almost 100% of all new facilities are non-profit.
Absolutely... the "1%" should continue to exist and be the countries rich. It's still quite rich, but not "greedily hoarding wealth well beyond what you could ever spend while others starve" rich.
That said, I've noticed Bernie using the language: "The top one-tenth of 1 percent [of Americans] own almost as much wealth as the bottom 90 percent."
Very true. Most people in the 0.1% to 1% still get hit by the AMT (higher taxes) every year. It's only the smallest group of elites that is able to exert undue influence.
You don't need that many millions to live comfortably for the rest of your life.
1M is 10 years of 100,000 worth of net income which is more than you would get if you just reach the 1% mark in the UK.
10M say a modest lottery payout would give you a 100 years worth of 100,000 net yearly income and that's before you count in any potential ROI on that money if you decide to invest it rather than just stash it under the mattress.
One of the other issues with money is that most of the people even those who are just in the 1% have to work to live, if you have access to sufficient finance to not worry about needing a job for the rest of your life one could argue that it's a problem.
Even if you take out 100% of the money out of politics it's not going to be enough, because those who do not need to work to survive can invest 100% of their time into politics and driving their agenda forward while the rest lags behind.
Now I'm not arguing that there is a solution for it, but what people tend to focus too much is on flat sums and income inequality which is almost futile. You might dislike some one who's making 160K a year but in most cases they are just like you if they do not work they'll find them selves on the street just as fast (and sometimes even faster than you).
So for the most part I discount those who work directly for their compensation from the so called "1%" while you might think that some CEO getting payed 700,000 is some wallstreet arsehole, the oil worker in Nebraska might think the same about a developer in NYC earning 300K a year.
True wealth allows people to focus on building dynasties and true power and if you want to focus on anything you might focus on that, that said we are 65 there's a good chance that we'll be considerably less supportive of things like inheritance tax when I'll have children and grandchildren to worry about.
He would need to make a little over 3% on that 50million to get into 0.1% in the US at 50 million. So, good odds, but not 100%.
PS: These numbers get crazy. I know a couple that has a little under 20 million, but don't quite think they have made it based on who they hang out with. And honestly there goals don’t seem that ridiculous. ~200k each after inflation from a diversified and conservative portfolio which will just snowball takes a lot more now than you might think.
It's a whole lot more easier to "vilify" the rich when you don't personally know them, or haven't spoken with them on a non-trivial level. For all we know, there are people much lower down on the scale than the "0.1%" that are impacting politics on levels/scales we won't ever know of. Generals, drug-bosses, influential figures, nefarious individuals that wield power through back-room dealings, etc.
In fact, there are probably legitimately influential people that wield more power than those much richer to them. One need only look at political "movements" to see that they're not always run by the rich and powerful. But rather, by those that can get large amounts of individual/normal people to agree with them and follow through. The oratorical figures, I'd say.
He has been saying (and publishing tax returns to show it) that he doesn't own any shares any more. And even when he did the amounts being talked about are in the hundreds of thousands range. Was there some new revelation in the past 24 hours that revealed Cameron to be a secret millionaire?
I didn't see anything in this article where the author explain how offshore money corrupted democracy. He also throws out the Koch Brothers as some kind of left-wing talisman, even though I haven't seen them implicated in the Panama Papers.
It is certainly possible that offshore money could be corrupting democracy, but I don't see any evidence in this article.
When I was at school, we used to play a game in English whereby we each had an obscure word that we had to get into compositions as often as possible without the teacher spotting it. The record, if I recall correctly, was something like 6 mentions of chiaroscuro.
I sometimes feel that Guardian political journalists aren't paid by the word but using some form of buzzword bingo similar to the game we played. So the more times they get terms like 1%, neo-liberal, progressive etc the more they make. Polly Toynbee is definitely the master at that but Chakrabortty is pretty good too.
The reason people tend to pay less attention to arguments by hypocrites is that arguments are often about tradeoffs that cannot be scientifically computed or discovered purely through rational debate, and actions speak louder than words.
