Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

[Andreuccio]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

http://www.halfsigma.com/2006/03/the_winnertakes.html

http://www.halfsigma.com/2011/01/bas...nsference.html

We can assume that puck has won a winner take all contest in the cooking industry. So are you saying that government supported detroit librarians have won a winner takes all contest? Comparing detroit librarians to puck is extremely illogical, at least it makes no sense to me.

To be a librarian requires a master's degree in library science. There are a variety of specialized skills involved. There is perhaps some overlap in job description with a floor clerk at a bookstore, but a professional librarian has a much wider skill set and a lot more responsibility. To claim that the librarian is overpaid because the floor clerk makes less makes as much sense as claiming Wolfgang Puck is overpaid because a short order cook makes less. Just because they both work in the same industry with some superficially similar tasks doesn't make their jobs comparable, and thus claiming they should earn comparable pay is meaningless and misleading.

[c1ue]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

According to IRS data for the 2008 tax year, the combined taxable income of all Americans who earned over $100,000 that year was $1.59 Trillion.

I'd point out that taxable income leaves out very important distinctions like what the individual receives vs. the corporation they control receives.

The income tax numbers also leave out the payroll tax, sales tax, and pretty much every other possible tax - which are skewed regressively against the hoi polloi.

Certainly it is correct that full confiscation wouldn't fix the deficit.

The problem is that while everyone will take a hit, it seems the least able to afford it are taking a far greater hit in proportion than those who can the most afford it.

[Raz]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

I'm with you on the $250k/yr bit. It's too low - functionally middle class - to leave that as the top marginal rate. There should be at least one additional bracket - probably around $4M/yr if there could only be one. That way you won't be increasing rates on actual small business owners and professional couples in high cost-of-living areas but still decreasing the pool of capital that will likely find its way into the speculative bonanza.

We are at a point where soon the regressive payroll taxes (6.2% up to $108k) will result in receipts that total more than the entire progressive income tax system. It's not a good place to be in.





You are right there. There is not enough pay delivered as 'income' to make it work. Capital gains must be "re-tethered" to income tax rates - the wider the gap, the more distortion exists.

From the CBO:





Of course confiscating all income is not the way to go. The way I see it, the only way to wind down the FIRE merry-go-round to where it serves the larger economy rather than the other way around is to build a tax structure that promotes this. Of course one should be rewarded for being a successful entrepreneur.



I tend to think that you can't simply shred the entitlements and let people sink. I find it ironic that the same politicians touting the 'knowledge economy' don't realize that the 'knowledge economy' is what is wrong here.

No matter how much money .gov throws at education, there will still be a large block of people who simply do not 'get' mathematics and hard science. Until there are real vocational opportunities in this economy, I fear that cutting people out and leaving them on their own will only result in the money saved on entitlements being spent on criminal justice.



Yes.



I fear that this will come if and only if all hell breaks loose.



I don't know if that can be ended now. We're pretty far down the rabbit hole. I absolutely agree that the percentage of capital required to be held in reserve should increase substantially, however.



I'm for eliminating the wage base - after that, means testing doesn't matter. Benefits need to decrease on a percentage basis as income goes up until one hits a 'benefit cap.' Right now, the benefit cap is determined by the wage base.

Rather than saying, 'Social Security will only take in so much of a person's income' and setting benefits on that, one could say 'Everyone pays the same percentage into Social Security, but there is a maximum benefit that one may receive.'

Means testing requires investigators, forms, badges, guns, bureaucracy, etc. A simple rule change would likely take care of most of the issue.

That being said, I'll take means testing over nothing.



Something does need to be done here. C-corps have been loosing total share of business activity for some time. S-corps and LLCs are taking up the slack. The current system provides incentives for tax havens.

C-corp business activity:



Number of S-corps and LLCs:



Ultimately, it would be nice to see corporate tax incentives for producing in the U.S., hiring in the U.S. and maintain or increase median wage vs. CPI in the U.S. It would be a lot better than providing incentives to move production oversees and keep capital units here so that they can declare losses and get a fat check from old Uncle Sam.



I think it's relatively besides the point. The economic issues at large are much bigger and more important than public unions. It's only 38% of the public sector anyways. Eliminating it, to me, is just more show that scares the middle class into taking it deeper from the rentiers.

Sure, public sector unions stifle the young and creative, make flexibility difficult, dump money into politics, and make merit pay all but impossible. These things are not good - but they are not the root of our economic problems either.

