Krugman: Bring back 91% tax rate

[denner]

Quote from failed_trad3r:

This makes alot of sense. Hard work is under appreciated nowadays, because of globalization. A look at twinkies shows that the people who do manual labor are fired and forced to make a pay cut why the CEO gives himself a 3X pay raise. Did the CEO work 3X harder? Nope. Very skewed. It is time for the plebs to take back control of the country. The name Twinkie manifesto makes alot of sense.

When you are an employee, this type of ideology makes sense...then you start a business, realize how much is at stake, how you can lose your entire business during any economic downturn and suddenly you find yourself literally working for the employees...after all, they all have a salary that comes out of YOUR pocket.

I've always said that every liberal should start their own business to get a better idea of how it all really works.

 

[logic_man]

Quote from failed_trad3r:

This makes alot of sense. Hard work is under appreciated nowadays, because of globalization. A look at twinkies shows that the people who do manual labor are fired and forced to make a pay cut why the CEO gives himself a 3X pay raise. Did the CEO work 3X harder? Nope. Very skewed. It is time for the plebs to take back control of the country. The name Twinkie manifesto makes alot of sense.

Funny you should mention globalization. Consider the following possibility:

What if all of the incremental income that goes to the CEO today is from globalization?

If so, that means that American CEOs (just to stick with Americans for now, but probably you could say the same about any Western country) are earning all of that "unfair" income from the geographic expansion into new markets.

If that's true, then NONE of that money is coming out of the worker's pockets, it's coming from consumers in the emerging markets. In fact, one could argue that without said geographic expansion, there would be far fewer people employed in the West. So, while their wages are not keeping up with the CEOs wages, they've at least got jobs.

We should be thanking CEOs for "exploiting" consumers in emerging markets and then bringing that income here to the US to be taxed, rather than vilifying them.

 

[logic_man]

Quote from denner:



I've always said that every liberal should start their own business to get a better idea of how it all really works.

It's really interesting to me when you consider that, if a conservative tried to tell a liberal how to do some liberal thing, e.g. direct a play, the liberal would complain that the conservative was overstepping the bounds of his expertise and the liberal should be given the freedom to direct the play as he saw fit.

Flip the situation to a conservative person "running a business" and the liberal feels no compunction about telling the conservative how to do it.

 

[Scataphagos]

Quote from logic_man:

It's really interesting to me when you consider that, if a conservative tried to tell a liberal how to do some liberal thing, e.g. direct a play, the liberal would complain that the conservative was overstepping the bounds of his expertise and the liberal should be given the freedom to direct the play as he saw fit.

Flip the situation to a conservative person "running a business" and the liberal feels no compunction about telling the conservative how to do it.

In America you have the choice to start a business and be the boss... if successful you deserve the fruits... modest or large. (Workers don't seem to "get it". They get paid FIRST... if there is any left over the boss gets paid. Sometimes that's a LOT.. often it's damned little or nothing. Not uncommon for the small business boss to feel like he's working for the employees.)

Or if you are unwilling or unable to "be the boss", you can work for wages and not be responsible for the success of the business.

If you work for the boss, you've got no legitimate bitch about whatever he does or however much he makes. If you don't like his policies or how much he pays you, you're free to move on.

 

[MKTrader]

As usual, Nobel fraud Krugman is either frighteningly ignorant or is being disingenuous. I saw this on another forum about the "good ol' days" of high taxes pre-1986.

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The dishonesty or perhaps ignorance in the tax debate that is going on today is the complete misrepresentation of the pre-TRA86 higher marginal rates in the old '53 code. Sure the marginal rates were insane, but the underlying tax code was rife with loopholes that a good tax planner (I was one) could exploit to get a persons effective tax rate as low or lower then it is today. Those loopholes are no longer part of the tax code which is a good thing as they encouraged investors to invest in projects that had no economic viability other then the income sheltering effect they created.

What else is ignored in the conversation is the fact that there was a massive amount of tax fraud at all income levels under the old code. It was so bad and so common that most people took pride in telling others how they cheated on their taxes. When I was practicing it was quite common for us to pick up clients that had owned businesses that had grown into large enterprises that cheated extensively on their income taxes sometimes for decades. Usually the only reason this ever got exposed was due to the owners wanting to sell or go public.

Today it would be very hard to get away with significant tax fraud for very long and the current code does not offer very many ways to legally shelter income, so a marginal tax rate of 70% would probably produce an effective tax rate on the top 5% of at least 45-50% which would be more then double what the effective rate was under the old tax code. Thus, if we were to go back to those insane marginal tax rates, we would be crossing into a level of taxation never seen in this country.

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PS - There's a telling picture of Krugman on Drudge's site right now--a fat metrosexual holding a cat. How charming.

http://drudgereport.com/

 

[vicirek]

Can somebody explain to me why people who are guaranteed equal rights and obligations (Constitution) can be subjected to discriminatory tax rates. How this is legally possible in free and democratic countries?

 

[Scataphagos]

Quote from vicirek:

Can somebody explain to me why people who are guaranteed equal rights and obligations (Constitution) can be subjected to discriminatory tax rates. How this is legally possible in free and democratic countries?

As for "equal treatment under the law", progressive tax rates should be unconstitutional... let alone being immoral.

However "progressive tax rates" are an easy platform to espouse and easy swallow for the undertaxed.... fairness and Constitution, be damned!

 

[failed_trad3r]

Quote from vicirek:

Can somebody explain to me why people who are guaranteed equal rights and obligations (Constitution) can be subjected to discriminatory tax rates. How this is legally possible in free and democratic countries?

The Constitution is a theory. It did nothing for the blacks in 1800.

 

[d08]

Quote from Scataphagos:

"... America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again...."

No, we can't.

America of the 1950 had nearly ALL of the world's important manufacturing done in America, by American workers... without competition from anywhere.

Today, there are 300-500 MILLION 3rd-world worker bees trying to achieve wealth and success... America has to compete with them.

That... and there are 7 Billion people on the planet... most of which seeking "middle-income wages and above"... but there are not that many well-paying jobs to go around.

We can NEVER, "do it again" and must accommodate that fact.

Krugman is an ASS... BTW.

+1, absolutely.

Try to tax the filthy rich like that, most will just leave or figure out ways how to circumvent it. Doing that in 1950s was almost impossible. Globalization has two sides.

 

[Scataphagos]

Quote from d08:

"... Globalization has two sides.

Correctamundo!

We like being able to buy cheap products... but we forget it's the low wages in Asia making that possible. It's getting "worse". Foxconn (likely the biggest employer on the planet.. even bigger than Wal-mart) admits it wants to replace 1 Million low-wage workers with robots.

Of course we'd LIKE to have high wages at home and still be able to buy cheap products... oil and water.