If someone is arguing for tradeoff A, and relying on moral/emotional/somewhat vague arguments for it, whilst simultaneously their actions suggest they actually prefer tradeoff B, then that suggests their proposed weighting of the tradeoffs is actually wrong and thus that their words are not worth very much.
In this case, the Guardian loves to argue that tax avoidance is wrong, using arguments that are vague and emotional at their core (e.g. fairness), but actually engages in it rampantly themselves. Given that actions speak louder than words, that suggests that their proposed tradeoff is perhaps not the right one.
> The reason people tend to pay less attention to arguments by hypocrites is that arguments are often about tradeoffs that cannot be scientifically computed or discovered purely through rational debate,
Wow, you've just chosen to discard rationality right at the beginning? I guess that's one way to go about it but I sure don't feel like I need to say much to prove that assuming hypocrites are wrong is irrational.
> actions speak louder than words.
This is a great rule of thumb when applied to judging a person's character, but completely irrelevant to evaluating the correctness of an argument.
> If someone is arguing for tradeoff A, and relying on moral/emotional/somewhat vague arguments for it, whilst simultaneously their actions suggest they actually prefer tradeoff B, then that suggests their proposed weighting of the tradeoffs is actually wrong and thus that their words are not worth very much.
Sure, moral/emotional/somewhat vague arguments are poor arguments. Actions still have nothing to do with it.
> In this case, the Guardian loves to argue that tax avoidance is wrong, using arguments that are vague and emotional at their core (e.g. fairness),
So attack their arguments. If their arguments are invalid they can be proven invalid without attacking The Guardian. The Guardian's hypocrisy remains irrelevant to this conversation.
> Given that actions speak louder than words, that suggests that their proposed tradeoff is perhaps not the right one.
No, it doesn't suggest anything of the sort. Even if we could consider the Guardian to be a single entity--which is isn't: as another poster pointed out, the writing staff are not the same people as the finance department--but even if we could consider the Guardian to be a single entity that was condemning behaviors while engaging in them, that would only prove that The Guardian is kind of an asshole. It doesn't prove that they're wrong.
You cannot evaluate the "correctness" of arguments about many things in the political space. Bob says that the country would be better if taxes were raised on the rich and spent on the poor. Charlie says that this would make the country worse and a better approach is to focus on educational attainment. Who is right? How do you arrive at a situation where both Bob and Charlie agree with each other?
Experience tells us that this isn't possible. They're probably arguing from different assumptions, they very likely have different ideas about what "better" means, and even if they could agree on those things, which path would actually yield better results is impossible to simulate or predict accurately.
That doesn't mean Bob or Charlie have discarded rationality, it just means that pure application of logic cannot solve most of the problems on which politics dwells.
When you say "attach the Guardian's arguments" after I just said that their arguments are vague and emotional, you're requesting something that won't go anywhere. The Guardian argues that companies should feel a moral obligation to pay more tax. At the same time, they don't appear to feel that obligation themselves. That's a fundamental inconsistency that invalidates their own "argument" (using the term loosely). There's nothing to refute: they did it themselves.
> You cannot evaluate the "correctness" of arguments about many things in the political space.
Of course you can. How do you vote, just pick the guy who you'd like to have a beer with? Give me a break.
Again, you're starting off by rejecting rationality as an approach, so I really don't need to prove that you're irrational here.
> How do you arrive at a situation where both Bob and Charlie agree with each other?
We don't. Bob and Charlie's agreement is entirely unnecessary. Why is this even your goal?
> which path would actually yield better results is impossible to simulate or predict accurately.
This is rarely true in practice for major voting issues.
> That doesn't mean Bob or Charlie have discarded rationality, it just means that pure application of logic cannot solve most of the problems on which politics dwells.
Nobody is claiming that Bob and Charlie have discarded rationality, but I'm claiming that you're discarding rationality. You've again state this fact for me.
If logic can't solve your problem, it can't be solved.