This issue drives me nuts because it's nothing more than a fantastic wedge for our wonderful two parties to act like there's a difference while they give away our future to the bank.

We're living in an age where municipalities and states have been borrowing against expected future federal revenue to match this year's federal revenue and doing it for a decade. They assume an 8% return on pension funds - and then underfund them and invest them with the herd. The result is a dirty debt pit.

Some arithmetic, once again, just for illustration:

In 2010 there were 3,823,142 teachers in the U.S. Even at $100,000 per year total compensation package (which is more than they get on average), that's $382.4 Billion/yr. Fire them all and it makes less of a dent than confiscating everything from the rich.

There were 21,114,528 public employees in the U.S. in 2006. 18% of all public employees are teachers. So multiply $400 billion by about 5 and there you are. About $2T per year if they all earn $100k in total compensation on average (which they don't). Fire all of them, create 21M new unemployed and pay out 50% of their wages temporarily in unemployment and you solve the budget problem - or you could confiscate all of the money declared as income of people in the top two brackets - 5.5M people.

Both ideas are silly to me.

At the end of the day, capital needs to be squeezed from the top where it quickly pools in opaque financial instruments. Greater economic rewards need to be provided for production and employment, and rentier capital needs to be reigned in. FIRE needs to wind down from 20% of the economy and find a sustainable place again. Loosing sight of the larger goal is not an option.

I'm a Paleoconservative and a Ron Paul supporter, but not a Libertarian. I'm guessing that your political views are to the Left of my own, yet we are mostly in agreement concerning the foregoing. The red highlites are where we differ (or misunderstand each other) and the green highlites are areas where we are in strong agreement.

I never meant that by means testing those on the lower end should have a lifeline cut and be told to swim or drown. And neither do I believe that a man who earned $200,000+ per year should have his Social Security eliminated, but his maximum benefit will have to be lowered in order to maintain systemic solvency. And for those in the Henry Paulson/Angelo Mozzilo bracket: they will receive about 10% of their current eligibility, and in the case of those two I hope they receive their checks at a Federal prison. In their case I'll gladly spend the money on the criminal justice system.

I don't believe that the problem of public sector unions and collective bargaining being forced upon states and municipalities is "besides the point". It is a large part of the greed problem that has wrecked our economy. I remember the 1960s and 1970s when unions played a major role in the destruction of several American industries. I.W. Abel and the Steelworkers comes to memory. I watched input prices for farm equipment literally explode from the early 60s to the early 1970s largely due to the ever increasing demands of certain unions. And while GM's management had to be among the worst in the entire industry, the UAW shares a large part of the blame for what happened there. (The sad story is more complex due in part to the rise of the Japanese auto industry.)

The financial services industry must serve the productive economy (agriculture and industry) - NOT the other way around. And for the social stability of the United States we must have an economy structured so that it "works for everyone who is willing to work".

But we will never get it from the RepubliCrats.

[DSpencer]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

I'm with you on the $250k/yr bit. It's too low - functionally middle class

The definitions of: the rich, middle class, the poor (and any others) seem perpetually elusive. I know that life circumstances (single vs a family of 6, etc) make a big impact, but $250k a year is middle class?

Rather than saying, 'Social Security will only take in so much of a person's income' and setting benefits on that, one could say 'Everyone pays the same percentage into Social Security, but there is a maximum benefit that one may receive.'

Maybe I am misunderstanding. Are you saying to just do away with the illusion that SS is a saving/retirement program and just admit that it is a program to redistribute wealth? Essentially, making it a welfare program where the poor and the middle class get money from "the rich"?

Sure, public sector unions stifle the young and creative, make flexibility difficult, dump money into politics, and make merit pay all but impossible. These things are not good - but they are not the root of our economic problems either.

This issue drives me nuts because it's nothing more than a fantastic wedge for our wonderful two parties to act like there's a difference while they give away our future to the bank.

Very good point. Is there enough common ground in other, more important, areas to start making progress? I think we may be close to a point where most people are fed up with the constant wars. Outside of that there seems to be very little agreement.

At the end of the day, capital needs to be squeezed from the top where it quickly pools in opaque financial instruments.

When you say "squeezed from the top" do you mean confiscated/taxed? This is a major issue in my mind. Taking people's rightfully earned money just because it's there and it's wanted/needed to pay for other people.

I realize the issue is muddied with lots of wealth gained by illegal/morally questionable means. Those issues are the first problems to deal with in my mind. But we should be careful not to have the attitude that every rich person is a criminal and therefore it's OK to take their money because we have a budget problem.

[dcarrigg]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

[COLOR=navy]I'm a Paleoconservative and a Ron Paul supporter, but not a Libertarian. I'm guessing that your political views are to the Left of my own, yet we are mostly in agreement concerning the foregoing.

Agreed. I am to the left of you, but I would exchange your ideal of the political economy for the one we currently have any day. Right and left are not as important a distinction as sane and reckless.

[dcarrigg]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

When you say "squeezed from the top" do you mean confiscated/taxed? This is a major issue in my mind. Taking people's rightfully earned money just because it's there and it's wanted/needed to pay for other people.

I realize the issue is muddied with lots of wealth gained by illegal/morally questionable means. Those issues are the first problems to deal with in my mind. But we should be careful not to have the attitude that every rich person is a criminal and therefore it's OK to take their money because we have a budget problem.

Rentier capital is what I am on about. Classical capitalism was never supposed to be about propping up rentiers and their decedents in perpetuity until we got back to a 17th century European class system. This is why things like a land tax have been discussed at iTulip (and elsewhere among economists). The point is to reward the hardworking and enterprising - not those who just sit around and earn capital off rent.

The overall points I am making are not for the sake of the government. They are for the sake of the people of this country. This is not just to fill a budget gap.

[flintlock]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

My various thoughts:



I agree with most of your overall post, but think this part needs clarified. People don't just want public employees pay cut so that money saved can be burned. They want that money BACK because it was their money before the government took it away.



Again, it's not necessarily just envy about other people's situations. It's the knowledge that they pay taxes so other people can do the same job for more money. Less money for public workers = lower taxes for private workers (in theory...)

Sure it would be great if "somehow" everyone could have more, but that isn't a very actionable idea.



I agree with the second part, but not the first. I think there is plenty of capital desperately seeking a reasonable rate of return (why/how do you think sites like itulip exist?) and for many they'd prefer to invest in the real productive economy . The problem is that major corporations have used influence to greatly increase the barriers to entry. Think about how much paperwork and the amount of legal advice you would need to start almost any business today. How much do you think was needed 100 years ago? As always...Cui bono?

IMO - the reason to be upset with both unions and corporations is the same: they have used the government to give themselves an edge which allows them higher profits/wages at the expense of everyone else. Really we should be upset with ourselves for letting the government assist them in this goal.

Applause!

[flintlock]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

.

[mesyn191]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

Most of the jobs and wages in the private sector of the United States are found in small businesses - not Toll Brothers, Target or Brunswick Corp.

That is not in question, but a huge chunk of them come from the mega corps, and the mega corps get a huge chunk of the profits.

[COLOR=navy]Not so with the "rich" guy who owns a small business and earns $250,000 per year.

$250K a year isn't rich IMO and while I haven't explicitly said so they're not who I'm taking about when I do say rich. I'm talking about the folks who make millions+ per year.

I don't think that going back to a 39% tax rate as existed during the Clinton years is unreasonable, but "eat the rich" is rather short-sighted.

50, 60, or maybe even 70% effective tax rates is about is about as far as I go down the "eat the rich" rabbit hole when it comes to taxing away some of their wealth. The other thing I don't really like is how much influence they have over our gov. and its representatives via lobbying, which is really just blatant vote buying at this point even if it perhaps once wasn't.

According to IRS data for the 2008 tax year, the combined taxable income of all Americans who earned over $100,000 that year was $1.59 Trillion.

If you only look at wages you miss half or more of the picture, you have to consider capital gains which is where rich make most of their money and get to keep it because its taxed different from wages.

It seems to me that the bigger problem is the structure of our domestic economy, a fraudulent and totally corrupt monetary system, and the totally unrealistic expectations concerning entitlements that have been foisted onto the American people. We desperately need to reinstate Glass-Steagall, have a monetary system based on a gold certificate ratio with an end to fractional reserve lending, means-test Social Security, provide a much lower tax rate to the C-Corps who bring manufacturing back to the US and punish those who domecile here but operate most of their production overseas, and yes, address the whole idea of collective bargaining for public employees.

I agree with most of what you say here but would quibble that a gold based monetary system probably isn't possible today. I would also point out I'm not saying taxing the rich is the end all be all cure to what ails our country, its one of several things that need to be done IMO which I've said several times now.

I stand with FDR on that subject: government employees should not have the right to unionize nor should collective bargaining be forced upon government at any level.

We're gonna have to find a way to agree to disagree on that...