> The Guardian argues that companies should feel a moral obligation to pay more tax.
That's not The Guardian's argument as far as I know, so let's stop right there. I doubt anyone with The Guardian's caliber would bother with the idea that companies should feel.
A newspapers finances aren't going to be managed by its editorial team, and bringing themselves up is a distraction from what the editorial team is trying to achieve.
Furthermore there's no general hypocrisy involved in advocating for stricter government policy A while following the loose current law to do B because 1) You gain nothing from changing these things on the individual rather than policy level and 2) if you do A instead of B you're at a competitive disadvantage.
It's the Guardian. You can't separate their financing from their politics because their financial setup was done specifically to allow them to lose money by running a newsroom far larger than their readership would normally allow.
The Guardian has not advocated for stricter government policies: they can't because they can't even define tax avoidance, let alone formulate a solution. Instead they've engaged in moral crusades in various attempts to shame companies into paying more tax than they actually have to, whilst simultaneously refusing to do so themselves.
> I do think it is important that those who read the Guardians moralising stance on tax are fully aware of it.
Why? Maybe it's important in some general sense, but it's certainly not important to this discussion. If, as you admit, it doesn't prove their stance wrong or right, then it really is just an ad hominem attack which has no bearing on this discussion.
Ad hominem and tu quoque are only logical fallacies if used as the premise for an argument that the conclusion is incorrect. The person you're replying to is making no such argument.
Seems like the opposite to me. The commenter doesn't appear to be justifying this behavior on the basis that the Guardian does it, but rather criticizing the Guardian for participating in it.
When I see the Koch brothers mentioned, but not George Soros, who's donated far more money and influenced far more country's politics, it always strikes me as highly partisan. When it comes to influencers of US politics, the Koch brothers are relative pikers.
But since then, the Koch brothers really ramped it up. The Koch brothers spent an estimated $412MM in the 2012 election alone, about an order of magnitude more than the amount Soros spent in the entire previous decade:
Combine the $412MM they spent in 2012 with the $900MM they want to spend in 2016, and that's ~$1.3 billion this decade, compared to Soros's ~$40 million in the last. That's not even close to the same level. And I haven't found any evidence that Soros is spending at the same level as the Koch brothers this decade.
You wouldn't happen to have a breakdown of the $412M spent by the Koch brothers would you? Like who, what, where, how much. Because that number includes $5M spent by the Koch brothers PAC and $407M spent by undisclosed campaign entities. Even of the $5M spent by the Koch brothers PAC, not all of that is necessarily Koch brothers' money. As such, using the $412M figure is rather disingenuous at best.
Do you have a source for this assertion? So far as I have seen, Soros has donated more money personally than the Kochs have - but the Kochs have an extensive network of "grassroots" political organizations which in aggregate have funneled far money to politicians than Soros has done personally(on the order of hundreds of millions). I suppose at some level they are all using tricks and loopholes.
Clinton's FOIA emails are full of Soros literally giving orders to her and other reps. Use Wikileaks archive to read them/search for Soros.
He's also bought electronic voting corps and managed to get them into primaries like Utah. There were all kinds of shenanigans with them recently like denial of service to some voters.
This is a highly partisan site, but they do source most of their links. And keep in mind this is just a list of US political organizations he funds.
I'm not sure not what you mean by the Koch's extensive network. They're either giving their money, or it is other people's money. They can't be held responsible for how other people donate their money. I don't hold Soros responsible for all the ACLU's actions, even if he is a major backer. When they ACLU stands up for something I believe in, I donate, but I'm certainly [not responsible] for all their actions, especially in years I don't donate.
The Kochs donate far more to charity than they do political causes too. Really, if it weren't for FreedomWorks, they would not have much dirt on them. FreedomWorks is just terrible. Otherwise, they donate to Cato, Reason, etc.
You don't find these articles to be interesting discussion starters amongst your HN peers? These are generally amongst the big problems facing developed countries. I like that potential problem-solvers are reminded of the opportunities out there, and we get the chance to read the full gamut of opinions surrounding them.