[mesyn191]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

http://www.mediabistro.com/tvnewser/category/ratings

The data seems to show that few people watch the mass media and more people watch culturally degrading program such as the jersey shore and other reality TV.

Note the age group though, tops out in the mid 50's. Older generations still trust what Fox, NBC, etc. have to say quite a bit. Also "eye time" as it were may not be the best guide to see how many people trust what they see from mass media regardless of eye time.

Humans are emotional creatures and they think emotionally.

Absolutely true but what really happens, the truth as it were, does matter to most if not all of them.

When Avg. joe sees the plutocracy graph above he doesn't feel anything.

I have to disagree with you there. Its not like I have a poll or anything, but the few people I've shown that chart to tend to get pretty pissed. Most of them already have a pretty good idea that things are screwed up, but they don't understand how FAR they're screwed up nor WHY they're screwed up.

Reminds me a lot of how it was like back in 2005 or earlier when people would talk about housing going up forever. Oh lots knew something was fishy but didn't understand the implications and would usually just shrug and give some variation of "make hay while the sun shines" as an excuse because you can't time the market anyways right? You point out earlier busts, and income vs price disparity, and how crappy the loans were, etc. and usually that blase' attitude would start to vanish within the span of minutes. Some of them couldn't accept that and would go into denial, but I was able to keep a few from losing their shirts so apparently some did listen after all.

Anyways that is just an anecdote so call BS if you like, but I think people really need to be informed better about what is happening and that just isn't going on.

[mesyn191]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

I get that they are making the comparison based on % of income, but why is that the only relevant measure?

Because we're supposed to have a progressive tax system that taxes people more according to their means, and per cent is far better measure when trying to figure that out. After all a loaf of bread will cost the same for the rich vs the poor/middle class, yet the amount of income consumed by that same loaf will be vastly different between those groups. Life's necessities, hell even a lot or most of its luxuries, cost a trivial percent of what the rich get each year much less vs. total wealth.

If I have a yearly income of 20 million and you tax me 50, or 60 or 70% I'll still take home 10 or 8 or 6 million dollars. I'm still rich by any measure!! And not by a little either!! The rich will be perfectly fine and still rich if you tax the heck out of them, they don't need any help.

The arbitrary notion that paying a higher percentage of income is "fair"?

Its not arbitrary, its the declining marginal utility that the rich get for more of their dollars. And they have so so many more of them vs. the middle class and poor.

The wealth disparity is mind blowing and indefensible.

When you say "you have to bear in mind that..." what you really mean is "it's my opinion that...".

No, what I really mean is "this is a fact", which is shown by the chart I posted to back that up otherwise it would be just an opinion. If you've got something which shows the charts I've posted to be false then post it, otherwise they stand as glaring evidence that the rich need to be taxed hella more and that the middle class and poor are getting screwed over here.

[mesyn191]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

Have you ever owned or run a business that requires employees? The reason I ask is because you chose to put this graph up.

No I haven't, but that doesn't change anything that the chart you quoted demonstrates.

See...labor tends to be a resource that is managed on a long term basis based on long term expectations.

Except during most recoveries jobs and wages tend to rebound fairly quickly, within a year or 2. We are going 2 years into this "recovery" now and yet unemployment and underemployment levels are still hovering around the highest we've seen post WWII, and that is going by fudged gov. numbers. Just how long term are we talking here? 5 years? 10? 20?

Perhaps the reason employment hasn't picked up is because businesses don't expect this rosy nominal uptick as permanent (in spite of what the "sentiment" factoids say) or are waiting to see it take hold further to reduce the odds of having to undetake a costly recruitment and immediate lay-off proposition?

I'm not sure any of these big companies think more than a quarter or 2 off into the future these days anymore. We've had going on 2 years of fantastic profits for them and they still aren't doing shit with it but redistributing it amongst them selves, I fail to see any reason to give them the benefit of the doubt that they are somehow being prudent.

[mesyn191]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

The definitions of: the rich, middle class, the poor (and any others) seem perpetually elusive. I know that life circumstances (single vs a family of 6, etc) make a big impact, but $250k a year is middle class?

Given the cost of things these days its upper middle class. Depending on where you live for instance a "good" home with a nice acre of land or great location (ie. CA or maybe one of the other more bubbly states) can easily be several times that alone. Want to send your kids to college? $30-40k a pop easy. More like $100k a piece if they want to go to a BIG LAW law firm and a top 5 school, or if they want to be a doctor. Engineer school costs are cheaper than that but I think they still hover around $50k-60k. Of course you have to pay for your own schooling too, which likely cost a similar amount. Healthcare is mind blowingly expensive, I'm not sure if you want those prices broken out in detail though... And then of course they have to save for retirement so knock off around 10-20% of their income for that, and voila!