1) Avoiding tax is in legal bounds is completely moral and is practised by everyone who is able to do that. I know a _lot_ of programmers in US who establish private consulting companies to write off all their private expenses and get 15% effective tax rate. If you think avoiding tax is immoral, you should hate them just as much as you hate billionaires.
2) Most of the people believe in political causes that are likely to directly benefit them. College students and young professionals are upset about college loans, old people are concerned with pensions, etc.
3) It's completely legal and moral to put effort and money to support political causes you believe in.
So, everything the article describes is completely normal and moral for an ordinary man — but it seems that when billionaires exhibit the same behaviour, scaled with their personal wealth and it's influence, everyone thinks it's awful, immoral and illegal. How so?
Well, most people would get very upset about someone going 120mph through a 25mph school zone but range from mildly disapproving to understanding of someone going 75mph on a 55mph highway.
Not an exact comparison, but it captures the general concept. Wage earners shaving some dollars off their taxes with exemptions likely has a much smaller impact on the country's financial health than those earning millions per year on ownership finding ways to lower their effective tax rate to the same levels.
Ideally, everyone should pay their fair share, but in the meantime, the higher volume offenders are going to be a higher concern.
> 1) Avoiding tax is in legal bounds is completely moral and is practised by everyone who is able to do that. I know a _lot_ of programmers in US who establish private consulting companies to write off all their private expenses and get 15% effective tax rate. If you think avoiding tax is immoral, you should hate them just as much as you hate billionaires.
Morality is not binary, and it is quite reasonable to think that while programmers evading taxes is bad, billionaires doing so is worse.
Whether morality is or isn't binary isn't quite the point you should be making. It's that not everyone shares the same views of morality. Some people find private property immoral, for instance. The reason that we have moral "gray" areas isn't so much because morality isn't binary, but more because what different people view of as moral varies. In a purely utilitarian sense, non-binary morality is more concerned with how closely an action comes to the "greatest good" in that an action can be morally good but not morally greatest good. But what defines the greatest good depends on how person defines morality.
Your 1) above, indicating that a "lot" of programmers can funnel work through "private consulting companies" and get "15% effective tax rate" can be highly misleading to those (inside or outside the US) unfamiliar with how the tax code works here.
In fact, if you are costing the same to your patron as either a consultant or employee (meaning, say, they outlay $100k for some number of hours of your labor, but indifferent as to how) it's far from clear that you can legally make for a much better tax situation by running it through a consulting company.
A. Normally an employer and employee each pay about 7.5% (total 15%) in payroll deductions; these are split ER/EE in a normal situation. In a self-employed situation, you pay both parts yourself. No real advantage.
B. Your private consulting company must be a pass-through entity (disregarded for taxation) otherwise it must pay taxes at its level. If it is not a pass-through, you can pay yourself favorable dividend rates from the profits, but you'll have to have paid income tax on those profits first at the corporate level. Oops.
C. Either way, once that money gets through your consulting company to you as earned income -- either direct or passed-through to you, or paid to you as salary through the company -- you'll be paying ordinary tax rates.
D. The rejoinder here by the unexperienced or the lax of compliance is "hey, but you can just deduct everything you ever spend as an expense of the company, and so you really can cut down on the reported income!" The problem here is that most things you can deduct legally as a consulting company you could also deduct as an individual. Mileage for travel, necessary expenses, etc. You can't (legally) deduct your shoes, your Netflix, your bar tab, your kids' tuition, etc.
(That said -- there ARE situations where you would do much better with Schedule C business income, but they tend to be where complications other than "I write software for an hourly rate" come into play, like other losses to offset, equipment expenses, interest expenses, flexibility in setting up and administering tax-advantaged benefits accounts, etc.)
E. The Internal Revenue Code is complicated for many reasons, but it's not just mindless. A good way to think about it is this:
The likelihood that there exists a perfectly legal, lucrative, opt-in alternative means of structuring an otherwise economically identical arrangement for IRS purposes; such likelihood is inversely proportional to the number of taxpayers (not $ of tax collectible) who could take advantage of it.
More cynically put: the tax regime is fairly watertight for those who sell their labor for money, and all of the leaks and loopholes are at much higher levels, tending to deal with those whose money begets money.
It's a real problem, but not as bad as people think. The current US presidential election has seen several massively financed candidates get nearly nothing for their money. Trump and Cruz spent relatively nothing in the early parts of the election compared to Jeb Bush who spent 10's of millions.
Hillary dwarfs Bernie's fundraising, yet is remaining highly competitive. About as competitive as one would believe if they had the same finances.
People don't like to admit it, but representatives are usually pretty popular locally even if highly detested elsewhere. The US Congress's ~10% approval rating is only possible because local representatives maintain ~>50% approval ratings.
I believe the real problem is that people don't actually know what their representatives are doing. If people understood the level to which health care insurance companies were allowed to influence the ACA, I doubt a single supporter would survive reelection. Health insurance companies writing health care reform bills is pretty much the definition of evil in the US.
It has a more significant effect on the smaller elections. When people are distracted by the presidential contests they forget that Joe Shmo stands no chance against the guy with all the rich friends. He can't buy local ads or get his name on all the billboards.
I always hear this goal-post moving argument when people point out that Presidential candidates who received large sums of money have since dropped out of the race, but never is any evidence to support that claim provided. Can you provide a few reputable, non-bias sources that prove this cause-and-effect you're claiming exists?
I don't think it's so much goal post moving as a lot of us never claimed it buys elections. My assertion has always been that generally speaking if you want to be competitive politically you need to scratch the backs of elites to get the proper funding to be relevant in elections. It's not an absolute, rather that there is excessive corporate influence that undermines the political process
I'm pretty sure everyone who wants campaign finance reform claims that money buys elections, unless a situation doesn't fit that narrative in which case the goal posts are shifted or moved. I'll check out your links though, thanks very much for those.
Do they really maintain ~>50% approval ratings? Or is it just the case that people are basically forced to choose between candidates that have <~10% individual approval rating? Given voter turnout for congressional races I tend towards the latter.
That's an extremely good point. I imagine they usually they usually keep good approval ratings for people who vote. Recently the incumbent senator from my state, who was wildly popular, retired. His replacement was hard core conservative and the election turned into a 3 way to see who could out conservative each other. I wasn't happy, but I think most of the electorate got exactly what they wanted.
Here's a thought - which to many people is a very crazy one. Treat the world as a unified world and economy, instead of having individual nations with separation of certain laws related to finance and human rights. All the nations just become states under a single union, with open trade and a standard on taxation.
One of the lessons that history in the XIX and XX century taught us is that economic competition between states is essential for determining how to best organize societies. A single worldwide ruling hierarchy negates this competition and may hold humanity in a local maximum.
Even today, there are major choices that are different between successful societies, and the definition of what is best is yet to be found. Is it better to have state paid medical care, like in Europe, or private medical care, like in the US? Is it better to have strong unemployment benefits (Sweden, Denmark) or strong worker protection laws (France)? Is pure capitalism (US) better than Social Democracy (EU), or is the better choice Capital Oriented Communism (China)?
The freedom for states to compete fiscally has produced an aberration, though, in the form of offshores. We should work towards severely limiting capital flux between our societies an unregulated tax havens. Without hurting the basic competition principle, though.
Because it is crazy. We can't trust people in power now but the idea of nations wanting to consolidate power even further to a committee of some number (even 101 or even 1001) to rule the ENTIRE world and economy? Won't solve any problems. Now instead of 1%, the rest of the populaces will refer to them at the "Infamous Thousand And One". If countries want to make sure their citizens stop using offshore methods, it should be made law and the market will play out.
Why not get everyone on your block to pool their money and act like a single family? Probably because different people have vastly different ideas, goals, and sensibilities.