Very good point. Is there enough common ground in other, more important, areas to start making progress?

I'd say no. People need to see an option that looks viable to them first before they're usually willing to go and burn things down. But there are no options and/or politicians you can get behind that will do the fixes we need. Its going to have to get way way worse for the middle class and poor I think, and when they do snap they'll probably just end up injuring or killing a few local bank tellers or maybe cops and messing up their own local neighborhood instead of the assholes who are in charge.

When you say "squeezed from the top" do you mean confiscated/taxed? This is a major issue in my mind. Taking people's rightfully earned money just because it's there and it's wanted/needed to pay for other people.

Are fraud and rentier gate keeping rightful ways to make money?

[DSpencer]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

Because we're supposed to have a progressive tax system that taxes people more according to their means, and per cent is far better measure when trying to figure that out. After all a loaf of bread will cost the same for the rich vs the poor/middle class, yet the amount of income consumed by that same loaf will be vastly different between those groups. Life's necessities, hell even a lot or most of its luxuries, cost a trivial percent of what the rich get each year much less vs. total wealth.

Oh, I see, it's "because we're supposed to..."

Yes, I realize that rich people have more money left over after they buy stuff than poor people buying the same things. That's kind of the point of being to be rich. It doesn't do anything to prove your argument.

If I have a yearly income of 20 million and you tax me 50, or 60 or 70% I'll still take home 10 or 8 or 6 million dollars. I'm still rich by any measure!! And not by a little either!! The rich will be perfectly fine and still rich if you tax the heck out of them, they don't need any help.


Its not arbitrary, its the declining marginal utility that the rich get for more of their dollars. And they have so so many more of them vs. the middle class and poor.

So using your logic, why is 50, 60, 70% the farthest you will go to tax the rich (and which is it)? If the goal is to equalize the marginal utility, then shouldn't everyone be taxed to where they have the same amount of money left over? Why does your declining marginal utility theory not follow through to this conclusion?

Does this line of thinking just apply to money? Or should be people needing a kidney transplant be given the right to take one from someone who has two? After all, the marginal utility is certainly much higher. Or is there still some kind of belief in having rights to your body and/or the fruits of your labor?

No, what I really mean is "this is a fact", which is shown by the chart I posted to back that up otherwise it would be just an opinion. If you've got something which shows the charts I've posted to be false then post it, otherwise they stand as glaring evidence that the rich need to be taxed hella more and that the middle class and poor are getting screwed over here.

What the rich "should" pay in taxes is a matter of opinion. It is subjective and can't be proven by any chart, no matter how accurate the chart is or what it shows.

I do agree that the wealth disparity is a problem and will likely have negative social consequences. I just think that reasonable debate requires some degree of sound logic.

I also think that taxing the rich does not solve the problem. Yes, many of them are rich through improper ways. But you wouldn't suggest taxing bank robbers to fix the problem of them having too much money. The roots of the problem need to be addressed. Otherwise, they will just buy a new tax loophole anyway!

I do think there is an issue today where basically every industry has lobbyists and its hard to think of anyone getting rich without at least accidentally being helped by government regulations, favoritism, tax law, etc. Loopholes exist in the tax code even if you didn't personally lobby for them, can we really blame people for taking advantage of them? Is anything uncorrupted?

[DSpencer]

Re: Proposal to Strip Corporations of Constitutional Rights Gains Momentum in Wisconsin

Rentier capital is what I am on about. Classical capitalism was never supposed to be about propping up rentiers and their decedents in perpetuity until we got back to a 17th century European class system. This is why things like a land tax have been discussed at iTulip (and elsewhere among economists). The point is to reward the hardworking and enterprising - not those who just sit around and earn capital off rent.

The overall points I am making are not for the sake of the government. They are for the sake of the people of this country. This is not just to fill a budget gap.

This is one area where I am interested to learn more. There's some areas where if I'm being honest, it's not likely I'll change my opinion. But, while I have some issues with the implications of taxing static assets (mainly I think it undermines the idea of property rights) I do see some of the problems of rentier income.

It's at least an idea where in the fantasy land of itulip forums creating a new political system, I could accept this as a compromise for a much improved system.