We (non 1 Percenters) can also buy political power. Imagine an institution/fond used only for financing ideas that are in the interest of general population. Financing here means buying political power that would make that happen. Institution would need to be fully democratic (maybe direct democracy) so that people that are involved (invested in fond) have a vote and chose in general how money should be spend. More people involved - higher the chance that bigger part of population would benefit.
The non 1 Percenters are already buying political power. The "1 Percenters", which in my mind means the political/corporate insiders, wanted an election between Jeb Bush and Hillary Clinton. They're getting Cruz/Trump (not sure who they want least) and are barely going to get Hillary.
Either way this US presidential season ends, the Republican 1%'ers will be in shambles, with many networks destroyed and political capital all tapped out. The Democrats might remain okay, but there's a huge well of populism on the left just waiting to boil up and completely overwhelm any amount of advertising dollars, as it did on the right.
On a realistic, individual level? Probably not a lot more than talk about it and do a minute part in maintaining awareness. Don't let it get you down. Raise your kids to be aware but not deterred by it.
It isn't remembered today, but in the 80's Reagan made a deal to get his tax cuts through by eliminating tax shelters (tax shelters are poorly performing investments made worthwhile only because of favored tax status).
This caused investment to flow out of poorly performing investments into better performing ones, which was good for the economy. I suspect that had a lot to do with economic growth in the 80's.
Moving investment money offshore to reduce tax liability is the same thing, and the solution is the same - reduce tax rates so that it is no longer worthwhile to invest elsewhere.
Newspapers so often bandy about the million unit that readers can get inured to its true significance. But if at the stroke of midnight on New Year’s Day you were lucky enough to get one pound coin every single second, it would still take 114 days to amass £10m. You would even now be waiting till Sunday week to collect the whole amount.
I have a very hard time imagining that. Surely it would be better to describe what having £10m would allow you to do.
I think this understates it, because necessities take up less of your income, proportionally, as you go up. That person making $30,000/year probably has to save for months or go into debt to buy an Xbox, while the rich person can probably pay for the car up front and hardly even notice it.
I guesstimated using the 66 years WolframAlpha spat out, while Google (sourcing World Bank) has 81.5 years (2012) with a more or less steady increase. Let's just say WA was smart enough to factor all that in.
Edit: Google data is for UK, because currency used in parent.
We're still linking to The Guardian? The government stenographers that are protecting the intelligence community by sitting on their part of the Snowden archive?
Hmmmm, strange how these supposedly all-powerful billionaires who own all the politicians through their nefarious offshore tentacles can't manage to get a bridge built:
I'm disappointed both in the Guardian and HN users for posting this crap. The article doesn't even have any evidence that Cameron evaded tax (which is the implication).
Cameron says he paid tax on the capital gains, so why the doubt? I know Cameron is a huge ass, but that doesn't mean he's guilty of tax fraud. In the UK you can't legally avoid tax by investing in an offshore fund. If you are UK resident you must pay capital gains tax when you sell the asset.
While I appreciate the general thrust of the Occupy emphasis on "the 1%", as an old school socialist I believe the real issue with the distribution of wealth is on who controls the institutions of wealth generation and power, not who happens to be holding large amounts of units of currency. That some people are 1% and others are in the 99% is a product of unequal distribution of power.
By some calculations, I am briefly in "the 1%" in my country but I own know corporations, factories, large quantities of stock, and am in that tier only on account of a set of temporary circumstances, and I've paid over half of it out in income taxes. And I have no more power than any other average voter.
Whereas there are people who have far more influence, and it isn't necessarily due to how much wealth they have, but more to do with the kind of control they have over wealth generation itself.
Why is income from money, you know that which is earned because you have lots of capital, taxed at a much lower rate than incoming from labor? The < 1% are hiding their money in plain sight and not paying the same level of taxes as people who trade their labor for money.
Partially from economic theories about the use of capital in a market economy.
Partially because the socio-economic class of people who benefit from such tax laws overlaps heavily with the socio-economic class of people who create tax laws.
Please don't forget the economic theorizers, and the subtle and not-so-subtle pressures that keep them in line.
(Put another way: in "[1] economic theories about the use of [2] capital in a [3] market economy" there's a whole lot of assumptions and underpinnings, at least three of them, that are not laws of physics, but rather are ways of perpetuating and recapitulating our present system.)
Wanted to give the same critical emphasis to the economic theory explanation as you had given to the socioeconomic class interest bit.
The statement articulated two "parts" of the explanation.
The second "part" was phrased as a matter of class self-interest, with a critical tone.
But the phrasing of the first, as being "from" economic theories, can very easily be read as giving those theories a pass, esp. in environments like HN.
If we wanted to explain with some finality, we might answer, "why do we mandate lead shielding around radioisotopes" by saying the reason is "from physical and biochemical theories [about harm from ionizing your DNA]."
Or we might answer, "why are some traits observed to be epigenetic / both heritable and environmental" by saying the reason is "from biological theories."
The appeal to science-y authority is pretty conversation-ending in technically-oriented conversation venues like HN, I find. Or more properly, it might not end conversations but it makes that piece a leaf node.
I just like to remind people that economic theories are far, far more than their hard-science counterparts, political products.
There is a reason for this though. Money earned from labor is under contract and assured. Money earned from capital is earned from risking the loss of that capital. Taxing it higher is the opposite of a solution as it will just make the corruption which allows rent buying, protectively burdensome regulations, and all the other tenants of crony capitalism all the more profitable.
Busting up trusts and forcing more competition is the best way to lower profits on risk.
There is a difference between being able to write off losses, and the rate at which gains are taxed. Not to mention much of that capital in fact > 90% of it belongs to a very small number of people who are not risking a thing. If you know that 30% of your investment will pay off and that payoff will more than make up for your loss, and you invest maybe 5-10% of your assets on that. You are taking virtually no real risk whatsoever. Employment can be lost, discretionary income is limited, and usually the income is barely enough for you to get by after all the costs of things like retirement are accounted for.
> not paying the same level of taxes as people who trade their labor for money.
20% (long term capital gains) of a million dollars is still $200k, so not sure why you would say they aren't paying taxes. Not to mention the sales and state taxes that rich people pay when they buy their toys.
Or is it just you somehow deserve the money more then them because they don't work hard / were born into wealth / are tax dodgers etc.
Capital can move away from taxation much faster than labor, so capital has to be taxed at the maximum possible rate that does not encourage too much of it to move away from the taxing authority in question.
But capital can move away from taxation much more quickly than labour because the political institutions that capital controls _have made it that way_.
As an example: we got a "North American Free Trade Agreement" which allowed mostly free movement of capital between borders, but at no time was it even considered that labour would be able to freely move. Even for people like myself who are skilled in software, etc. it is quite difficult.
All of this is to reiterate what another poster said above: the people who control large amounts of capital have an outsized influence on the way tax _and trade_ laws are written.
One way to think of it is an alternative tax rate, but it's also a minimum tax rate. It also incentivizes certain practices that are beneficial for everyone, such as holding stocks for many years instead of day trading.
If you were paid once every year instead of every week should both be taxed the same?
Rich people corrupt democracy ? Does this mean if rich people leave politicians alone, politicians will be somehow honest?
I am used to Guardians amateurish articles but this puts the bar even lower. Just like there is no such thing as "natural balance" there is no such thing as "honest democracy".
All sort of special interest groups will always try to influence power in many ways. Rich people will always be at top. We have two choices. Either have entrepreneurs and free market driven ruthless rich people or more socialistic crony capitalists who steal our money using government. I prefer the former any day.
Regarding representative democracy there were roughly 2 lines of though, historically speaking:
1) the ones that believe government would work as long as we had good people there; and that's where we need to focus, getting good politicians that can do good things, oh well if there are bad apples, nothing is perfect
2) government is a necessary evil, that has to be constantly under check because even if there is good such thing as a good politician, the ones that should worry us are the bad ones even if that also hinders the good ones; oh well if government has it's hand tied, government doesn't need to be a father figure, and has to be limited
The first group, fueled by the symbiosis of some enlightenment naivete, different classes of people trying to legislate advantages for themselves and the lust for power, won over time.
> Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow
They wouldn't have played by the same rules even without offshore tax havens because they would be required by law to pay higher tax percentages than most people anways.
Is it a surprise to anyone that people try to avoid paying 45, 50, sometimes as high as 90% on their earnings in tax and perhaps just as much on illiquid, inheritable assets?
With the tax evaded, we could END hunger, we could END child poverty, we could have universal pre-school, we could pay for state college for everyone.
It is good to keep in mind that society must be balanced between to centers of power: state/political power, and economic power. If the state has complete consolidation of both political and economic power, then you have Russia, China, etc. and corruption at a state level.
If you have economic power control the politicians, you have something close to the US and some other countries where wealthy politicians pick and choose senators and greatly influence outcomes.
Both extremes are bad - a state controlled by the wealthy, and all wealth controlled by the state.
If the wealthy control the state, you have mass poverty, crime, a weak democracy, corruption, etc. If the state controls the wealth it has total power, so you have people disappear if they question it, you have mass starvation, no one to complain towards even if mines are unsafe, etc. In general, states killed 1000x more of their own people than corporations did.
To my mind this really throws the excesses of the financial industry into light.
The sum of money reportedly made David Cameron's father, as the director of a long-established stock brokerage, is less than some of my 25-year-old friends were earning as relatively junior employees at London investment banks in 2008 (£200k+ pa).
Why does this line of investigation happen with British leaders but not in the US? Australia has also recently had a lot of media coverage of misuse of government benefits by political leaders. I feel that US media is awash with coverage on the presidential race, immigration, wars etc, but the integrity of politicians in congress isn't explored as deeply.
Depends on where you get your news from. If all you do is watch the evening news, you will never get the full picture. Most of what is on television is so dumbed down as to be useless.
Because the media in the US are star struck. They wan't to be on the red carpet. They want to be at the big parties. They want to clink glasses with the rich and powerful.
"1%" is a joke. if you apply that to the entire world, and not just selectively to western countries (as is the habit):
According to the Global Rich List, a website that brings awareness to worldwide income disparities, an income of $32,400 USD a year will allow you to make the 1% cut.
Using current exchange rates, that amounts to roughly:
29,185 euros
2.2 million Indian rupees, or
211,126 Chinese yuan
Maybe the phrase "1%" is a tool used by 1%'ers like Aditya Chakrabortty(the author of the article) to manipulate the innocent masses against other 1%'ers like David Cameron.
Those rich people and their political infighting. I have no doubt that Aditya - being a member of the 1% - is at this very moment twirling his mustache and plotting to enslave some poor African children. As soon as anyone crosses the income threshold of $32,400, they immediately start foaming at the mouth with an urge to bite the common man.
...or maybe the term is used by folks trying to look more humble than they are. When people use the term 1%, they don't think they're IN it - they compare things nationally or globally depending on when it suits their argument.
If you're bringing Africa into the argument, then by the nature of your (global) argument, you are in the 1% if you make more than $32,400 USD (or equivalent). Some people just don't want to accept that FACT.
1% of my pocket change is different than 1% of my bank account.
Quoting Chomsky from this portion of the film: "Concentration of wealth yields concentration of power. Particularly so as the cost of elections skyrockets which forces the parties into the pockets of major corporations. And this political power directly translates into legislation that increases the concentration of wealth. So fiscal policy like tax policy, deregulation, rules of corporate governance, and a whole variety of measures - political measures designed to increase the concentration of wealth and power, which in turn yields more political power to do the same thing."
The documentary has spurred me to start reading the book, but falls in line with what's coming to light in the mainstream media today unfortunately.
Edit: Honest question - why the downvote? Directly falls in line with the original post.